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Mrs Siân C. James (Swansea East) (Lab)
I am pleased to have secured this important debate and thank the Minister for attending. I will declare an interest at the top and state that the Land Registry has its largest facility in the UK in my constituency of Swansea East. That provides a substantial number of jobs and plays an important role in the socio-economic life of Swansea East and the surrounding areas.
On 23 January, the Minister announced plans to launch a consultation on ending the Land Registry’s status as a trading fund. The consultation exercise proposed two things: first, that Her Majesty’s Land Registry be separated into an office of the chief land registrar and a service delivery arm; and secondly that the service delivery arm be transferred out of the civil service and become a company, either a Government-owned company—a GovCo—or a private or quasi-private company.
Currently, the Land Registry, as a trading fund, is entirely self-funding and therefore no drain on the Government purse. Furthermore, year on year the service makes a surplus, which is passed on to the public by way of reduced costs for usage of the service and by way of providing the Treasury with significant income.
The Public and Commercial Services Union suggests, and I agree, that only by keeping the Land Registry’s trading fund status can the service maintain its necessary independence, impartiality and accountability. I also believe that the status of the organisation as it stands offers best value in providing a land registration service to the public. Given the success of the current service, not to include in the consultation a proposal to retain the current trading fund status seems ludicrous. It is certainly not a good business move and shows a distinct lack of forward thinking by the Land Registry executives.
Let me give some background. The Land Registry has been a non-ministerial Department since 1862. It was established as an Executive agency of the Lord Chancellor in July 1990 and as a trading fund in April 1993. The main aims and functions of Her Majesty’s Land Registry are set out in the framework document of 2008. As with other non-ministerial Departments, the Land Registry’s functions have always been entirely statutory. It has no prerogative powers. The Land Registry’s main statutory functions are to keep a register of title to freehold and leasehold land throughout England and Wales, and to provide the statutory service of registering, on a daily basis, the many thousands of new titles and dealings with land. That includes registering mortgages, changes of ownership and many other legal interests.
There are many challenges for the future. I repeat that the Land Registry’s managerial dilemma appears to be what sort of company the Land Registry should become—a GovCo or a private enterprise—but where is the evidence that changing from a trading fund to any sort of company would meet the Department’s objectives? None has been provided. The current system is tried, tested, evaluated and proven; and as the old adage goes, if it ain’t broke, don’t fix it.
Mr Henry Bellingham (North West Norfolk) (Con)
I have been approached by a number of companies in my constituency, including Norfolk Information Ltd, trading as the Property Search Group, Index Property Information and AW Searches, which is also trading as the Property Search Group. They all say that the changes being proposed are important and that a much longer consultation period is needed, particularly when we are talking about small and medium-sized enterprises, many of which are expanding. As the Minister correctly keeps reminding us, SMEs are the lifeblood of our economy.
Mr Peter Hain (Neath) (Lab)
I congratulate my hon. Friend on securing the debate and on the eloquence with which she is advancing her case. Is she aware that the proposal has cast a big shadow of uncertainty and job insecurity over the staff of the organisation, some of whom work in my constituency, which is nearby, and that when Tesco recently advertised for staff to open a local store in nearby Briton Ferry, 15 posts attracted 600 applicants? These are communities of very high unemployment, and job insecurity is therefore a big problem in the area.
Mrs James
It is. I thank my right hon. Friend for that intervention. The Land Registry jobs are quality, well paid and well respected posts, and it is very important that we retain them in a mixed economy and give job opportunities and a way forward to people from all sorts of backgrounds. I am very loth to lose one job, of any type or description, from my constituency when, as he has just pointed out, they are all very important.
Have the Government failed to notice that the Land Registry has a customer satisfaction rating of 98%—a rating that many large-scale, international and well known organisations would love to have—that it operates at no cost to the taxpayer and that it made £98.8 million last year for the Treasury? That was used to reduce fees and to invest back into our everyday lives. Why is the Minister not standing up and congratulating that organisation on its effectiveness rather than swinging the sword of Damocles over its head?
The service users—every person in the UK who owns property—need a reliable, low-cost and secure land registration service that also guards against the ever-increasing crime of property fraud. Nothing in the current proposal provides any evidence that moving to a commercial model will improve the existing service, so I ask again: why mend what is not broken? The talk is rhetorical.
Alison McGovern (Wirral South) (Lab)
My hon. Friend is, as has been said, making an excellent speech. On behalf of my constituents who work in the Birkenhead office, does she agree that her point—if it isn’t broke, why are we fixing it?—is apposite, and that, at a time of high levels of insecurity, especially in parts of the country such as the north-west, the proposal adds insult to injury for people such as my constituents who have worked incredibly hard for the satisfaction scores she mentions?
Mrs James
I thank my hon. Friend for that intervention. Yes, the proposal beggars belief and causes me concern. It causes me even greater concern when I consider that that is how hard work and loyalty are repaid. We hear much about the training of staff and the investment in staff and training, but now we are considering losing an excellently trained and efficient work force, and at what cost? That is of great concern. It is of even greater concern that we could even think about moving these people out of a job that is doing such great and good things for us as a society.
No comparisons have been made to show how a company would achieve more than the organisation does with the current trading fund status. No information is being offered as to how the supposed benefits of change, said to be agility, alignment and capability, will be achieved or even what those mean. The Government claim that a change in status from a trading fund would allow
“greater flexibilities to operate around pay, recruitment and possibly provide other services”.
I suggest that there is ample scope in the current model to accommodate all of those.
The Minister has declined to provide vital information to Parliament, as demonstrated in his responses to written parliamentary questions on 13 February on the Land Registry’s business strategy and new plans for service delivery. I crave your patience now, Mr Walker, because I would like to quote directly two of the responses. The first states:
“The way in which Land Registry’s services are delivered will likely change as the business pursues a digital, efficiency and modernisation agenda through its Business Strategy. This will continue irrespective of the outcome of the consultation—including if the status quo is maintained.”
He continues on the theme of service delivery, stating: “The target operating model”, which is the Land Registry service delivery plan,
“includes initial operational planning based on the number of LR business delivery assumptions. The consultation reflects a broader and different range of issues, as it considers and seeks views on a range of Land Registry commercial models. Some parts of the TOM will be affected by the consultation’s outcome. Therefore, it would be misleading to provide further details.”—[Official Report, 13 February 2014; Vol. 575, c. 773-774W.]
The Minister cannot have it both ways. If, as he claims, the proposed changes to service delivery will continue irrespective of the outcome of the consultation, he can hardly refuse to reveal those changes on the basis that they would be misleading.
The PCS has provided me with its formal consultation response, which demonstrates that part of the rationale for moving from a trading fund to a company is tied to “speeding up” new methods of service delivery. That new service delivery, which is part of the Government’s digital by default agenda, appears to be a plan to remove the vast majority of the service provision of land registration from the Land Registry and move it to the customers—conveyancers and solicitors. Those solicitors and conveyancers will have to self-serve and they, not the Land Registry, will have to register legal interests in dealing with land on behalf of the public. If that is what is planned, where is the evidence that solicitors and conveyancers have been consulted?
