Warning as Sturgeon confirms rent freeze to help with cost of living crisis

Warning as Sturgeon confirms rent freeze to help with cost of living crisis
Warning as Sturgeon confirms rent freeze to help with cost of living crisis

NICOLA Sturgeon has announced emergency legislation to freeze household rents immediately as part of measures to tackle the cost-of-living crisis.

It lead to warnings it could “fatally undermine” the private landlord sector.

Setting out the Scottish Government’s annual legislative programme  at Holyrood, the First Minister said the country faced an “humanitarian emergency” this winter.

“It poses a danger, not just to livelihoods, but to lives,” she told MSPs.

She said the rent freeze would apply to tenants in both the private and social rented sectors.

The plan was two-fold, she said, with a moratorium on evictions giving people security, plus a rent freeze which the legislation would ensure was effective from today.

Ms Sturgeon said: “The Scottish Government does not have the power to stop your energy bills soaring, but we can and will take action to make sure that your rent does not rise.”

She said the measures were expected to last until at least the end of March next year.

Ms Sturgeon said state-run ScotRail fares, which were due to increase in January, would stay at their current level until March.

She was criticised by opposition parties after saying that, of the UK Supreme Court allowed it, there would be a Bill for a second independence referendum in Ocotber 2023.

Tory leader Douglas Ross said Ms Sturgeon was distracted by her party’s obsession with the constitution and needed to put country before party.

Scottish Labour leader Anas Sarwar accused her of failing to use the powers she had to drive reform and lapsing into permanent campaigning instead of making a difference.

Ms Sturgeon insisted that leaving the rest of the UK would “give us the wherewithal to build a better, wealthier, fairer future”.

She said the current cost-of-living crisis “highlights - starkly - the pressing need for independence”.

She added: “We are being reminded every day that where – and in whose hands – power lies really matters.”

The First Minister also revealed she had written to the new Prime Minister, Liz Truss, urging her to hold an emernegncy four nations summit on the cost of living crisis.

The Programme for Government, which included 18 new Bills, focused on the cost of living crisis, but also the squeeze on the Scottish Government’s own budget.

Ms Sturgeon said that inflation surging from 2 to 10% had reduced the real value of the 2022/23 budget by a “stagging” £1.7billion since it was first published in December.

In addition, new public sector pay deals had cost an unforeseen £700m.

“I don’t begrudge a penny of that,” she said, but warned of “hard choices” ahead.

She confirmed the Scottish Child Payment, the devolved top-up benefit for low income families, which recently doubled from £10 to £20, would increase to £25 per eligible child from November 14, when it would also open to all under-16s.

She said: “These extensions, to a strand of the social security safety net that is unique to Scotland, will make more than 400,000 children eligible for support of £1,300 per year.

“It will lift children out of poverty, enhance their life chances, and improve the lives of thousands of families across the country.

“In addition, two Best Start Grants – the Early Learning and School Age Payments - will now be awarded automatically to families in receipt of the Scottish Child Payment without the need for a further application.”

Other measures to hlep the most vulnerable included extending free school meals to all primary children, and a doubling of the Fuel Insecurity Fund to £20million

New Bills include a Criminal Justice Reform Bill ending the Not Proven verdict in Scots Law, despite misgivings from the legal profession, and a statutory guarantee of anonymity for complainers in sexual offence cases.

Ms Sturgeon said: “This Programme for Government is published in the context of the most severe cost crisis in many of our lifetimes. It is a crisis pushing millions into poverty and poses a genuine danger, not just to livelihoods, but to lives.

“The Scottish Government is already committed to a range of measures, worth almost £3 billion this year, that will help with rising costs. But the magnitude of what is being experienced by people and businesses means that mitigation is nowhere near sufficient. What is needed now is action on a scale similar to the initial Covid response.

“Regrettably, the powers to act in the manner and on the scale needed do not lie with this Parliament. In my view, they should lie here. If they did, we could have acted already. But they don’t. These powers are reserved to Westminster.

“The cost crisis means this Programme for Government is more focussed than ever before – deliberately so – with priority actions to provide help now.

“Given the powers to act in the manner and on the scale needed do not lie with this Parliament, this Programme for Government also provides for a Scottish Independence Referendum Bill. Independence would give us – like it does other independent countries – the levers we desperately need to respond to a crisis such as this.

"That’s the prize we surely must grasp.”

Mr Ross said: “The global cost-of-living crisis is as big a challenge to the Scottish people as the Covid pandemic. It must be treated with the same seriousness by our governments.

