Land Registration etc (Scotland) Bill: Stage 1
The next item of business is a debate on motion S4M-02304, in the name of Fergus Ewing, on the Land Registration etc (Scotland) Bill.
13:34
I thank the Economy, Energy and Tourism Committee for its thorough and collaborative scrutiny of the Land Registration etc (Scotland) Bill. I also thank the Scottish Law Commission for its excellent work in developing most of the policies that appear in the bill, and I thank those who have given oral and written evidence to the committee at stage 1.
The Land Registration (Scotland) Act 1979 introduced a modern map-based land register that provides clear information about land ownership, backed by a state guarantee to title. However, since rights on land began being registered in the land register, only 55 per cent of properties have been so registered. The bill will replace most of the 1979 act with a piece of 21st century legislation that will provide for completion of the land register and will place on a statutory footing the practices of the keeper of the registers of Scotland.
The bill also addresses legal tensions that have caused confusion and uncertainty for property owners since the introduction of the land register, by realigning registration law with general property law in Scotland.
In addition to those primary purposes, the bill has two significant secondary purposes. The first is to introduce a system of advance notices for use in conveyancing transactions, and the second is to amend the Requirements of Writing (Scotland) Act 1995 to allow electronic documents to be legally valid and to enable electronic registration of those documents.
I have followed the committee’s stage 1 deliberations on the bill and commend committee members on their diligent and thorough report. The report requests clarification of a number of matters. The committee asks for clarification of what was meant when I said in my evidence to the committee:
“there will be no keeper-induced registration of large and complex land titles in this parliamentary session”.—[Official Report, Economy, Energy and Tourism Committee, 8 February 2012; c 949.]
I confirm that, if resources allow it, Registers of Scotland may use the power to register titles within research areas, which are predominately urban areas, such as flats and houses.
The committee also asks whether a fee will be payable for keeper-induced registrations. I confirm that no fees will be charged for such registrations during this parliamentary session, although the bill will allow fees to be payable for keeper-induced registration.
The use of time-and-line fees has been raised. At present, fees are charged mainly on an ad valorem basis. I confirm that we are not considering moving to time-and-line charging for the majority of registrations. However, time-and-line charging may be considered for complex registrations of high-value properties. It is under consideration in relation to services such as the keeper’s pre-registration title investigation service. I assure the Parliament and the committee that the Scottish Government will consult stakeholders before introducing a fees order, which would be subject to affirmative procedure.
The committee’s report recommends including in the bill aspirational targets for completion of the land register. I understand the importance of the aim, but do not favour that approach. On top of the extra triggers for registration that are in the bill, completion could be accelerated by keeper-induced registration and by promoting voluntary registration. The keeper and I are doing all that we can to encourage voluntary registrations. On keeper-induced registration, the keeper has shared with the committee her initial thinking on how to take the issue forward, and work to develop that is proceeding.
I will pass the committee’s comments about mapping to the keeper’s mapping working group, and I will ensure that the keeper writes to the committee with an update from that group.
I would like to reaffirm my commitment to lodge at stage 2 an amendment that will remove the requirement to prove that there has been seven years of abandonment of land before a person can become a prescriptive claimant under the bill. The committee recommends that the Scottish Government consider introducing a public process of advertising abandoned land. We feel that there are pros and cons to that suggestion. I will, therefore, consider the proposal further, in advance of stage 2.
I welcome the committee’s view that it is content for the new statutory offence in section 108 to remain in the bill. The committee has heard much evidence in relation to the offence provision. In particular, I note the Law Society of Scotland’s opposition. As part of my on-going consideration of the provision, I have written to the president of the Law Society to request further information on fraud involving solicitors. The aim of the offence provision is to disrupt serious organised crime and to criminalise individuals who knowingly use the land register to facilitate criminal behaviour. It is not the Government’s intention to criminalise honest solicitors who make genuine errors in applications for registration. The keeper and the Solicitor General have told me that they will work with the Law Society of Scotland to help to provide guidance to the legal profession.
In view of the concerns that the committee has expressed in its report, the Government will carefully consider in advance of stage 2 whether amendment to section 108 is appropriate. There has been some debate about whether one or two advance notices are required when a disposition and standard security are being granted. In those circumstances, two advance notices will be required if the lender wishes fully to protect the standard security. That is the scheme that was devised by the Scottish Law Commission and the Government is satisfied that it is simple and that it will work.
On the provisions on shared plot title sheets, it appears that there are differing views in the evidence that the committee received on the policy. The aim of the policy is to clarify who owns land and to assist conveyancing practice so that a deed has to refer to only one title number. This is a complex subject, so I will provide an in-depth answer in my written response to the committee’s report.
The committee specifically asked in its stage 1 report for clarification of certain miscellaneous matters that were raised by stakeholders. I do not propose to address those fully in my opening speech, due to the technical nature of many of those matters, but I am happy to speak about them later, if members wish it.
I move,
That the Parliament agrees to the general principles of the Land Registration etc. (Scotland) Bill.
13:41
I declare my interest as a member of the Law Society of Scotland.
As convener of the Economy, Energy and Tourism Committee, I mention that the committee recommended to Parliament that it should agree the general principles of the bill.
As the minister did, I acknowledge the work that has been done by the Scottish Law Commission—initially by my old friend Professor George Gretton—in its comprehensive consultation on the first draft of the bill. I thank all those who gave oral evidence or submitted written evidence to aid the committee’s consideration, and I thank the committee’s clerking team for all their assistance on what is a very technical subject. I also thank the committee’s adviser, Professor Kenneth Reid, who was able to put in layman’s terms, for the benefit of committee members, some of the issues that are addressed in the bill.
Last, and by no means least, I thank all the committee members for their hard work and engagement on the bill. It is fair to say that for the non-lawyers on the committee—which means everybody apart from myself—the prospect of dealing with the bill was probably not greeted with the greatest of enthusiasm at the outset, but as we got into the subject, some of the issues stimulated some debate and, I hope, interest.
As the minister said, the bill represents a much-needed update to, and extension of, existing legislation. Although it is comprehensive and very technical in parts, there are some areas that are of real interest to people in Scotland. There is much to be commended in the bill; for example, the move to the use of e-documents, the closure of the register of sasines so that we have one land register rather than two, and the introduction of advance notices.
However, the committee considered that a number of areas of the bill could be improved upon. I will comment on those in the time that is available to me. My first point relates to the key policy aim of the bill, which is completion of the land register. The key powers that are aimed at increasing land registrations are, first, increased triggers for first registration of land and, secondly, voluntary and keeper-induced registrations. We know that only about 21 per cent of the land is currently on the land register and that there has been slow progress since the Land Registration (Scotland) Act 1979, so the committee welcomes the powers to increase land registration, but we have some concerns about how the powers might work in practice.
A key method of increasing land registration is voluntary land registration. The committee heard a lot of support for voluntary registration and heard that a similar method of registration has been used successfully in England and Wales, where a reduced fee has been used as an incentive. Given that the approach would be key in achieving the objective of a complete land register, and given that we learned that Registers of Scotland has reserves of about £75 million, the committee asks the minister to consider introducing incentives to encourage voluntary registration, particularly in complex cases.
