[Relevant documents: Tenth Report from the Public Administration Select Committee, Session 2013-14, Statistics and Open Data: Harvesting unused knowledge, empowering citizens and improving public services, HC 564.]
I beg to move,
That this House notes the important role the Land Registry plays in registering the ownership of land and property in England and Wales; further notes that the Land Registry has made a surplus in 19 of the last 20 years and paid back £120 million to the public purse in 2015 alone; believes that any privatisation of the Land Registry will have serious consequences for transparency and accountability in the UK property market and hinder efforts to crack down on corruption and money entering the UK property market via offshore jurisdictions; expresses grave concern that all the potential bidders for the Land Registry have been found to be linked to offshore tax havens; notes that the Government has acknowledged that property can provide a convenient vehicle for hiding the proceeds of criminal activity; notes that the Prime Minister stated in July 2015 that there is no place for dirty money in Britain; regrets the Government’s decision to seek short-term profit at the expense of the public interest; opposes the proposed privatisation of the Land Registry; and calls on the Government to reconsider that proposed privatisation.
I thank the Backbench Business Committee for enabling me to bring this important debate before the House. In supporting this motion, signing the letter I sent to the Business Secretary on 2 June and signing early-day motion 160, well over 100 Members drawn from eight political parties have made clear their opposition to the privatisation of the Land Registry. I hope that the Government take note of the strength of opposition to the proposal before it is too late.
My hon. Friend is absolutely right: the strength of the deep concern felt in the country is expressed in the letters that hon. Members have received. I look forward to hearing what the Minister says, because he will be aware that it is with regret that I must bring the debate to the House today, so soon after the Government last attempted to privatise the Land Registry in 2014.
I thank my right hon. Friend for initiating this debate. Has not the Government’s position moved since they announced the privatisation, in that they say they want to stop properties being used for money laundering? He may know that I and our hon. Friend the Member for Dagenham and Rainham (Jon Cruddas) have a Bill to achieve precisely that, but we need a service that is not corrupted and on which people can rely. Without the Land Registry, where are we going to find a service we can rely on?
I congratulate my right hon. Friend on securing this important debate. I too have been inundated with responses, and indeed I met a constituent who was proud to have worked for the Land Registry for many years. Does he agree that public confidence is vital, particularly for our housing industry, and that in these times of real uncertainty about the economy and the future of house building in this country, the Government are taking an unnecessary risk?
My hon. Friend makes an excellent point. In these troubled times, when confidence in this House and in major political parties is at a low ebb, it is important to recognise the institutions that the public hold dear, of which the Land Registry is certainly one. As a former Minister who had responsibility for the Land Registry, I am well aware of the valuable roles it plays.
Does my right hon. Friend think that the privatisation proposal has been driven by a desire to maintain the professionalism, integrity and impartiality of the Land Registry or by a petty desire for a short-term and dangerous input of cash to the hard-pressed Treasury? Which is it?
My hon. Friend makes a serious point. According to the Government’s answer to my written questions tabled earlier this month,
“No decision has been taken on the future of Land Registry”.
I fully expect that line to be trotted out later today, but the serious questions that hon. Members are raising about transparency in this important institution must be heard.
I congratulate my right hon. Friend on securing this debate. Does he agree that privatisation would give the new owner essentially a monopoly on commercially valuable data, with no incentive to improve access to it? Does he also agree that information about land and property ownership is vital for local communities and that they should have more access to it, not less?
Further to the point made by the hon. Member for Brighton, Pavilion (Caroline Lucas), does my right hon. Friend accept that many businesses that work in property and data are also concerned about the possible privatisation of the Land Registry? They worry that a privatised Land Registry would see the new business owner seeking to extract maximum value from the business, rather than trying to improve access to the data.
My hon. Friend is absolutely right. There is deep concern about a hike in fees and a profit motive distorting a public institution that we all value. I hope that the Minister will take that on board and give the House some comfort on that in the coming hours. I give way to the right hon. Gentleman.
My wife is right hon., not me.
Were I not going to a Somme service in my constituency, I would try to take part at length in this debate. Is not the issue this? Whatever safeguards the Government want to build, commercialisation should be the Land Registry’s decision, not the decision of some commercial owner of the Land Registry. The issue is, therefore: can Government understand—I know that my hon. Friend the Member for Brighton, Kemptown (Simon Kirby), who is on the Front Bench, understands because I have written to him about it, as my Whip—that many of us here want the Land Registry to have the opportunity of creating innovative, value-creating enterprises? It should not be sold off for that to happen—it is not necessary.
The hon. Gentleman is demonstrating why he should be a Privy Counsellor and why he has been knighted. The Government should accept the cogent case being made by esteemed Members on the Government Benches. We are aware that there is a general sense that the Government are itching to privatise the Land Registry. Unlike with the 2014 consultation, this time around the status quo is not even being offered as an option. The wording of the consultation document is focused on how, not if, the Land Registry operation should be moved to the private sector. We know that the Government have commissioned bankers at Rothschild to size it up. We also know that potential buyers are linked to offshore tax havens. I am here today, alongside colleagues across the House, to make our opposition known and to call on the Government to think again.
I congratulate my right hon. Friend on securing the debate. As a solicitor, I have often had to use the Land Registry. He is making the economic case for non-privatisation. Does he agree that the Land Registry is entirely self-funding? In fact, it has returned £126 million to the Treasury.
If the House will forgive me, I will make some progress, because so many Members want to speak.
The recording of land and property ownership is integral to the functioning of our economy and has been carried out with integrity and impartiality by the Land Registry since 1862. Indeed, the Land Registry’s reputation as wholly independent from the influence and pressures of the market is crucial to its work. The current consultation exercise tries to preserve that necessary independence by attempting to create an artificial distinction between “Land Register ownership” and a new company which “delivers Land Registry services”. That is totally meaningless in practice. While the Government claim they will retain “ownership” of the land register, a private company would be free to grant title and make changes to the register as transactions occur. The consultation document talks of putting
“the right protections in place”
to ensure that the Land Registry would continue to deliver an impartial service to customers. However, there is absolutely no detail about what those protections and safeguards might be. In the words of John Manthorpe, former Chief Land Registrar,
“at the heart of this is the nonsense that a private company should have the power to decide the legal land and property title rights for others”.
The Department for Business, Innovation and Skills is yet to publish the responses to the latest consultation, but I have taken the time to read through the responses to the January 2014 consultation. I quote Clifford Chance, the law firm, certainly no stranger to the profit motive or enemy of the private sector, which said that privatisation would create:
“An inherent conflict between a private sector company, whose main purpose is to maximise shareholders’ profits, and the need of consumers for a low cost, high quality and risk free service”.
Does my right hon. Friend agree that although the Government say that they will retain ownership of the land register, that is completely meaningless while millions of changes are progressively made to it by the private company? Is that not the key issue? In the words of John Manthorpe, the former Chief Land Registrar whom my right hon. Friend has quoted, the proposal does not stand up to “any reasoned scrutiny”.
My right hon. Friend mentioned the 2014 consultation, in which only 5% of respondents thought that privatisation was a good idea. My right hon. Friend and I are both London MPs, and the market in London is complicated enough as it is. Anything that will complicate things even further cannot be a good idea. If every professional in the sector is condemning these proposals, surely the Government should listen.
I thank my right hon. Friend and congratulate him on securing this debate, which is very much welcomed by the 400 or more people in my constituency who work at the Land Registry. Does he agree that this proposal not only flies in the face of professional opinion, but comes at the worst possible time, demonstrates short-term thinking and represents poor value for money? Is the economic uncertainty created by the referendum result last week not an additional reason for the Government to drop these proposals?
My hon. Friend makes a very serious point. Even if there were a case for these proposals—I suspect all of us agree that there is no case—now cannot be the time to continue with them. There is no doubt that a private company would seek a profit and become a compulsory monopoly business, driving up the fees charged to users—the point raised by my hon. Friend the Member for Harrow West (Mr Thomas). A sale price of about £100 billion has been mooted in the press. A private company would therefore look to recoup this investment through the fees it charges and then turn a profit for its shareholders.
The argument we often hear in favour of privatisation is that competition will drive prices down, but this completely disregards the fact that the Land Registry is a unique asset in our lives. It is one of a kind, and users are compelled to pay the fees during any transaction involving land or property. There is only one Land Registry; it is a compulsory monopoly and we need to reflect on what would happen if this public monopoly became a private monopoly. We would have profiteering—pure and simple—by ripping off the public with inflated fees.
The Minister refused to answer my written question of 6 June about what steps would be taken to ensure that Land Registry service fees did not increase in the event of privatisation, so I hope we will hear something from him today. We are left to assume that the “protections” and safeguards that the Secretary State mentioned in the foreword to the consultation document do not include any protection from vastly inflated service fees. In time, whatever sum the Government might secure from a sale today will ultimately be paid for by the people and businesses who use and depend on the Land Registry’s services.
I must make some progress.
We therefore reach the crux of the issue: the Government are looking to sell off the family silver to turn a short-term profit to try to make their sums add up. As the most recent Budget showed, the Government’s plan to close the deficit is dead in the water, so now they are looking around for assets to cash in. This privatisation is purely political, with absolutely no regard for what is right for the Land Registry or indeed the people of this country. The short-term profit derived from any sale will be dwarfed by the increased costs that are ultimately paid by all of us in the form of increased fees, and it will be dwarfed by the lost revenue to the public purse in the medium to long term.
There is no economic rationale for this privatisation. If the Land Registry were making a loss and being subsidised by the taxpayer, I could understand the Government’s enthusiasm for privatisation, but it has made a surplus in 19 of the last 20 years, and it returned over £100 million to the Treasury last year alone. The Land Registry pays rich dividends to the public purse, and there is absolutely no reason why it should pay dividends only to wealthy investors and shareholders in the future.
Satisfaction with the Land Registry is currently running at 96%. Far from being a basket case of public sector inefficiency, it is a shining example of a successful public service being run efficiently and effectively. I must state in the clearest possible terms that privatising it would be daylight robbery and a national scandal. Sadly, we know that this Government have previous: just look at what they did to Royal Mail.
Let me deal briefly with the conclusions of earlier studies. In particular, the Government’s quinquennial review of 2001 found that the privatisation of the Land Registry
“should be firmly rejected”,
“be an act of…considerable folly”.
It is clear from the responses to the consultation on proposals to transfer the Land Registry to a service delivery company in 2014 that the proposed privatisation was decisively rejected by most of the respondents. We are told that
“91% of respondents did not agree that creating a more delivery-focused organisation at arm’s length from Government would enable Land Registry to carry out its operations more efficiently and effectively”,
“89%...not be comfortable with non-civil servants processing land registration information”.
However, although the overwhelming majority of respondents made it clear that the Land Registry must remain publicly owned, the Government are back, disregarding what was said just two years ago and making their case again.
A further issue of vital significance is the impact that a privatised Land Registry would have on the transparency of our property market. The Panama papers leak earlier this year brought to light the industrial use of tax haven shell companies by tax evaders, oligarchs, corrupt crooks, drug traffickers and arms dealers seeking to conceal their wealth. More than half the 214,000 companies whose details were leaked were incorporated in the British Virgin Islands, and many channel their money into the UK property market. A total of 100,000 properties worth £170 billion have been registered by shady and opaque overseas entities in the UK to hide their true owners.