The Government purport to be a friend of small businesses, but what evidence is there that small and medium-sized high street firms can make those changes and become self-servers in land registration for the public without incurring massive costs in IT equipment and increased staffing? If the Government put an end to the current low-cost, efficient public service of land registration and make solicitors and conveyancers undertake that work, how will that change be reflected in the prices paid by the public? How will such momentous changes fit in with the aim of making the system less vulnerable to increasing property fraud? We need answers to those questions.
The Minister for the Cabinet Office and Paymaster General once accused the previous Labour Government of losing control of IT procurement and locking out small, innovative and efficient IT firms from supplying services to Government. The current Government claim they have changed all that and that they support procurement from SMEs in the form of the Government Digital Service. Why, therefore, has the Land Registry board, which includes non-executive directors from the shareholder executive—part of the Department for Business, Innovation and Skills—said that it wants the “unfettered” agility to avoid the Government’s alleged preference for using SMEs for procurement? How is that consistent with being a friend of small businesses?
I said at the beginning of the debate that land registration involves the granting of title to land and the guarantee of legal interests that it registers on a daily basis. Those are fundamental to every home owner in England and Wales and an essential part of the UK economy, and there is much potential to expand. The Land Registry’s reputation is its greatest asset. As a public service, the trust that has always been placed in it assures the public that it is independent and has authentic credentials of honesty. It is entirely focused on its service to users and not distracted by profits, outside interests or political interference. Given that it provides the state guarantee of title, it must surely remain entirely free from commercial influence.
The case against changing the Land Registry into a company, whether a GovCo or a privately financed company, is that doing so would create a body with unclear commercial status, which would lose the necessary independence from commercial influence. The proposed funding changes might easily negate the current controls—statutory and Treasury—on surpluses, which serve as checks and balances on trading funds and control what surpluses can be retained. Those all feed into the argument that there are disadvantages to shifting the delivery of land registration to a commercial profit model.
In conclusion, I emphasise that plans to make the Land Registry a commercial enterprise are unclear. We are not yet sure whether such an enterprise would be fit for purpose, because we do not know what the aims are. The proposal is uncosted, so we do not know whether any savings would result. It is untested, so we do not know whether it would work. We know, however, that the current Land Registry trading fund model is self-funding, profitable, reliable and trusted, tested, secure and in a good position for development. Once again, if it ain’t broke, don’t fix it.
Mr Stewart Jackson (Peterborough) (Con)
It is a pleasure to serve under your chairmanship for the first time, Mr Walker. I congratulate the hon. Member for Swansea East (Mrs James) on her speech, and I would like to put on the record that she will be a loss to the House when she leaves at the general election. She is a diligent and hard-working Member.
Almost four years ago, I stood on the other side of the Chamber opposite the then Justice Minister Michael Wills, who represented North Swindon. During that debate, I argued against the changes to the Land Registry estate that had been mooted by the previous Labour Government. Those changes were driven by the Lyons review of 2004, which focused on capital, land and buildings, and rental values.
I opposed the proposal because the methodology used was flawed, and it was very much a top-line, cost-saving exercise rather than one about efficiency and effectiveness. It did not take into account the great professionalism, esprit de corps and commitment of my constituents, some 210 of whom work in the Land Registry in Peterborough. I seek, as always, to protect the interests of my constituents; those are good-quality, white-collar jobs in Peterborough.
There is a difference between those proposals and the current ones, however. I echo the comments of my hon. Friend the Member for North West Norfolk (Mr Bellingham). There should be a consultation, but the Government should consider extending it because the proposals will have implications for many small and medium-sized enterprises involved in conveyancing and other property-related activities. If there is inherent merit in the Government’s case, I do not think that it will be damaged by extending the consultation.
Mr Bellingham
Does my hon. Friend agree that outside London and the south-east the housing market is still quite fragile, so any change in that local authority-based arrangement may lead to a great deal of uncertainty? That is another reason why the consultation period might easily be extended a bit.
Mr Jackson
I take my hon. Friend’s point, and I largely agree with him. However, it would be remiss of the Government not to look at different models for the delivery of necessary public services. In some important public service activities, even the previous Government looked at substantial changes in governance. That is the distinction between the proposals enunciated by the previous Government between 2008 and 2010—as hon. Members will have concluded, they resulted in the saving of the Peterborough Land Registry office and others across the country—and the current proposals, which are much more about governance.
For the record, 10 constituents have written to or e-mailed me about the matter, which is substantially fewer than contacted me about the debate four years ago. I make no comment on that; I merely highlight it for comparison. I support a proper debate on the delivery of such an important service, but I have no ideological opposition to the splitting of functions, whereby a GovCo might carry out practical land registration functions separately from the office of the chief land registrar, which is much more policy-based.
I agree that there must be a new business model, not least because we must always be mindful of the fact that our first priority as constituency MPs is to protect our constituents’ job opportunities, as the hon. Member for Wirral South (Alison McGovern) says, particularly in areas with high unemployment. However, we also have a wider responsibility to other stakeholders, including the taxpayer and businesses that rely on the Land Registry being efficient and delivering a good service. It is an important tripartite approach.
Julian Sturdy (York Outer) (Con)
My hon. Friend is making a powerful point. Like him, I have had regular contact from constituents on this issue. North Yorkshire Legal Services Ltd, based in York and run by one of my constituents, has written to me on a number of occasions. It is deeply concerned about how the proposals that my hon. Friend has set out will affect the market. The potential consequences could be devastating for my constituent’s business. Does my hon. Friend agree that we have to understand any wider implications before rushing into such decisions?
Mr Jackson
That is a typically astute point from my hon. Friend. He anticipates some of the comments I will make later.
The Land Registry is almost totemic: it is a trusted, strong brand and the people who work there are professional and committed to the public service ethos. There is a general commitment in the Conservative party—indeed, across the House—to good governance and the aspiration to the proper ownership of land, owner-occupation and property ownership in general. The Land Registry is at the heart of that and, as the hon. Member for Swansea East said earlier, it has been in existence, governed by statute, for more than 150 years.
Mike Weatherley (Hove) (Con)
GroundSure Ltd, a company in Brighton and Hove, is very concerned about the impact of changes to the Land Registry on smaller businesses. Does my hon. Friend agree that we really should take such businesses into account?
Mr Jackson
Yes, indeed.
I would be remiss and rather churlish if I did not compliment the work of the PCS union. Members do not often hear me saying that, but it has done a good job on the research it has sent to Members and entered into a good, fact-based debate, which is as it should be. Members will no doubt be aware of the very good PCS document “The future of our Land Registry”. It might also be appropriate to mention the contribution of Mr John Manthorpe, the former chief land registrar who also prepared interesting information, both for me in 2010 and now for other Members and others.
However, to a certain extent we have moved on, even since 2010. The provision of services is now online much more than even four years ago. The digitisation of the core facilities and services of the Land Registry is developing at a significant rate. We must take that on board as an important factor that informs the debate.