Keeper-induced registration will give the keeper the power to register land without an application from, or notification to, a landowner. The committee had concerns about how that might work in practice. Which land would be subject to keeper-induced registration? When would registrations begin? What fees would be payable? I am grateful to the minister for the clarity that he has provided on some of those issues.
Another issue is that even if there is no fee, expense will be occasioned to landowners in checking the land register and the work that has been done by the keeper. It must be borne in mind that even with a zero fee the exercise is not without cost to landowners.
I will consider further and respond in due course on reduced fees for voluntary registration. Does Mr Fraser agree that there is an incentive for voluntary registration of, for example, large landed estates, because the current ad valorem fee does not reflect the actual cost to the keeper of carrying out the work for those complex cases? Therefore, there is an incentive to landed estates and even to large estates that are held in the public sector, such as Forestry Commission estates, to take advantage of what might be regarded as bargain-basement fees, according to the existing table.
The minister has made a fair point. In his opening speech he mentioned the proposal to introduce time-and-line fees. Higher costs would potentially act as a disincentive, so he is right to say that the current arrangements are more beneficial and might encourage voluntary registration.
It is worth bearing it in mind that the biggest landowner in Scotland is probably the Scottish Government, through its various agencies. Many public agencies and charities also hold large tracts of land. When we talk about landowners, we are not necessarily talking about people who have large resources at their disposal.
The committee considered the high cost to the public of trying to resolve disputes, given that the keeper cannot adjudicate where there are competing claims. The committee heard a lot of evidence about the high costs to the public of having to resolve land registration disputes through the court system. I was interested to read in The Scotsman this morning that our erstwhile First Minister, Lord McConnell, has been embroiled in a court action with his elderly neighbour over ownership of a coal shed in the boundary of his garden, which perhaps demonstrates how issues can get blown out of proportion and the cost of resolving them through the court system can be disproportionate to the value of the land involved. The committee suggested that a lower-cost option would be to use the Lands Tribunal for Scotland to consider boundary disputes.
I do not want to interrupt the flow of Mr Fraser’s speech too frequently, but I ask him—as one solicitor to another—whether it is fair to say that the high cost of disputes has more to do with solicitors’ fees than with the keeper’s fees.
That is a fair point, although I am sure that when Mr Ewing was in practice he was very reasonable in the fees that he charged—as, indeed, was I.
The offence in section 108 probably caused the most heat in the evidence that the committee heard. The committee heard that it is a significant additional measure to tackle serious and organised crime, specifically in relation to mortgage fraud, but we also heard a lot of evidence that the scope of the offence is too wide and could cover genuine mistakes by solicitors. Section 108 does not mention fraud, even though it is intended to deal with fraudulent behaviour, and it provides no detail on what solicitors need to do to ensure that they are not prosecuted for recklessness.
The committee welcomed the minister’s commitment to consider the wording of section 108, with a view to providing much-needed clarity, and I welcome his comments about consultation of the Law Society of Scotland on the provision.
The committee raised other issues, which I do not have time to cover in detail. I will briefly mention prescriptive claims. The majority of the committee took the view that the Government needs to consider a more public process for advertising land where there is an application for prescriptive acquisition. I and one other member of the committee dissented from that view, but I acknowledge that the issue generated much public interest.
My time is almost up, so I say in closing that the committee said unanimously in its report that completion of the land register of Scotland is a worthwhile objective. However, we believe that the register should not be completed at the expense of quality; that is an important point to bear in mind. We hope that the bill and our report’s recommendations will go a long way towards increasing the number of land registrations. We therefore commend the bill to Parliament.
13:50
I associate myself with the thanks that Murdo Fraser and the minister offered to those who provided evidence to and assisted the committee. The bill is largely technical, so that assistance was very much required and appreciated.
Much of the bill has been well received and is widely recognised as being required to improve the land registration process. The bill is largely technical, but it raises some policy issues, and it is disappointing that those issues have not been properly thought through.
There was an opportunity to continue the land reform process that the Labour Party started. In coalition with the Liberal Democrats we made a lot of progress, but there is much left to do. In opposition, the Scottish National Party signed up to many such reforms, so it is disappointing that it has not taken up the baton and continued to push forward.
One omission from the bill is on the need to register the beneficial owner of property or land. Much of the land reform legislation was based on the need to know who owns estates in Scotland. If land was owned by a company that was registered in Liechtenstein and those who lived and worked on that land could not speak to the owner, they would be unable to develop economically.
Is it the Labour Party’s position that only companies or individuals who are resident and domiciled in Scotland should be able to buy land in Scotland?
No. If Mr MacKenzie listens to the points that I will make, he might understand where I am coming from.
The land reform legislation was based on the need to know who owns land. The right to buy was introduced to allow communities to take economic drivers into their own hands. If a community cannot speak to a landowner, it can at least take back the drivers for itself. However, not every community is able or wishes to do that, so it is important to know who owns the land on which people live and work.
Registration of the beneficial owner would cut the opportunity for people to use land ownership to cover illegal or fraudulent dealings, such as money laundering and tax evasion. Andy Wightman suggested that, in order to own land in Scotland, a company should need to be registered in the European Union and therefore subject to EU legislation. Large global organisations normally register a local subsidiary when starting a business, so that would be no barrier to them. However, the committee heard that the owner of an EU-registered company could easily be a company that was registered somewhere else in the world. The proposed approach would give a signal, but it would not in itself close the loophole.
On the other side of the argument, beneficial ownership needs to be registered in a way that does not unreasonably delay registration or, indeed, restrict registration and ownership to those who are in Scotland. The minister had and still has the opportunity to examine that further before stage 2, so I urge him to consider how we can register beneficial ownership to make land ownership in Scotland much more transparent, so that people who live and work on the land know who owns it.
Probably one of the most contentious areas of the bill is the amendment of legislation on prescriptive claims. Currently, when land has no clear owner and has been abandoned, it can be prescriptively acquired—basically, people can take ownership and register the land to themselves after a period. A process for bringing apparently unowned land back into economic use without the owner’s permission is required. If that cannot be done, development will stall.
However, the system that is currently in place allows unscrupulous people to land grab. If such people see that land is unused, they can go through the process to acquire it for themselves and sell it on when they have a clear title. The bill will tighten the process and make it longer—the land will need to have been registered for 10 years before ownership is conferred—which is an improvement. As the minister said, the bill provides that such land must have been vacant for seven years prior to registration. I welcome his intention to amend that provision, because clarifying the position for that length of time is seen as being extremely difficult.
We need a mechanism to deal with land that has no owner, but the current system is open to abuse. We need to go back to first principles to develop a way forward. The current system is used when there are mistakes in the register; when, for example, a strip of land has not been registered properly and when land is ownerless. We should have different systems to deal with those issues. When there are mistakes, the keeper has the power to amend the land register and to rectify them, but we also need a dispute resolution system. If the owner of land cannot be traced, however, we need another process that will allow the land to be brought back into use but will also ensure that it cannot be abused. That process must also ensure that the land is put to the best use for the public interest. The process must have checks and balances, and every effort must be made to trace the true owners and to ensure that, if an owner does come forward, their property will be reinstated to them or that they will, at least, be compensated.
