Lord McKenzie of Luton (Lab)
My Lords, I congratulate the noble Baroness, Lady Kramer, on her extended role during the course of this Bill and indirectly congratulate the noble Baroness, Lady Stowell. The amendment moved by the noble Lord, Lord Tope—for the GLA to perform the role of disposal agency in London—on the face of it makes very good sense. As the noble Lords, Lord Tope and Lord Jenkin, said, the HCA’s objects simply do not run in Greater London as a result of the Localism Act 2011, and without a change you would have to retain the arrangements where transfers are made indirectly.
I took the opportunity to raise the matter with the Bill team, who have sent me a helpful note, which, if I may, I will just read from:
“I have been advised that under the Localism Act 2011, the GLA has responsibility for the HCA functions in London and the HCA does not have a remit to operate. The HCA has powers to operate in London but to do so would require delegated authority from the mayor. Under existing legislation, central Governments can transfer their land directly to the GLA; arm’s length bodies can also presently do so but would have to transfer the land to the parent department first”.
That is the inefficiency we are trying to tackle with this provision. The note goes on:
“DCLG are working with the GLA to determine what offer the GLA would be able to make to departments regarding land transfer. This will include whether statutory transfer is the most appropriate mechanism or whether an alternative approach is preferable”.
Could the noble Baroness just unpick that expression a little? Whatever arrangements are to be entered into, it does not seem to me to preclude supporting the amendment of the noble Lord, Lord Tope.
We have had a helpful briefing from the Mayor of London, which raised a number of points. The point about the GLA having to hold its land in a taxable subsidiary company would appear to have been addressed by government amendments, but there was also a point about transfers of land from the GLA, a mayoral development corporation or the HCA hitherto not having been able to pass on the override of third-party easements. This means that such owner-developers could be pursued for remedies by the previous owners and beneficiaries of such rights. Given that Clause 22(10) is to operate only where land is disposed of after the provision comes into force, how does the Minister see this point being addressed?
The Minister of State, Department for Transport (Baroness Kramer) (LD)
My Lords, it is a pleasure to stand here in the place of my noble friend Lady Stowell. I join the congratulations to her on her new role and apologise for the disappointment of noble Lords who were looking forward to debating these issues with her today. I will have to do for today’s purposes.
The public sector land programme aims to speed up the disposal of land and put disused land back into use for much needed homes. The current public sector land programme has identified land with capacity to deliver 100,000 new homes by March 2015. At the end of March 2014, it had released land capable of delivering more than 76,000 homes. As we move forward with the programme, we are aiming to reduce the bureaucracy involved in transferring land to the HCA and to speed up delivery of much needed homes and economic development.
The GLA has a pivotal role in delivering housing and economic growth in the capital, as my noble friend Lord Tope illustrated, and we are working with it to consider how its expertise can best be utilised in the disposal of surplus government land. In some cases, this may mean transferring sites from central government bodies to the GLA. Although the original clause, which is the one currently in the Bill, did not mention the Greater London Authority, we agree that there may be some benefit to exploring whether it should be included in the clause. There is an existing transfer process, but this might smooth the process of transferring sites from arm’s-length bodies to the GLA. There would need to be an agreement between the Government and the GLA that this is the best delivery mechanism for individual sites and the one that provides best value to the taxpayer.
One alternative, for example, would be to purchase land directly from the Government or their ALBs. All this needs further discussion and exploration with the various parties, and we need to work through whether there are stamp duty implications or other factors. Some resolution will be required before we can come to a definite decision on that process. We have been working closely with the GLA on the land disposal programme, as we will continue to do, so that we can work out how surplus public land can be better used to support housing and economic growth, alongside finding efficiency savings. We recognise what the noble Lord, Lord McKenzie, said—
Lord Jenkin of Roding
I perhaps should have mentioned earlier that shortly before coming to the Committee, I had an urgent e-mail from a group with which I had been in touch about what amounts to affordable housing. It is a question of whether the houses that this group provides are liable for the local land levy. A decision was made in the group’s favour, which it sees as possibly depriving it of the opportunities to have the land. My noble friend has made the point about how the surplus land, as it were, brought into the ownership of the GLA, or whoever, will be disposed of. If my noble friend could include that in her examination of the matter that her officials will be discussing with the GLA, some of these people might have some comfort. They fear that they may not be in people’s sights of having land that ought really to be made available for affordable housing.
