Environment, Climate Change and Land Reform Committee

Meeting date: Tuesday, October 23, 2018

Official Report 824KB pdf

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Subordinate Legislation

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Land Reform (Scotland) Act 2016 (Register of Persons Holding a Controlled Interest in Land) (Scotland) Regulations 2021 [Draft]

I welcome to the committee, for the second item on the agenda, Roseanna Cunningham, the Cabinet Secretary for Environment, Climate Change and Land Reform, and her officials. They are Pauline Davidson, who is the head of land reform policy team; Andrew Ruxton, from the Scottish Government legal directorate; and Dr Simon Cuthbert-Kerr, who is the head of the land reform unit in the Scottish Government.

Can we have an update on the development and integration of the 20 registers in Scotland’s land information service?

The most important registers for my purposes are those that are related to land reform. I understand that ScotLIS will not provide access to all 20 registers. It will include the land register, the register of sasines and the register of inhibitions—which are already available through ScotLIS—as well as a crofting register. The register of deeds and the register of judgments will be available imminently through ScotLIS. The register of persons holding a controlled interest will also be available through ScotLIS when it goes live. Registers of Scotland is currently planning how best to do that.

What work has been done to publicise ScotLIS to ensure that our citizens are aware of the availability of all that information?

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Officials are currently working closely with Registers of Scotland. An awareness-raising exercise is being planned for before the new register becomes operational, in order to ensure that people are aware of the information that will be available on the new register. It will also ensure that people who ought to register do so. The awareness-raising exercise will therefore cover both sides. It will happen close to the register going live, which we expect will be in 2021. I am not sure that raising awareness this far in advance would be particularly helpful. I suspect that people would have forgotten about it by the time the register went live, so the idea is to push it towards the point at which the register becomes live.

In evidence, several organisations talked about the difficulties in being able to access information on the register and described it as being potentially “onerous”. What work is planned or being carried out to develop a user guide? Will stakeholders be involved in that?

Officials have up to this point been working closely with stakeholders on developing the regulations and will continue to work closely on the revised regulations and on guidance. I intend to publish guidance for users, to be available when the regulations come into force. That work is being undertaken; the conversation between officials and stakeholders will continue until that point.

We will also work with Registers of Scotland on its end of things. It will do user-testing with its stakeholders, who are customers and potential users of the register, in relation to access and making the system as simple as possible to use. There will be guidance for those who will be trying to navigate their way through the system, just as there will be help for those who have to register. That guidance will be ready when the register goes live.

Do you have a timetable for laying and commencement of the regulations and publication of the guidance?

The expectation is that the register will go live in 2021, so we are not under enormous time pressure. Our consultation does not close for another couple of weeks. We will consider the results of that consultation. I am not hugely familiar with the procedure, because it is unusual. When we have analysed the consultation, we will publish revised draft regulations and will, no doubt, come back to the committee, when the committee will be able to see any changes that result from the consultation exercise. The regulations are still in draft form, and we are working on the basis that we will reach that point by autumn 2019. A year from now, the revised draft statutory instrument will be ready for the committee’s perusal.

Our expectation is that the final regulations—we are much more familiar with that bit of the process—will be laid early in 2020. Of course, the expectation is that the register will not go live until 2021, so there is quite an extended timescale.

Several members have questions on the recorded address.

People in some sections of society, for example candidates who stand for election as MPs, can ask that their home address be withheld for security reasons. People can also ask that their home address not appear on the electoral roll. Furthermore, there are data protection laws that relate to withholding of such information. What is your view on what

“recorded person’s name and address”

means in practice? Do you agree with the keeper of the registers of Scotland that it does not matter whether it is a service address or residential address? Would an email address be appropriate?

I am not sure that I agree that an email address would be appropriate. I understand why people think that that is an easy option, but we probably all have a number of email addresses that we have forgotten about or which just sit unused and unchecked. There are issues around email addresses that mean that they are not a particularly useful option. I agree with the keeper of the registers that a physical real-world address is preferable, because that gives us more certainty about notification.

I understand from the keeper’s evidence that there are pros and cons for use of service addresses versus official residential addresses. It is really just an issue of balance. There is a conversation to be had about that, but I do not think that the issues should push us towards use of email addresses, which would not be appropriate.

We all agree that we need a contact address, but there are issues—for example, when someone is fleeing a violent partner and needs their address to be kept private in order for them to be safe. I might be straying into an area that someone else wants to ask about, but there is an issue around the fact that the keeper has discretion about what she will allow. Do you agree that it might be preferable to use the address of a lawyer or a business, rather than a person’s personal address?

I mentioned that there are pros and cons. On the issue of safety that Richard Lyle has raised, there would be pros for use of a business or service address. The most obvious service address would be a lawyer’s office—that is not an unusual concept. Of course, our allowing service addresses to be used could allow people to spread their interests across numerous addresses. There are issues that would need to be unpacked and thought about quite carefully if we were to go in that direction. For example, we might say that, if a person uses a service address, they will be expected to use that same service address for everything, rather than use different service addresses for different properties.

There are questions about managing the process. The register is intended to make ownership more transparent, so we are trying to strike a reasonable balance. There are still issues to be bottomed out in that regard.