We also need to consider mechanisms to register common land. No organisation has a duty to do so, which leaves such land open to prescriptive acquisition. The committee has suggested that public bodies, such as local authorities, should have a duty to register common land to protect those areas for their communities.
There are several types of common land, such as commonties, land that is bequeathed to the community, and land that has been purchased by the community. I am sure that there are many other variations on that theme. Land being purchased by the community is a relatively new concept and I am sure that most such land will already be properly registered. Commonties are an ancient form of community land ownership and there are very few left because of acquisition of land, so we need to move to protect those that are left.
Land that has been bequeathed in the past is also difficult to identify, but it needs to be registered for protection, so the Government needs to give that issue more consideration before stage 2.
In order to identify the owners of land, the register needs to be accessible to the general public. We need the register to be available electronically and for that access to be affordable for the general public so that people can scrutinise the register to ensure that they know who owns their land.
The bill is required and it has been widely welcomed, but the Government is missing an opportunity to do something radical that would make a difference to land ownership in Scotland. It is not too late and I hope that the Government will take up the challenge before stage 2.
13:57
It is a challenge to bring some verve and spice to the issue of land registration. The subject does not brim with pulsating excitement. Things were a lot more colourful when buyer and seller exchanged clods of earth to reflect the sasine of acquired ground. I declare an interest as a former solicitor who practised conveyancing.
All the complex, technical and rather dry environment surrounding registering a title to heritage in Scotland should not blind us to the important function of giving a purchaser or an existing landowner a good title in law, and a secured creditor a good security. Without those components being delivered in an efficient and cost-effective process, much domestic conveyancing could grind to a halt and, on the commercial front, Scotland could become an unattractive destination for doing business. In modernising and improving the function of land registration, an important balance has to be struck.
My party accepts the need for that modernisation and, within the constraints of the time I have available, I will restrict my comments to the particular areas on which I would like the minister’s input. I also pay tribute to the Economy, Energy and Tourism Committee. I found its report to be very informative and helpful.
The objective of completing the land register is essential and the statutory changes that are proposed to achieve that are positive. However, if voluntary registrations are cut off at the pass by excessive registration fees, progress will not be made. That is a fact. I urge the Scottish Government to produce the carrot in the form of voluntary registration fees that act as an inducement. There could be a trial charging regime for a fixed period to assess the response. If the fees in Scotland are significantly greater than those in the comparable process in England and Wales, that is not a good message.
I accept that keeper-induced registrations are consistent with the ends of the bill, and the minister has sought to clarify the fee-charging mechanism, to some extent. I am still unclear about how the proposal will work in practice, so I urge the minister to spell that out in more detail. It is not only the involvement of the landowner that is significant; it is also about intimation to any secured creditor who has an equivalent interest. Without that clarification, the retention of section 29 will be problematic.
Nothing could be more vital than the technical issue of the land register’s accuracy. There are problems with the scale of the Ordnance Survey map, particularly for remoter geographical areas. Interestingly, those problems also existed in the old sasine system, which depended on a combination of plans and a series of written descriptions of physical boundaries such as walls, hedges, burns and rivers. I suggest to the minister not only that such additional information should be a minimum requirement to accompany a land registration application, but that the documents should be retained by the keeper for the purposes of archive information and that they be accorded legal status. A professionally drawn surveyor’s plan that is fully measured to reference points of an area of ground is the most accurate description that the keeper can procure. An Ordnance Survey map cannot match that degree of accuracy. That additional information can only help the keeper and make the land register more robust. That is why, without legal status for such plans, the inherent weakness of title depending on an Ordnance Survey scale that is too small for purpose remains unaddressed.
On electronic conveyancing—a bewildering concept to an old bird like me—I share the committee’s rejection of making it compulsory. The opportunities that will be provided by, and the potential of, proceeding with automated registration of title to land are obvious, and the committee was right to raise the twin issues of cost and safeguards.
The provision that troubles me most is section 108, in which the theory of box-ticking usurping common sense seems to have manifested itself. I do not know who is responsible for the inclusion of section 108, because it does not seem to have many friends. It was not in the original Scottish Law Commission bill, it was not consulted on, and it did not seem to find support from witnesses or in written evidence to the committee. At present, any party or agent—whether purchaser, landowner, heritable creditor, solicitor, surveyor or other adviser to a land registration application—who is dishonest and who, through dishonest conduct, knowingly induces a registration of land, is committing a serious criminal offence and can and should be prosecuted under existing law. The proposed new law is unnecessary and grossly disproportionate. I urge the minister either to remove section 108 or to amend it heavily.
Genuine error is a separate issue. I am concerned that section 33(1)(b) will give a power to the keeper that could be used excessively, to the detriment and prejudice of purchaser applicants and their heritable creditors. Rejection for a serious error or a material omission is one thing, but rejection on any other grounds seems to be irresponsible and could seriously prejudice a creditor’s interest.
Finally, anything that replaces letters of obligation has to be very good. I still recall the spasm every time I signed a letter of obligation, knowing that I was personally guaranteeing the wellbeing of my partners and my firm—an onerous undertaking for which to be responsible. I welcome advance notices and support the motion.
We now move to the open debate. I remind all speakers that they have a fairly tight 10-minute time limit. [Interruption.] I am sorry: I meant to say four minutes.
14:03
I speak as a member of the Economy, Energy and Tourism Committee, which held a number of evidence-gathering sessions as part of its detailed examination of the Land Registration etc (Scotland) Bill. In addition to taking oral evidence, it also gathered detailed written evidence, which was received on an almost weekly basis from organisations that wanted to get their point across to the committee.
The bill aims to introduce an element of modernity and reform and to restate the law in relation to the registration of rights in the land register. The committee’s stage 1 report on the proposed legislation notes that
“the powers contained within the Bill for increasing land registration will assist in securing the desired objective of a complete Land Register.”
One of the issues of concern for the committee was whether the bill would help to provide a complete land register once enacted. We were concerned that we were not progressing quickly enough towards a complete land register in Scotland.
During the committee’s evidence-gathering sessions, it became clear that progress since the passage of the Land Registration (Scotland) Act 1979 has been painfully slow, hence our suggestion that it would be desirable to set targets—even interim ones—in the bill. The minister addressed that issue when he gave evidence to the committee, but the committee felt that it would be useful to have at least some targets in the bill that we could try to work towards. One overriding objective of the proposed legislation is to have the fastest method of completing land registration efficiently, with sufficient safeguards built in to maintain robustness.
The committee held five evidence sessions, during which the automated registration of title to land system was raised as an issue. I welcome the minister’s commitment to raise with the keeper the matter of an upgrade. Behind such mechanistic processes, there is usually a human cost that needs to be considered. I hope that the proposed legislation will go some way towards tackling that issue.
There are also issues with prescriptive claims. The committee discussed how to deal with such claims and how they should be advertised. One solution that I came up with is to use the same process as is used in planning applications, so that anyone who makes a prescriptive claim would have to notify neighbours on surrounding land, who could then intervene or comment on any acquisition that was sought through a prescriptive claim.