Baroness Kramer (LD)
The noble Lord, Lord Jenkin of Roding, makes clear that there are complexities in all this. We do not have set levels of affordable housing. That has to be for the local authority. It is best placed and will undoubtedly use its planning processes, which of course apply to any development, to make the relevant determinations. He is right that there are complexities that we have to iron out and work our way through. I just want to alert the Committee and to say that we are sympathetic to the underlying direction of this amendment, but there is work to be done to know whether this is the most effective way to achieve what I think everyone here is attempting to achieve.
Lord McKenzie of Luton
Will the Minister expand on what she said because I am not quite following? I can see that there may, in differing circumstances, be details to work out as to how particular parcels of land are put together and how they end up for the benefit of housing in London. But this amendment would simply include the possibility of the GLA being the beneficiary of a Secretary of State’s scheme. The Secretary of State does not have to enter into a scheme under these provisions in all circumstances. I am struggling to see why the amendment could not be accepted. It would not be mandatory. It would just be one route. If it is not picked up in this Bill, I wonder when it will be picked up by another local Bill coming down the path. I am struggling to see the logic in not making this adjustment.
Baroness Kramer
I say to the noble Lord, Lord McKenzie, that I will go back to the department and ask whether we can share any of that without disrupting the process of negotiation. I am sure that we would be willing to share those thoughts. This goes beyond my direct area of expertise and I would not want to mislead the noble Lord by taking him in a wrong direction. We will try to provide that clarification. The one thing that everyone here would be concerned about is making sure that it does not disrupt a negotiation process that would come to the conclusion that we are all seeking; that is, the efficient transfer of land to make sure that housing is made available at the earliest possible date.
I will be happy to work with your Lordships. The department is working with the GLA to consider whether these amendments would be beneficial or whether a somewhat different form is needed to deliver that public sector land programme in London. With that assurance, I hope that my noble friend Lord Tope will feel able to withdraw his amendment.
Lord Jenkin of Roding
My Lords, I was relieved to hear the noble Lord, Lord McKenzie, say that this was a probing amendment. It is on that basis that I hope that the Minister will at least undertake to examine the possibility. All three noble Lords who have spoken in favour of the amendment have much more recent experience than I of local government service. It is more than 50 years since I was chairman of the housing committee of a then London borough which is now part of the London Borough of Haringey. It was then called Hornsey—I should say that it ends “sey” for the benefit of Hansard, which usually spells it like the Lincolnshire town. However, I was the chairman of housing and the problem existed then. In an inner London borough, one was very much of aware of the shortage of available land. We had a substantial slum clearance programme and I was very much concerned about where we were going to put the residents while the building was going on. That was a problem and I lost my seat on the council before it was solved, but that is a different story which my noble friends in the Liberal Democrat party perhaps do not wish to hear. However, within six weeks I was the prospective parliamentary candidate for Woodford, so I did not mind very much.
There is a real problem with surplus land. For me, by far the most important objective that this clause is intended to achieve is speeding up the whole process of getting surplus public land into development. The test that I hope my noble friend’s department will be able to apply to this is: does this amendment actually promote that objective? The objective is not necessarily to allow local councils to retain land because I suspect that some of them have a good surplus of public land, which they somehow think they may want to develop in future. Such is the housing crisis in this country—as we have said, it is a crisis particularly in London but I think it is elsewhere as well—that the important thing is to get the land into use now. The test that ought to be applied is whether this amendment would help to achieve that or not.
Baroness Kramer
My Lords, that is some intimidating experience from quite a number of your Lordships, which I cannot possibly hope to match. However, your Lordships will be aware that a recently concluded strategic land and property review identified the scope to generate something like £5 billion in receipts from both land and property to support growth and drive efficiency. The Homes and Communities Agency will have an important role to play in leading this programme from next year. However, it may not always be the best or the only delivery option. The noble Lord, Lord Smith, gave us an illustration from Greater Manchester. He obviously has great expertise and played a very significant role in Greater Manchester.
As I say, local authorities also have a vital contribution to make, and in some cases this may mean transferring sites to them. I am keen that we explore the best options for delivery, taking into account local circumstances. So while our clause does not mention local authorities, to respond to my noble friend Lord Tope, there may indeed be benefits to exploring whether they should be included in the clause, which may smooth the process of transferring sites from central government’s arm’s-length bodies to local authorities, where this is the best option locally and supports the delivery of local and national priorities.
