Most notably, those are the definitions that are used in the legislation on the register of people with significant control of UK companies.
Another key area on which we will have to consult and develop proposals is in relation to which landowners will be required to provide information. The Scottish Government intends that the information will have to be provided where the landowner is a legal entity, such as a company or a Scottish limited partnership, or where an individual is the owner of the land but holds the title to land under a special capacity such as a trustee.
One advantage of Government amendment 34 over section 35A, which was inserted into the bill at stage 2, is that the regulations can require the disclosure of information about persons who have a controlling interest in landowners or tenants in respect of all legal titles in Scotland. Section 35A requires disclosure of information only in relation to land that is registered in the land register, which accounts for only 28 per cent of the landmass of Scotland.
The Government is determined that the Parliament will have full opportunity to scrutinise the regulations effectively. Therefore, amendments 35 to 37 provide that the regulations will be subject to an enhanced form of parliamentary procedure on the first use of the power. Amendment 34 provides that the regulations will be subject to the affirmative procedure, but amendment 35 provides that, on the first use of the power, the Scottish ministers cannot lay the first draft regulations unless the ministers have complied with the consultation requirements that are laid out in amendment 36 and unless the proposed draft regulations and an explanatory document have been laid before the Parliament.
Amendment 36 provides that the proposed draft regulations must be laid in the Scottish Parliament for 60 days and be accompanied by a draft explanatory document. The Scottish ministers must consult the keeper and such other people as they consider appropriate, who must be provided with a copy of the proposed draft regulations and the draft explanatory document. That means that the Parliament will have the opportunity to scrutinise and make recommendations on the proposed draft regulations.
In addition, the public will also be able to make representations to the Scottish ministers on the proposed draft regulations. Only after that consultation has been carried out can the first draft regulations be laid before the Parliament. When the first draft regulations are laid they will be subject to the normal affirmative procedure, giving the Parliament a further opportunity to scrutinise them and take evidence from ministers.
Amendment 38 removes section 35A from the bill. The Government believes that introducing regulations is the best way to ensure the transparency of land ownership that we all want. We must also put on record that section 35A, as it stands, is outwith the legislative competence of the Parliament and it must be removed to ensure that the bill can proceed to royal assent.
Amendment 94 provides that all uses of the proposed regulation-making power in the new section introduced by amendment 34 will be subject to the affirmative procedure. Amendment 95 provides that section 101 of the bill is amended to refer to the new section introduced by amendment 34 and so exempts the Crown from being criminally liable in respect of breaches of the requirements of the regulations made under that new section. That is simply a consequential change.
The Scottish Government believes that these amendments provide the best way forward to deliver transparency of land ownership in Scotland and we recommend them to the Parliament. We urge the Parliament to support the amendments.
We thank Sarah Boyack for lodging her amendments and acknowledge the work that has gone into drafting them. I reiterate that the Scottish Government is committed to increasing the transparency of land ownership in Scotland and will introduce regulations that will provide for the disclosure of information about persons having a controlling interest in land
The Scottish Government will publish a consultation this summer on developing proposals for the regulations. The responses will be helpful to inform the drafting of the regulations, which will need to be laid before Parliament, as required by the enhanced affirmative procedure that will be inserted into the bill by amendments 35, 36 and 37.
Alongside the parliamentary and public consideration of the regulations, and the practical issues highlighted in a letter from the minister, Dr McLeod, to the Rural Affairs, Climate Change and Environment Committee on 3 March, the Government will be working on the practical arrangements to give effect to the regulations. Our intention is that the regulations will be approved by the Parliament by the end of 2017.
I will now address Sarah Boyack’s amendments.
Amendment 34A seeks to provide that ministers must make regulations. Government amendment 34 currently provides that ministers may make such regulations, which is the normal formulation for affirmative regulations. The Scottish Government is clearly on the record as saying that it will make regulations, but in such exceptional circumstances and with such a clear level of support for our proposals we are willing to support amendment 34A.
Amendment 35A would require the Scottish ministers to lay a draft of the first regulations to be made under the new section proposed by amendment 34 within 18 months of the bill receiving royal assent. A duty such as that proposed by amendment 35A could mean that to comply with the duty ministers would have to make regulations that did not provide for the full policy. A further set of draft regulations would then be brought forward at a later date containing the remaining policy detail. It would only be after those second regulations were made that the full scheme could come into force.
Alternatively, if a draft of the first regulations was not laid before the Parliament within the 18-month time limit, amendment 35A could have the effect of not allowing a draft to be brought forward at all after that time. That could prevent the government from making regulations. The Government will make draft regulations for approval by the Parliament. Therefore, amendment 35A is not required and we ask Sarah Boyack not to move it, given the commitments that we have made on timing.
Amendments 34B, 34C, 34D and 34G seek to replace the words “a controlling interest in” with the words “significant control in relation to”. We do not think that the change is necessary. What is meant by a person having a controlling interest in landowners or tenants will be set out in the regulations that will be made under the new section proposed by amendment 34. The definition will be designed to enable the policy objective of increasing the transparency of land ownership in Scotland to be achieved. The definition will not be constrained by the use of the term “controlling interest” in other legislation. We ask that Sarah Boyack does not move the amendments.
Amendment 34E would mean that the matters that the regulations could provide for might include duties associated with the provision of information. The regulation-making power in new subsection 1(a) that is proposed by amendment 34 already refers to the regulations requiring the provision of information, and new subsection (2)(d) already refers to the information that must be provided under the regulations. Therefore, amendment 34E is not required and we ask that Sarah Boyack does not move it.