This is not necessarily a party political point, but we also need to remember that all public services are and should be much more customer-focused than they ever were before. The integrity and reputation of the Land Registry must, of course, be of uppermost concern. To a certain extent, I am reserving judgment on the proposed changes. I would like to look in detail at any future primary legislation that governs the operation of the Land Registry. Although it may not be fashionable, I think that there must be a degree of ministerial accountability for the activities of the Land Registry—the Minister can take that as my direct consultation response. It is too important an operation and piece of our national life to be disregarded. There should be some form of—circuitous, if necessary—direct or indirect accountability to Ministers and certainly to Parliament.
I am also slightly concerned about the potential of offshoring. I do not buy the concept that delivering a public service in a different way is necessarily a bad thing, in and of itself. Ultimately, the issue is what is good for the taxpayers, the work force and the wider community. Nevertheless, when considering an important function such as the Land Registry, offshoring slightly worries me. I would like the Minister to reassure me on that point.
There must also be a strong business case for the different model—the GovCo. They probably will not want to do so today, but in future the Government may want to say that the proposed changes are a signpost to a future privatisation. That does not scare me particularly and in principle I am not against it, but there must be a robust, demonstrable, fact-based business case in the preparation of the target operating model going forward.
As my hon. Friend the Member for York Outer (Julian Sturdy) said earlier, there must also be very thorough analysis and scrutiny of not just the benefits but the costs of any new model. It is important that we look at the costs of, say, moving over to e-conveyancing, or of the development of new IT. That is important, and I am sure that the Minister will want to reassure me on that point.
I will not be much longer, Mr Walker, because I know others wish to speak. As the hon. Member for Swansea East said, we are discussing a self-financing organisation that currently costs the taxpayer nothing. The proposition I would put to the hon. Lady is that if we could replicate the professionalism and efficiency of the present Land Registry and also make a profit for the taxpayer, we would be duty bound to look into that.
I would like to make a few other brief points. We must have an open and transparent procurement process for things such as IT. I am sure that the Minister is mindful of that. We should not have any sweetheart deals if we are looking into new IT procurement. If people transfer over, we must also ensure that the Government are mindful of TUPE in relation to the terms and conditions of people who have given a great deal of their professional life and commitment to public service in their local area.
I want to see more details of the GovCo and would want greater clarity in any future regulations or primary legislation. I believe that there should be flexibility and autonomy for the new company, if it so develops. That could well be the right thing for the taxpayer, for the work force and for business. As I say, however, I currently reserve my judgment. Let us extend the consultation and have a proper debate based on facts. We have a duty to all stakeholders and I expect the Government to rise to the challenge and robustly put their case for any future changes. I look after the interests of my constituents in Peterborough, who come first, last and always for me. I hope that the Government are mindful of the individual circumstances resulting from any large-scale changes to people’s jobs and opportunities.
Mr Charles Walker (in the Chair)
Order. Four colleagues have risen to speak, and there are just over 40 minutes until winding up. That is about 10 minutes each if Members wish to take that long.
Alison Seabeck (Plymouth, Moor View) (Lab)
It is a pleasure to serve under your chairmanship for the first time, Mr Walker. It is also a pleasure to follow the hon. Member for Peterborough (Mr Jackson)—my father represented that seat, so I understand some of the specific constituency issues he has mentioned. I am delighted that my hon. Friend the Member for Swansea East (Mrs James) managed to secure this debate.
The hon. Member for Peterborough is absolutely right that there was a period under the previous Government during which a number of us who were involved with land registries in our constituencies had meetings with the then Minister, Michael Wills, to express our concerns. The economy was then in a downturn and the Land Registry was finding things quite difficult financially, for a whole range of reasons, but the position has now changed, as has the potential trading position. As the hon. Member for Peterborough pointed out, there is potentially now scope for money to go back into the Treasury, because the Land Registry is a successful enterprise.
The proposal suggests splitting away the Land Registry policy arm—comprising around 30 staff—and having a commercial delivery arm. The options for the latter are set out: a GovCo, a joint venture partnership or contracting out. All those could lead us down the route to eventual privatisation, which is a major concern for all of us.
At the moment, we do not have clarity—indeed, there is quite a lot of confusion out there. It is partly due to the compressed nature of the consultation, but there are also issues involving Ministers’ approval for the Land Registry board to go ahead with a target operating model, which could lead to a significant rationalisation or downsizing of the organisation. However, we do not know what is in the TOM, as it is not public. It is difficult for people to make a submission to a consultation when the ground rules are not properly known and available. We could be saying that we want to do X, when in fact, according to suggestions and proposals in the TOM, Y would be a far more sensible route. The information is not available for people to respond intelligently to the consultation.
A number of organisations have mentioned the length of time available, which is not adequate as more and more small businesses come out of the woodwork. I have had a couple more letters today, on the back of the 90 that I have already received. I take the point made about differences in response, but more than 90 people have got in touch with me, and I am encouraging them all to feed into the consultation. From my perspective, this is all rather back to front. I know that the Minister’s colleagues felt a few weeks ago, rather perversely, that it would be misleading to provide any more detail. Does he take a different view?
Let us look at the implications of drastic change. Is the Minister aware that a decision to remove posts from cities such as Plymouth will pose problems? Plymouth is still heavily dependent on the public sector. The Government have the view that if they remove public sector jobs, they will be backfilled by the private sector, but a recent Centre for Cities report flagged up the fact that Plymouth is probably in a slightly different situation. Our peripherality makes it difficult for us to attract new business, and our issues with transport in recent weeks—the south-west has effectively been cut off—do not send out the message to private sector businesses, “Come and set up in Plymouth.”
Some 650 jobs sit in our Land Registry; there is a slight difference—about 50 full-time equivalents—between the figures provided on the ground to me and the figures in a parliamentary answer. Those jobs are well paid. They contribute to our economy significantly. More importantly, we have about 100 highly skilled IT people there. Plymouth has no capacity to soak up those people if they are not employed at the Land Registry. That would be a loss to the city, so I hope that the full socio-economic impact of any change, downsizing or moving of offices around the country would be seriously considered.
One option is a GovCo, which would require people to be imported to fill capability gaps. Is it the Minister’s intention to offer enhanced salaries, terms and conditions, as the Ministry of Defence has done? If so, I assume that she is aware of the huge mess that the GoCo has left in its wake. The Treasury is still baulking at offering the MOD freedoms and flexibilities. The union PCS says in one of its briefing notes that it assumes that the ability to vary pay will depend on the model chosen. At the moment, the Government’s own model, chosen by the MOD, is running up against the buffers. It would be interesting to know whether the Minister has the Treasury’s go-ahead to offer enhanced terms and conditions to people in a GovCo in this circumstance.
What is the Minister’s view on the experience of the Forensic Science Service, which has pursued a similar option? Can he confirm that the assumed benefits of being commercially competitive did not in fact materialise? Why does he feel that the Land Registry is different?