The Lord Bishop of St Albans
My Lords, an interest in forestry has brought me along today. I am hugely grateful to the noble Baroness, Lady Royall, for what she said; indeed, she made many of the points that I wanted to make. I will therefore say just one or two things. In starting, I have come hotfoot from the General Synod, where we had a debate last night on Magna Carta, which I had to read. I discovered that three of the clauses there are about bishops and barons bringing the Executive to account on the forests—in those days King John wanted to make them bigger so that he could take more land. I now find myself here as a Bishop among Barons and Baronesses, reflecting on that.
I have had a number of representations on this area. It is an important issue for us, for the many reasons that the noble Baroness laid out. It is akin to our green belt; we still have it but there are many incursions into it. This is about how we protect it and how we protect forestry. It is true that work was done by my colleague James Jones, the former Bishop of Liverpool, on this important area. However, we are still waiting—I have asked questions on this as well and engaged in discussions—for the Government to move and set up the new body that Owen Paterson promised us some time ago.
I am grateful for the noble Baroness’s assurances, but what is involved here is the nature of this surplus land. However, if that accords with what we have been promised, surely this is belt and braces and makes a lot of sense. In particular, I am attracted to Amendment 89, which gives the assurance that that comprises the whole, as well as any part of, the public forest estate. As stated in proposed new subsection (9), that,
“comprises all the land, property, rights and liabilities”.
That is surely in line with what we were promised and what the Government have agreed to. If that forestry body is to be set up, that is fine—this is all in agreement with that. However, in the mean time, I should certainly like to receive some assurances from the Government in line with the amendments before us.
Baroness Kramer
My Lords, first, I am sure that no discourtesy was intended to the noble Baroness, Lady Royall, over the timing of the letter that was sent. I cannot quite explain the sequence but I know that, in trying to co-ordinate the numerous questions that came to us following Second Reading, we tried to make sure that we had covered everybody’s questions and answered them fully, which may have delayed putting our responses in the post by a day or so. Therefore, I apologise if she was concerned by that.
The public sector land programme is about bringing disused land currently owned by central government back into better economic use, not about selling or building on community assets enjoyed by local communities. It is a continuation of our current programme, where we are on track to dispose of disused land with capacity for 100,000 homes. This clause is not about new policy, but merely the introduction of efficiency into the mechanism.
Surplus land can and already does transfer to the Homes and Communities Agency, but the process is more bureaucratic than is necessary. This clause is simply about increasing the rate of delivery by accelerating internal government procedures. The proposed amendments would actually slow down the process by adding further bureaucracy. For that reason, we would resist this amendment because our goal is to increase efficiency in this process, not to slow it down further.
On the issue of surplus land, it is important that land can transfer to, for example, the HCA while it is still in operational use but a decision has been clearly made that it will no longer be needed beyond a certain point. The HCA would then be able to start remediation works and marketing in parallel with the wind-down of operational activity. This minimises bureaucracy and ensures that we are making best use of our land at all times. Questions have arisen about the word “surplus”. There is not a definition in that sense because property-owning departments and arm’s-length bodies are expected to review their landholdings regularly to identify potential for rationalising their estates. When a landholding is no longer required by government, it is not just surplus to our requirements and there is no hard-and-fast definition of surplus beyond this because it varies so greatly from department to department and use to use. It is for individual departments to decide why they no longer require a piece of land.
I assure your Lordships that it is not possible for the Homes and Communities Agency to transfer land from other public bodies without the consent and co-operation of the transferring department. The transfer is direct but all statutory transfer schemes to the HCA must be signed by a Minister of the Crown or a delegated representative. Therefore, only land that the transferring public body has identified as surplus to its requirements will be transferred. This is standard government business and the noble Baroness will have been very used to this process when her party was in government. There is nothing new or different about the way in which it is being handled.
As I said, the clause is about accelerating internal government processes to transfer surplus land so that it can be disposed of more quickly and effectively for appropriate development. It does not override existing planning policy or community rights. The Government fully appreciate the importance of amenity land to both nature and our communities. Common land is central to our national heritage and we value it for agriculture, recreation, nature conservation, landscape and its historical and archaeological significance.
