Hansard

There is a lot of detail, as you will appreciate. As Claudia Beamish has said, it is important for us to be able to put our position on the record. This is a key section of the bill, so I hope that members will bear with me. In order for us to understand how land is owned and used in Scotland, we need to know who owns the land, who controls the decisions over the land, and how changes in our laws and policies relating to land influence those who own and control our land. As Sarah Boyack has explained, amendment 103 would impose a statutory duty on the keeper of the registers of Scotland to complete the land register in respect of all publicly owned land by 2019 and all other land by 2024. That is exactly the target that ministers have set and which the keeper accepted in 2014; we are all agreed on the importance and desirability of completing the land register within those timescales. A great deal of work is already under way to accelerate progress towards land register completion. The keeper has published a consultation paper that sets out proposals for using the powers of keeper-induced registration that Parliament provided in the Land Registration etc (Scotland) Act 2012. That consultation closed on 8 January, and within a matter of weeks the keeper will announce how she will take matters forward. Registers of Scotland is also in discussion with a large number of major public and private sector landlords with a view to facilitating the voluntary registration of their titles. Against that background, I think that it is unnecessary for Parliament to legislate further at this stage. However, I am happy and keen to give Sarah Boyack an undertaking that we will keep the committee and Parliament informed of progress, and I do not rule out the possibility of further legislation in due course, if that proves to be necessary. On that basis, I invite Sarah Boyack to withdraw amendment 103. I note what Alex Fergusson has said in relation to amendment 104 and its purpose and effect. I want to take the opportunity to confirm to the committee the Government’s approach to section 35 of the bill. As I said in my letter to the committee of 13 January, which followed the meeting that we had on 6 January in which I discussed the approach rather than the detail, it is our intention to lodge amendments at stage 3 to provide a regulation-making power that will enable provision to be made for a public register of persons with a controlling interest in landowners. That will replace the provisions that are currently in section 35 of the bill. Where an individual or community wants to find out if there are persons with a controlling interest in a landowner, they will be able to consult the new register. In any case, if an individual or community were to make a request under the current provisions in section 35, they would have to show that they were being affected by the land, as the regulation-making power only allows provision to be made for access to information by persons affected by land. Exactly what information would need to be provided and how that information would require to be presented in the application would be best set out in the regulations, as the detail of the process is developed through consultation. Section 35(2)(c) makes it clear that any regulations could specify the circumstances in which a person affected by land could make a request, and paragraph (d) would allow for the regulations to set out the form and content of requests. The bill as drafted already makes sufficient provision for any requester to have to provide reasons for making the request. Therefore, amendment 104 is unnecessary, and I ask Alex Fergusson not to move it. Before I speak to Graeme Dey’s amendments 29, 30, 36 and 69 and Sarah Boyack’s amendment 30A, I would like to put on record that I welcome the intention behind Graeme Dey’s amendments. As we have heard, it is clear that we are all absolutely committed to achieving greater transparency of land ownership in Scotland, so it would probably be helpful for me to outline to the committee the approach that the Government is planning to take to strengthen part 3 of the bill. We believe that, in principle, it is possible to increase the transparency of land ownership in Scotland through requiring the public disclosure of information about persons who control land. I would therefore like to reconfirm to the committee that the Government will lodge amendments at stage 3 in the form of a power to make regulations to provide for the creation of a public register that will contain the information that is required to provide greater transparency on who controls the land in Scotland. As the committee is aware, providing greater transparency of land ownership gives rise to many complex legal issues that we have been trying to work our way through, most notably the right to free movement of capital under EU law—which has been mentioned already—and the interaction with rights that are protected under the ECHR. There are also considerable practical difficulties to overcome in ensuring that we provide a robust and viable solution that will provide the greater transparency of land ownership that we all seek to achieve. We are confident that we can map out the overall scope of a requirement to provide such information in a public register that will allow us to produce a regulation-making power at stage 3. Some issues that we are looking at include what information should be disclosed and in what circumstances disclosure should be required; how any requirement to provide the information would interact with registration law and our commitment to complete the land register; how the information should be obtained and kept up to date; fees and charges; what provisions would be necessary to protect the legitimate interests of individuals in maintaining their privacy; whether there should be any exceptions on de minimis grounds—for example, flats and houses owned by private individuals; how requirements to disclose and update information could be enforced; and how we could ensure that landowners could not avoid the disclosure requirements. As part of all that, we will consult key stakeholders. Given the significance and importance of the proposed regulations and the details of the proposed register, it is important that the Government consults widely on them. This policy development and consultation cannot be carried out within the timetable for the bill, given that we have only a number of weeks between now and March. Therefore, introducing a regulation-making power will allow further policy work to be undertaken on the issues that I have outlined and further consultation to be carried out so that we can introduce detailed regulations at the earliest opportunity in the next session of Parliament. The Government recognises the concerns that both the committee and the Delegated Powers and Law Reform Committee have expressed in relation to regulation-making powers being taken in the bill. Given those concerns, I confirm that the regulation-making power that will be brought forward at stage 3 will be subject to an enhanced form of parliamentary procedure to ensure that there is an appropriate level of scrutiny when the regulations are introduced in the next session of Parliament. Because it plans to introduce the proposed regulation-making power at stage 3, the Government does not feel that it will be necessary for the current provisions in section 35 to remain in the bill. If information about persons in control of land was publicly available, there would be no need for people to make requests for information on persons with control over land on a case-by-case basis. That is why the Government has not lodged any amendments to section 35 at stage 2 but will lodge amendments at stage 3 to remove section 35 from the bill, replacing it with the new regulation-making power. In the light of our proposals to introduce the regulation-making power, it will no longer be necessary for the keeper to request information about individuals with a controlling interest in