Jenny Chapman (Darlington) (Lab)
My hon. Friend is making an excellent case. What does she think the motivation might be for pursuing that line of approach? If the Land Registry were making a loss, performing poorly or not providing customer satisfaction, perhaps we could understand. Why does she think the Government are intent on following this particular course?
Alison Seabeck
That is a good question. As the hon. Member for Peterborough said, if it ain’t broke, why fix it? We need to understand from the Minister exactly what the benefits of fixing it will be, or whether it is purely ideologically driven, leading in the long term to privatisation.
In Plymouth, the registry’s computing centre has been recognised as an award-winning success. There has been very little turnover of specialist staff, all of whom have an experienced Land Registry background, and unlike other Government computing centres in London, it does not constantly lose staff to the private sector. It is not an exaggeration to say that the registry’s successful computerisation of the land register, its fast online inquiry services and the development of online lodgement succeeded where others in Government, dependent on major outsourcing to private IT companies, have failed. We must look at what we do well, nurture it and learn from it.
Like other Members, I have been lobbied by organisations such as the Local Land Charges Institute and those involved in independent land searches. All have serious issues with the proposals, not least because of the target operating model and the fact that it has not been made public. I would welcome the Minister’s view on whether the options proposed will fragment the local land charging function, as those organisations feel it will. The LLCI feel that it will result in a poorer service to the property-buying public. Clearly, there are a range of views on the subject, but the property-buying public are stuck in the middle, and nothing that we have heard—either fact or rumour—inspires confidence in the process being undertaken by the Government and the board.
Members of the Property Codes Compliance Board feel that the proposed changes will negatively affect those involved in the house-buying process and affect the market and small and medium-sized businesses, as we have heard from hon. Members. Their view is that SMEs will be disproportionately affected by what they see as Government transferring current activity into a private-sector monopoly. They also express their concern about the accuracy of the impact assessment.
There are complaints all round about the consultation, involving its accuracy, the timing, the process, the questions and the fact that a significant part of the picture has not been painted for those responding. I have not received a single representation from any organisation or individual in favour of the proposals. I look forward to the Minister’s response.
Roberta Blackman-Woods (City of Durham) (Lab)
It is a pleasure to serve under your chairmanship, Mr Walker. I thank my hon. Friend the Member for Swansea East (Mrs James) for securing this timely debate and making such a powerful case in support of keeping the Land Registry much as it is. Like many hon. Members here, I am concerned by the Government’s recent statement on the future of the Land Registry because of its potential impact on a national level; my primary concern, of course, relates to my constituency.
There is a large Land Registry office in Durham. Many local people are concerned about the possible consequences of the proposed changes announced in the consultation, should they go ahead. Significantly, they are concerned, as am I, about the potential impact on jobs in Durham. Durham has had a Land Registry for nearly 50 years. It has been the only one in the region since the closure of the office at York several years ago.
The Durham office is reported to be worth £10 million a year to the local economy. I hardly need remind the Minister that Durham’s economy has gone through a difficult period and is not yet fully experiencing what the Government are referring to as an economic upturn. Perhaps that is about to happen, but at the moment, things are still pretty depressed locally, leading to additional concern about what will happen to the Land Registry and the jobs that go with it if the proposals go through.
The Land Registry office in Durham provides many good-quality jobs that we desperately need locally, and I do not want that to be diminished in any way by potential privatisation. More than 400 highly skilled staff work at the Durham office. They provide a valuable national service that returns considerable value for money to the taxpayer. It is a strong brand and very much trusted by the people who have to use Land Registry services. It is vital that we should scrutinise the Government’s proposals and any impact that they could have. However, that is quite difficult because of the lack of information from the Government in the public domain.
In its consultation paper, the Department for Business, Innovation and Skills proposes that the Land Registry be replaced by both a small Government body and a new company, which would carry out the current service delivery functions. There would be a new role of regulation and a maintained role of fee setting for a newly created Office of the Chief Land Registrar, which would sit within Government and be accountable to a Minister. It would set only the fees of the statutory functions, not the commercial services it might provide. That is one of the key aspects of the proposals that is creating a lot of nervousness in the sector.
The Government suggest three options for this new service delivery company: 100% owned by Government; jointly owned by Government and a private sector company; and 100% owned by Government, but day-to-day operations would be the responsibility of a private sector company on the Government’s behalf, which I think means outsourcing. Critically, what is not on the list is the Land Registry staying as it is.
Significantly, the Government consultation describes the above models as being considered for the “transition phase”. We are not sure exactly what that means, but I suspect it means a transition phase on the way to a future privatisation. If it does not mean that, the Minister will have to clarify the situation and be clear about what the transition phase means.
In addition, the Government’s consultation does not address the issue of why the changes are being proposed; it merely focuses on how they will be done. As other hon. Members have mentioned, there is no rationale as to why the changes are necessary. Several organisations, ranging from the PCS to the independent Law Society, have raised concerns regarding the consultation. The Law Society highlights the statement in the consultation that
“beyond the transformation phase, Government will review the ownership and control of the service delivery company in line with the policy on asset ownership”.
Importantly, this policy includes assessing options for moving assets to the private sector
“where there is no longer a strong policy reason for continued public ownership or where there is potential for an asset to operate more sensibly and efficiently in the private sector”.
As has been said, that potentially leaves the door open for complete privatisation after the transition period. Again, there is no information available to us about what the Government mean by
“more sensibly and efficiently in the private sector”.
I find the proposed changes to be remarkable, particularly given both the lack of evidence offered by the Government in support of their proposals and given that the Land Registry currently operates under a trading fund model, and in 2012-13 made a surplus of £98.8 million. Equally remarkable is the fact that, despite such considerable changes being proposed, my local Land Registry has refused to meet me to discuss the issues. I find that truly extraordinary.
In all my years as a Member of Parliament, I have never had an employing body refuse to meet me to discuss what are real concerns for many of my constituents. I was so shocked that I wrote to the Minister in January and pointed out to him that I thought this was an extraordinary course of action being taken by my local Land Registry. I asked him to intervene so that I would be able to attend a meeting to get more information and to raise concerns on behalf of my constituents.
I found the Minister’s response in February even more extraordinary. I will read out what the letter said:
“Some parts of the”—
target operating model—
“may be influenced by the outcome of the Government consultation as the future structure of Land Registry will necessarily affect business planning—and I understand that is why Land Registry does not think a meeting with you to discuss potential impacts on staff at the current time would be productive.”
In other words, it does not want to share its true thinking, or it does not want it to be obvious that there is very little evidence behind the proposals, or it does not want to be clear and open and honest and transparent, as it should be, about what the true impact of the proposed changes will be on my constituents. I think that is extremely bad practice. The Minister should have intervened and ensured that I got a meeting to represent my constituents. I would like to hear a further response from him today to see whether he has reflected further on this issue and come to a different conclusion.
Jenny Chapman
I am very disturbed by what my hon. Friend has said. Many of the staff at the Land Registry in her constituency live in my constituency, which is the former constituency of the Minister. I hope that he listens carefully to her remarks and has something positive to add.