Section 108 concerned the Law Society of Scotland and others. It is a key principle of the bill that giving the keeper a materially false or misleading statement will be made a statutory offence. I recognise that the Solicitor General for Scotland, Lesley Thomson, and the minister believe that the measure should be enshrined in legislation so that they have the legal force to deal with serious and organised crime. I also recognise that there is a significant problem. The bill attempts to address some of the concerns that have been identified with the process, particularly in relation to organised crime, in relation to which redress has been somewhat limited.
In oral evidence to the committee, the Solicitor General highlighted the importance of creating an offence to deal with structured criminality. That evidence was reflected in the committee’s stage 1 report. I welcome the Solicitor General’s desire to discuss with the Law Society of Scotland what further guidance and advice could be provided to solicitors when the proposed legislation becomes statute.
I welcome the stage 1 debate and the broad principles in the bill. I look forward to the bill coming back to the Economy, Energy and Tourism Committee. I thank all those who provided written and oral evidence. I also thank the clerks and the committee adviser, as well as my fellow committee members, who scrutinised the bill at stage 1.
14:07
I thank the clerks for the support that they gave me as a new member of the Economy, Energy and Tourism Committee when I started in January, just after the Christmas break. On an issue such as the Land Registration etc (Scotland) Bill, with members going from a standing start, the support that we receive from parliamentary staff is important. I thank my fellow committee members for the warm welcome that they gave me. Perhaps that was because they were pleased to have me to share the burden of the bill, although I am sure that it was a wee bit more than that. There has been a steep learning curve for all of us, me included, on land registration, but we were boosted by the understanding and knowledge of those who gave oral and written evidence to the committee. As the committee’s work progressed over the past couple of months, we began to appreciate the expertise in and understanding of the issues that are out there.
One key issue, which John Wilson mentioned and which I think is the most important factor, is about ensuring that we start to complete the land register. I was amazed to find that, although it has been 30 years since the initial legislation was introduced, only 21 per cent of the landmass has been registered. If the bill does anything at all to improve the opportunities to increase the amount of land that is registered in Scotland, whether through voluntary means or some form of enticement, that would be a success in itself. However, in trying to do that, although it is important to have something in the bill, the net result is that we need to ensure that we have sufficient resources to make it happen. We have spoken about the keeper’s reserves, and we need to see where the deliberations on that take us. I hope that resources will be made available to increase the amount of land that is registered in Scotland.
I am keen to highlight a couple of things about electronic documents and the accessibility of the land register. Those are important issues for people outside the Parliament who are trying to engage with the land register and people who are trying to conclude as quickly as possible their deliberations with the legal professionals who are acting on their behalf. For example, a local group in my area wanted to find a bit of land that would be suitable for them to build a sports facility on. Although they were able to bring partners together and find information about a range of things, particularly funding, they found it difficult to engage with the land register. There are a number of websites that tell us how much houses cost. I wonder whether we might be able to get a system in place in which someone could press a button and identify the piece of land that they wanted to use, getting the information quickly online instead of having to go through the rather laborious process that people have to go through now of checking and identifying the land on Google maps. If the bill could set up an electronic system that improved the opportunities for consumers, that would be very welcome.
On section 108 and the offence provision, I was quite confused about the evidence that was provided. Most committee members were concerned about the lack of real evidence that the section would make a difference, so I appreciate the minister’s comments today about guidance being produced by the Law Society and the keeper. I look forward to seeing that.
I thank again those who have given evidence to the committee and hope that we can get a workable bill as we move forward.
14:12
I am pleased to have the opportunity to speak in the debate. Although I am what Murdo Fraser has described as “a non-lawyer”—I wonder whether that is a Latin legal term—in my previous career I had various practical experiences of the difficulties that are sometimes presented by our system of conveyancing and land registration. I compliment my colleagues on the Economy, Energy and Tourism Committee on a good example of working together in a largely consensual but effective manner in our scrutiny of the bill.
An effective land registration system is of fundamental importance in a property-owning democracy. Although I support the general aims of the bill, it is unfortunate that we do not seem to pay sufficient tribute to our original register of sasines. Cumbersome as it now is, it has operated fairly well over a considerable period and we must be careful that our efforts to modernise the system do not have unintended consequences. It is easy to criticise the old system. While it is true to say that there are many old titles that are vague or inaccurate, it is also true to say that some titles approach the level of works of art in their efforts to describe and define properties accurately. As a body of documentation, they describe much of the history of our country and are a tribute to our legal profession. They remain a valuable resource and, where possible, should be used to clarify current title certificates.
Modernisation presents considerable challenges. The Ordnance Survey map is not always as accurate as it ideally should be, especially in rural areas, which has given rise to historical errors and continues to give rise to errors. With modern global positioning systems and other surveying systems becoming increasingly capable of affordable accuracy, many of those errors are coming to light for the first time. Human error, whether from historical bad drafting of titles or from errors in first registrations, must also be acknowledged. Any modernisation system must provide an efficient and cost-effective mechanism for the resolution of those mistakes.
I am glad that the bill also contains proposals to improve the situation regarding a non domino acquisition, as such acquisitions often present opportunities to correct historical errors or unfairnesses.
We received a lot of evidence from Andy Wightman. I have a great deal of respect for him and the idealism that he advocates, but his suggestion that we should advertise or hold auctions of land of unknown ownership could give rise to profound practical difficulties. Nevertheless, I congratulate him on his recent book, which is a readable and lucid account of what can, in less capable hands, be a dry subject.
Finally, I must support my friends in the legal profession who are rightly concerned about the proposal in section 108 to introduce a criminal offence for what might be innocent errors on their part. That might create onerous obligations on them and on buyers or sellers, who would be required to protect their innocence. I was glad to hear from the minister that he will think carefully about that aspect of the bill.
14:16
As one of the non-lawyers on the Economy, Energy and Tourism Committee, it was with a sense of trepidation that I started out on my journey through scrutiny of the bill. At the informal briefing session that we had before our scrutiny began, the bill was described as largely technical, but when we went through it, a number of issues were highlighted, none of which was merely technical.
We have already heard about section 108, and I warmly welcome the minister’s comments on that in his opening speech. He and other members touched on the issues that are highlighted in the committee’s report. I am sure that the constructive approach that we have seen so far in the committee will continue.
The bill is welcome because it will update the land registration process. I agree with Murdo Fraser’s comments on those who have participated in the bill process, and all who have assisted the committee. I particularly thank Ken Reid, the committee’s adviser, who managed to put some technical terms into layman’s terms for the benefit of the non-lawyers on the committee.
One area of the current system in which deficiencies have been highlighted is the automated registration of title to land system. We were told in both written and oral evidence that that system is clunky, is deemed to be inefficient and difficult to use, and is not well used. Given that the purpose of the bill is to ensure that more of Scotland is on the land register, the technical issue with the ARTL system needs to be resolved.
The committee whole-heartedly supports the proposal to allow e-registration as that should make registration easier and more accessible. However, if the ARTL system is not improved, the policy will face technical difficulties. The sector has already bought into the idea of e-registration despite the fact that there has not been much take-up. To ensure that the buy-in is carried through, the keeper needs to carry out widespread consultation and testing.
As someone who worked in the information technology sector for a time some years ago, I understand that technology and software rapidly become out of date when they leave the factory. As a result, futureproofing any IT system is a tough challenge, irrespective of the sector for which it is designed. It is imperative that systems are designed with input from those who will use them, and that is particularly true in the area that we are discussing today. Furthermore, I am sure that the financial benefits of such a system will help both the sector and the end customer—the individual who is buying or selling a property.
