New register won’t answer ‘who owns Scotland?’ question
The Register of Persons Holding a Controlled Interest is welcome but loopholes remain, writes Martyn Mclaughlin
It is one of the great underappreciated surveys of its time, taking in every nook and cranny of land so as to better understand a vital question: who owns Scotland?
For five years, a small army of surveyors combed over nearly every plot of land across the nation, recording the names of the owners, the nature of their holding, and the details of any tenancies, charges, and valuations.
The reams of carefully collated information were recorded in small printed bound volumes known as field books, before being annotated on Ordnance Survey maps.
By the time the endeavour was complete, the surveyors had produced around 95,000 of these books – in them was the raw data which underpinned an open registry detailing who owned all but 0.3 per cent of Scotland’s land.
It would have been a remarkable undertaking in any era. The fact that it took place in Edwardian Britain, at the behest of David Lloyd George, makes the achievement even more astonishing.
Yet it also raises one troubling question. If such a feat could be completed in the foothills of the 20th century, why is it so troublesome in the digital age?
Though the surveyors armed with ink and paper maps did not know it at the time, their efforts resulted in a high-water mark for transparency. Ever since, the barriers to land ownership in Scotland have been plentiful, with information that was once free and easily available now costly and convoluted.
In theory, all that should change next week. Come the start of April, a new public register allowing people to find out who has a controlling interest in Scotland’s land will go live.
The Register of Persons Holding a Controlled Interest (RCI) has been six years in the making. Its introduction was a key provision of the Land Reform (Scotland) Act 2016, and it has been lauded by the Scottish Government as a key lever in Scotland’s land reform journey.
The idea is that the new register, operating alongside the new register of overseas entities being brought in at Westminster via the Economic Crime (Transparency and Enforcement) Bill, will provide a better understanding of who owns, controls and benefits from Scotland’s land.
Mairi Mcallan, the Environment and Land Reform minister, has hailed the register as a “significant milestone”, which will make Scotland a “frontrunner in Europe”.
There is no doubt that the register is a welcome and overdue tool, and those who have helped bring it to the statute books deserve praise for resisting calls from those who sought to dilute its powers.
It should come as no surprise that several leading law firms argued for the omission of overseas entities from the register, with one describing their inclusion as an “unnecessary administrative burden” which risked damaging the reputation of the UK as “an attractive destination for investment”.
Such an argument was facile prior to recent events in Ukraine. It is even more dubious now.
Even so, the register coming into force has more than enough loopholes and weaknesses to raise questions of Ms Mcallan’s bold claims.
As has been pointed out by the veteran land reform campaigner and former MSP, Andy Wightman, it is one thing introducing the legislation, but interpreting it is another matter altogether.
He said the new register will improve transparency on paper, but its effectiveness will depend on
enforcement. Unfortunately, Mr Wightman is not confident that the new laws will be upheld.
“With the Crown Office having failed to prosecute any of the 17,000 Scottish Limited Partnerships that have failed to comply with reporting duties, it is unlikely they will have time or inclination to pursue failures here,” he predicted. “Time will tell.”
The hope is that those legally required to sign up to the register will do so within a 12-month grace period, but that too is perhaps optimistic.
Anyone who does not comply with the requirements of the new register faces a £5,000 fine. This might sound like an effective deterrent, but when you consider the fact that the new register of overseas entities carries punishments of up to five years’ imprisonment, it seems rather limp.
Indeed, MSPS on the Environment, Climate Change and Land Reform
Committee warned four years ago that the maximum fine may prove insufficient to deter those who are determined to remain anonymous.
There is also no requirement for the information provided by beneficial owners to be verified. Indeed, the regulations explicitly state that it is neither the role nor the duty of the keeper of Registers of Scotland to investigate potential inaccuracies in the register.
Anyone who has trawled through Companies House only to find countless examples of spurious records and bogus directors will appreciate that this omission is highly problematic.
Another worry is the fact that in order to avoid duplication with the People with Significant Control (PSC) register maintained by Companies House, those behind companies incorporated in the UK will not have to submit their details to the Scottish register.
Such a move might make sense administratively, but it ignores the fact that the PSC register is badly let down by issues with compliance and the quality of its data. The named PSC of a firm is often an offshore entity, while three years after its introduction, a UK Government review of the register found that nearly one in ten firms had not named a PSC.
In practical terms, the reliance on the PSC data means that some highprofile individuals will not be named on either register, given how easy it is to conceal identities by owning land via UK firms, even if those companies are owned in turn by overseas and offshore entities.
So yes, the new register coming into force next week will help, but it is not a patch on Lloyd George’s century-old designs.