Roberta Blackman-Woods
I thank my hon. Friend, who has made an excellent point. It is very wrong for any employing body not to be prepared to meet a Member of Parliament, who will obviously raise issues on behalf of their constituents.
The Law Society has stated:
“No detailed evidence is provided to explain how any change to the current model could bring about increased efficiencies or effectiveness to an organisation that currently makes a significant profit.”
The Minister needs to provide evidence to support his proposals, and to address the following issues. If the move to more digital services leads to some job cuts through voluntary redundancy, can the Minister assure me that the Land Registry will continue to have a presence in the north-east, particularly in Durham? Can he explain why the delivery of land registration by a company that would permit
“greater flexibilities to operate around pay, recruitment and possibly provide other services”
would make the Land Registry’s business strategy more achievable? Will the taxpayer be getting value for money from the privatisation? I do not trust this Government to get it right, given their appalling track record on undervaluing Royal Mail. What if the same situation arises again?
In addition, there may be long-term costs to the state and users of the service, which could undermine any sale price. If there are going to be new costs or restrictions on what information businesses, individuals and public sector agencies can access in relation to land programmes, how will that be monitored? No details have been provided as to the precise nature of how any of the options might operate, making it, as we have said many times, difficult to assess accurately the extent to which any new model will work better than the existing one.
I finish with one further question to the Minister. The Land Registry in this country—I wonder whether he is aware of this—has been giving advice to many other countries about how to set up land registry services. We are seen as a model of best practice around the world. I implore him to think very carefully before he severely disrupts a model that has been shown to work so well.
Mr Charles Walker (in the Chair)
We have time for three more colleagues with about seven minutes each. Mr Bellingham, are you standing?
John McDonnell (Hayes and Harlington) (Lab)
I shall be brief, because it is important that everyone should have a say. My hon. Friend the Member for Swansea East (Mrs James) gave a marvellous exposition of the arguments. She should rethink her decision to stand down. The contributions that she has made in the House have always been based on sound common sense, and so was her speech today.
I chair the Public and Commercial Services Union parliamentary group and want to express the view that is coming back from PCS members. The PCS represents 3,000 staff in the Land Registry, and there is a drop-in briefing from half-past 10 to 12 tomorrow in Room W1; those who want to know what PCS members are concerned about should come. The hon. Member for Peterborough (Mr Jackson) said that he has had only 10 letters this time. He need not worry: we will sort that out for him. There is real anxiety among the professional, highly competent, dedicated and committed staff.
In debates under the previous Government we argued that of course it is open to any Government to review the administration of a service, but that they should not throw out the baby with the bathwater. If a service provides high standards of professionalism, brings income to Government—which is unusual for any Government service—and is respected not just in this country but throughout the world, the last thing to do is destabilise it with rushed or hurried reform. To give the previous Government their due, they carried out an exercise, and exhaustive consultation was carried out over a long period, with staff, the relevant small and medium-sized enterprises, and professional groups. They reached the conclusion that moving to a trading operation was the best way forward.
We expected that there would then be a long period of stability. The last thing that is needed is a continuous round of reform and change, which destabilises an organisation. A professional with a family, whose job is threatened every four years will look for another profession or line of work, and I fear that that is what will happen. The professionals at the Land Registry will look elsewhere, because of the insecurity of their situation, and we shall lose the bedrock of expertise as a result of continual attempts at change—and why?
Everyone has asked the same question; what is the motivation? The service operates effectively, on every premise. It has 98% satisfaction rates. I would love that rating, for myself as an MP, and for any organisation, whether commercial, public or private. Even in the most difficult circumstances, in the trough of recession, the Land Registry still brought money to the Treasury, covering its costs and making a contribution. There was a short period of deficit, but that was overcome as soon as the economy began to lift. The Land Registry has won the respect of every professional body, and there is now an alliance: I am the chair of the Socialist Campaign Group, which is in that alliance with the Law Society and the other groups that are coming forward. That shows the breadth of the support. Yet again, however, an attempt is being made at destabilisation.
What is the motivation? We know what it is. As to the hedging of bets about the various consultation options, I am sorry, but there is one option that the Government want to pursue. It was in the report obtained by the PCS in a freedom of information request: the 2012 KPMG report, which said that the GovCo was the best way forward, to make it possible to move on to full privatisation. My concern is that that is the Government’s motivation; an attempt is being made at full privatisation, which will result in the siphoning off of the profitable areas of the service, job cuts, and the undermining of workers’ conditions of employment. The result of that will be to undermine their professionalism as well. The Government need to come clean about their long-term objectives, because, if they do not, the suspicions will remain. I should rather that they would publicly state that those are their intentions now—to follow the KPMG recommendations for full privatisation. At least then we could have an honest debate. At the moment I do not think that the debate is honest, and as a result suspicion is building. Suspicion leads to lack of confidence in the organisation and further destabilisation.
Lilian Greenwood (Nottingham South) (Lab)
My hon. Friend makes a passionate plea on behalf of those who are worried about the future of the Land Registry. A concern expressed in response to the consultation is that it will become less accountable to the public. Does not the experience of my hon. Friend the Member for City of Durham (Roberta Blackman-Woods) heighten our fears about the Land Registry’s future and its responsiveness to MPs’ and the public’s concerns?
John McDonnell
The reason the suspicion of privatisation is so clear in the minds of PCS members is that they cannot get access to information about the Government’s real plans—and nor can Members. When an organisation refuses to have a meeting with a Member of Parliament, just for some dialogue and discussion about their constituency concerns, it undermines the principles of parliamentary democracy. It is a disgrace. I do not know of any other Government organisation that has refused to meet Members, including bodies such as Her Majesty’s Revenue and Customs, where there are confidentiality issues. That refusal builds on people’s suspicions that the Government are not coming clean.
There is also suspicion about the point raised by the hon. Member for North West Norfolk (Mr Bellingham)—the short consultation period. Why is it so rushed? Why push it through so rapidly, other than to get to full privatisation before the next general election? That is unacceptable. Everyone is now asking the Government to stand back and carry out a full consultation with staff and the professional bodies that have expressed an interest; and to take into account something that has repeatedly been said—the fact that the staff in question are usually in locations where there is high unemployment and high need.
A range of examples about the impact on local economies came out of the previous consultation. My hon. Friend the Member for City of Durham (Roberta Blackman-Woods) mentioned the figure of £10 million. I think that the calculations about Wales made it something like £15 million the last time around. The impact is substantial. It is not acceptable to take a leap into the dark with respect to the organisation and the ramifications for towns and areas. Undertaking a consultation in such a way, in a rush and with the information not fully available to all the interested parties, is not good governance.
I urge the Government to stand back and think again. There are many other places where they can look for major reform, and there are areas worthy of examination, or whose long-term futures need to be discussed, in which Ministers can busy themselves: the Land Registry is not one of them. Why are 150 years of public service about to be thrown out? I think it is because of an ideological commitment to privatisation. I cannot think of any other reason. Any other Department would want to keep the Land Registry in-house because it is such a successful organisation. Any other Minister would be proud to represent such a successful area of work. Privatisation must be the motivation, and that is why PCS members are so anxious. I urge Members to come along to tomorrow’s drop-in meeting to meet the professionals and let them explain what they do, as well as the implications of the threat to their services and their own plans for making the Land Registry even more successful as a public service.