landowners. Therefore, we will lodge appropriate amendments to section 36 at stage 3. Section 36 also enables regulations to be made to allow the keeper to request information about the category of landowners, and it is the Government’s intention to retain those provisions in the bill. Having information about the category of landowners will be very useful in establishing further information on the pattern of land ownership, which will help in developing policies on the use and management of land. 13:00 The amendments in the name of Graeme Dey outline a potential scheme for disclosing the names of persons with significant control on the land register. It is clear that significant consideration has been given to those proposals. I also put on record my thanks to Community Land Scotland, Global Witness, Megan MacInnes and Peter Peacock for all the work that they have done in the area. Amendment 36 seeks to remove the current provisions in section 36. I highlight to Graeme Dey that amendment 36 would remove an important power enabling the keeper to request information on the category of landowners that amendment 30 would not replace. Amendment 30 provides for the disclosure on the land register of the names of persons with significant control in relation to proprietors on the land register. The amendment would constitute a fundamental change in the purpose of land registration in Scotland. As we know, the land register plays a pivotal role in the Scottish conveyancing system by providing the mechanism for a person to obtain the real right in land, so the existence or otherwise of a “person in significant control” is not required under Scots property law for the legal rights that are created by registration. The amendment also restricts the potential for disclosure to land that is registered in the land register, and only 28 per cent of the landmass of Scotland is currently on the land register. The Government’s proposal to legislate for a separate register of controlling interests early in the next session of Parliament potentially avoids unnecessary consequences for registration law and leaves open the potential for the new register to include information about controlling interests in land that is still held on a sasine register title. In response to concerns that separate registers will mean that it will be more difficult to access information, I highlight the development by Registers of Scotland of a digital land and property information system—Scotland’s land information system, or ScotLIS—which is due to be launched in 2017. The system is intended to allow information from all the different registers and sources that relates to the same land to be disclosed in a single inquiry, so it should be easy to access information about controlling interest in landowners alongside details of the legal title to land that is held in the land register. In order to identify persons with control over land, one first needs to clearly identify the legal owners of land. One of the measures that Registers of Scotland is taking to increase the transparency of land ownership in Scotland is the completion of the land register by 2024. Any measures that are introduced to identify individuals who have a controlling interest in landowners must be considered alongside that commitment to complete the land register and may have significant impacts on the ability of both voluntary registration and keeper-induced registration to meet the 2024 target. The effect that amendment 30 would have on the keeper’s current work on completion needs to be considered further. We understand the intention behind amendments 29, 30 and 30A, and given that a series of major amendments will be lodged at stage 3, I do not oppose those amendments. I reiterate my absolute commitment to work closely with the committee as we develop effective and competent proposals that will allow for the development of a public register of controlling interests in landowners to be brought forward at stage 3. Given the work that has gone into amendments 29, 30 and 30A, I want to work with the committee in this area to produce the amendment that we will lodge at stage 3. I also say to Graeme Dey that, although we do not oppose amendment 30, we have some serious concerns with it. Its drafting does not provide appropriate protections for individuals’ rights to privacy under article 8 of the ECHR. For example, the amendment does not require a proprietor or the keeper to remove a person’s name from the title sheet when that person has ceased to be a person of significant control. It would not be reasonable for information about a person to continue to be disclosed if they are no longer a person of significant control. The amendment also does not provide an appropriate means for a person of significant control to engage with the keeper on whether the information disclosed is correct or to assert why the information should not be disclosed for legitimate privacy reasons. Amendment 30 also provides that churches are to be excluded from the obligations to disclose information. I am not clear what the basis for that is. In the absence of further justification for that measure, I am concerned that it would give rise to issues under article 14 of the ECHR concerning the prohibition of discrimination. My intention is that the regulation-making power that we will introduce at stage 3 will be capable of being exercised in a way that is within the legislative competence of the Parliament and compatible with EU law and the ECHR. I welcome the intentions behind Patrick Harvie’s amendments 105 and 106 and Sarah Boyack’s amendment 106A. When the land reform review group recommended that only legal entities registered in a member state of the EU should be able to own land in Scotland, the purpose of that was said to be that it would increase the transparency and accountability of land ownership in Scotland. It is evident that we are all committed to increasing the transparency of land ownership in Scotland, but perhaps we have differing views on how that can be achieved. The Scottish Government believes that our proposal to lodge amendments at stage 3 for a regulation-making power that will provide for a public register of persons that have a controlling interest in landowners, taken together with the measures by the Registers of Scotland to complete the land register by 2024 and set up Scotland’s land information system, will significantly increase the transparency of land ownership in Scotland. We carefully considered the land reform review group’s EU legal entities proposal, which amendments 105, 106 and 106A attempt to implement. However, I strongly believe that the proposal and the amendments would fail to increase significantly the accountability and transparency of land ownership in Scotland and that they are, in fact, outwith the competence of the Parliament. My officials wrote to the committee on 10 September setting out the Scottish Government’s analysis of the EU legal entities proposal, and I restated the Government’s position in my evidence to the committee when we were in Dumfries in November. There are varying requirements in relation to the transparency of legal entities in the EU. We are not convinced that simply setting up a shell company within the EU, the shares and directors of which could still be based in offshore tax havens and obscured through complex corporate structures, would provide the greater transparency of land ownership that people who support the EU legal entities measure suggest that it would achieve. Some stakeholders support the proposal because they perceive that it would prevent land in Scotland from being owned by companies that are based in tax havens. We also have to bear in mind the fact that the Scottish Parliament has limited competence to legislate in relation to reserved taxes such as capital gains tax, inheritance taxes and corporation taxes. That means that, if the purpose of a measure is to prevent tax evasion or the avoidance of reserved taxes, that measure would be outwith the competence of the Scottish Parliament.