Amendments 34F and 34H would limit the circumstances in which a person can request that information about them is not published. Although new subsection (2)(h) provides that regulations may set out circumstances in which information does not have to be published—and it provides that the circumstances in which a person may request that information not be published may in particular include those in which publication may result in serious risk of violence or abuse, threat of violence or abuse, or intimidation to a person—it does not require that the regulations provide that that is a circumstance in which a person could request that information not be published. Careful consideration will have to be given to determine whether the regulations should provide for such circumstances. I ask Sarah Boyack not to move amendments 34F and 34H.
Amendment 34I seeks to provide that the regulations under new subsection (1) may provide that the information about controlling interests be available on the internet and searchable by the public. The regulation-making power in new subsection (1) expressly provides a power to make regulations about the publication of information in a public register. The regulation-making power is wide enough to allow regulations to be made about access to the public register. The Government is committed to providing digital public services and we do not consider that these amendments to provide for online access are necessary. I ask Sarah Boyack not to move amendment 34I.
Amendment 34J provides that regulations made under new subsection (1) cannot be used to amend the regulation-making power in that subsection. It would be very difficult to use the regulation-making power in the new subsection to amend itself, as the regulations would have to be within the scope of that power. We do not want there to be any uncertainty as to the validity of the regulations and so do not intend to make regulations amending the regulation-making power. Amendment 34J is not appropriate and is unnecessary, and I ask Sarah Boyack not to move it.
Amendment 37A appears to be designed to clarify that the Scottish ministers can include summaries of responses to the consultation in the explanatory document that has to be laid before the Parliament under amendment 35. There is no limit on the Scottish ministers using the information provided in representations in developing the regulations and reporting in general terms on the representations made, even where that is restricted under the terms of new subsections (2) and (3) proposed by amendment 37. As a result I do not consider that amendment 37A is required and I ask Sarah Boyack not to move it.
Patrick Harvie’s amendments 103 and 104 are the same amendments that he lodged at stage 2. They aim to provide that only legal entities that are incorporated in the European Union could be registered as the proprietor of land in the land register of Scotland. The amendments were debated and voted on at stage 2, when they were rejected by the Rural Affairs, Climate Change and Environment Committee.
Amendments 105 and 106 seek to prevent the registration of title to land in the land register by entities that are incorporated in the British overseas territories, as defined in the British Nationality Act 1981, or in the Crown dependencies of Jersey, Guernsey and the Isle of Man. Amendment 106 sets out that entities that are incorporated or established in the British overseas territories or the Crown dependencies and already have a title registered in the land register must take such steps as are necessary to ensure that they are no longer the registered proprietor five years after the date that amendment 106 comes into force.
Amendments 105 and 106 have the same effect as amendments 103 and 104, but the entities that would be affected would be very different.
At stage 2, the Minister for Environment, Climate Change and Land Reform said that the amendments lodged by Patrick Harvie in relation to EU entities would not achieve the transparency of land ownership that is wanted and that the amendments were outwith the legislative competence of the Scottish Parliament. For the same reasons that were given at stage 2, we consider that amendments 103 and 104 would be outwith the legislative competence of the Scottish Parliament, as they are incompatible with the rules on the free movement of capital in article 63 of the Treaty on the Functioning of the European Union.
Amendments 105 and 106 have a similar effect to amendments 103 and 104, but in relation to different types of legal entities. The difference with amendments 105 and 106 is that they restrict legal entities that are incorporated or otherwise established in British overseas territories and Crown dependencies from registering title to land in the land register. The amendments appear to target the British overseas territories and Crown dependencies, some of which are referred to as secrecy jurisdictions.
As I hope that we have clearly set out today, the Scottish Government is committed to increasing the transparency of land ownership in Scotland. It is clear that there is support across the Parliament for doing that. However, when legislating in this area we have to ensure that the measures that we put in place deliver the transparency that we all want, and that they do that in a way that is within the legislative competence of this Parliament. We understand that the purpose of Patrick Harvie’s amendments is to increase the transparency of land ownership in Scotland, but we are not convinced that they would provide the transparency that is desired. What would prevent a proprietor from re-incorporating in a country that is as untransparent as some of the jurisdictions that are British overseas territories or Crown dependencies?
It has not been demonstrated that all the countries that would be affected by the provision are secrecy jurisdictions, or that all landowners and tenants who are registered in those countries are not transparent about their ownership structures.
In addition to the minister’s concerns about the effectiveness of the amendments in Patrick Harvie’s name, we consider that amendments 105 and 106 are outwith the legislative competence of the Scottish Parliament. As I said, the amendments would not necessarily increase the transparency of land ownership, because they would not necessarily result in land being owned by a legal entity that is registered in a country that requires greater transparency. In addition, the amendments would not prevent legal entities registered in British overseas territories or Crown dependencies from being subsidiaries of legal entities that are registered in other countries.
We are committed to bringing forward, in the next parliamentary session, the regulations that will provide for a public register of controlling interests. Many legal and practical issues must be addressed if we are to bring forward effective and proportionate proposals, one of which is how we ensure that legal entities that own land and are incorporated in secrecy jurisdictions comply with the requirement to provide information. We encourage everyone in the Parliament to work with the Government when we are developing the regulations, to ensure that we can achieve the transparency of land ownership that we all want. I ask Patrick Harvie not to move his amendments 103 to 106.
I move amendment 34.