I have focused my contribution on the issue of the ARTL system because of my background in the IT sector, which meant that I could understand it easily, and because of the importance of e-technology to the Scottish economy. The bill represents an opportunity to bring Scottish land registration into the 21st century, and e-technology can play a massive and major part in making that happen successfully.
14:19
This is an interesting topic. I have witnessed huge amounts of difficulty overseas, in particular for farmers who have smallholdings. When an inheritance has gone unregistered for many years, the true inheritors, what land they own and where it is all need to be identified. We will face similar, historical difficulties here.
However, I want to talk about another area. There is a moral responsibility for some of the larger landholders, particularly in Scotland, to register in order to kick-start the process. That would be welcome. Some of the larger landholders, such as the Scottish Government itself and the Ministry of Defence, need to lead by example.
I got a few ballpark figures on ownership from the Scottish Parliament information centre today. In Scotland, the MOD owns approximately 23,500 hectares, and has 541 hectares, or thereabouts, of land on lease. It also has training rights over a further 120,000 hectares—land for non-exclusive use in military training. That is a lot of land, and I wonder how much of it is registered. The MOD also owns sites of great value, including grade A, B and C listed buildings, and sites of special scientific interest, protected areas, conservation areas and wetlands of international importance. With the shrinking of the armed forces, what will happen to those sites? Will they be returned to the national parks or to communities? Recently, I watched a programme about how the Victorians left us wonderful parks in our cities, which their descendants enjoy today. Will some of the MOD’s sites be left to future generations of our children and grandchildren to enjoy?
The important thing in all of this is registration. If large corporations and other large landholders are encouraged to register, some of our smaller landholders will be encouraged to do so, too, particularly those in our farming community who are challenged at the best of times, and this is a difficult period for them. To support our smaller landholders, I suggest that we ensure that they at least have free registration in the first instance, especially families who have inherited difficulties and have the complicated task of clearing up previously undone business.
Online registration is very important. I was recently overseas, and saw that India and Pakistan—countries that have been in business for fewer than 70 years—are going down that route. We have a lot to learn from some of the people overseas who have already done this. Registration is absolutely fundamental if we are to have proper, accurate records, and we should all be able to access information about who owns what. Without that accuracy, neighbours who have had good relations for generations can fall out over small differences.
I emphasise that we need to lead by example and ensure that our house is in order before we encourage others. More important, we need to force the issue of registration, so that we have accurate records.
14:24
When I offered to speak in today’s debate, I was aware that I would be doing so more from a sense of how important the bill is than from a position of taking an opportunity to show my detailed knowledge of the complexity of land registration and the related legislation. I am neither a lawyer nor a member of the committee, so I am really pushing my luck.
The introduction to the SPICe briefing quotes the Scottish Law Commission as saying:
“Much law is like plumbing: useful but unexciting and seldom thought about except when it goes wrong.”
That relates to this very topic.
On “Good Morning Scotland” this morning, only the debate that will follow this one was deemed worthy of attention. Clearly, our Cabinet Secretary for Health, Wellbeing and Cities Strategy has in the Alcohol (Minimum Pricing) (Scotland) Bill a far more sexy subject than the Minister for Energy, Enterprise and Tourism has with land registration. I regret that. I believe that the bill should be of topical interest and that it would be justifiable to debate it on BBC radio. Land ownership should be promoted as something that everyone in Scotland will be affected by and may have direct active involvement with at some point in their lives. The ambition for accurate and accessible registration of land with a system that is transparent and efficient will give Registers of Scotland a reputation for being trustworthy and reliable and the people of Scotland reassurance and peace of mind.
The history of land registration in Scotland is absolutely fascinating. We hope that it might be given some space in a new curriculum on Scottish studies. The present value of land, the lack of available land in communities for social purposes, the prospect of more community land ownership and the future of crofting and agriculture all mean that we should be interested in the bill.
The impact of the land tenure system goes far beyond land use, because it influences the size and distribution of an area’s population; the labour skills and entrepreneurial experiences of the population; access to employment and thus migration; access to housing and land to build new houses; the social structure of an area; and the distribution of power and influence. Professor Bryan MacGregor said in the first McEwen memorial lecture:
“In many areas of rural Scotland ... landowners play a crucial role in local development: they are the rural planners.”
That was restated in Andy Wightman’s book “The Poor Had No Lawyers”, which has already been referred to.
It has been calculated that in the past 30 years we have managed to register only 21 per cent of Scotland’s landmass. If we were to see no change in the rate of registration, I estimate that we would not have the essential knowledge that we seek on all Scotland’s land until 2132. I therefore welcome the bill, which I hope will radically change the method of registration. However, I think that we will do that only if we can make it a more sexy subject and something that everybody realises is important. Perhaps the voluntary registration aspect should be better highlighted. I hope that the minister might be able to do that.
I hope that the bill becomes a hot topic for the minister as it makes its way and that we might yet hear him being interviewed about it by Gary Robertson on “Good Morning Scotland”.
14:27
I welcome the opportunity to speak in this debate on the Land Registration etc (Scotland) Bill. As someone who is not a member of the Economy, Energy and Tourism Committee, I compliment the committee’s members on the substantive report that they have produced, and I congratulate the clerks on the amount of work that they have clearly put into such an informative report.
It is clear that there is a need for a change in the law and that the 1979 act needs some reform and is no longer fit for purpose. It is silent on some areas, for example, which I know has meant major challenges for those who work in Registers of Scotland. As many people have pointed out, it is quite clear that there has been a lack of registration since 1979, so the issue needs to be taken more seriously. In addition, there are genuine challenges around mapping and how that is dealt with in terms of modern land registration law.
One of the central issues that members have touched on is the completion of the register. As many have said, only 21 per cent of Scotland’s landmass is registered in the system, which means that nearly 80 per cent is not registered. The register is therefore far from complete and we need to look at methods of encouraging more registration.
There has been some discussion of fees. As the committee has said, we should consider reducing some fees, particularly for voluntary registration. Looking forward, the Government has to be serious about the fees that it sets if it wants to encourage more registrations.
Registers of Scotland’s reserves of £75 million underpin all of that, and any future fee-setting regime must be set against those reserves. Surely we can come up with more realistic fees that can encourage people to register. The situation must be monitored, with transition and timescale targets set to ensure that there is a greater uptake of registration. Closer monitoring will ensure that the matter is taken seriously.
Many members have raised the issue of electronic conveyancing and access to the land registration system. It is vital that that access is taken beyond those who are involved in conveyancing. Members of the general public are interested in land issues. People occasionally come to me, as a constituency MSP, with land disputes, but it is hard to get information. It would help greatly if more information were available through IT. IT can be of great benefit—Stuart McMillan made a number of relevant points about that—and we need an IT system that is fit for purpose. If the current ARTL system does not do the job, we should look at creating a new system, although that would need to be planned properly. We need to listen to those who want to use the system and implement a new one that can be used in future to service not only conveyancers, but the general public.