Meanwhile, the Prime Minister and Members of his Government have consistently spoken of a crackdown on offshore tax evasion and dirty money. Indeed, the Prime Minister himself declared last year:
"There is no place for dirty money in Britain... London is not a place to stash your dodgy cash.”
How, then, can we be in this situation? I noted with interest the Prime Minister's article in The Guardian, in which he said:
“We know that some high-value properties—particularly in London—are being bought by people overseas through anonymous shell companies”
“plundered or laundered cash.”
The Department for Business, Innovation and Skills has also said that it is aware of the problem. Perhaps the team who wrote its consultation document could let the Minister know.
I listened with interest to this year’s Queen's Speech, which promised that
“legislation will be introduced to tackle corruption, money laundering and tax evasion.”
I say this is in the strongest possible terms, and I say it as a warning to the Government.
We are faced with a severe housing crisis and institutional tax avoidance on a huge scale. First, we need serious steps that will make it harder for shady offshore entities to buy up property in this country, and secondly, we need to make it harder for opaque shell companies to shield themselves from scrutiny and investigation. Privatising the Land Registry would achieve the complete opposite. Surely the most basic common sense tells us that the first step in any crackdown on tax evasion, money laundering and corruption should be to ensure that data about who owns what are made public and are not privately held. As recently as last month, the Minister for the Cabinet Office told the Open Government Partnership in South Africa:
“The UK is a leader on transparency...Increasing openness and tackling corruption are 2 sides of the same coin.”
A public Land Registry could open up its data to support efforts to tackle the endemic corruption and abuse of the property market.
Currently, the average fee for the searching and provision of Land Registry data is £3. Journalists and campaigners have made use of that function to lay bare the true scale of offshore ownership of UK property, much of it derived from shell companies set up to avoid tax or to launder dirty money. A private organisation would have no obligation to open its data and would be able to charge whatever it liked for providing such data. Crucially a private company would not necessarily be subject to the Freedom of Information Act, so would have no duty to supply such data when asked.
Confidence in land and property in our society depends on a land registration system that is administered with integrity, neutrality and absolutely no conflict of interest.
It is a nonsense that a private company should be given an adjudicatory role on the land rights of citizens, other companies and the Government. It is a nonsense that a publicly owned Land Registry that is performing well and returning healthy dividends to the public purse should be turned over to a private owner. And it is a nonsense that this is being forced through by a Government apparently committed to tackling offshore tax evasion and corruption in this country.
This privatisation is not only woefully misguided, but plain wrong and should be abandoned before the public interest is sacrificed in favour of a short-term profit. I look forward to what the Minister has to say and the many contributions from Members in this House this morning.
I am pleased to make a contribution to this very important debate about a significant national organisation. Of course I am aware that the consultation has concluded and acknowledge that the Government have not yet come forward with any proposals for the actual privatisation of the Land Registry. I also bring to the House’s attention my entry in the Register of Members’ Financial Interests: I am a practising solicitor.
There are plenty of arguments for retaining the Land Registry in state hands, and we have already heard a number of them. Some of those arguments may be valid and some undoubtedly have merit, but quite a few are, to be honest, bordering on irrelevant. Similarly, there are very sound arguments to suggest it would be far more beneficial for the Land Registry to move out of state ownership into more commercially minded ownership.
I wanted to say this to the right hon. Member for Tottenham (Mr Lammy) as well: while I certainly am a privatisation believer, I do not understand why the Government are seeking to take a public monopoly and make it a private monopoly. I cannot see the benefit that the market will be able to bring to that.
My hon. Friend makes an interesting point, and unsurprisingly I could support many of the arguments for privatisation, but I will come to that in due course.
I want to make two specific contributions to this debate. First, I shall comment as a practitioner—as someone who actually uses the services of the Land Registry and whose firm works with the Land Registry on a daily basis. Secondly, I shall comment as a Conservative politician.
Speaking as a practitioner, the Land Registry is an extremely important aspect of the conveyancing and land ownership process. Indeed, it is central to the whole system as over 75% of land is already registered and ultimately all land will be registered, at which point no physical deeds will be required. Therefore, the accuracy and integrity of the register is absolutely vital. Each day thousands of transactions are logged through the Land Registry portal, queries are raised, and in some cases disputes are resolved. It is part of the everyday work of the conveyancer.
However, we have to accept that the Land Registry is not in any way perfect. Most practitioners would confirm this and I suspect the Land Registry itself would also acknowledge it. The Land Registry does make mistakes, it has backlogs, it needs investment, and it needs to modernise—it is in many respects just like many other organisations that have similar issues.
The Land Registry does make a profit, and it is quite rightly trying to modernise. It also continuously develops its programmes, and all conveyancers are aware of that.
Like many other practitioners, I acknowledge that the Land Registry plays a vital and central role in the property market. Practitioners greatly value and respect the services that it provides. As a legal practitioner, I see the worth of the Land Registry and its services. We should also not forget the many skilled people who work for the Land Registry, all of whom ensure that the legal profession, the owners of land and the financial institutions are well served.
As a Conservative politician, not unsurprisingly I believe in a market economy, in competition and in competitive markets. I have absolutely no issue with the privatisation of businesses or industries, as I firmly believe that, more often than not, private sector ownership leads to greater efficiency and innovation and better value for money for the taxpayer and the consumer. I do, however, believe in a strong liberal democracy, in the importance of the rule of law and in the significance of property rights in a market economy—in this case, the rights relating to the ownership of land. We must therefore tread very carefully when considering the future ownership of the Land Registry, given its central role in the property market.
The Land Registry is at the very centre of land and property rights in this country, and the integrity of the system is critical. Its importance is such that all solicitors, property owners, leaseholders, lenders and financial institutions must have complete confidence in its integrity, openness and honesty. It has to be trusted. Any doubts or concerns about its integrity, about possible conflicts of interest or about misuse of information could affect this central part of our capitalist system. We must also recognise the fact that the Land Registry is a natural monopoly, a bit like the police or other institutions that do not lend themselves to competition. Such monopolies, which are of great importance to the very fabric of our system, must be treated with great care.
A considerable number of my constituents work in the Land Registry in south Wales. Their concern is that they constantly have to adapt their practice on the basis of new policy guidelines from the Government. They work within an overarching public interest requirement, and they are worried that that ability to adapt will go if there is a constant need to renegotiate contracts and seek changes with a private sector company. How can we keep that integrity for my constituents if we have to factor in the profit motive of a private sector company?
The hon. Lady raises an interesting point about the constant changes in the Land Registry. As practitioners, we have to deal with those changes as new rules are put forward by this place in relation to the Land Registry and other aspects of property transactions.
As I have said, the Land Registry is central to our property system in this country, and it is vital that it has absolute integrity and openness. It has to be trusted.
I congratulate my right hon. Friend the Member for Tottenham (Mr Lammy) on securing this debate. It is also a pleasure to follow the hon. Member for Carlisle (John Stevenson), who has demonstrated its cross-party nature. I shall not keep the House for long as my right hon. Friend has done such a good job and covered practically every point.
The Land Registry office in Hull represents our only success in securing Government business in many years by bringing that business out of London. It came to Hull in the 1980s specifically because the Government of the time wanted to bring good, decent, well-paid jobs to an area that had been devastated by the collapse of the fishing industry. Incidentally, the collapse of that industry had nothing to do with the EU; it was the outcome of the cod wars with Iceland, for which Iceland gained retribution earlier this week on the football field.
The Hull office has taken its share of the overall two-thirds reduction in staffing that has taken place in an attempt to make the Land Registry more efficient. During my 20 years as an MP, I can almost plot my time in that role by the number of inquiries, examinations and investigations into the Land Registry. They come up about every two to three years. My right hon. Friend mentioned the wonderfully named quinquennial review of 2001, when I was a junior Minister at the old Department of Trade and Industry. Quinquennial reviews took place across Whitehall and I was responsible for the quinquennial review of the Patent Office in Cardiff. One of my bright young civil servants—obviously hugely qualified—asked me why quinquennial reviews only took place every five years, so I explained it to him. That review, as my right hon. Friend said, concluded by saying that
“privatisation should be firmly rejected”
and that it would
“be an act of considerable folly”.
Three quinquenniums later, we are being asked to commit this act of considerable folly by a Government whose motivation seems to be not to improve the service, but to raise a quick buck—and a fairly insubstantial buck in the scheme of things.
My right hon. Friend mentioned the quinquennial review, one of the most important findings of which was that the registry’s core functions—maintaining the land register, providing services to customers and operating its guarantees and indemnities scheme—hang together
“like the particles in an atom”
and that it would be “a great mistake” to contract out or split any of those core functions and threaten the whole enterprise. Does he believe that that argument remains true today?
I do indeed. The quinquennial review, like all quinquennial reviews, had to be carried out by a neutral Minister from a different Department and the procedure was quite rigorous. That conclusion has been said in different words in practically every other examination.
Since the quinquennial review, the Land Registry has been subjected to an accelerated transformation programme, a feasibility study, a proposal for public bodies reform and, a little over two years ago, a plan to make it a service delivery company which was supported by just 5% of those consulted. Never has an organisation been scrutinised so often to such little purpose.
In the meantime, the Land Registry has got on with its crucial work with unimpeachable integrity, registering 87% of the land mass of England and Wales, paying large dollops of cash to the Exchequer—over £119 million last year—building up its digital capability and achieving customer satisfaction ratings close to 100%. It was 95% last year and everyone was reaching for the Kleenex because it had gone down from 98%. That is an extraordinary level of customer satisfaction.
The right hon. Gentleman is making a strong case. My understanding is that if the Land Registry was privatised, it would not be subject to the Freedom of Information Act. It would therefore be easier to conceal who owns our land and would stop the publication of datasets, such as the one that was so important for the Panama papers exposé. Does he agree that that is one of the many risks of privatising the Land Registry?
I agree with the hon. Lady, whose name is also attached to this motion. Indeed, the question of transparency, as my right hon. Friend the Member for Tottenham said, has become vital since the publication of the Panama papers and adds another reason why the proposal should be dropped.
As for the privatisation proposal, the important question hovering over the Chamber is “Why?” This jewel in our public sector crown has been operating successfully since 1862. It is literally world class. Previous Conservative Governments that sold off anything that was not nailed down did not flog off the Land Registry. When I wrote to the Minister for Small Business, Industry and Enterprise seeking an answer to the question, she said:
“The Government has been clear that where there is no compelling case for keeping an asset in public ownership…it is right to explore a change.”
But there is a compelling case. It has been highlighted by the Competition and Markets Authority, the Conveyancing Association, the Law Society, the HomeOwners Alliance, the British Property Federation and by countless solicitors, such as the hon. Member for Carlisle, who have hardly been known to unite on anything, but who are absolutely as one on this.
As the single authoritative record of ownership and the basis of the state’s guarantee of ownership, the Land Registry’s integrity must be beyond reproach. It is a natural monopoly. Whenever any title to a property is being transacted, a citizen can use only this register and then pays the appropriate fee accordingly. A commercial undertaking would seek to profit from this captive client base. We know that property can provide a convenient vehicle for hiding the proceeds of crime and we now know that all the potential bidders to own the Land Registry are linked to offshore tax havens. The Land Registry is crucial to tackling tax evasion and offshore ownership, as the hon. Member for Brighton, Pavilion (Caroline Lucas) said. Those are all compelling reasons for the Minister not to flog it off.