So, you have not yet made up your mind.

I am looking at all the evidence. The committee has asked me to come and give evidence while the consultation is on-going. I assume that that is because the committee wishes to be part of the consultation.

I need to see the responses to the consultation. I do not want to terrify officials by making up policy on the hoof without having discussed it with them, but one way to manage the service address issue would be to insist that a single service address be used for multiple registrations, rather than trying to have one set of solicitors dealing with one registration and a different set dealing with another. Other addresses that might be used include those of accountants and land agents. One can imagine how many potential service addresses there might be if we were to just open it up. There are still issues to be considered.

I want to explore those issues in a little more detail. Do you agree that by not recording a home or permanent address there is a risk that it would be easier for the recorded person to avoid identification? For example, would it be acceptable for an absentee landlord who visits only a couple of times a year—if that—to record an address in Scotland at which to contact them?

As I understand it, the register will be searchable by a person’s name and date of birth. That would help to get round the issue, because then we could see the various interests that were held by any single associate. Were you talking about a recorded address?

I was talking about there having to be an address in Scotland at which the person can be contacted.

I do not know what the current position on that is.

Perhaps the question was about the issue of absenteeism and the transparency of ownership in the context of the dialogue that we are having.

The difficulty is in thinking through the potential implications. This is about people who own land in Scotland, regardless of where they live.

Yes.

The recorded person is the person who is providing the information about their associates and who should be on the land register in some form, because they are registered as the owner. The new register is trying to capture the people who do not appear on the land register, including associates. As the cabinet secretary said, we are trying to strike the balance between what is appropriate and finding the right address for people who might often be absent.

That is helpful. I also want to highlight the issue of commercial confidentiality, on which we have received different views. In evidence, the keeper said that she does not think that commercial confidentiality is a justification for exemption. Do you have any comment to make on that?

I would be inclined to agree with that. I do not know how commercially confidential ownership should be. There might be issues about management details being commercially confidential, but I struggle to see why there should be anything commercially confidential about the physical act of ownership. That is probably what the keeper means.

The register would not disclose a person’s financial status or anything like that. It will be basically just name details that will be disclosed.

We must remember that the register comes directly off the back of explicit provisions in land reform legislation that we will not be able to go beyond, which will protect issues of commercial confidentiality.

Finally, on the security declaration, there has been mention of the appropriate degree of anonymity and protection for those who could be regarded as being at risk, and it was proposed that use of a unique reference number could be considered. Do you have any thoughts on that?

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That is part and parcel of trying to decide on the pros and cons of various approaches, in order to ensure that we capture the maximum amount of the information that the register is expected to capture without the consequences for some individuals being so adverse as to be perverse. We need to maintain that balance. We will keep all that under consideration.

On part 3, on the duties to provide information, you mentioned awareness raising. To ensure compliance, it is imperative that there is significant publicity in the run-up to the register going live. When the keeper gave evidence to the committee, she mentioned the possibility that someone could, inadvertently, fail to comply through ignorance of the rules. Do you agree with the keeper that there should be a grace period to allow for inadvertent non-compliance to be rectified? If so, how long should that period be?

We could not really argue against a grace period. Such a period would not be unusual. There are other circumstances in which a similar approach has been taken and it would be reasonable in this case. It is obvious that a big awareness-raising exercise will have to be undertaken. It might just not dawn on some people that the register is appropriate to them and, in some cases, people will make a genuine mistake.

I do not think that anyone wants to be in the business of hounding people who have made a genuine mistake and who have no real intent to try to fly under the radar. If I am right, the keeper said that if she came across people under those circumstances she would prod them by writing to remind them, which would allow them to rectify the situation before any criminal proceedings were begun.

We will work closely with the keeper on that, although we cannot have an open-ended timescale for the grace period. Whatever that grace period is, we would want it to be quite clear. We can have further discussion on whether the grace period should be around six months, but the period must be time limited.

If the awareness-raising exercise in the run-up to the register going live is successful, we should have got it down to only a very small number of people who might accidentally or inadvertently fail to comply.

The current proposition of a grace period of six months feels about right. As we are already raising awareness of our plans for the register, we hope that by the point that it goes live, we will not have many folk who are unaware of it.

My two questions are linked. There is a duty to provide information and the keeper can carry out some level of validation with regard to addresses that are inputted, such as a check that a postcode exists or that the date of birth is feasible. However, it is less easy to verify information and so, for example, find out whether an address is false or the date of birth is incorrect. The regulations are clear that the legal responsibility lies with the person who is registering the information.

What guidance and training will be given to the police, who, ultimately, will be enforcing the regulations?

I am sure that the police will be delighted to be advised of the purpose of the regulations, what constitutes non-compliance and so on, and officials have already been in contact with Police Scotland and the Crown Office in respect of this to ensure that the police are involved at an early stage and understand the process. We will continue to work with them as the regulations are further developed.

As I said in response to an earlier question, we are consulting on and will continue to talk to stakeholders about guidance, and that work will obviously include the police and the Crown Office. There is a job to be done in that respect, but the process gives us the time to do it. We expect that, by the time the register goes live, the police will be well aware of what is and is not required and what their responsibilities are.

