Meeting of the Parliament (Hybrid) 09 March 2022
In the spirit of transparency, I refer members to my entry in the register of interests as an owner of land in the Highland Council region.
I begin by associating myself and other members of the Conservative Party with the remarks that the cabinet secretary made about the ongoing situation in Ukraine. We share his concern about the profound impact that the invasion is having first and foremost on the Ukrainian people, but also its impact on the Ukrainian community in Scotland. I have met members of the Edinburgh Ukrainian Club and offered my party’s support and solidarity to them and those whom they represent across Scotland.
The crisis has led the UK Government to lodge the Economic Crime (Transparency and Enforcement) Bill, the contents of which were originally due to be part of a more wide-ranging piece of legislation. As others have said, it might well be that there is more UK legislation to come. However, given the situation that we currently face and the need for urgency in targeting illicit finance, including from Russia, it is right that the bill is being discussed today.
I also welcome the fact that the Scottish Government has recommended consent and that it broadly agrees with the robust action that is being taken by the UK Government to reform unexplained wealth order powers and to introduce a register of overseas entities. I welcome both the tone and substance of the cabinet secretary’s speech. There are difficult and complex questions of law about what is reserved and what is devolved in the area, but it is fair to say that we are all broadly on the same page.
I also welcome the support of the Labour Party at Westminster. It shows that, on issues such as this, political unity can achieve positive outcomes. We will support Michael Marra’s amendment today. I will return to that in a moment.
The bill introduces significant and timely changes that will improve transparency and give the UK and Scottish Governments greater powers of enforcement. The proposed register of overseas entities will require anonymous foreign owners of UK property to reveal their real identities, and will prevent individuals from hiding behind secretive chains of shell companies. The creation of the register will ensure that there is a level playing field in relation to property that is owned by UK companies which, at the moment, need to disclose their beneficial owners to Companies House. Sanctions will be imposed for non-compliance.
The cabinet secretary mentioned that the UK Government has committed to tabling an amendment that will introduce a statutory mechanism for consulting Scottish ministers on regulations that are within this Parliament’s legislative competence.
There are some areas of minor contention—namely, that the register will apply retrospectively to property that was bought up to 20 years ago in England and Wales, but only to property that was bought since December 2014 in Scotland. The Government’s legislative consent memorandum says that it has not explored an extension to an earlier date, which is what Michael Marra’s amendment attempts to consider. Land registration is, of course, a devolved matter. We support—and have supported—greater transparency in land ownership in Scotland. For those reasons, we will support Michael Marra’s reasoned amendment.
As others have noted, there are overlaps between the Scottish regulations on the register of persons holding a controlled interest in land—the RCI, as it is known—and the bill, in which the UK Government has reduced the grace period during which foreign-owned properties must be registered from its initial suggestion of 18 months to six months. That is a positive step forward, and I wonder whether the Scottish Government believes that the grace period in the RCI regulations should also be reduced—from 12 months to six months.
The ROE is directed at money laundering, as the cabinet secretary said, not at transparency about land ownership, but there might be room for joint working. For instance, if overseas entities require to report to the RCI, should they also have to report to the register of overseas entities?
Finally, there is a question of resources. It would be helpful to know what further resources the Scottish Government is making available to the Crown Office and Procurator Fiscal Service, which will be responsible for enforcing the new measures—especially given that the bill also seeks to strengthen the UWO regime, to increase and reinforce operational confidence in using UWO powers, and to clarify the scope of those powers. One way in which it will do that is by enabling UWOs to be sought against property that is held in trusts and other complex ownership structures.
The Scottish Conservatives support the Scottish Government’s motion. We believe that there is clear urgency for putting into effect the measures that are contained in the bill, and we believe that Parliament should give consent to the bill. It is right and proper that, as a Parliament, we play our role in making our institutions more robust, and that we ensure that we have in place the strongest possible measures for combating illicit financial activity.
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