Public rights of way in the country are the primary means by which people access the countryside and engage in outdoor recreation, which in turn promotes improved health and well-being, as well as sustainable transport. Our amendment will not affect public rights of way. Normal planning procedures will apply to protect open spaces and other amenity land. The National Planning Policy Framework makes clear that open space should not be built on unless it is surplus to requirements, can be replaced or the benefits outweigh the loss. Planning policies should also protect and enhance public rights of way and access. Where the Homes and Communities Agency owns such land, it seeks to transfer it to the local authority or other community group to continue to manage the land for the community. It is also worth noting that the Homes and Communities Agency often facilitates the creation of new open spaces, allotments and amenity land, which over time become an important asset to the community.
I will talk more directly about the public forest estate in response to the amendments that address this and which are intended to prevent the transfer of land from the public forest estate to the Homes and Communities Agency. We made clear our policy on the public forests at Second Reading and again in the letter that we provided to the noble Baroness, Lady Royall. The forest estate is not for sale and we will not transfer the public forest estate to the Homes and Communities Agency.
The noble Baroness, Lady Royall, asked about future Governments. Future Governments have always been able to make their own decisions, and this Parliament could not prevent their doing so. We can give an absolute assurance about the position that this Government take. Were she in government, she would have to make that decision on a democratic basis for herself.
In my published response to the Parliamentary Question from the noble Baroness relating to Clause 21, I said:
“Clause 21 of the Infrastructure Bill is completely unconnected to the Government’s stated policy to establish a new public body to hold the Public Forest Estate”.—[Official Report, 30/6/14; col. WA 214.]
The Government have no intention of transferring land from the new body to the Homes and Communities Agency, as the public forest estate is currently in use and not declared surplus. As such, the powers will not be used in relation to this body and will therefore have no effect on it.
I also refer to our forestry and woodland policy statement, published in January 2013, which built on the recommendations made by the independent panel on forestry, chaired by the then Bishop of Liverpool. It confirmed that the PFE will continue to benefit from public ownership. Nothing has changed. We remain committed to this and are continuing to work closely with stakeholders.
I believe that we shall have a discussion on the group that begins with Amendment 91A which will address some of the issues of easements. Just for the purposes of the issues that were raised by the noble Lord, Lord McKenzie, third-party purchasers will be able to override easements in any land sold by the HCA, the GLA and the MDCs, the mayoral development corporations. That has always been clear from this legislation.
Lord McKenzie of Luton
I apologise for intervening on the Minister but I wonder if we can clear that up, as it is before us. Did she say that third-party purchasers can override those easements?
Baroness Kramer
I think that a better way to express it is that where they have been overridden by the HCA, the GLA and the MDC, they are sold, as it were, with the override in place. I believe that that is correct; I will write to the noble Lord if it is not, but that is my understanding of the situation.
Lord McKenzie of Luton
I am grateful; that is helpful. It is what I understood the position to be likely to be—that third party purchasers could not create those overrides.
Baroness Kramer
That was the issue at dispute. My understanding is that they cannot create. I am now looking for some clarification on this so that I can come back to the noble Lord with a more correct answer. I just have a note that says, “If Clause 22 goes ahead, they will”. I believe that we are going to address that under Amendment 91A, in which case I may be able to give the noble Lord a more substantive answer shortly. If not, I will ensure that he gets complete clarification on this issue.
On the tax issues that the noble Lord raised, tax provision to produce a tax-neutral result will be made in secondary legislation under new Section 53B. Again, we can provide more detail on that than I have at my fingertips at this moment.
To return to the heart of Amendments 85B, 86, 87, 88 and 89, we believe that the necessary safeguards are in place to ensure that land transfers only when agreed by the Secretary of State and when the transferring department has deemed the land to be surplus to its requirements. The clause sits within the wider planning framework, which offers sufficient safeguards to protect any open spaces or other amenity land. For that reason we will resist these amendments, and I hope that what I have said provides some assurance.
On the Edward I freemining rights, we will indeed follow up in writing. I confess that that is beyond my general knowledge of these issues, so this may be the most helpful way to provide that information to the noble Baroness, Lady Royall.
Lord McKenzie of Luton
I am grateful to the Minister for that detailed response. I accept that there are some points on which we shall have some follow-up, particularly on easements. On matters of tax, the particular point I sought to probe was: at the point when the land goes from the HCA—or the GLA, if that is what it is—to a private sector developer, what is the basis on which it acquires that land? Is the developer thereby getting a tax break? Is the value of its land uplifted or is it reduced somehow? I do not expect the Minister to deal with that in detail today but I would be grateful if there could be some follow-up on it. We accept the assurance that there will be procedures in place to make sure that the owning department will have to sign off on any transfer and that it would only be surplus, as the Minister described.