Nia Griffith (Llanelli) (Lab)
Thank you, Mr Walker. I shall try to be brief and not repeat too much of what has been said by my hon. Friends and, indeed, coalition Members. I congratulate my hon. Friend the Member for Swansea East (Mrs James) on today’s excellent exposé, and on all the work that she has done. We shall all miss her genuine feeling for the community, and the way she expresses that here.
I shall come straight to the point and talk about the Government-owned company being part-way to privatisation. That is what is on the agenda, and we should stop beating about the bush, and say it plainly. 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 in close to £100 million a year. It makes a profit and does a good job. Why on earth would anyone want to hive it off to the public sector? It is madness to steal that money from the public purse. What would happen afterwards? We would stuff it into the pockets of private contractors; and what would they do? They want to maximise profits, so they would put up prices, and hike the fees for the customer. Of course, who is to say that this Government would not be wilfully incompetent and sell off the Land Registry at a bargain basement price, just as they did with the Royal Mail, depriving the public purse of the true value of this asset?
We are facing loss of income, potential privatisation and potential hikes in fees—and a monopoly—if we go down the route of a Government-owned company. Part of the argument for privatisation is always that competition will be a good thing and that prices can be driven down, but this is an invaluable asset, looking after the land assets of the country, and it is a monopoly. What would we have if that were put into private hands? There would be profiteering, just as we see with some energy companies, which have managed to make six into one—a monopoly.
It makes no sense to privatise the Land Registry, and that is before we come to the issue of trust. Currently, it has a customer satisfaction rating of 98%. Hon. Members have said that everybody would be overjoyed if their organisation had that rating. People can trust the Land Registry precisely because it is a public body. They know it is impartial. How can we possibly say we are surprised when there are bank scandals and when people whose job is to make money try to make money in all sorts of ways? Exactly the same situation would arise if the Land Registry were privatised. There would be conflicts of interest. Would we be surprised, then, if shilly-shallying were going on or there was a lack of integrity and, potentially, corruption, if people want to use such a strong word? People want there to be the utmost integrity in land transactions, but feel that the door would be left open for precisely the type of behaviour I have mentioned if it were put in private hands.
There is another issue: data protection. I am advised by the PCS that there would be nothing in law to prevent a private company from selling on personal data to buyers who wanted the information. I think we have all had a gutsful of this, with information here and there, and people’s details being sold on. The last thing people want is yet another source of data leaking out into places unnecessarily. I feel strongly that these are good reasons why we would not want the Land Registry to be privatised.
Of course, to maximise profits, private companies would look to reduce labour costs, worsen terms and conditions and make jobs more insecure. It would be harder to attract high-quality staff and there would be a greater turnover of staff, leading to loss of expertise and low morale. I make no apology for wanting to protect quality job opportunities: I do not want to see a race to the bottom. But much more than that, I do not want a poorer service. High turnover of staff, loss of morale and lack of expertise would result in a much poorer service. That is without even talking about whisking the jobs off to some far-flung place, as hon. Members have mentioned.
The point of moving some public sector jobs was precisely to offer quality job opportunities in a range of locations, where perhaps there had not been such opportunities because some main industries had closed down. What do we find in those areas? These are prestigious jobs that people want and that they try to keep for a long time, because by comparison with local rates they are good jobs. As has been mentioned, in some areas of the country where the economy has heated up, the top-quality people are being lost. That control would be lost if the Land Registry were privatised, because there would be no choice about where the jobs were; they would be put into the private sector and could go where they like.
Swansea has the largest Land Registry office. Many of my constituents work there and they have expertise. It does not take them three or four glances at a Welsh word to write it; they can write, type, speak it and say it on the telephone. They do not have to think twice about dealing with complex Welsh place names, even Llanfair-pwllgwyngyllgogerychwyrndrobwllllantysiliogogogoch. [Interruption.] I would say it again if there were time. It is essential that we keep these jobs in the public sector and do not go down the private sector route.
There is a wider role for the Land Registry. Surely, we value our land. Land is key to development and crucial to our economy. We have heard a lot about shortages of land for housing and about not being able to get planning and about land banking. If we are going to have a more strategic view and to have any opportunity to use the Land Registry in a much broader sense, again, we want to keep it firmly in the public sector.
Finally, on the consultation, why on earth are we going down this route? As has been said, past changes are just about beginning to bed in, but here we are going through some sort of phoney consultation all over again. I say “phoney” because there seems to be an agenda behind it and because we do not have the information available. There is a lack of clarity and insufficient information. We do not know why we are having this consultation.
We should strongly resist any attempt whatever to hive off the Land Registry into a Government-owned company, which would pave the way for privatisation. Privatisation would mean selling it off at a low price, as was done with the Royal Mail, ripping the public off with higher fees, leading to poorer terms and conditions for the work force and, ultimately, no doubt, some great scandal in future, which we could avoid by avoiding going down that path now.
Mr Charles Walker (in the Chair)
Mr Bellingham, you have four minutes, but if you spoke for three minutes I am sure the Minister would be grateful.
Mr Henry Bellingham (North West Norfolk) (Con)
Of course, Mr Walker. It is a great pleasure to serve under your chairmanship for the first time.
This has been an interesting and important debate. It was brought to my attention by a number of constituents whose companies I mentioned at the start of this debate, when I intervened on the hon. Member for Swansea East (Mrs James). I spent quite a lot of time in the first part of this Parliament, when I was on Her Majesty’s Government’s payroll, going to developing countries. Quite often, I would ask them what more the Department for International Development could do to help in terms of capacity building and improving the standard of government. Time and again, we were told that they really respected our Land Registry and that they wanted help embedding expertise, knowledge and capacity in that area. Obviously, if there is no fit-for-purpose Land Registry system, it will be difficult to have a proper market in property.
I respect the Minister’s intent in all this, but it is incredibly important that we get it right when he finishes the process. I am concerned about a number of points. At the moment, there is no question but that public confidence in the organisation is high. As a number of colleagues have said, the public respect this organisation and have confidence in it. The chief land registrar—the chief executive—has said that the new strategy is all
“around customer needs”
and that the organisation needs to focus on
“our customer needs…to improve our service delivery”.
However, he must be careful, as must the Minister, not to take away home owners’ confidence.
Let me say just a word about this organisation, which is making substantial sums for the Treasury. I do not have any difficulty with privatisation, but I am concerned about an organisation that is successful and making money, remitting a dividend to the Treasury. If that continues, it is good for Government finances and for the Budget deficit. I accept that, if this organisation was privatised at a premium, it would perhaps help pay down the Government national debt by a small amount, but the Minister should also think about the recurring income to the Treasury from the organisation in its current place in the public sector. That is not to say that I rule out any changes in future.