While the Minister for Small Business, Industry and Enterprise talked in her letter to me about it being
“right to explore a change”,
this is no exploration. We have had a consultation on an issue the outcome of which has been predetermined. The status quo—public ownership—has been ruled out from the start. If the Government are foolish enough to press ahead with privatisation, it must be defeated. This delicate and vital work must be entrusted to civil servants working for a public service in which trust and integrity are maintained.
There has been mention of John Manthorpe, a former Chief Land Registrar and someone who has been associated with the Land Registry for 50 years in one capacity or another. He gave evidence to the Government’s consultation. We have not seen the results but he published his response, which is absolutely devastating. To quote from just one part, he says:
“The Registry’s independence from commercial or specialised interests is essential to the trust and reliance placed on its activities. It would not be possible for actual or perceived impartiality to be maintained or public confidence sustained, if a private corporation …were to assume responsibility for…the maintenance of a public register.”
That says it all. Parliament must not allow this piece of vandalism to proceed.
I will be as brief as I can, speaking in this debate as the Chair of the Public Administration and Constitutional Affairs Committee—the successor to the Public Administration Select Committee, which considered the question of open data in the previous Parliament and produced a report on the matter.
What is the Land Registry? It is a part of our critical national infrastructure. It is an absolutely fundamental function of any civilised state. It is how disputes are resolved. In the most war-torn parts of the world, there is a land registry in every country—even for every town. It has been in the lexicon of military doctrine since the days of empire that when a town is taken, the land registry is taken first so that the disputes that arise between different factions and families after control has been taken can be resolved. The first building that the Black Watch took in Basra when the British Army went into southern Iraq was the land registry. That is how fundamental a land registry is to any civilised state.
My hon. Friend and I share different views on the European Union, but I wonder whether he remembers the chaos that ensued when the former East Germany was unified with West Germany. There was no proper land registry for East Germany, making it difficult to ascertain who owned many houses in places such as Potsdam.
That is exactly the point. The former communist state had destroyed the old records to create a new order.
I have no objection in principle to privatisation, which has been a successful means of transforming large parts of the former public sector. Even the Labour party would have absolutely no intention of returning large parts of what is now in the private sector to the public sector.
Transforming the Land Registry into a modern, digitally-based service is crucial for making it more efficient and responsive to user needs. So far the digital transformation has been extremely slow. I have three main concerns about the present proposal. I hasten to add that I am speaking on my own behalf; this is not an agreed statement by my Committee. The Land Registry must continue to operate as an essential public service, the future owner of a privatised Land Registry must be committed to providing long-term stability, and the final deal, if there is one, must fulfil the Government’s own stated objectives for the use of open data.
In a submission to the Government’s consultation, I recommended that the quality of service provided to the public by the Land Registry must be prioritised above realising capital gains or transferring risk from the Government’s balance sheet. The primary concern must be to ensure that an accurate record of land use and ownership is maintained in public hands. The Land Registry’s core services should be protected from any real-terms price increases, and their quality must not suffer as a result of any transfer of operations to the private sector. The Land Registry is, and will remain, part of our critical national infrastructure. Its protection is crucial, and any public-private model or privatisation model must put in place safeguards to prevent the service being disrupted in the event of bankruptcy or commercial failure of any kind.
Our report in 2014 was based on evidence from leading figures in the world of data management and statistics, as well as from Ministers. Although the Committee did not look in detail at the privatisation of the Land Registry, we did look into the future use of the Government’s major datasets, of which the Land Registry is one. The final report made several recommendations for the use of Government data. In particular, we stressed the need to ensure that datasets are easy to access, easy to read and free to use.
On the specific subject of the Land Registry, the Committee concluded:
“A radical new approach is needed to the funding of Government open data. Charging for some data may occasionally be appropriate, but this should become the exception rather than the rule. A modest part of the cost to the public of statutory registrations should be earmarked for ensuring that the resultant data . . . can become open data.”
Data held by the Land Registry are one such example. If this model is adopted by the Government, they must not allow a new privatised entity to expect to make money from the selling of those data. The expectation must be that the data will be freely available.
In public policy terms, it is important to understand the value of open data to the economy as a whole. Research commissioned by the Open Data Institute found that public sector open data will provide more economic value every year, equivalent to as much as 0.5% of GDP, than data that users have to pay for. For example, we all use the Postcode Address File. That has been privatised, but what makes it of such value to us is that we can get on a website and get it free. How outrageous it would be if we had to pay for that.
Unfortunately, when the Royal Mail was sold, we transferred those data to the private sector and now big businesses have to pay to use those data. The result is that new forms of open source data will be created, which will gradually take over from the Postcode Address File. By transferring those data into the private sector as we have, we have undermined their value and created a cost to the productive sector of the economy for accessing them. In our conclusions, we stated that the sale of the Postcode Address File was the wrong decision. We concluded that such an asset should have been kept in public ownership, where it would be a national asset, free for businesses and individuals to use for the benefit of the wider economy.
If the Land Registry is privatised, the land register itself—the actual data—must stay in public ownership. It is crucial that the Government preserve for themselves a substantial degree of policy flexibility with regard to any agreement made with a privatised organisation, and if they decide that the public interest is best served by a change in data policy, they must remain free to effect this and to do so without excessive cost.
I am deeply concerned that the future owner of a privatised Land Registry must be committed to long-term stability and continuity. That depends on the character of the operator, if there is to be a private sector operator. The operator should understand that it may derive profit only from some kind of long-term yield for a long-term contract with the Government and be prepared to invest in the organisation to achieve this aim. An investor with a more venture capital-style approach, aiming to make a capital gain out of the development of the business and then on-sale, would be a completely inappropriate form of ownership.
Given all that the hon. Gentleman has said about the importance of the integrity of the Land Registry, why is it not appropriate to build that flexibility for entrepreneurship into the current Land Registry so that it can make the profit that is necessary for the investment and modernisation that are needed? Why do we have to take this risk?
I shall come to that. It is a perfectly reasonable question.
The type of owner of the infrastructure might be like the banks automated clearing system, which is a company that is owned by the banks. It is just an operating company that the banks fund in order to provide them with a service. That is much more the kind of privatisation that I would find acceptable, rather than a company called Land Registry plc, with its own board of directors thinking about how to develop its business. It is a service and there is a function that it needs to provide.
The final proposal should include a full assessment of what has happened in other countries where such a service has been transferred to the private sector. Additionally, in any privatisation plan the Office for National Statistics should have the power to take over the collation and publication of Land Registry data, effectively getting a daily feed from all new records and publishing them free online. If the Government decide to proceed with some kind of privatisation of the operations, in two years’ time I expect to be calling the Department for Business, Innovation and Skills and UK Government Investments, which is overseeing the process, to discuss with my Committee what effect this movement has had on the publication of open data.
Finally, in answer to the hon. Member for Bridgend (Mrs Moon), I hope the Government will explore alternative means of doing that by keeping the Land Registry in the public sector. Let us face it: it is only silly Treasury rules that prevent very cheap public money from being put into this with public sector involvement, but keeping it in public ownership, in order to develop the customer-responsive and properly capitalised system that we want. My mind is open, provided the data remain in public hands. My mind is open, provided the arrangement is stable, but I would not rule out transferring the service to some mutual or some existing consortium of banks or insurance companies or even keeping it in the public sector.
I declare an interest. I am proud to say that the Land Registry has its largest UK facility in my constituency.
The Land Registry provides a substantial number of jobs to Swansea East and plays a very important socioeconomic role, not just in my constituency, but in the surrounding areas. In July 2014 the coalition Government shelved plans to sell the well-respected 150-year-old service. That was after only 5% of respondents to a consultation felt that privatisation would make the Land Registry a more effective and efficient service. The consultation produced an overwhelming response:
“Overall, across virtually all respondents, it was suggested that a case for change had not been made.”
Despite this, fewer than two years later, the Government are yet again reviewing plans to privatise the Land Registry. That is being driven by the Treasury’s demand to make cuts, with the short-term aim of cutting the national debt.
My hon. Friend is making a passionate case on behalf of the people she represents. Is she aware of the report from the New Economics Foundation, which concluded that future funds from the Land Registry would outweigh the cash cost of a one-off sale after 25 years? The plan fails on the Government’s own terms.
I am aware of that and I will come to it later in my speech.
The consultation on moving Land Registry operations to the private sector was launched on 24 March 2016. Ludicrously, it closed two days later. I would argue that it was deliberately timed so that MPs would not notice the announcement, because we were all heading home for the Easter recess—I was actually on a train to Swansea, and I read of the plan on a Twitter post. Like many colleagues, I was furious at the way the announcement was made.
Currently, the Land Registry is entirely self-funding and no drain whatever on the Government purse. Furthermore, the service makes a surplus year on year. That is passed on to the public by way of reduced costs for using the service. It also provides the Treasury with a significant income.
A report from the New Economics Foundation shows that selling off the Land Registry would harm Government finances in the long term. It suggests that the Land Registry and other assets under threat of privatisation or part-privatisation are clearly able to innovate and deliver a profit without needing to be in the private sector.
The sale of the Land Registry will hardly put a dent in the national deficit finger—[Laughter.] We can all point the finger at the Government. At the same time, we will be giving up valuable assets and forgoing long-term revenue streams. Land Registry jobs are also well paid and, more importantly, well respected. It is important that we retain them as part of a well-mixed economy to give job opportunities and a way forward to people from all sorts of backgrounds.
Only an in-house Land Registry can continue to deliver a quality, trusted and impartial public service.
My hon. Friend is making a key point, and I completely agree with her. The public outcry about the privatisation of the Land Registry is unprecedented. People trust the service, and they want it to remain. Fundamentally, it is also profitable. Why the Government are considering privatising it is beyond most Opposition Members and several Government Members as well.
I entirely agree, but, unfortunately, public demands do not always fall on receptive ears, to quote the Women Against State Pension Inequality Campaign.
If privatised, the Land Registry would no longer be subject to the Freedom of Information Act, so it would be easier to conceal who owns land and to prevent the publication of datasets such as those that identified the properties in London owned by the non-domiciles in the Panama papers.
I am distressed to see jobs disappear in my constituency. Swansea East is already suffering enough job losses—Royal Mail, HSBC, Virgin Media and Tata Steel. We cannot afford to lose any more jobs. In the last Parliament I tabled an early-day motion calling for the Government to abandon plans for privatisation, and I am glad to say that it received a lot of support. It has been retabled this month, and it is again gathering support.
Many feel that this proposal is just another get-cash-quick scheme from the Government, but in reality it jeopardises jobs, brings economic uncertainty and threatens to remove the transparency that allows us to have confidence in the fight against corruption and illegal accounting.
I implore the Minister to realise that this plan is ill-thought-out and that it will be challenged by the unions, legal and property professionals, the public and Opposition Members. The Land Registry is value for money, and it is an efficient and trusted service.
I congratulate the right hon. Member for Tottenham (Mr Lammy) on securing this important debate. It is a pleasure to follow the hon. Member for Swansea East (Carolyn Harris). I am not sure that I can quite match her passion, but I will certainly set out where I stand.