Baroness Kramer
Perhaps I might make a small correction for the noble Lord, Lord McKenzie, because I want to be absolutely clear on this point. It would be a Secretary of State, a Minister or somebody delegated. Because the Government act as a whole, I cannot guarantee to him that the owning department would necessarily provide that signature but I will look for clarification.
Lord McKenzie of Luton
I am grateful and perhaps we could have some follow-up on that as well, if necessary. I also accept that the different approaches to when land is identified as surplus mean that it may be difficult to have an all-embracing definition in the Bill.
However, that leaves two issues around the forest estate, which my noble friend Lady Royall spoke about with a great passion, as indeed did the right reverend Prelate the Bishop of St Albans. Given the generality of the assurances that the Minister has given, is there not the possibility that we could at least have something specific in the Bill in relation to the public forest estate, as an example of where it simply will not be transferred? That would ease the genuine concerns of many who are not happy about the broadness of this clause as it is drafted. Could that, at least, not be included in the Bill? We accept that there are issues around surplus and the processes of transfer.
Baroness Kramer
I apologise for bobbing up constantly but the noble Lord will understand that I am trying to catch information as rapidly as I can to ensure that we do not leave him with an inaccurate picture. In terms of that sign-off to which I referred a few moments ago, if the land is surplus, it is the Minister for the DCLG who provides the signature in all cases. It is important that I share that, rather than leaving the noble Lord misinformed on this issue.
Lord McKenzie of Luton
We need to think about that. Is it the Minister for the DCLG in all cases, wherever the land was originally owned or used and whichever department it was?
Lord McKenzie of Luton
I am grateful for that. It is news to me but it is helpful to have it. I should like to press again on the issue of the public forest estate and why that cannot be specifically included as an exemption from the operation of these clauses. I am sure the Minister will recognise that that would ease the very real concerns that have been raised. She may say that those concerns are unnecessary, given the assurances that have been provided, but notwithstanding that, there would be clarity and certainty in the Bill. What is wrong with that?
Baroness Kramer
My Lords, I feel that at this point we have given real clarity on this issue. As I say, this mechanism simply makes more efficient a process that is currently in place. The assurances that stood yesterday and stand today are the assurances that will stand tomorrow, and it seems to us that those are clear and unequivocal. We therefore cannot see what is gained by putting this into the Bill.
Lord McKenzie of Luton
My Lords, we have reached the stage where it is necessary to withdraw the amendment but I cannot believe that we will not return to this matter at a later stage. I beg leave to withdraw the amendment.
Lord McKenzie of Luton
My Lords, this is a straightforward amendment that would require the regulations specifying public bodies to be subject to the affirmative procedure. These provisions are focused on identifying which public bodies’ assets can be the subject of a scheme for transfer to the HCA. In other amendments, we have just discussed the sensitivity around these schemes, which should be clear. The affirmative procedure is still limited but it seems to us that it should apply, at the very least on the first use.
Baroness Kramer
My Lords, I gather from general conversation that there are many arm’s-length bodies—certainly several hundred of them. A process whereby adding them or subtracting them from a list would require affirmative actions in your Lordships’ House and the other place seems excessive, frankly, when the whole purpose of this is to speed up the process of land disposal and ensure that appropriate developments can happen quickly. Maximising the release of surplus public sector land is critical to support our ambition to reduce the deficit and, even more importantly, increase the number of homes being built.
We are already releasing surplus public sector land under the current public sector land programme, and have an ambition to dispose of land with the capacity to build 100,000 homes. The language in the Bill lets us do that better and faster, getting much needed land developed quickly. We already utilise the expertise of the HCA to remediate and market surplus land, and it will continue to play an important role in speeding up development. The purpose of the clause is to eliminate needless bureaucracy and get surplus developable land to the HCA quickly.
An amendment specifying that the regulations about bodies transferring land to the HCA would have to pass through the affirmative procedure would merely slow that whole process down again and defeat the whole point of what we are attempting to do. We are cutting out a middleman, and it is important to resist various attempts to slow this process back down again. Needing a debate in both Houses every time a new set of regulations was made or when names were added to a list would have the effect, frankly, of wasting parliamentary time. There is a process in place that allows for objections to be made if concerns are sparked by any particular change.
