Meeting of the Parliament 06 October 2022
I am pleased to support the emergency legislation, which will secure—with limited caveats, of course—a six-month eviction ban and a six-month rent freeze for tenants across all tenures. The case that that is essential was made very well at stage 1.
We heard from the minister that 63 per cent of tenants in the social rented sector and 40 per cent of private tenants did not have enough savings or reserves to cover a month’s basic income and live above the poverty line if they experienced income shock. The figure was 24 per cent for people with mortgages. A tenure-specific approach was therefore appropriate. The Joseph Rowntree Foundation said that almost a third of all renters were struggling even before the current cost of living crisis. The case has therefore been made.
The approach had to be appropriate, absolutely necessary and proportionate. It had to strike a balance in order to be legal. That is what the bill, which is soon to be an act, seeks to do. It is proportionate, because landlords in the private rented sector can pass on to the property that is being let out some costs for increasing mortgage interest payments. They can pass on some costs in relation to landlord insurance or in-service charges. Those are only 50 per cent of those costs, to a maximum of 3 per cent of the rent levied. Modest safeguards have therefore been put in place for the private sector, which help to make the bill proportionate and legal. We have heard about similar protections in cases of evictions, which I will not go into because of time constraints.
There has been a good range of amendments, some of which have been accepted by the Government. It was very sympathetic to some. It was quite rightly signposted that, with the bill on the new deal for tenants that our Government will bring forward, it will engage directly with Opposition parties to develop amendments for a bill that can be shaped properly by Parliament and is not emergency legislation. That is also appropriate.
I want to use the time that I have left to talk about concerns in the social rented sector that I raised at stage 1 and in various interventions in the stage 2 and stage 3 amendment processes. We should, of course, put on the record that there are concerns about core repairs in the social rented sector, the ability to pay loans in relation to new builds that have already been commissioned and new builds in the pipeline, and in relation to net zero and the wider role that housing associations and social landlords fulfil. We cannot deny that those concerns exist. It is really helpful that we will get an early decision on what will happen from April next year. The Government’s stage 3 amendment says that we will know that by 14 January next year. That is really important, and I warmly welcome it.
Housing associations have said to me that they are keen to get on with their statutory duty to consult on rent increases in the sector. I am glad to hear that the Scottish Government, too, is keen for them to do that. In the consultation process, social landlords quite often offer tenants options. They will say, “Here’s what we would do if there was a rent freeze” or “Here’s what we would do if there was a 1 per cent increase, a 2 per cent increase or a 5 per cent increase.” They outline that. They do modelling work every year anyway to see what would happen if there was a rent freeze. I hope that, in the short-life working group, the Government will suggest to social landlords—this would be for them to decide independently, of course—that they should put the zero per cent option in their rent consultation so that they can say what tenants would get for their money if there was a rent freeze and what the consequences of that would be.
When all the rent consultations have come in, the Government will—rightly—want to analyse them before making an informed decision, on the basis of the engagement that social landlords have had with their tenants about what tenants want in relation to a rent freeze. That is vital.
One final point is that it can be really difficult for social landlords to engage with their tenants. They are very good at that, but getting a high turnout in the engagement process can be difficult. Sometimes, one demographic of a tenant base responds disproportionately. It is important to find out about affordability not just for those who rely on benefits and receive the housing element of universal credit to pay their rent but for many of the working poor, who pay full rent, because they are in the firing line of the Tory cost of living crisis, and the bill is trying to address their concerns.
I support the bill and the on-going engagement with the social rented sector. As I said at stage 1, I would prefer to reach an accommodation and an agreement with that sector rather than to provide for a rent cap come April, but let us wait and see what happens.
16:06