I was elected last year on a mandate to balance the books. There is no question but that the Land Registry offers an opportunity to raise money for the Government—the amount is purported to be around £1.5 billion. I am not ideologically against privatisation. When the Government can raise capital by selling assets, without detriment to public services, it can make sense to do that in certain circumstances. I appreciate, however, that that is a point on which Opposition Members may not agree with me.
I was a practising property solicitor until the last election, so I spent my days buying and selling houses for people. As part of that role, I spent several hours a day and many hours on the telephone liaising with the Land Registry. I used to find the Land Registry very helpful, and I very much valued its expertise. However, on occasion, and sometimes more often, it was quite slow, particularly regarding non-urgent matters such as first registrations. To be fair, the Land Registry has done a great deal in recent years to innovate. It has largely moved away from paper and some of the online tools, especially the mapping tool, are really useful. Having said that, some of the tools it uses are very much outdated and in need of an upgrade.
On that basis, there is no question but that there is a strong case for privatisation, because that could lead to a cash injection that could be transformational and drive innovation. Having said that, I am not in favour of, and nor can I support, the privatisation of the Land Registry. To be clear, the Land Registry is not RBS or Royal Mail. To compare it with those organisations fundamentally misses what the Land Registry is and what the consequences would be if it were in private hands.
As hon. Members have said, the Land Registry continues to be an essential part of land and property ownership in England and Wales. The main statutory function of the Land Registry is to keep a register of title to freehold and leasehold land. That represents 24 million titles covering 87% of the land mass of England and Wales. On behalf of the Crown, the Land Registry guarantees title to registered estates and interests in land. For a very small fee—as little as £3—it also makes data available to the public and solicitors via searches.
My objections are simple. In proposing the move, the Government have misunderstood what the Land Registry is fundamentally about. It is more than just a data provider or an authority for recording title. It registers title, guarantees rights to land and provides guarantees pre and post completion searches. The reliability of the register is vital to the property market, and any loss of confidence in the register would significantly affect the property and mortgage markets and, therefore, the economy as a whole. While the Land Registry can, at times, feel clunky and hugely frustrating for property professionals, at its heart it is based on the principles of integrity and impartiality, and I fear it is that that we put at risk if we accept the proposals to privatise.
We are a nation of homeowners and a level of trust has been built into our system through the security that has been provided by the Land Registry since 1862. We have an established property market, which is why England and Wales is a highly trusted market in which to invest. I fear that privatising the Land Registry would put that trust at risk, particularly for foreign investors. Let us not forget that the Land Registry guarantees the titles to billions of pounds of residential and commercial property.
The Land Registry acts as a repository for huge amounts of important data as a monopoly, and rightly so. However, let us remember that it has no hidden agenda or motive other than to provide a public service and to ensure that the property market continues to function well. I share the concern of many that privatising the Land Registry would undermine impartiality, increase fees for customers and pose a considerable risk to the integrity of the organisation.
Let me be clear that I would not criticise any private company for acting in the way I have described; in fact, we should expect it. However, a profit motive would completely change the nature of the organisation and we should expect costs to be driven down, with prices for data and fees rising. With the monopoly that exists, I struggle to see how the move could not be seen as anti-competitive. Given the monopoly, it could be argued that if the Land Registry were in private hands, it could reduce innovation and the transformation agenda, as there would be no market forces forcing it to do otherwise.
Fees at the moment are reasonable and offer customers good value for money, but let us be clear that property transactions are expensive when we include legal fees, stamp duty, search fees and moving costs. The current scope of the Land Registry’s work is limited by its direct link to the property market, meaning that there are limited options for a private company to increase workload and therefore revenue and profit. I appreciate that there is potential for the Land Registry to start providing other searches. However, that would require primary legislation and would lead to opposition from local authorities and private companies that already provide such services. The most likely outcome, notwithstanding the commitment the Government have made to retain an element of control over fees, is that fees will rise.
I have not heard any stakeholders in the property industry calling for this change, let alone warmly welcoming it; in fact, they all criticise it. Solicitors, surveyors, estate agents and mortgage lenders are opposed to the plans. The Competition and Markets Authority has said that the proposals would give the new owner a monopoly on commercially valuable data with no incentive to improve access to it. The concerns raised are not unreasonable, nor do I consider those raising them to have a hidden agenda or motive; their worries are genuine and we should not ignore them. There is no need to do this. As the right hon. Member for Tottenham said, the Land Registry has returned money to the Treasury in 19 out of the past 20 years, while continuing to reduce the fees that it charges the public.
Selling the Land Registry—the sole record of land ownership information—is a privatisation too far. We would, rightly, not consider privatising HMRC or the General Register Office. Some things are just too important to take out of the hands of Government. We would not consider privatising the births and deaths registers, and we should not treat land ownership differently. The Land Registry works. It makes money. If all the concerns I have raised cannot be addressed, please just leave it alone.
I thank my right hon. Friend the Member for Tottenham (Mr Lammy) for securing this debate. It is a pleasure to follow the hon. Member for Colchester (Will Quince), who made a powerful speech.
It is completely clear to me that privatisation is not the way forward for the Land Registry. Privatisation will damage the Land Registry’s reputation for independence. It could cause job losses in my constituency and elsewhere and, ultimately, cost the public money. The UK’s Land Registry is a model of good practice around the world. It gives advice to other countries about how to set up and run land registry services in an independent and impartial way. Its expertise is welcomed by many other countries.
Privatisation could seriously damage confidence in the Land Registry’s independence. As we have heard, the former Chief Land Registrar and chief executive of the Land Registry, John Manthorpe, has said:
“The Registry’s independence from commercial or specialised interests is essential to the trust and reliance placed on its activities. It would not be possible for actual or perceived impartiality to be maintained or public confidence sustained, if a private”
“were to assume responsibility for the…maintenance of a public register.”
As others have said, the consultation paper from the Government seems to show a lack of understanding of what actually happens with the register. The Government talk about the register as though it were a static document that is produced once and for all and can be handed over to somebody else, but it is very much a live document, as transactions are constantly added and updated. That means that there is enormous potential for a conflict of interest emerging from a private company running the register when information that might be placed on it could change on an hourly or daily basis. The Government’s consultation paper showed no acknowledgement of conflicts of interest that could arise or how they would be dealt with.
The Competition and Markets Authority has also raised concerns about privatisation, particularly that a private company running the Land Registry as a monopoly could weaken competition by making it harder to access the information it holds. As we have heard, an exemption from the Freedom of Information Act could mean that the sort of information found in the Panama papers would not be available for public scrutiny, which would be a great loss. The Government must seriously consider whether it is sensible to change a model that has a sound international reputation and a lot of trust, and that works so well and has real independence.
It is abundantly clear that there is no public demand for privatising the Land Registry. When privatisation was last suggested in 2014, the public consultation showed that 91% respondents disagreed with the idea that the services could be better delivered outside government. The hundreds of emails I have received from constituents opposing the Land Registry’s privatisation in just the past few weeks suggest to me that public opinion has not changed since 2014. I will quote just a few of my constituents who have written to me about this so that we can all hear how concerned they are. One wrote:
“The Land Registry is a self-financing public service which doesn’t cost the taxpayer a penny to run—so why is the government considering selling it off to companies with links to offshore tax havens?”
“Experts from all backgrounds have been calling the government’s plans to sell the Land Registry short-sighted. The government’s own watchdog warned that it would threaten competition, and an expert from the World Bank said it would increase corruption.”
“This government seems to be hell-bent on disposing of everything which we value, not to mention that
the Land Registry
“is actually a net contributor to the treasury.”
It is not only constituents who are concerned. Institutions from the Law Society, to the Public and Commercial Services Union, the Open Data Institute, the Co-Operative Group and very many small and large businesses have expressed their unease at the idea of privatising the Land Registry. That is for a whole variety of reasons that we have heard today: the registry has strong public confidence; there is ease of access; and it is trustworthy. Why are the Government so keen to go against the opinion of the public and experts? The Government’s decision again to raise the idea of privatisation, just two short years after they were forced to withdraw proposals in the face of massive opposition and a broad alliance of interests is, quite frankly, baffling.
Will the Government provide reassurances to my constituents working in the Land Registry office in Durham who fear that their jobs could be lost in the event of privatisation? The Land Registry is a major employer in Durham, providing hundreds of skilled jobs. Employees are understandably very concerned that privatisation could lead to job losses or even a full closure of the Durham office, which has existed for over 50 years. As this has been the only Land Registry office in the whole of the north-east since the closure of the York office some years ago, I would be concerned about not only my constituents’ jobs, but the impact that such a closure might have on the north-east’s economy.
When the privatisation of the Land Registry was last discussed in 2014, it was estimated that the Land Registry in Durham contributed £10 million per year to the local economy; I very much doubt whether that sum would have reduced in the past two years. Given the instability of our economy in the wake of the pro-Brexit vote, I would be extremely concerned by the prospect of further damage to the north-east’s economy.
The privatisation of the Land Registry would be bad not just for my constituents but for the public as a whole. The revenue brought in through the Land Registry each year would be lost. As a recent report from the New Economics Foundation made clear, in the long term, the sale of the Land Registry would result in a significant loss of income to the Treasury. In 19 of the past 20 years, the Land Registry has produced a surplus. It paid £120 million into the public purse last year. It is clear that the decision to review proposals to privatise the Land Registry is being driven by the Treasury’s desire to bring in revenue in the short term without looking at the long-term negative impact that that would have on public finances. The estimated £1.2 billion that could be raised from the sale will not stretch very far into the future.
In 2014, the Land Registry expanded to include services relating to local land charges. I said at the time that I thought the Government were doing that in order to fatten the registry up for privatisation, and it seems I might have been right. Once again, the Government are pushing for privatisation, so I think my fears were not misplaced. The Government’s responsibility must be the long-term health of the economy, and it is clear that the money that can be raised from privatisation will not offset the long-term costs of having no revenue from the Land Registry.
This Government have failed before to get the best deal for taxpayers when privatising services, most recently in the case of Royal Mail, in which shares were tragically undersold at the cost of millions of pounds to the taxpayer. How can we be confident that the Government will get the best deal for the British public with the privatisation of the Land Registry? Without them being able to guarantee a good deal, would it not be better, for that reason alone, to keep the Land Registry in public ownership? We have been through many of the other reasons why privatisation should not happen.
I end by quoting the words of another of my constituents who wrote to me about this issue:
“The Land Registry is working well, it’s not broken—there’s no need to fix it. In fact, it’s successful, profitable and part of a vital data infrastructure that our country needs.”
I completely agree with my constituent and ask the Government to drop any idea they might have about privatising the Land Registry.
It is a pleasure to speak in this debate and to follow the hon. Member for City of Durham (Dr Blackman-Woods). I thank the Backbench Business Committee and the right hon. Member for Tottenham (Mr Lammy) for securing this debate, which I have co-sponsored. My name would not usually appear alongside the others on the list, which shows that this is very much a cross-party debate.
I feel sorry for the Under-Secretary of State for Life Sciences, my hon. Friend the Member for Mid Norfolk (George Freeman). I thought that he would be somewhere else at midday, seeking help from colleagues to go for the top job, but he is here instead, listening to us talk about the Land Registry. It is a pleasure to see him in his place.