There are serious issues that need to be addressed in the bill, such as beneficial ownership, which Rhoda Grant made relevant points about. I hope that we can move the bill towards stage 3 and produce legislation that benefits people and helps to answer the eternal question “Who owns Scotland?”
14:32
I should declare an interest. I worked for BiGGAR Economics when it did the piece of work for Registers of Scotland on the economic impact of its proposals. I was not involved in the study, but I had initial discussions with Registers of Scotland officers in framing the tender that we submitted. I also have a role in the Finance Committee; we had a low level of scrutiny of the bill, so there was not much evidence to go on.
I note that the estimated annual cost of the proposals is £3.85 million against an annual income to Registers of Scotland of £48.6 million, and that it is expected that efficiencies will arise to Registers of Scotland that will partly offset the annual cost. I also note the £19 million cost over the first five years, which puts in context the figures that James Kelly rightly highlighted when he spoke about Registers of Scotland’s reserves. Registers of Scotland is quite unusual in the public sector in that it needs to be self-sustaining. Its reserves are therefore an important part of its finances and of ensuring that it maintains its on-going operations.
The benefits from the bill will not just be to property owners, investors and authorities in reducing potential risks from inaccurate information. I will highlight a few benefits that I am aware of, having worked in the property sector, although not as a lawyer like Murdo Fraser and some other members. I have used the data that Registers of Scotland has produced. It is extremely important that the information is accurate, not only to understand who owns the land, but to understand what is happening in property markets.
Registers of Scotland has substantial reserves, which should keep the costs down. As others have stated, they could perhaps provide some scope for keeping the registration costs down and encouraging voluntary registrations. I noted the minister’s comment that, in effect, landed estates have a window of opportunity to increase the amount of land that is registered at an advantageous rate. That is an important point to raise.
I agree with Annabel Goldie on the mapping issues. The suggested tolerances for Ordnance Survey maps of 0.3m to 0.4m might sound accurate to some, but in the context of property they create the opportunity for ransom strips. The strips might be thin but, if there is some doubt about who owns them, they could cause all sorts of problems in securing investment. I agree with James Kelly about the Economy, Energy and Tourism Committee’s excellent degree of thoroughness. Paragraph 78 of the committee’s report suggests that consideration has been taken of the cost of mapping and that the use of Ordnance Survey mapping should continue, with the understanding that, although it is perhaps not the ideal form of mapping for registration, it keeps costs to a reasonable level.
Paragraph 77 notes that Ross MacKay of the Law Society of Scotland told that committee that
“the difficulty at the moment is that many titles are based on old sasines, which have no maps at all.”—[Official Report, Economy, Energy and Tourism Committee, 11 January 2012; c 753.]
A map that is not perfect is better than no map at all. That is something to bear in mind.
As a community councillor, I was aware of regular problems in my local area to do with buildings at risk. It is difficult to enable the council to take enforcement action to ensure that a building at risk is maintained or improved if we cannot trace who the real owner is.
On common good land, there is the recent example of a wind farm at Drone hill in the Coldingham area of east Berwickshire. The wind farm had been approved and it was subsequently discovered that Drone moss, a site of special scientific interest, was technically still owned by the local community of Ayton but no one could identify who the legal owners were. My point is that registration has some practical benefits to local community organisations.
14:36
As the convener of the Rural Affairs, Climate Change and Environment Committee, I have an interest in the Land Registration etc (Scotland) Bill dovetailing with the Agricultural Holdings (Amendment) (Scotland) Bill and the Long Leases (Scotland) Bill, both of which are before my committee. Registration of aspects of leasing are as important as registration of ownership, and there has been much debate on both bills about ensuring that that happens. It is in our interests that the Economy, Energy and Tourism Committee bears that in mind at stage 2 and ensures that the bills dovetail.
I turn to the excellent report from the Economy, Energy and Tourism Committee and highlight the issue of Ordnance Survey maps. The 6in:1 mile map—or the 1:10,000 map as it is now called—was used for the whole of the Highlands and Islands for many years. It is not up to scratch; it never was. It was not fit for purpose when we were having these debates in the mid-1990s, at a time when land registration was 20 years old. Did anyone ask Ordnance Survey to step up to the plate and get mapping properly? It is a union dividend for us that large areas of Scotland are inadequately mapped by Ordnance Survey. One per cent of the titles of Scotland are affected by the 1:10,000 scale, but of those, many are the largest estates that have never been registered except in sasines, and they are not properly mapped at all.
Why is that important? Crofting communities have a right to buy, and such communities have to provide details in mapped form of the area of which they wish to take ownership. We would therefore expect it to be necessary for landowners themselves to have their land mapped in a modern and up-to-date fashion. There is a direct link here between those issues, which is part of this Parliament’s wishes. I know that the Labour Party did not wish to see a map-based register for crofting, but as many people who are registering leases for farms and so on have to do that, Labour should recognise now that landowners should be registered and that crofters eventually will be, too. There has been no secondary legislation on that yet, but it is a point.
Annabel Goldie and others have mentioned fees. I suggest that, for a large estate, the price for registration is like selling off a couple of housing plots. Large estates are not short of capital for registration, so why are we not making the point that they have got the benefit now of voluntary registration at a reduced ad valorem rate? They should get on with it, or we should find means to ensure that we use the research area approach of the bill not just to apply to cities but to apply to areas in which communities may wish to use the right to buy, because they will have to have accurate maps to do that.
The bill is an excellent start, but it is important for Scotland’s future that the timeframe for the completion of the register is speeded up, because 30 or 40 years might not be a long time in land ownership, but it most certainly is when it comes to getting an up-to-date register that people can access electronically. Registers of Scotland’s mapping working group should ask Ordnance Survey when it will step up to the plate. We know that, during the Thatcher era, Ordnance Survey was cut back and was made to be a business, but it is supposed to be a service. Instead of seeking other means, we should demand that that service is there for us to use in future.
14:40
I strongly commend Rob Gibson for much of what he said. In addition, I thank everyone who contributed to the committee’s work, in whatever capacity.
My fellow members of the committee will not be astonished to learn that, in much of my speech, I will refer to the evidence of one particular witness but, before I come to Mr Wightman, I want to welcome the bill’s overall purpose—the completion of the land register of Scotland.
However, like some other members, such as John Wilson, I wonder how the completion of the register can be compatible with a bill that does not set out a timescale for its completion. We should be asking, and the minister should be able to say, how complete the register can be expected to become and how quickly, and whether it will be possible for it to be completed without greater use of keeper-induced registrations. There is currently a presumption against the use of keeper-induced registrations. For how long can that go on? Do we expect to achieve 50, 60, 80 or 90 per cent completion of the register? Will the final 5 or 10 per cent of the register be completed without the use of induced registrations? There is a role for targets, as the committee recommended in its report.
Andy Wightman’s contribution to the debate began with the observation that the bill has been presented as a largely technical bill, yet it represents the first opportunity that a democratically elected Scottish Parliament has had to consider the legal basis of land registration in Scotland. His position is that opportunities might have been missed to engage with wider issues of public policy and public interest, some of which have been mentioned. How should we deal with abandoned land? Should we simply continue—albeit with slight restrictions—the prescriptive acquisition process, or do we need a more public process to ensure that other parties who may have a legitimate interest can express it and have it considered? It may well be that there is not a one-size-fits-all solution, and that different means of disposing of land that has not had an identified owner will be appropriate in different circumstances. I would like to hear the Government’s view on that.