I am concerned about the need for proper consultation. In addition to the names of the companies I mentioned earlier, I shall quote an e-mail from a constituent, who says that 12 months ago he invested in a new property information franchise, which he operates from his home, employing himself and his wife. He says:
“Due to the success of our business, only last week we took office space in Hunstanton”—
a small town in my constituency—
“and employed two local people (both out of work) to keep up with demand”.
He is looking to expand and hopes to take on another four. Over the next few months he may have increased numbers further. He continues:
“These types of jobs are rare in this area and there will be no shortage of local candidates of all ages.”
He wants to build his SME up, but says:
“Needless to say, until we know exactly where Land Registry is going with its plans I am reluctant to push on with my plans”.
I hope that the Minister will meet these SMEs, which are the lifeblood of our constituencies. Will he also ensure that he has a meeting with the Council of Property Search Organisations? If he has already met CoPSO, will he update us on exactly what it said? I hope that he will take on board the strong points that have come out of this debate and, above all else, allow further time for the consultation.
Mr Iain Wright (Hartlepool) (Lab)
It is a pleasure to serve again under your chairmanship, Mr Walker. I remember with fond affection the Committee on the Education Act 2011. My mother sends her regards.
I congratulate my hon. Friend the Member for Swansea East (Mrs James) on securing this excellent and sensible debate. I reiterate what others have said by saying that I will be sorry to see her go. She will be a huge loss to the House. She has served her constituents diligently, and it has been an absolute pleasure to work with her.
The recording of land and property ownership is vital and has to be done with integrity, impartiality, professionalism and consistency, which has been provided by the Land Registry since 1862. The Land Registry serves a population of more than 55 million, and as its annual report stated last year, it
“facilitates one of the most active property and mortgage markets in the world”.
More than 23.5 million titles are recorded by the Land Registry, which is an essential part of the home buying market. Any changes to the service must be made with clarity and purpose and must be backed up with empirical evidence, and it is clear from today’s debate that the Government have not provided that clarity.
I have a series of questions for the Minister based on three themes: the consultation, the process and the impact on staff. The Minister published a written ministerial statement announcing the consultation on 23 January 2014. The consultation, as we have heard, is to last eight weeks until 20 March 2014. Cabinet Office advice on consultations issued in November 2013 said that consultation periods should be decided on a case-by-case basis but that:
“For a new and contentious policy, 12 weeks or more may still be appropriate.”
Employees of the Land Registry and the millions of people like us who rely on the integrity of the data held by the organisation will find the Government’s proposals new and contentious.
I hope the Minister saw the letter in The Times last week by Ms Hilary Mobbs of Leeds, which stated:
“The consultation has not been widely advertised and the (very short) consultation period ends in March.”
The hon. Member for North West Norfolk (Mr Bellingham) made a pertinent intervention reflecting the concerns of businesses in his area. Will the Minister respond to Ms Mobbs and explain why only eight weeks was decided upon? What sort of wide-scale communication campaign was put in place to alert stakeholders, including many members of the public, of the proposed changes?
On the consultation document, it appears that the Government are fairly agnostic on which option to choose, but there is some doubt about that. My hon. Friend the Member for Hayes and Harlington (John McDonnell) asked the Government to come clean on whether the GovCo is the preferred option for ultimately getting to privatisation. What is the Minister’s preferred option? In the interest of greater scrutiny and transparency, will he publish the KPMG report, as has been asked? If he does not have a preferred option, how on earth does he know how the perceived benefits of greater flexibility to deliver, greater focus on service delivery and more flexibility on pay, recruitment and the provision of other services will be achieved? How will the outcome of the short consultation affect the Government’s thinking? If there is overwhelming support from stakeholders for maintaining the status quo, will the Minister pledge to ensure that that will be the Government’s policy? What happens after the consultation? There will be a period of Government consideration, and then presumably, if necessary, legislative changes will be outlined. Does the Minister anticipate that something will be in the Gracious Speech before the next Session? Does he ultimately think that legislation will have to be enacted before the next general election?
The big theme of today’s debate is what problem the consultation is trying to solve. As we have heard time and again, the Land Registry does not seem to be a failing and inefficient organisation—quite the reverse. If the Minister thinks otherwise, perhaps he will say so. It is required by statute that income from fees charged to customers covers all the Land Registry’s expenditure. There is no burden on the taxpayer whatever, and there is no need for a call on moneys from the House.
The annual report states that the previous chief executive left the organisation
“in a healthy financial position with improving staff morale and a signed-off Business Strategy.”
The Land Registry, as we have heard, achieved a surplus of £98.8 million, showing that the organisation is on top of weeding out inefficiencies. Cost per unit is £23.36, which is significantly better than the key performance target of £28.41. The return on capital employed was a hugely impressive 23.4%. Many good private sector organisations would kill for such a return on capital employed. Net assets approach £0.5 billion and the cash-flow position at year end is positive, with £472 million cash in the bank. This year, the Land Registry paid a dividend back to the Treasury of £26 million. Under no possible criterion could the Government claim that there is a need for private sector financial rigour to be injected into the organisation. The Land Registry is well run and the financial metrics are sound.
As we have heard time and again, the Land Registry has 98% customer satisfaction and, to quote the annual report again, enjoyed
“target-beating performance in terms of the quality and speed of our registrations.”
In such circumstances, I do not understand what the Government are doing. That is especially pertinent when paragraph 37 of the consultation document explicitly states:
“The proposals outlined in this document would have a very limited impact on customers”.
If that is the case, why on earth do it? Is it really to ensure that the Land Registry is fit for purpose in the digital age, with a central focus on digitising land registration services? If that is the case, why cannot it be done under the present statutory arrangements? The Land Registry seems to be diversifying its business model and being more innovative. Why is a change in corporate and statutory status necessary? Given the high level of customer satisfaction, will the Minister say how he anticipates fees will move in the next few years? Does he anticipate that fees will increase and, if so, to what extent?
The consultation document states that there is scope for additional services and refers to amending the Land Registration Act 2002. Will the Minister provide more detail? What other services does he anticipate and what services would he like the new entity to provide? There is talk in the consultation document of
“greater access to a richer data set.”
What does that mean? It is vital that customers have faith in the integrity of registering land. To quote Ms Mobbs from Leeds again:
“One could envisage a situation, as has arisen with our power providers, whereby the registered title to all properties would be in the hands of an overseas company or one with its own commercial interests in the property market. This concerns me.”
I can understand Ms Mobbs’s concern. What will the Minister do to address that concern? Will a vertically integrated business model, whereby a company provides the full range of property services to the customer, whether conveyancing, land registry or otherwise, be acceptable to the Government? Would the Minister be concerned if, say, Zoopla owned the company? What about a bank? What will the Government do to put safeguards in place to prevent that from happening? How will data protection be safeguarded? There is no clarity whatever on that in the consultation documentation.