I thank Andy Woodgate, our union representative in Weymouth, which is in my constituency. The Weymouth office is one of 14 in the country. That number has come down from 22 over the past 10 years, due to efficiencies and reorganisations, including digitisation and computerisation, which many hon. Members have mentioned. Weymouth has certainly gone down that road: it has made huge advances and is meeting the technical challenges in the computer age. In fact, it has been described as a “beacon” of the civil service. It is ironic that a beacon of the civil service should be proposed for privatisation, but there we go.
The office occupies one floor of a building that once held 600 members of staff over three floors. There are now 200 members of staff working on one floor, yet their workload is increasing, not decreasing. It is one of the biggest employers in my constituency and I am proud to represent those 200 members of staff. I have spoken to them and listened to their concerns. I am acting, as we all should be, without fear or favour. Having listened to their views, I concur with and share their concerns about the Government’s proposal to privatise. Given everything that is going on in the country, I hope that the issue can be shovelled aside and—dare I say it?—that we can get on with the bigger issues facing the country at this very exciting time.
An Englishman’s home is his castle. The very territory that we live on is the biggest investment that any of us makes. This sell-off would undermine that absolute, fundamental basis of security.
The proposal and consultation fail to register the fact that the Land Registry is quasi-judicial. The integrity of the organisation’s database is paramount. Its quasi-judicial nature is one very good reason why it should not be sold off, and it is on that basis that all other activities occur. That is why it should be allowed to continue its excellent work. Land Registry data are fully accessible to Ministers and the public, with all the checks and balances required. It is the largest database in western Europe. It underpins the housing and property market, and it is a cornerstone of our economy. A sell-off could destabilise the housing market for a short-term return—there is no point in doing that.
The Land Registry is self-financing, returning approximately £100 million to the Treasury, although that was never intended because it is a non-profit-making organisation. Privatisation would inevitably introduce a profit-seeking motive, which might lead any new owner to take short cuts to reduce costs and to maintain the database less well, thereby leaving its integrity at risk. Once those data are corrupted, the situation would be irretrievable.
The Land Registry is a public monopoly. As every speaker has asked, why should it now become a private monopoly? That just does not make sense. Hedge funds and overseas buyers are not interested in the greater good or the stability of the country—that is the risk. They want to make a return. I have nothing against privatisation per se—I run a business myself, and if we did not make a profit, we could not reinvest in the business—but this business should not be put under that sort of speculation. Selling to a foreign company might well be against the national interest.
Interestingly, only the Treasury thinks that this is a good idea; no one has even asked for it. Yet the consultation is written in such a way that submissions must choose between alternative sale models—in other words, the status quo is not represented. Nowhere is it suggested that the whole idea may be wrong. As we have heard, of the 30,000 responses to the consultation, sampling shows that about 95% of them are against the proposal.
At present, Land Registry mistakes or errors that result in owners suffering a loss are underwritten or insured by the Government through a state guarantee fund. Big mistakes could cost millions in compensation—in effect, the figure is unlimited. What new company would be willing to underwrite that risk? That would be factored into the sale price, thereby lowering it.
The Land Registry has been valued at just over £1 billion, which is only 10 times the current revenue it produces. That is not enough. Once the indemnities and the safeguards are factored in, would a private buyer spend that sort of money anyway? I suggest not; I think they would ask for a lower price because of all the indemnities that would have to be in place.
The proposal also makes a false distinction between a land register and the Land Registry. The register is the database of 20 million-plus titles, to be kept in public ownership according to consultation document. The registry is the operational arm that creates and maintains the database, which would be sold off. There is no suggestion as to how that separation could be achieved or how it could make money.
Land Registry fees are kept reasonable and are constantly reviewed. If new owners must make a profit, they will inevitably rise, as will conveyancing costs. There is very little slack in the system, given that the Land Registry has already been pared down over the past 10 years from 10,000 to 4,000 employees.
The employees that I have met are extremely skilled and knowledgeable, and it takes at least two years to train them in conveyancing law, ordnance survey maps, digital learning and all the rest. The situation is complex, because the decisions they make are quasi-judicial decisions at a basic level, in that once ownership is registered it is guaranteed.
Interestingly, I understand that the Land Registry is going to employ 200 more staff, which suggests that there is more, rather than less, need for the organisation. A private employer is likely to look at cutting costs, so there is a risk that staff, who would be most vulnerable—they are certainly the most expensive part of any business—could be laid off at a time when more are needed.
The Law Society—a highly respected organisation with no vested interests—has opposed the proposed sell-off in a submission. So too does the Competition and Markets Authority, which says that a sell-off would introduce a profit motive that would affect the Land Registry’s ability to provide a good service at a low price.
The UK Land Registry is world-renowned and respected. It consults on establishing land registries in developing nations and abroad through its international arm. We must be most careful not to bring it into disrepute. That is particularly pertinent now, when the UK is taking a leading role in tackling corruption and money laundering. Offshore investment in UK properties must be very carefully monitored. Currently, we have free public access to freely available information in the Land Registry in cases of investigation. If it were privately owned, would that be the case? I doubt it. Interestingly, some tenders have reportedly already come in from interests in offshore tax havens—a subject that is particularly volatile in this House—and I do not think that they would be apt owners of an organisation such as the Land Registry.
Many excellent points have been made by other speakers. I will conclude at this stage, because others wish to speak. I urge the Minister, with all that is happening to this great country—with the wonderful opportunities that lie ahead and the far bigger fish that we will have to fry—to ensure that this little tiny fish is left alone to swim in the sea for years to come, as it has done successfully.
It is a pleasure to follow the hon. Member for South Dorset (Richard Drax). I speak in my capacity as chair of the Public and Commercial Services Union parliamentary group. I pay tribute to the speech by, and the motion in the name of, the right hon. Member for Tottenham (Mr Lammy).
As has been said, more than 350,000 people have signed an online petition, and objections have been raised by, among others, the Open Data Institute, which warns that the proposed privatisation will build barriers in the data infrastructure, inhibit GDP growth and reduce the tax revenue that would be received from price paid data that the publicly owned Land Registry releases.
Several hon. Members have mentioned the report and investigation by the New Economics Foundation, which has argued that it is inappropriate to privatise the Land Registry—that the privatisation is politically motivated to reduce national debt in the short term—because the Land Registry, as a trading fund, is self-financing and brings in a surplus of £100 million a year. It performs well, with a 95% customer satisfaction rating. It concerns me that 3,500 jobs are at risk as a result of the privatisation.
There is also a risk of increased property fraud if the Land Registry is privatised. Currently, Her Majesty’s Land Registry invests heavily in this area at significant cost. The Land Registry deals with a large amount of personal data and the details of borrowing, secured debt and even court orders, because they form part of the land register.
That is an important point. One thing that occurred to me is that although there is a great deal of value in the land that is titled and registered, there is also quite a lot of value in land that is unregistered. Of course, the Land Registry makes the assessment as to whether people have a legitimate claim on that land.
The hon. Gentleman makes an excellent point, and I will come on to that. The New Economics Foundation states in its research that only an in-house Land Registry can continue to deliver a quality, trusted and impartial public service while fairly bringing in new revenue. In the research, the foundation also revealed that the Government’s assurances about the service are meaningless, because no risk assessment has been undertaken; and that a private company, naturally seeking to maximise profits, would inevitably put up fees to achieve an increased profit margin. There are also risks in the proposals to all users of the system, to any future Government planned infrastructure build, to the housing market, to the wider economy and to the national interest as increasing amounts of land are sold off, all too often to unknown overseas individuals and companies, as has been said.
Just last week, it was announced that the Ministry of Defence is set to privatise the repatriation and burial of war casualties—an idea that I find abhorrent. Does my hon. Friend agree that that is a clear sign that the Government’s privatisation agenda is ideological?
It is quite clear that we have an ideological Government, and they will be debating among themselves how far that ideology will take them.
As many hon. Members have pointed out, if the Land Registry is privatised, it would not be subject to freedom of information requests or the Freedom of Information Act, and it would be easier to conceal information on that basis. There is also the issue of local land charges. In 2014, the Land Registry added to its scope additional services such as land charges. The Land Registry is looking at the rules, and it concerns me that its consultation on the matter contains only a passing reference to privatisation plans and no mention of what impact they would have on local land charges or the local land charges service. Local land charges service providers have seen their business removed and nationalised, and now it may be sold off to a large conglomerate before the nationalisation has even taken place.
In the words of the former chief land registrar, John w, the Land Registry is
“highly regarded by those who depend on it as a provider of trusted, prompt services. Land registration is not an activity that any responsible Government can transfer to the private sector.”
I urge Ministers to abandon these damaging plans for the Land Registry service.
It is a pleasure to follow the hon. Member for Glasgow South West (Chris Stephens), who made some very good points, and to congratulate the right hon. Member for Tottenham (Mr Lammy) on securing this important debate.
I absolutely support the principle behind this proposal. One of the Treasury’s principles is to maximise capital receipts, and we must not forget that this country is about £1.6 trillion in debt. In the right circumstances, it makes absolute sense to sell off assets to pay off liabilities; that is a sensible economic policy. Of course, the Government since 2010 have halved a deficit that was running at £153 billion—now it is £75 billion—and simultaneously grown the economy. We have one of the fastest growing economies in the developed world. Day after day, we debate how we will balance the books and how we will pay off the rest of the deficit or reduce it, and the Opposition oppose every single cut that we suggest. At the same time, they complain about the lack of deficit reduction. It simply does not stack up.
We have talked recently about a new politics. I had the great pleasure of serving on the same Committee as Jo Cox, who really set the tone for the future. I hope that we will take forward the sentiment that we should have challenge, but it should be a constructive challenge. We should not be sanctimonious. The majority of people who come into the House do so for absolutely the right reason: to improve the lot of the less fortunate in society and those who have the least opportunity. Members on both sides of the House should recognise that.
Many Labour Members have made the point about the Land Registry’s important role in providing secure title for people, but in the same breath they bring forward policies such as the mansion tax, which would take away the security of that title. It is a complete contradiction.
Nevertheless, I have concerns about this privatisation, because we may create a new private sector monopoly. We absolutely cannot have that. The Treasury’s criteria for sale of these assets—it is absolutely right to pay down our debt—are to maximise capital receipts, to provide better customer service and to reduce Government control. We would all agree with those principles, but may I add another: not to create any private sector monopolies? There is no effective competition in prospect if the Land Registry is privatised. We all encounter problems in our surgeries with a company called BT, which is a de facto private sector monopoly, certainly in the case of superfast broadband.
I believe that that business suffers from a culture of corporate obfuscation in pursuit of maximising profits and minimising investment, while maintaining desperately poor customer service. We must not let that happen in another private sector context, although privatisation is of course positive if it encourages competition in that it drives innovation, it drives investment and it should in itself drive great customer service.
Another of my concerns, which has been repeated many times, is the likely amount we would get for the Land Registry. The figure is around £1 billion to £1.5 billion, but it consistently produces a surplus of over £100 million a year. That represents a return of 8% to 10%, but the Government can borrow money at about 1%, so it does not make financial sense to sell it.
The Government have another very important role, which is to be a facilitator or enabler, and there are so many opportunities for open-source databases. Ordnance Survey has recently provided open-source data that could enable many technology companies to develop applications. One of those involves broadband because Ordnance Survey data are hugely important in allowing fixed wireless providers to provide remotely—at desktop level—superfast broadband in communities.