I want to jump back to the question of what addresses are suitable, whether it be a home address, an agent’s address or whatever. With regard to your earlier comments, I have to wonder whether it is not all that forward looking to exclude the possibility of identifying or verifying individuals through email addresses. After all, individuals can be verified through many methods such as links and so on. Given the legal responsibility to provide valid information, there would be no point in me using, say, [email protected] as an address, because nothing would get to me and I would not be able to verify my identity. Has any thought been given to using emails to verify a registration? Moreover, could one add to the verification process by sending a recorded letter to an agent or home address, requiring a response within a set time? Would that not ensure that we got to the individual to whom the registration applied?

I hear what you say about emails, but I am still not confident that they give us the kind of confidence that we are looking for. As I have indicated, people have a multiplicity of emails, some of which are not checked and can go into disuse. We do not feel at this stage that an email has enough security—

I am sorry to interrupt, but I am talking about the public-facing side of the register. As Claudia Beamish suggested, there might be some reference back to an actual physical address, but that information would not need to be in the public domain.

At the moment, I am not convinced that email is the way forward. I know that it seems a bit retro, but as far as everyone’s confidence in the system is concerned, I do not think that it is quite the right direction to go in. That is not to say that it might not become more so in future.

You mentioned the use of recorded letters. With a letter, it would certainly be possible to require a response within a set time, but with an email, you would not even know whether it had reached the person whom it was meant to reach. That is an issue. There is no doubt that validating addresses is also an issue, but it might be extremely difficult to apply that to absolutely everyone. It could make the whole process incredibly unwieldy. There is a certain amount that we will be taking on trust, because there is really no other way of doing this. If we had to validate every contact address, the cost of operating the register would probably spiral out of practical management. This is all about maintaining the balance between what is appropriate and practical and what is effective.

Finally, we have a couple of questions on non-compliance sanctions, starting with Mark Ruskell.

Is the five-grand fine an appropriate deterrent for non-compliance, or is there a danger that it will become the price of anonymity?

That is based on the assumption that everyone on the register would be so wealthy that a potential £5,000 fine would not be a huge issue. However, such an assumption is itself based on a misunderstanding: this penalty is actually about the nature of the crime, not the financial interests of the person who has committed it. That is how these penalties are arrived at across a whole range of criminal activities. The fine is up to £5,000—that is the normal way of expressing it—and it remains to be seen whether there are people who think that that is a price well worth paying. I do not think that there is any evidence of that at the moment.

We should not forget that it is a criminal matter. Non-compliance, even if it is not considered a huge issue financially, would nevertheless leave someone with a criminal record.

What would be the practical implications for a landowner of having a criminal record in such cases?

It would depend on the individual owner’s circumstances. It would be different depending on what the owner did and did not do, and so on. I could not really answer that question in the absence of an individual criminal case and an individual accused. For some accused, that would be a pretty serious issue, regardless of the matter involved. I would expect that most people do not want a criminal record.

So, if somebody was a director of a company, for instance, and needed to be a fit and proper person—

All those things come into account, yes.

That would compromise them.

Given that the prosecution would take place against a backdrop of somebody seeking to maintain the anonymity of their connection to a particular property, would the prosecution itself not reveal that connection?

That is a very good question.

That would thus remove the privacy that the individual sought and would therefore remove any reason for them not to register. However, that could be obviated if the court decided to hold the case in private, which I could imagine it might do.

Nonetheless, would you expect that the verdict of the court, if someone was found guilty, would be put on the record, thus removing the anonymity that was being sought?

That is not a question that I can answer, for obvious reasons. I may be wrong—I do not know whether anybody wants to chip in on the justice side of things—but I would be surprised if a prosecution proceeded on the basis of anonymity in those circumstances. I would certainly be surprised if a conviction proceeded on the basis of anonymity.

It may be, depending on the circumstances of the individual person, that lawyers could argue that there were reasons why anonymity should continue to apply, but I am not in a position to answer with a definitive yes or no regarding those circumstances, because that would probably be a matter for the court at the time.

Would the Government consider amending its proposals so that, upon conviction, the interest would then be recorded on the register, whether the person concerned wished that to happen or not?

We will take that question on board and have a think about it. It is a fair point. The discussions with the Crown Office in particular could perhaps be extended to include that particular aspect. In the normal course of events, that would be a matter for the court at the time. Whether or not we would be in a position to bind that in advance is a question that we will need to have a think about.

Or at least empower the court so to do.

Yes. It is an interesting point, and we will take it on board.

I believe that we have asked all our questions. I thank the cabinet secretary and her officials for coming to give us evidence.

At its next meeting, on 24 October, the committee will take evidence from the Minister for Rural Affairs and the Natural Environment on the Scottish Government’s proposal to consent to the UK Government legislating using powers under the European Union (Withdrawal) Act 2018 in relation to the UK statutory instrument proposals for the Greenhouse Gas Emissions Trading Scheme (Amendment) Regulations 2018.

I request that the public gallery be vacated as the public part of the meeting is now closed.

12:30 Meeting continued in private until 12:54.