“In a time of emergency, governments must focus on what they need to do, rather than what they wish to do for political purposes. They must govern for our whole country, not just for their supporters.

“Unfortunately, this programme falls woefully short of rising to the big challenges we face.

“The Prime Minister has changed, but sadly it’s the same First Minister directing blame elsewhere and seeking grievance with the UK Government.

“Both governments need to do more to tackle the cost of living crisis. But there's no doubt the SNP are not delivering their side of the deal."

Mr Sarwar said: "For almost a year now the Labour Party has been demanding action on the cost of living crisis.

“From the windfall tax, to the energy price freeze and a rent freeze -we have been setting the agenda from opposition.

“And after 15 years it is hard to give this government the benefit of the doubt.

"Change will only come when the First Minister decides to end the culture where every failure comes with a ready-made excuse. It is always someone else's fault.

“Under this government’s watch there is a crisis in our NHS.

"There are more than 700,000 Scots on an NHS waiting list - that is 1 in 8 Scots waiting for appointments and treatment. More than 9,000 children and young people are waiting for a mental health appointment.

“There is a crisis in education. The promise to feed every child in Scotland's primary schools broken, the attainment gap refusing to close, and money cut from schools in the poorest communities.

“And there is a crisis in our communities - the highest drug deaths in Europe, a quarter of children living in poverty and £6 billion cut from council budgets since 2014.

“Politics is about choices.

“Today I want to welcome some moves the First Minister has made in the right direction but it is not enough - and we will need to go further as this crisis continues.

“This cannot be just another Programme for Government that goes through the motions of promising change and delivers nothing."

Scottish Liberal Democrat leader Alex Cole-Hamilton added: “It’s disappointing to see the First Minister give the impression that the Scottish Government have responded to this crisis to the sum of £3bn, when Parliament’s independent experts have debunked that and pointed out that includes policies that date back to the Lib-Lab coalition.

“And on rail, having already hiked fares 4% this year, today’s promise amounts to a two-month delay on further price hikes. When you look at the investment going on across Europe, that’s embarrassing.

“It is clear that after more than 15 years in power, this is a government that lacks the humility, the creativity and ambition necessary to solve the problems the people of Scotland currently face.

“This is a meagre programme. Nothing new for health when a staggering one in seven Scots is on a waiting list, nothing on long Covid, nothing significant to boost the economy despite the country’s slide towards recession.

“This is a programme for a winter of discontent.”

Tom Mundy, co-founder of the lettings platform Goodlord, warned a rent freeze could “fatally undermine” the private sector.

He said: “This rent freeze represents a potentially seismic new frontier in UK lettings policy.

“While we understand the need to support tenants, introducing rent control could mark the end of the private rental sector as we know it by stripping away the central incentive which encourages people to invest in buy-to-let properties.

“There's a major risk that this freeze will push landlords out of the private rented sector market at a time when pressure on rental stocks is particularly acute.

“This will squeeze the whole lettings market and create bigger headaches for the Scottish Government later down the line. Long-term, it could serve to stymie all future investment in the space and fatally undermine the system."

Scottish Property Federation Director David Melhuish said: "Today’s announcement of an immediate rent freeze for public and private residential homes will do nothing to address the wider challenges of supplying enough homes for people to buy or rent.

"If anything, this policy threatens to derail efforts to improve the supply of new, purpose-built homes for rent as investors pause to ask what else the Scottish Government might be prepared to do.

"Private rental sector providers have endured years of restrictive measures that have led to the sector losing homes for rent, with both renters and providers forced into using a tribunal system that is simply overrun.

"We fear there will be a further loss of homes in the Scottish Private Rented Sector and the long-term consequences on investment in the nascent build to rent sector.

"Already since this announcement we are aware of a multi-million pound investment that has been put on pause. We call on the Scottish Government to ensure there is support for affected property owners, who are also facing significant cost increases.

"We also need to see meaningful action to boost all-tenure housing supply, which is the only sustainable solution to addressing upward pressure on rents."

John Blackwood, Chief Executive of the Scottish Association of Landlords, said:  “Since rumours of this announcement broke this morning, I have been inundated by landlords saying they will be removing their vacant properties from the rental market, and I don’t blame them.

“Who on earth is going to let a property in the knowledge that they will be unable to meet their own financial and maintenance obligations if their tenants don’t pay the rent or their outgoings increase?

“Instead of helping tenants pay their bills, the Scottish Government has chosen to penalise people who have provided the homes politicians have failed to provide for decades.