The Government have done such work in other areas. They have opened Department for Environment, Food and Rural Affairs databases to provide a free flow of information to enable the development of new technologies and applications. We are on the verge of what is called the fourth industrial revolution—the fusing of physical, digital and biological technologies—which could have huge benefits to the economy and to mankind. Given those real opportunities, the Land Registry should be kept in public ownership.
We should provide a more long-term and strategic approach in the public sector, rather than look for short-term profits. Our very own Tim Berners-Lee, a member of the Open Data Institute, has said that the sale
“could undermine the government’s bid to make more data publicly accessible”.
On that basis, it absolutely should not be considered.
As my hon. Friend the Member for Carlisle (John Stevenson) said, the Land Registry does need reform. It has a relatively new chief executive officer. The average tenure of the 4,500 staff is about 25 years, so it probably needs a bit of a shake-up if it is to make the best use of some of these opportunities.
Another point is about underpinning property rights, which are a fundamental component of economic success. The Land Registry has been in operation since 1862, and the average person in the street might be surprised to learn that it no longer has any paper deeds, but keeps everything digitally. I think the average person would be very concerned about that combination—the fact that the information is held digitally and that it would be kept by a private sector company.
The Land Registry does not only provide an administrative function. As the hon. Member for Glasgow South West keenly observed, the staff also use their knowledge and judgment. They are often asked difficult questions, and they need to be experienced and knowledgeable to provide a proper service.
The Government have introduced new initiatives on beneficial ownership, including consideration of a public register to make sure that foreign companies disclose the true ownership of UK property. That is revolutionary in that it is trying to tackle money laundering, corruption, crime and tax evasion. Those are all reasons why it is better for the Land Registry to be in the public sector than the private sector.
I am involved in the property sector. You must excuse me, Mr Deputy Speaker, for neglecting to draw the House’s attention to my entry in the Register of Members’ Financial Interests. Just about all the people in the property sector to whom I have spoken are against this move, whether they are members of the Conveyancing Association, or solicitors, house builders or property agents. Indeed, the Competition and Markets Authority has said that a private sector provider may fail to
“maintain or improve access to the monopoly data; and…weaken competition to its own commercial products.”
The Government are committed to the ambitious target of providing 1 million new homes by 2020 and increasing home ownership. Does my hon. Friend agree that we should avoid any disruption to the Land Registry that might jeopardise its service to home buyers in the future?
I totally agree. As we have heard, the Land Registry service is regarded as a very high-quality service and the housing market is such a critical component of our economy, particularly now that economic markets such as the housing market are looking a little more fragile.
I have significant reservations about the privatisation of the Land Registry, and—supportively and gently—I ask the Government to think again about these proposals.
A few weeks ago, I joined Public and Commercial Services Union members and representatives from the campaigning group 38 Degrees to hand over a petition with more than 200,000 signatures to the Department for Business, Innovation and Skills, calling on the Government to abandon plans to privatise the Land Registry, which has its main offices in Swansea, where many of my constituents work. Why on earth are we here again, just two years after the previous attempt at privatisation?
It is not simply employees of the Land Registry and their PCS and First Division Association representatives who are very concerned about the privatisation. Back in 2014, we had a meeting in the House of Commons—it was organised by my hon. Friend the Member for Chesterfield (Toby Perkins), who then shadowed the BIS Minister with responsibility for the Land Registry—at which real concerns were expressed by representatives of the Law Society and the Council of Property Search Organisations. Jonathan Smithers, deputy vice-president of the Law Society, and James Sherwood-Rogers from the Council of Property Search Organisations explained that, in their analysis, a privatised land registry would inevitably end up being a private monopoly that could impose rip-off fees and provide a worse service for its clients.
We then discovered from leaked documents that the Government were determined to push ahead with privatisation plans and that the recent consultation had in fact been a sham. They had clearly not listened to respected independent bodies, such as the Law Society, never mind to their employees, who were represented by the First Division Association and the Public and Commercial Services Union. Two years later, it seems that the Government are determined to push through privatisation of the Land Registry, because the consultation is focused on how to do so, not whether to do so.
To me, privatising the Land Registry would be nothing short of daylight robbery: it would rob the taxpayer of millions of pounds. The Land Registry currently brings £100 million into the Treasury in profits each year, so it is madness to steal that from the Treasury and stuff it into the pockets of private contractors, who would probably then add insult to injury by hiking the fees and ripping off the public. The enthusiasts of privatisation cite the benefits of healthy competition in providing a better service for the public, but we all know what happens to a privatised monopoly, which is exactly what the Land Registry would become. There would be no control over the service provided, and prices would be hiked.
Indeed. My hon. Friend puts it concisely.
Let us remember what happened with Royal Mail. Who is to say that this Tory Government will not be wilfully incompetent and will not sell off the Land Registry at a bargain basement price, as they did with Royal Mail, depriving the public purse of the true value of the asset? Even worse, we hear that the private companies interested in taking over the Land Registry have links with tax havens. It would be a double whammy: first, the Treasury may lose the revenue that the Land Registry brings in; and then, to add insult to injury, the Treasury may lose out because profits are offshored. We would lose not only the revenue but some of the tax take. As other Members have pointed out, in situations such as that with the Panama papers the public interest would be seriously hampered if FOI did not apply, as I understand it would not were the Land Registry a private company.
All in all, it would be an absolute disaster, and that is before we even come to the issue of trust. Currently, the Land Registry’s customer satisfaction rating is enormously high—some 98%. People trust it because they know it is impartial, as only a Government body can be. How could we possibly guarantee that there would not be conflicts of interests if it were a private company? Then there is the issue of data protection. I am advised that there is nothing in law to prevent a private company from selling on personal data to buyers who wanted that information.
For all the reasons mentioned both by me and by my hon. Friends, I implore the Minister to think again. He should listen as well to Government Members who also have concerns. Privatising the Land Registry is simply not the right thing to do. It is not just us who are saying that. The Law Society has set out its concerns very clearly. We have already heard concerns from practising solicitors. We really must keep the Land Registry in public ownership, so that we can maintain its integrity.
It is a pleasure to be called to speak in this really important debate. I thank the right hon. Member for Tottenham (Mr Lammy) for securing it, and all Members who have spoken in a very collaborative way—that is the way forward on issues such as this.
As is the case for many other Members who have spoken, the Land Registry has been an important employer in my constituency for many years. It is part of Telford’s fabric and success story. As Members may know, Telford is a new town, built in the 1960s on the coalfields of east Shropshire. Today, it is a thriving, dynamic, vibrant town at the cutting edge of new technology, with inward investment and innovation, but that has not always been the case.
Back in the 1980s, when the Land Registry came to Telford, it was an unemployment blackspot. The Land Registry gave Telford a much needed boost. Throughout its history, Telford has found ways of overcoming obstacles and meeting the challenges it has faced. The Land Registry has played a really important part in that, which is why my constituents have a genuine attachment to it and a genuine concern for its future.
I have met employees and their representatives to get a full understanding of those concerns. Although some people have sought to make this an ideological and political issue, my constituents, Land Registry employees and their families are rightly most concerned about retaining jobs in Telford and securing the Land Registry’s future. I share those concerns. As a constituency MP who is passionate about Telford’s future, securing those jobs for Telford matters to me most. The employees I have met are long-serving, highly experienced members of staff who have gained invaluable experience, expertise and knowledge of their roles over the years. They make an important contribution to that successful business.
Telford is a great place to live and work. Businesses move there all the time. It has a unique rural-urban identity, in the heart of rural Shropshire but with a vibrant urban twist. Close to the M54, with good links to Birmingham, it has clean air, green spaces and a quality of life second to none. Most of all, it has a community of hard-working people who want the best for their families and for Telford’s future. We live in a modern, changing world that will constantly evolve. Telford is used to change, and has always adapted to it, and that flexibility and resilience lie behind the success story that Telford is today. Like any successful business, the Land Registry will continue to evolve and modernise, as an efficient business.
I am grateful to the Secretary of State for Business, Innovation and Skills for taking the time to listen to me and hear my constituents’ concerns at a recent meeting. I will do everything I can in this place to ensure that Land Registry jobs stay in Telford. Although I have no ideological opposition whatever to any particular ownership structure, I could not support any sale that was not value for money for the taxpayer or risked jobs in my constituency. I recognise that no decision has yet been made. The consultation has only just ended and the responses are being considered. I do not want to get distracted by any ideological or party political arguments on this. I am sure that Members on both sides of the House agree that people and jobs are what matter, not politics.
As I have completely lost my place, I will ad lib. I once again thank the right hon. Member for Tottenham. I was slightly concerned by some parts of the motion, as over the past few weeks we have seen rather a lot of fear and scaremongering, which does not help my constituents, whichever side it comes from. I would really welcome a collaborative, cross-party approach on this, where we do not talk about dirty money, or tax havens, or the proceeds of crime—that does not benefit my constituents. I urge all Members to reflect on the fact that if we are to ensure that the Land Registry retains its current structure we must work together to urge the Government to consider all the issues that have been raised and take note of everything that colleagues have said.
Everyone who has spoken in this excellent debate has consistently come to the conclusion that the Government consultation should conclude that the Land Registry should remain in public hands, and that privatisation should be rejected. That has been the very clear message from speakers from all parts of the House. The proposal to privatise the Land Registry highlights the choice between a quick buck and long-term stability. It gives us the chance to consider the importance of an impartial register for the ownership of 24 million UK properties. It has revealed, yet again, overwhelming public opposition.
I congratulate my right hon. Friend the Member for Tottenham (Mr Lammy) on securing both the debate and such strong cross-party support. His opening remarks were comprehensive. He said that in bringing this proposal forward the Government had shown that they were itching to privatise, that the status quo had not been offered and that the proposal amounted to profiteering. I am afraid that that is very good summary of what will happen should the proposal go forward.
I will respond to some of the excellent speeches we have heard. The hon. Member for Carlisle (John Stevenson) described the Land Registry’s natural monopoly and pointed out that just as we would not privatise the police service, so too this was a privatisation too far. I agree.
My right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson) talked of considerable folly. He mentioned the benefits that the people of Hull have derived from the location of Land Registry offices there, which generate Government business and deliver good, well-paid jobs, helping to replace lost industry in Hull, not least the fishing industry. The locating of the Land Registry around the country is a good example of how Governments in previous generations have located offices up and down the country, in an attempt to devolve to and support the regions. I hope the Government will take note of his comments on the importance of continuing that policy in relation to the Land Registry, or indeed in relation to the offices of the Department for Business, Innovation and Skills, such as the one in Sheffield which, sadly, is closing. He made the point well about how Government jobs and Government offices support the economy outside London.
The hon. Member for Harwich and North Essex (Mr Jenkin) talked about the importance to any country, not least ours, of having a reliable registry, and referred to what happened in Iraq. Another hon. Member made a similar point in an intervention about what happened in East Germany after reunification. This is an incredibly important point that underlines the importance of the Land Registry and secure data to the economy and to the reliability of property title.
My hon. Friend the Member for Swansea East (Carolyn Harris) talked about the importance to her constituents of the jobs the Land Registry delivers. She also talked about profitability and the harm that privatisation would do to Government finances, with annual profit being lost to the Exchequer.
The hon. Member for Colchester (Will Quince) said that he was elected to balance the books and was against this privatisation. I am pleased that he understands the economic argument between a one-off capital receipt and a sizeable annual return to the Exchequer. If we want to balance the books, we need to keep that strong annual flow of revenue to the Exchequer.