Several members, including Rhoda Grant, have mentioned common land. I am glad that the committee supported the in-principle objective that Andy Wightman has sought to achieve, and the objective on access, because we are not doing as well as England and Wales at providing easy and affordable access to land register information.
The most significant issue that I want to address is beneficial ownership. Andy Wightman’s view is that registration should be conducted by a European Union-registered body. There are other views. Andy Wightman cited Andrew Edwards’s mentioning of the need for disclosure of the true or beneficial owners of registered properties in cases in which they differ from the nominal owners.
With the bill, we have a real opportunity. I recognise that, at the moment, neither the Scottish Parliament nor the Scottish Government has the power to deal with issues such as tax avoidance, but the land registration scheme can act to close such loopholes. Tax avoidance and the use of tax havens have been fundamental mechanisms for the accumulation of wealth by the few against the interests of the many. We have the opportunity, through the bill and through public leadership from the Scottish Government, to say that that is not acceptable and that action will be taken to close those loopholes. The committee’s report asks the Government to consider the options, and I look forward to hearing some detail on the minister’s consideration.
14:44
It is difficult in an essentially technical debate to introduce ideas and concepts without risking repetition. I prefer to comment briefly on one or two points and leave the minister with more time to respond to the debate. That is not a cop-out on my part, because I was struck during the debate by a number of points that attracted attention from members on all sides of the chamber, not least the issue of voluntary registration and how we make people register, which is key to the bill’s success.
I am pretty relaxed about targets. The much-vaunted target for tourism, for example, was set with the best of intentions, and now everyone keeps hanging their argument on it. The lesson to be learned is that, if the bill changes things for the better, we should assess the practical consequences of its implementation and consider whether adjustment or change is necessary.
I was struck by some of the contributions on inducing greater voluntary registration. Hanzala Malik made an interesting point about large landowners such as the MOD. The MOD may well be amenable to an approach, and other larger landowners may take the same view. I noted that James Kelly and Paul Wheelhouse share my view that the charging mechanism could be the key, and I would like to hear the minister’s comments on that.
On the accuracy of the land register, members such as Paul Wheelhouse made some good points about the genuine practical problems, particularly for remoter rural areas. Rob Gibson made an interesting point, but I am not quite sure whether I understood him completely. He seemed to be focusing on the OS map as the problem, and arguing that we should make that better. My concern is that, at present, I do not think that we can make an OS-based system better at dealing with issues relating to plots in rural areas on an appropriate scale. One line on an OS map may be a difference of several metres on the ground, which could be critical for the accuracy of title conferment and title interpretation. I go back to the point that we must ensure that the keeper is armed with all the ancillary information that she can get. There is a huge obligation on the registration applicant’s solicitor to provide as much information as possible. That may include professionally drawn surveyor’s plans and—as Mike MacKenzie indicated—information that is held in the old sasines system.
Surely whatever informs the keeper about how to register a title is worth while only if it is given some type of legal status in the archive. Otherwise, where is the keeper to go when there is a subsequent registration application? I would like the minister to comment on that.
It was no surprise to hear that a number of members on all sides of the chamber have profound concerns about section 108. Obviously, members of the minister’s own party were a little more circumspect in their observations, while others, such as myself, were a little blunter, but I would like to hear the minister’s further comments in that regard.
14:48
I acknowledge that, although the bill is largely technical, most of its proposals have been welcomed and are required if we are to improve land registration.
There is no doubt that a modern and effective system of land registration is important for any modern economy. Much as the communist in me—I am sure that the minister looked up with a start to see that Red Ken is now standing in the chamber, so I will put it differently. Much as the idealist in me struggles with the concept of us as mere humans asserting our rights to mountains and rivers, which will outlive and outlast us all, I appreciate that our banking, business, trade and credit systems rely on securing title to property and land. I understand that the property market in Scotland was worth approximately £24 billion the year before last, so the bill is an important and worthwhile measure.
The background to the bill lies, as many members, including the minister, highlighted, in the gradual replacement of the 17th century register of sasines with the land register of Scotland. Although the changes have been taking place since 1979, so far just over half—55 per cent—of Scotland’s 2.6 million units of property have been switched. The figure for the land area that has been covered is much lower, with only 21 per cent of Scotland’s landmass on the register.
As Paul Wheelhouse, John Wilson, John Park and others said, the completion of the register is a practical and important step that will make a difference for many communities.
The reason why there is a gap in the transfer to the land register is mainly that the principal way in which a property enters the land register for the first time is through its sale. The bill will update the law on registration. It will enable electronic conveyancing and, in due course, it will provide for the closure of the register of sasines. It makes provision for four measures that are designed to ensure the eventual transfer of all property in Scotland to the land register.
As my colleague Rhoda Grant suggested, the only disappointment with the bill is that it misses an opportunity to move the land reform agenda on apace. There is a timely article in today’s Scotsman—not the one about my former colleague Jack McConnell but the one by Brian Wilson—which I encourage ministers and members to read. It highlights some of the issues around land ownership that still bedevil communities around Scotland. Mr Wilson says that, despite the Parliament’s early achievements, such as abolishing feudal tenure, guaranteeing the right to roam and introducing the community right to buy, Scotland continues to have
“the most inequitable distribution of land ownership in Europe”.
As I suggested earlier, I struggle with the concept of owning a mountain or a river, and it is jarring to see absentee millionaires and billionaires buying up Scottish islands and estates while local people on those estates struggle to make a living. Like Andy Wightman, who was quoted favourably by my colleague in the Green Party, Patrick Harvie—sorry, Patrick—I believe that it is offensive that there is such difficulty in finding out who owns land in Scotland.
I was going to quote the case from 10 years ago that involved the MacLeods in Skye claiming ownership of the Cuillins and trying to sell them on. That case was resolved, but other members, such as James Kelly, have reminded me of constituency cases that are far more practical and which involve areas of land in suburban and urban areas whose ownership is unknown and which are therefore not maintained and become litter infested and overgrown. Being able to identify the owner of those pieces of land, which have become nuisances, would improve the environment and therefore provide a great service to many communities.
It is worth highlighting that the issues of land reform and the transparency of land ownership are not just relevant to rural areas. When residents of Neilston, which used to be in my constituency but is now admirably represented by my colleague Hugh Henry, were faced with the closure of the last bank in the village, they used the Scottish Parliament’s land reform legislation to buy the property for the community. The benefits have not simply been about the use of that building, because the Neilston Development Trust has become a driving force for improving the landscape of the village, bringing people together for events and other activities, and the trust is now on course to establish the ownership of a wind farm, the income from which will go directly to the village. That demonstrates that what on the face of it looks like an issue to do with property and land ownership is, in essence, about the rights, needs and wishes of the local community.
Like many members, I am grateful to the Economy, Energy and Tourism Committee for the work that it has done to highlight a number of issues in the bill, particularly the issue of beneficial interests and ownership, with particular regard to the transparency and accessibility of information relating to that issue. The bill does not do quite enough in that area, so I am pleased that the committee has recommended that
“the Scottish Government should reflect further on options for ensuring that the land registration system reduces the scope for tax evasion, tax avoidance and the use of tax havens, and that the Government should explain prior to Stage 2 what additional provisions can be included, whether in the Bill or otherwise, to achieve this objective.”