Finally, I want to address the Land Registry’s staff. More than 4,000 people spread across the country provide a prompt, professional and efficient service. We have heard a number of hon. Members talk about the great work that their constituents do for the Land Registry. I have constituents from Hartlepool who work for the Land Registry in Durham. What will happen to those staff? The consultation document states that
“we expect that the majority of staff would transfer to the service delivery company and would cease to be civil servants.”
There is a lot of ambiguity in that short sentence. What does the Minister mean by “majority of staff”? Does he mean that all current staff who want a job will have a job, whether it is in the new service delivery company or in the proposed office of the chief land registrar? If so, what about location? Would my constituents who travel to Durham be required to travel to Swansea if they want to keep their job in the new organisation? Will the Minister provide clarity? Does it mean that there will be rationalisation of both work force and locations? What is the TUPE situation? Can the Minister make any comment on pension entitlements for current staff?
The Government have poor form on such things, whether one considers the botched change in respect of the GoCo for the defence procurement function—that change was very similar to that proposed for the Land Registry—or the Royal Mail privatisation, which short-changed the taxpayer. The Government are in danger of making the same mistakes again. It is difficult to avoid the conclusion that, regardless of the organisation’s performance and given the absence of evidence, the process is merely a means of privatisation. I ask the Minister to exert caution, provide more evidence before making a decision and consult widely—that has currently been eluded—before embarking on such important yet irreversible changes.
The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)
I, too, congratulate the hon. Member for Swansea East (Mrs James) on securing this debate on an important subject. I am also sorry that she is leaving us at the next election. I am sure that she is not considering retirement, and I wish her well in whatever form of public politics she continues to pursue. I thank all hon. Members who have participated in the debate. I will try to reply to a number of their points, but if I may, as there were a number of questions—not least those fired at me by the hon. Member for Hartlepool (Mr Wright)—I will reply by letter to some in the interests of time.
A well-functioning property market is critical to the UK economy. Ensuring that the market functions properly has long been one of the Land Registry’s main tasks. It recently celebrated a landmark 150th year and continues to be a cornerstone of property ownership in England and Wales. It undertakes a range of functions and responsibilities that are critical to the property market operating effectively. In the past, successive Governments have been at pains to ensure that land registration procedures keep pace with a dynamic and rapidly-changing property market. As we look to the future, it is important that the Land Registry is able to modernise successfully and move into the digital age. The Land Registry already provides a number of services through digital channels, but it is looking to become a leader in digitising land and property services, and in the management and reuse of land and property data.
Accordingly, its ambitious new business strategy is focused on a number of areas: the digitisation and re-engineering of its core registration services, which should reduce processing times, risk of error and the costs of those services; playing a wider role in the land and property market, including being able to take on other adjacent registers; and maximising the reuse of property data for the benefit of the wider economy. Reduced processing times, errors and costs, and wider services and better access to public sector data, will all bring significant benefits for customers and make it easier to register land in England and Wales.
The strategy also reflects our broader digital, efficiency and modernisation aims and as such is a key priority. The experience of other countries in modernising their property services makes a compelling case for us to realise those benefits at an early stage. A number of other countries and states have already successfully digitised their land registries, so it is important that England and Wales do not fall behind where there are useful lessons that could be learned.
Before I turn to the commercial models, I will say something about local land charges. The Land Registry is looking to become the sole registering authority for local land charges, a job that is currently undertaken separately by each of the 348 local authorities. The benefit of the Land Registry providing a single central solution is that it would result in cheaper, quicker and more standardised services, so avoiding the current postcode lottery.
Commercial models dominated the debate. The hon. Member for Swansea East fairly asked: “If it ain’t broke, why fix it?” I will reply directly to that. Of course, the Land Registry is profitable, but we have a responsibility to review continually whether the business can drive further benefits to its customers and the wider market by driving digital by default services, which could deliver lower-cost services and reduce processing time.
The proposal in the consultation to introduce a new service delivery company is aimed at supporting the business in delivering its business strategy in the best way possible. We have been working with the business to consider whether the current model is fit for purpose or whether there may be benefits in considering alternative commercial models. Following that, there should be a number of benefits through a greater focus on service delivery, greater operational flexibility and a more clearly defined relationship with Government. Central to any change in the commercial model is the guiding principle that we must continue to protect the integrity of the registry in such a way that its role in underpinning the property market by giving confidence to buyers, sellers and lenders is not compromised.
Mr Stewart Jackson
I am sure the Minister would like to reassure us on the comments made by the then Lord Chancellor at the time of the feasibility study in 2011. He said that
“the registry’s state guarantee of title to land and property is essential, and that it must be retained in any arrangements that we make.”—[Official Report, 29 March 2011; Vol. 526, c. 151.]
Michael Fallon
Indeed. The proposal being considered in the document is to introduce a new Land Registry service company that would have responsibility for the performance of the service delivery functions. There would be a separate office of the chief land registrar retained within Government primarily to perform the regulatory and fee-setting functions. It is also envisaged that the indemnity arrangements will continue to be state-backed. The new company, if we choose to go down that particular road, could focus on delivery. Its ability to carry out additional activities would no longer be narrowly constrained by legislation. It would be outside the civil service and would have greater flexibility on pay and recruitment.
I emphasise that no decision has yet been taken about the ownership of such a new company, should we move forward with the proposal to create it following the consultation. A number of models are being considered, but the oversight that will be retained by the office of the chief land registrar would ensure that Land Registry companies and the integrity of the register would be protected irrespective of ownership. Models being considered include a wholly owned Government company, a joint venture and a contracting-out model. It is Government policy to assess options for moving assets to the private sector where there is no longer a strong policy reason for continued public ownership or where there is potential for an asset to operate more sensibly and efficiently in the private sector.
I was asked what the transition period means—it means the digital transformation phase. During that phase, we see benefits in partnering with the private sector, whether the status quo is maintained or whether there is a change in model, as considered by the consultation. The form of that partnership with the private sector would be different under each scenario. Looking internationally, a range of commercial models have been adopted to deliver the digitisation of land registration, but in each case there has been partnership with the private sector to bring in the capacity and capability needed.
I was asked about data protection. I confirm that the data protection procedures that currently apply would apply to any new service delivery company, to ensure that personal information is not mishandled. I was asked about the KPMG report, which was prepared in March 2011. Many parts of it are no longer relevant, but I understand that a redacted version of the report has been supplied to one of the unions under a freedom of information request.
My hon. Friend the Member for North West Norfolk (Mr Bellingham) asked me specifically about conveyancing self-service. I make clear to him that the current customers of the Land Registry will have their views sought before any new or revised services are launched. They would certainly be consulted again before any such services were mandated by the Land Registry. I hope that that reassurance will be of use to him.
I was asked about meetings with MPs. I say to the hon. Members for City of Durham (Roberta Blackman-Woods) and for Darlington (Jenny Chapman) that I do not think it is satisfactory that the meeting was refused. I am asking the management of Land Registry to look at that again to see whether, as we come to the close of the consultation period, those meetings can now be organised with the hon. Member for Darlington and her colleagues. I hope that it offers some comfort to her that my former constituents are still at the forefront of my mind.