“Once again the Scottish Government fails to grasp the reality of Scotland’s housing crisis and has chosen the easy option of attacking landlords for political reasons which will only further reduce the supply of housing, putting more people at risk.  This is not a solution, it will only cause more hardship.

“In just a few weeks, we will see more stories of students and others who can’t find suitable accommodation.  We warned of this last year and nothing was done but no one should be in any doubt where the blame for that new crisis will lie.  It will be at the door of Bute House.

“Despite reassurances from Scottish Ministers that they value the role private landlords play in provided much needed housing, we are astounded that once again they have chosen to attack landlords at a time when they should be encouraging landlords and tenants to work together to overcome financial hardship.”

David Alexander, chief executive officer of DJ Alexander Scotland Ltd, the largest lettings and estate agency in Scotland, said: "The proposed announcement by the First minister of a rent freeze for tenants in the private rented sector tells you all you need to know about the Scottish Governments' commitment to consultation and fairness.

"With the burden of the cost of the freeze being placed upon landlords the First Minister seeks to gain cheap political points whilst not addressing the fundamental failings of her own government's housing policy.

"No government would tell supermarkets, pubs, or clothing manufacturers to freeze the cost of their goods, but it seems that Nicola Sturgeon and her colleagues believe the private rented sector is fair game.

"One parliamentary source is quoted in the media as saying if the cost of a freeze was met by landlords the policy would cost the Government nothing.

"The result of this policy will be a shrinking of the private rented sector at a time when demand is at its highest. This has come at a time when local councils are seeking help from the private rented sector in housing the homeless as they have no capacity within social housing.

"This policy underlines how inadequate the response of the Scottish government has been to delivering homes for the people of Scotland.

"This move marks a new low in the Scottish governments' relations with the private rented sector and, given that this has been done without consultation, is a sign of desperation at a time when we need considered thought and action."

However the Scottish Greens, who had been opposing a rent freeze when Labour first proposed it earlier this year, welcomed it.

Green MSP Ariane Burgess said: “Improving tenants rights and tackling inequality are at the heart of the cooperation agreement that we agreed with the Scottish Government and must be at the heart of our recovery.”

“With soaring inflation, skyrocketing bills and increasing rents, these are desperate times for tenants all across Scotland.”

“We are facing the biggest social emergency for decades. The rent freeze and eviction ban that the First Minister announced will provide vital stability and support for tenants across Scotland at a time when many are suffering.

"It is one of the steps we are taking, in partnership with the Scottish Government, to mitigate the damage being done by Downing Street and the energy companies.”

“Over the course of this parliamentary term Scotland will see the biggest expansion of tenants rights since devolution, with more rights for tenants to make a house a home by keeping pets and decorating, better protections from eviction and, perhaps most importantly, a robust system of rent controls.”

Alba party MP Neale Hanvey said: “While the rent freeze for tenants and the halt to evictions are both to be welcomed, the announcement of £20 million for the Fuel Insecurity Fund and the increase in discretionary housing payment funds to Councils by £5 million, is wholly inadequate to deal with the scale of the humanitarian crisis facing Scots families.

“The Scottish Government could have raised the Scottish Child Payment to £40 per week for 400,000 children in 250,000 households but failed to do so.  That is the real help that families are crying out for and should have been delivered today.

“The Scottish government must stop tinkering around the edges and must stop going cap in hand to Westminster.

“The scandal of one in three Scots households living in fuel poverty in energy rich Scotland will not be addressed without a significant strategic move away from the dominance of the energy giants and their massive excess profits. We need Independence to pursue public ownership, a wellhead tax, carbon levies and micro grids storage so as to deliver sustainable energy security and affordability for our people.”

STUC General Secretary Roz Foyer said: "The Scottish Government is to be commended for freezing rents. If implemented correctly – and we are pressing for further answers - this will help thousands of households across Scotland when they need it most.

“When used, the powers of our Parliament can bring positive change. This must now extend to Scotland’s tax powers.

"There are constraints but it simply isn’t true that Scotland has a finite budget.

"The Scottish Government could raise millions from income, wealth and business taxes.

"The Local Visitor Levy is a step in the right direction in this regard.

“In a cost-of-living emergency, we need strides – not steps. The Scottish Government could have coupled the welcome increase in the Scottish Child Payment with expanding universal free school meals to all. It’s a political choice not to feed hungry children; a choice we’re unwilling to accept.

“On Thursday we will make that clear as we march on the Scottish Parliament for better public sector pay in addition to wider action on the cost-of-living crisis.”