My hon. Friend the Member for City of Durham (Dr Blackman-Woods) talked about the importance of the register as a live document of the way that transactions are always being added, and the potential danger of a conflict of interest if a private company were to take over responsibility, especially given that it is a monopoly.
The hon. Member for South Dorset (Richard Drax) spoke of the potential destabilisation of the housing market that a sell-off could cause. He said that privatisation might lead to shortcuts by a private operator that could undermine the integrity of the data. He felt that the risks of such changes were too great to be considered.
The hon. Member for Glasgow South West (Chris Stephens) said—the hon. Member for Brighton, Pavilion (Caroline Lucas) made a similar point in an intervention— that the Land Registry would not be subject to freedom of information requests. He urged the Government to abandon what he called damaging plans. I completely agree with him on that.
The hon. Member for Thirsk and Malton (Kevin Hollinrake) made the point that asset sales might cut the debt as a one-off, but that the loss of annual receipts would not help deficit reduction in the long run. I am pleased to hear Conservative Members recognising the importance of economic credibility. I thought, when he talked about BT, that he was going to recommend renationalisation, but he did not quite go that far.
Yes, I rather thought the hon. Gentleman might say that— [Interruption.] The Minister correctly points out that was an opportunity for mischief that could not possibly be missed.
My hon. Friend the Member for Llanelli (Nia Griffith) made an excellent speech. She talked about the petition containing 300,000 names that was handed in to the Department for Business, Innovation and Skills. I was there with her on the day, as were a number of our hon. Friends. She rightly asked what on earth we are doing here just two years after the last attempt at a privatisation, at which time very clear and widespread opposition to it was demonstrated.
Does my hon. Friend agree that when many of us, with a whole range of organisations and unions, including the PCS, turned up at the Department, it would have been really helpful if the Minister had come out to meet some of the people who wished to hand over that huge petition? [Interruption.]
The Minister, from a sedentary position, points out that that would not have been him. Perhaps we can take that as him agreeing that the Minister responsible should have been there to meet us all on that day. He can choose whether to respond to that point when he replies to the debate shortly.
The hon. Member for Telford (Lucy Allan) made a point about the importance of the Land Registry’s success to her constituency. That is true for each and every one of us in every constituency in the country.
The Land Registry has existed for 150 years. Currently it does not cost the taxpayer a penny. It makes a significant profit and delivered a surplus in 19 of the past 20 years. A one-off fee from its sell-off is no strategy for deficit reduction, as Conservative Members have acknowledged. It would allow for only a one-off reduction of debt. This is not an economically coherent approach to Government finances. Worse, it is cynical to pretend to taxpayers that the proposal constitutes the responsible management of the economy. I am afraid that, driven by the Treasury and the Chancellor, privatisation is exactly what the Government appear to be trying to do.
The consequences of selling off the Land Registry are far wider and more dangerous than losing a profitable public sector enterprise. Having a trusted impartial register of land underpins our economy. I do not need to repeat to Members the uncertainty and danger that has been caused by the Brexit decision that was taken a week ago. We have seen that uncertainty in the markets and it is spreading to the real economy, with job losses already announced. That uncertainty applies right across our economy, as well as to the role the Land Registry plays.
Any house that families or companies buy or sell relies on the Land Registry granting and transferring title deeds. It is the only proof of title or ownership recognised by law for £3 trillion of UK property. By virtue of it, every property sale, purchase, repossession and mortgage in the UK is carried out transparently and in confidence by the seller, buyer and lender. The Land Registry’s independence is fundamental to the trust that homeowners, mortgage lenders and solicitors place in it. How could that trust remain if the very basis of that trust—the knowledge that the Land Registry is utterly impartial—is removed? How could the Government maintain that its impartiality will remain if it is taken over by private interests?
Let us look at the potential buyers who are showing an interest. Of the private investment firms reported last month by The Times to be interested in running the Land Registry, all have links to offshore tax havens. That makes a mockery of the Government’s claims of being serious about clamping down on tax avoidance and tax evasion. Canadian pension company OMERS, American private equity firms Advent International and Hellman & Friedman, and General Atlantic each have links to such jurisdictions, not least the Cayman Islands. When the Minister responds, will he tell us if he agrees that the Land Registry’s absolute transparency and independence from private interest is fundamental to the trust placed in it by homeowners and mortgage lenders? Does he also agree that this trust would be fundamentally undermined if such firms took over? That is what people up and down the country can see happening.
It strikes me that the companies that my hon. Friend has just cited as potential owners are also all foreign based. Does he share my concern, apart from their being tax dodgers, that we should resist placing something so fundamental to the UK in foreign hands?
My hon. Friend is right. Of course, we have seen a steady direction of travel towards foreign ownership of British interests for a great many years. It is surprising that we have anything of any substance left in this country that is not foreign owned, given the way the Government proceed. He puts his finger on an important aspect of the debate and another good reason why the proposal should be turned down.
My hon. Friend the Member for Swansea East (Carolyn Harris) mentioned the timing. The way in which the Government time their announcements is normally a good indication of how conscious they are that they are on thin ice. The proposal to relax Sunday trading laws is one such example, because they slipped out that unpopular policy at the last possible moment—the night before it was debated and after legislation had gone through the Lords, where the relevant Bill started its life.
As my hon. Friend reminds me, the approach did not do the Government much good on that occasion. I suspect, following today’s debate, it is not going to do them much good this time either.
They chose to release the proposal on the Land Registry on the afternoon of the last day of Parliament before the Easter recess. Were you a cynical man, Mr Deputy Speaker, you might think that that was done deliberately to avoid attention, but of course you are not cynical, so there is no way you would think that.
The Government are fully aware that the public do not want this and that the proposal will not stand up to scrutiny. This is not the first time they have tried to railroad through Land Registry privatisation. The public response that they received last time could not have been more overwhelmingly negative: 91% of those asked in 2014 said that privatisation would not provide a more efficient service, while just 5% thought that it would. Survation’s more recent polling—not that we should necessarily believe everything we read in polls—delivered the same message, with opposition outstripping support among the public by more than 4:1. The online petition that was signed by 300,000 people was handed to BIS just the other week. Those 300,000 people made it clear within a month of the opening of the consultation that they, like many others, were against the privatisation.
If the Government think that they can mask an economically incoherent proposal with a “public sector bad, private sector good” mantra, nobody is going to be fooled. Do they honestly think that a private operator would create a more profitable Land Registry and therefore support broader economic growth? In public hands, it is generating £100 million-plus for the Treasury each year, so that simply does not stack up as an argument. The New Economics Foundation has pointed out that state assets—not just the Land Registry, but Ordnance Survey, NATS and Channel 4—are all examples of publicly owned services that are delivering lean, efficient and profitable business models. If the Government have any interest in long-term growth and stability, they should hold on to those assets, not sell them off. Securing this annual revenue is the economically responsible and more stable approach at a time when we lack the certainty on which the economy and business depend.
Do the Government honestly believe that a private operator would create a more efficient Land Registry? The Open Data Institute says that moving the body out of public hands would build barriers in our data infrastructure, reduce efficiency not just in the Land Registry but across Departments and other public services, and have clear consequences for public confidence. Do the Government honestly believe that a private operator would support a more transparent Land Registry? If it was privatised, it would cease to be subject to the Freedom of Information Act. It beggars belief that the Government can seriously suggest that, in the wake of the release of the Panama papers, it would be reasonable to pursue policies that make it easier to conceal landownership for non-doms?
If the privatisation happens, the Land Registry will go to private interests that are not subject to the same checks and balances, such as freedom of information provisions, as any remaining public sector body. As my hon. Friend the Member for City of Chester (Christian Matheson) said, we are not just talking about any private interests. Judging from the interested parties so far, these are interests that are already tied up overseas, including in tax havens. Given that we are dealing with trillions of pounds of property that underpins our whole housing sector, this can only be downright dangerous.
Privatisation would deny homeowners, mortgage lenders and buyers an independent national register of title deeds. It would be destabilising. The consultation asks how, not whether, privatisation should go ahead. We should enable the Land Registry to continue innovating, and delivering savings and revenue to the Government. It is already a success, so why does the consultation not consider the option of encouraging further improvement, development and success in our public sector, both to improve service and to generate further revenue, if that is what is driving what the Government want?
As I understand it, the Minister for Small Business, Industry and Enterprise has told constituents that this is a ridiculous idea driven by Treasury capital receipts. I agree. Labour will fight this privatisation, and I hope that the Government will once again perform a U-turn in the face of widespread pressure from professionals and the public alike.
I congratulate the Backbench Business Committee on picking this debate. I did not get here by rebelling against the Government often, but I am proud that one of my early rebellions was in support of that Committee. It has done us a service by bringing this debate to the House. Strong views have been expressed from all parties, except UKIP, which does not seem to have a view on this, and the Liberal Democrats. I also congratulate the right hon. Member for Tottenham (Mr Lammy) on securing the debate.
I want to say something about what the Land Registry does and why it is such an important office in this country, and to touch on why it is right that the Government review the basis for investment and leadership in different parts of the public sector. I will deal with several of the issues raised by hon. Members and confirm the Government’s position.
The Land Registry, as colleagues on both sides of the House have highlighted, underpins an important role of the state in keeping a safe, reliable and independent register of landownership. As every speaker has acknowledged, that goes right to the heart of our property-owning democracy. The rights of ownership of land and property and our ability as a society to enforce those rights were hard won, are much regarded around the world and are not taken for granted here. That is why the debate is important.
The Land Registry deals with more than £4 trillion of assets, with £1 trillion of mortgages depending on that clarity of ownership. Its 4,500 members of staff, to whom I pay tribute for carrying out an important function in our society, lead and manage the organisation. Accounts show that in the last year it generated £295 million of income, incurred slightly less in costs, and paid back to the Treasury a £14 million dividend—each year, it more or less turns over, washes its face and returns a small surplus operating profit. It is currently addressing issues of digitisation and efficiency, including through the much-commended map search and property alert products. It carries out a vital role at the heart of our system.
Colleagues, particularly on the Opposition Benches, have talked about privatisation, so it is worth reminding the House why successive Governments have embraced a bold programme of privatisation and the rationale for so doing. I stand as a proud member of a party that achieved much through that programme in previous decades. You do not need me to remind you, Mr Deputy Speaker, but privatisation was driven by the need to introduce competition and choice into key services on behalf of consumers, users and taxpayers; to draw additional investment into those services at time when Governments were not able to make that investment; to introduce new management into sectors of our economy that were failing, such as British Leyland and British Telecom; and to take off the Government balance sheet chronic liabilities that they were unable to meet and deal with.
That last point was one of the original rationales for the transfer of council houses from a state that was unable properly to maintain them to the citizens, who then showed how to maintain them and have been grateful to us ever since. People forget that a large amount of money was recycled back into the housing association revolution, which led a huge boom in public housing, albeit perhaps not a big enough boom. That reform was made to deal with a serious liability and to transfer a major asset—in that case, council housing—into the hands of the people who were paying for it through their taxes, and indeed to increase tax revenues for the Government. Many people—
I need to crack on—I am sorry.