Similarly, on access and transparency, the only electronic system that is in place is predominantly geared towards lawyers and conveyancers. I am pleased that the committee has flagged up that point and I whole-heartedly agree with its recommendations in that regard.
I would like to raise some other points—about prescriptive claimants; common land; and section 108, which I noticed was raised only by the lawyers or former solicitors in the chamber, but is still an important point—but, given that my time is up, I will end by welcoming the work of the committee and saying that I am pleased to support the general principles of the bill.
14:55
I have thoroughly enjoyed the debate. There have been useful contributions from all sides. If I do not reply in my short speech to some of the suggestions and, in particular, questions asked of me, I will ask my officials to ensure that I do so before stage 2 begins.
I was not entirely expecting the revelation from Ken Macintosh that part of him is a communist. As far as I can recollect, we did not hear much about that during his leadership campaign, but it was an engaging revelation.
In the light of that, I begin by addressing the remarks that Rhoda Grant, initially, made about the land reform agenda. The purpose of the bill is not to reform the law of property but to update, modernise and make more efficient, accessible and user friendly the law of registration of property in Scotland. That may be a pedantic, lawyerly point—others will be the judge of that—but this is therefore not the forum for reform of our property law, although I fully recognise the deeply held views that many members, from most of the parties represented in the chamber, have on the matter. In making that point, I do not belittle the arguments that were put, nor do I dismiss out of hand the points that were made; it is simply that it is not the function of the bill to deal with those matters.
Nonetheless, as a minister who always prefers to concentrate on the good news rather than the negative, I am sure that Rhoda Grant will join me in congratulating the Scottish Government on the announcement on 20 February that the Scottish land fund will help more rural communities purchase their own land, with £6 million available over the next three financial years. I am sure that that point is understood.
Beneficial ownership was raised, but that, too, goes beyond the province of the bill, because the position of the keeper is that the keeper must register who owns the land of Scotland. That is the keeper’s duty on receipt of an application for registration of land. It is not the purpose of the keeper to reform the law of trusts, of companies or of taxation. Indeed, the latter matter is largely reserved to Westminster.
Patrick Harvie rose—
I will carry on for a bit, if I may.
Mr Harvie acknowledged that point, as did others. I can tell him that we have had some discussions on the matter and officials are looking to see whether we have the powers to deal with any of the matters referred to in relation to beneficial ownership, which might reduce the scope for tax evasion, tax avoidance and the use of tax havens but—before Mr Harvie gets up—I do not want to raise his hopes, because I think that that would require the transfer of the powers to the Scottish Parliament.
Will the minister allow his officials to have discussions with Opposition members prior to stage 2, so that we understand the limits of what the Government thinks it can do and can lodge the most useful amendments on the issue?
I always do that.
Why are reserves necessary? First, because the keeper cannot have access to consolidated funds; she must balance her budget. She does not have recourse to knock on Mr Swinney’s door and ask for a top-up because things are not going well. The reserves have been far in excess of £75 million in the past 10 or 15 years. In a sense, that is a good thing, because it has allowed the keeper to deal with the losses that have been incurred over the past few years.
I draw members’ attention to the fact that applications have reduced from 438,000 in 2007 to only 245,000 in 2010-11. They have nearly halved, so the income from them has nearly halved. The keeper must have reserves to deal with the loss-making potential because, sadly, such situations arise.
Secondly, the keeper needs to keep reserves because land registration provides a state-backed indemnity. If something goes wrong, we pay out. That is one benefit of land registration. In one case south of the border, in England, our colleagues had to pay out £8 million for one case, so members can see that the keeper needs to be prudent.
The keeper also needs a reserve for investment in, for example, ARTL. In that context, Stuart McMillan sensibly devoted his speech to a practical matter. I take seriously the evidence that we heard from various solicitors about the ARTL system’s efficiency, and we will ensure that we consult on all such matters.
How long do I have, Presiding Officer?
You have another four minutes.
Oh good. I thought that I needed to finish.
Oh, no.
Members will be relieved that there was no premature conclusion to my remarks and that I am allowed to say a little more, which is jolly good, of course.
Will the minister take an intervention?
Well, why not?
I am grateful to the minister for taking an intervention while he gathers his thoughts. I am sure that, like me, he has been having flashbacks this afternoon to his experience of the Crofting Reform (Scotland) Bill. He visibly winced when Paul Wheelhouse referred to ransom strips.
I think that every speaker has talked about the importance of accelerating the process of registration. I would not necessarily subscribe to the view that a target is needed. However, during the passage of the Crofting Reform (Scotland) Bill, ministers were willing to give an indication of the rate at which they expected mapping to take place, through community mapping or whatever. Can the minister give an indication of the timeframe that he expects is likely for progress to be made on registration?
I cannot really, although I discussed the matter with Rob Gibson in John o’Groats on Monday—and indeed in Thurso and Wick. The matter is important, but it is not in itself impeding the ability of people to develop businesses, jobs and opportunities. The primary purpose of the register is to provide a safe, effective and reliable means of transacting property in Scotland, as Mr Malik said. It is a commercial tool, first and foremost. That is its purpose and its function, and that is its benefit, as Ms Goldie said.
Of course we all want to complete the register as quickly as possible, but the only way to do that would be by making registration compulsory, which would require people to pay fees to lawyers and to the keeper. We do not think that that is reasonable, especially in a recession. There are fine judgments to be made about whether public bodies use their scarce resources to spend money on voluntarily registering large tracts of Scotland. There is a case for an upgrade, as it were, in the number of titles of large properties, whether in the private or public sector, and I have argued that the current fees structure creates an in-built incentive to register. I have discussed the matter with, for example, Scottish Land and Estates, and I think that there was a meeting of minds about encouraging but not requiring registration.
On keeper-induced registrations, I say in response to Annabel Goldie that section 29 is necessary, because there will be properties that the keeper, using her judgment, will feel that it is sensible to include, to complete the register. For example, if Acacia Drive has 29 semi-detached properties, one of which is not registered, it is advantageous to the keeper to bring the final property on to the land register. I think that people can see the sense of that from a practical, operational point of view. In those circumstances, there would of course be no fee to the person who was required to register their title.
Will the minister take an intervention?
I just want to finish my response to Mr McArthur, who quite rightly raised the issue—he did so in a perfectly fair way, which summed up the tone of today’s debate. We all want the register to progress as quickly as possible. We are using the voluntary registration method and the word “voluntary” is key; we want to encourage people to register and not compel them to do so.
I am happy to take another intervention—I see that I do not have time to do so. I have to close, and so soon.
I am grateful to the committee for its work, which helped us a great deal. There is much work to be done at stages 2 and 3. Section 108 is entirely necessary and is supported by the Lord Advocate, the Solicitor General for Scotland and the Scottish Crime and Drug Enforcement Agency. Honest solicitors have nothing to fear, but the tiny minority of dishonest ones will not be happy when the provisions on the new offence become law. It will be a very good thing to stamp out mortgage fraud in this country.