Many people, probably including many Opposition Members, would admit that it would be strange to have a society—[Interruption.] Oh, I have lots to say. Very few Opposition Members would today be calling for the return of British Aerospace, British Telecom, British Gas, British Petroleum, British Leyland, British Steel and British Airways. We have achieved much in recent decades. I am merely reminding the House of the arguments for privatisation made at the time. We will come shortly to decide whether they are appropriate in relation to the Land Registry.
The right hon. Gentleman makes an interesting point. I was just setting out the reasons for dealing with sectors such as aerospace, telecoms, gas and other utilities, and British Leyland. Does anyone seriously think we should still have a car industry in the hands of the management of British Leyland? I doubt it. I merely remind the House that the reasons for those privatisations were to do with competition and choice, investment, management and the reduction of liabilities on the public balance sheet.
What would be the rationale were the Government to take privatisation of the Land Registry forward? Well, I can confirm that the Government have absolutely no plans for this. We have carried out the consultation and we are in the process of hearing, loud and clear, what is said. For those watching from the Gallery and wondering why it is even being considered, the rationale would be to create a basis on which the Land Registry, if it needed it, could raise substantial extra investment that the Government could not provide. It could be a mechanism to get a substantial injection of new leadership, to help the Land Registry to deal with the opportunities of globalisation—around the world, newly liberated and fast-growing economies and societies are looking to copy the UK model in many respects, and this might be one of them. And yes, it could be a mechanism to help us to tackle a still ongoing and chronic debt and deficit crisis, which has saddled the next generation of this country with debts. The Government look all the time at the public balance sheet, so those are the reasons why an institution such as the Land Registry might be worth considering.
The Minister is giving reasons why the Government might look at something. If the Government do not have a view, why was the consultation framed as it was—in terms of how to privatise, not whether to privatise? Does that not suggest a fundamental commitment to the privatisation?
I suggest that the best indication of our commitment is what I am saying at the Dispatch Box right now. I will comment in a moment on events going on outside this Chamber, which will determine how this is ultimately taken forward.
I was making the point that the Government have carried out a consultation. It is right that, as a responsible Government, we keep under review whether and how functions that are currently the monopoly responsibility of the state can be better financed and thrive more with new freedoms, and by so doing put the public finances on a stronger footing. I merely set out the rationale on which such matters have been addressed in the past and confirm once again that the Government have no plans. This is merely a consultation. We have received no bids; no decision has been made.
When the Minister says the Government have no plans, is he in fact pronouncing on the consultation? He has heard the House this afternoon: no one has risen to speak in favour of privatisation. Obviously, one is reflecting carefully on whether to test the strength of feeling by putting the matter to a vote. It is important to understand what the Minister is saying, because the real concern is that this is a Treasury-driven proposal—that was one of the reasons he gave. If that is the case, it probably is right that the House of Commons demonstrates to the Treasury that it probably would not get the privatisation through.
The right hon. Gentleman is a canny parliamentary operator. Let me continue my speech and deal with the various points that have been raised, because in so doing I may be able to reassure him that this Business Minister is listening and has heard what has been said loud and clear.
I am glad the hon. Gentleman asks that. Let me explain.
It may have escaped the hon. Gentleman’s notice for the purposes of this debate that the present Government and our predecessors, the coalition Government, have had to confront a very serious crisis in our public finances on behalf of us all, but on behalf in particular of the young of this country, whose debts these are not and who did not make the decisions and are not responsible for incurring them, but who have entered a society and an economy mired in debt. That creates a situation that any responsible Government have to deal with. If the Opposition want to form an alternative Government, they will have to deal with this question, which sits at the heart of the reality confronting any serious candidate for Government. As a Business Minister in the present Government, I would not be doing my job properly if, with my colleagues, I did not keep under review the functions that we currently carry out within Government and ask whether there is a way to put them on a footing where they can raise the investment they need off the public balance sheet and attract stronger and better management—Whitehall is not always the best place to manage every function in the state. We have to be creative about how to generate more revenue, so that we can support higher quality services for UK customers, citizens and taxpayers. I do not think a modern Government would be doing their job if they did not ask those questions.
A Government also have to consider the points made by parliamentarians and take into account the issues that might arise from such a move in terms of the delivery of the service. That is what the Department is doing right now. We are considering the responses to the consultation and the submissions made today in this debate, which is why I thank the right hon. Member for Tottenham for securing it. Let me reply now to the points raised.
The right hon. Gentleman spoke about the public concern and questioned the motive for having the consultation. I hope I have dealt with that: there is no illegitimate motive. It is appropriate for a Government to ask the question. He made a really important point, which others have echoed, about transparency. The register sits at the heart of our democracy because it is a register of land ownership. It is important that it is transparent and interrogatable and that people can see that it is.
The right hon. Gentleman raised the need to ensure that the operating surplus is reinvested and to allow the organisation to grow and develop. The right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson), who was very amusing in his summary of the quinquennial reviews that plague all Governments, asked the important question: what is the compelling case for this? I have tried to set out the bones of what a case might be; whether it is compelling or not, it is required to be considered alongside the other points that are being made.
My hon. Friend the Member for Harwich and North Essex (Mr Jenkin) made an interesting speech. As he pointed out, he is someone who one would normally expect to be on the barricades for more privatisation. Indeed, he was a great champion of it in decades past. He made the point that this is critical infrastructure and goes right to the heart of our ability as a society and a political economy to keep track of our land rights.
Issues were raised about integrity, stability and the importance of open data and transparency. I am the Minister who, with other responsibilities, is in charge of ensuring that the country is able to use our health data to modernise the NHS, to attract the investment we need in new medicines, and to make the NHS and the UK world leaders in developing new medicines. We are absolutely clear that, in doing that, one of the things that we will not do is sell any state or private data. We are building databases on which industry can work with us to interrogate the conditions for new diseases, but we are seeking to take royalties and rights from commercialisation to put that money back into providing additional services. However, we are absolutely clear that it is a reference library, not a lending library. That principle of not selling core data is important. We want data to be open and used to support innovation and greater research. I know that my hon. Friend cannot be here for my speech; he did give me his apologies—he had to be somewhere else.
My hon. Friend the Member for Carlisle (John Stevenson), a solicitor himself, who has used the Land Registry and indeed relied on it, was pretty powerful when he referred to this as a privatisation too far. My hon. Friend the Member for Colchester (Will Quince), who has been a property lawyer—once a property lawyer, always a property lawyer—made a similar point and echoed the concerns, referring to this as potentially anti-competitive and said that he would have concerns on those grounds.
My hon. Friend the Member for South Dorset (Richard Drax) raised a chuckle or two when he referred to his belief that every Englishman’s home is his castle. He referred to this as quasi-judicial, which may be a reference to the name of the new Lord Chancellor in the next Administration, but he talked powerfully about the Government having bigger fish to fry. He is right that any Government formed to deal with the scale of the ongoing crisis, which is affecting this economy and others across western Europe, with ageing societies, the need to reform and update our public services, and to get rid of deficits and to pay off the debt, will face substantial issues, and this is one small part of looking at how we can refresh and modernise our approach to 21st century Government.
My hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) made a powerful point about this debate being something of a symptom or an emblem of a new politics and mentioned our late, much lamented and respected colleague Jo Cox, whom I suspect would have spoken in the debate with her much respected blend of passion and local responsibility. She would have spoken for her constituents. My hon. Friend made the point that if any reforms were to be put in place, it would be important not to make the mistake of creating a private sector monopoly. That is partly why I repeated the rationales for those early privatisations. They were never about creating private monopolies; they were about choice and competition where those would be advantageous for the consumers and users of the service. My hon. Friend the Member for Telford (Lucy Allan) powerfully endorsed those points.
I am conscious that the House’s time is precious. Although I would love to stand at the Dispatch Box all afternoon and talk about how we might embrace more interesting, bolder and innovative models for delivering private and public sector innovation, I am conscious that colleagues are distracted by events beyond this Chamber. [Interruption.] I assure Members that whoever it is, is not behind me, in more ways than one.
I confirm that the Government have merely consulted in the last few weeks and months on this question; for the avoidance of any doubt, I also confirm that no decision has been taken and that Ministers are listening carefully to the views that have been expressed. As a Government we have a serious responsibility to ensure that we constantly keep under review the arrangements we have in place for the delivery of services such as these.
As my hon. Friend the Member for Colchester said, we were elected on a mandate to balance the books. That requires some careful judgments about the timing and the way in which we do it. My ministerial portfolio is all about driving a different model of innovation between private and public, working together and ending the apartheid of private productive and public not; I do not think that that is appropriate or sensible for 21st Government. We need to find ways of working together. It is right that we constantly look at these issues. Colleagues have touched on a range of different models. Were one to look at taking forward a way to put the Land Registry on a footing that allows it to invest faster, to develop new services and new leadership and to tap into global markets, one could consider a range of models, including mutualisation and the new structures that are being developed.
We have heard the concerns expressed in the House loud and clear. Others elsewhere, in those other rooms I referred to, will determine in due course what the Government will decide to do in this case later in the year. I am aware, as all of us painfully are on the Government Benches, that the majority is 12. It does not require many people to take a different view from the Government of the day in order for us to assess the likelihood of getting a measure through. I have no idea what those currently looking to form the new Administration will want to do when they are in office, but anyone listening to the debate will have heard loud and clear the view of those who have spoken on both sides of the House. If anything is to be done to look at the future of the Land Registry, it will need to be clearly focused on solving particular problems that exist today and dealing with specific issues that need to be addressed. I think it was one of the Members on the Opposition Benches who said, “If it ain’t broke, don’t fix it.” The right hon. Member for Kingston upon Hull West and Hessle called for clarity on what the case would be. I hear him loud and clear. We would need to set out clearly the problem that we were trying to solve to take the matter forward.
I hope that I have addressed the points that have been raised. I again thank the right hon. Member for Tottenham for securing the debate.
This afternoon, the strength of feeling in the House has been conveyed. Across the House, there is opposition to the privatisation of the Land Registry. I think we can describe the Minister as one of the Government’s more eloquent junior Ministers. I think he acknowledged that he was making a case for looking at the matter, but that he clearly had not made a compelling case for privatising it. He used phrases such as “listening very carefully to the House” and “merely looking at it.” On that basis, those who read the debate in Hansard and reflect on what he has said and on what he has not been able to say in any convincing form might conclude that it is unlikely that the Government will move forward in this way. Certainly with the majority as it is, it is clear that the Government would not command the strength of the House. I hope that the debate gives some comfort to those deeply concerned across the country and to those who work for this great institution. With that, we can perhaps move on to the next debate.
Question put and agreed to.
That this House notes the important role the Land Registry plays in registering the ownership of land and property in England and Wales; further notes that the Land Registry has made a surplus in 19 of the last 20 years and paid back £120 million to the public purse in 2015 alone; believes that any privatisation of the Land Registry will have serious consequences for transparency and accountability in the UK property market and hinder efforts to crack down on corruption and money entering the UK property market via offshore jurisdictions; expresses grave concern that all the potential bidders for the Land Registry have been found to be linked to offshore tax havens; notes that the Government has acknowledged that property can provide a convenient vehicle for hiding the proceeds of criminal activity; notes that the Prime Minister stated in July 2015 that there is no place for dirty money in Britain; regrets the Government’s decision to seek short-term profit at the expense of the public interest; opposes the proposed privatisation of the Land Registry; and calls on the Government to reconsider that proposed privatisation.