The proposed programme is not a one-time programme but a continuing one, and new sites can be identified by departments and arm’s-length bodies. The transfer could come from an arm’s-length body that currently either does not exist or is not on the list because it has not at present identified land to transfer. We really do not want to exclude land because those names are not on the list—we want to make sure that development can happen. This amendment is at odds with the aims of the Bill, and for that reason we ask that the amendment be withdrawn and that it be accepted that these regulations should remain subject to the negative procedure.
As I say, when there are genuine concerns about a body specified in the regulations, the negative resolution procedure allows a challenge to be made and a debate to take place, in either House. The regulations can be challenged and dealt with in that way. In our view, the negative procedure is proportionate and in line with our policy aim to accelerate the pace of land disposal and to remove bureaucracy. I therefore ask that this amendment be withdrawn.
Lord McKenzie of Luton
My Lords, I think I am convinced. I beg leave to withdraw the amendment.
Baroness Kramer
Baroness Kramer
My Lords, maximising the release of surplus public sector land is critical to supporting the Government’s ambitions to reduce the deficit, increase the number of houses being built and help to drive economic growth.
We have introduced Clause 22 to speed up the process of land disposal and ensure that appropriate development can happen quickly. The ability to remediate and sell surplus public sector land is critical to the supply of much needed new homes. I think this is going to address the question raised a few moments ago: our clause will bring the powers of purchasers of land from the HCA, the GLA and the MDCs into line with those presently enjoyed by purchasers of land from local authorities and other public bodies involved in regeneration and development, such as urban development corporations, when overriding easements. This now picks up the issue that I stumbled upon a few minutes ago.
The ability to override easements is often necessary to the development of a site. It is in the wider public interest that we support development that brings much needed homes and jobs. We have tabled this amendment to ensure that the power can be used as intended by the Greater London Authority. The bulk of GLA land is held and managed by GLA Land and Property. We need to ensure that it is able to use the powers as intended, which is what the amendment will do. I beg to move.
Lord McKenzie of Luton
My Lords, I think that I am happy with this. Do I understand that it relates just to dealing with the GLA problem and its need to operate through a taxable subsidiary?
Baroness Kramer
My Lords, I am looking to make sure that I have some advice on this. However, it is my understanding that local authorities and other public bodies involved in regeneration development are able to sell land to purchasers with the power of overriding easements. Urban development corporations are an example of that. When that legislation was drafted, however, the GLA did not gain that power. We believe that that was by oversight, and, if I understand it correctly, this clause will now correct that.
Similar powers can be found in other legislation, as I have said. Local authorities have long had powers to override third party interests, as do housing action trusts, local highways authorities and urban development corporations. This was true even of defunct bodies such as regional development agencies, the Urban Regeneration Agency—better known as English Partnerships— and the Commission for New Towns. This is basically to correct a drafting oversight in the original GLA legislation and, as such, it is an important though fairly technical amendment.
Lord McKenzie of Luton
I am grateful to the Minister for her explanation. I think that I have got it but I want to make absolutely sure. This amendment deals with the GLA situation but outside that, in the example being pursued by the noble Lord, Lord Jenkin, if there is a disposal to a third party by the HCA with planning permission and all the constraints presumably being in the contract, can the third party purchaser in those circumstances take the benefit of overrides that have been provided by the HCA or a local authority but not create new overrides itself? That is the particular issue that I am trying to get clarity on.
Baroness Kramer
Perhaps I might write to the noble Lord, Lord McKenzie, on that issue because I think that I am getting myself caught up in circles, which is not an appropriate way to give him the answers that he needs.
Lord Jenkin of Roding
I am full of admiration for the way that my noble friend is dealing with this, having had to come to terms with it at such short notice. Perhaps I could be included in the letter.
Baroness Kramer
“(8A) After subsection (4) insert—
“(5) In this section references to the Authority include a company or body through which the Authority is required by section 34A above to carry on activities where those activities are carried on for a commercial purpose.
(6) Subsection (5) does not affect the application of Parts 3 and 4 of Schedule 4 to the Housing and Regeneration Act 2008—
(a) in relation to the acquisition of land by the Authority under this Part, or(b) in relation to land in respect of which functions of the Authority relating to housing or regeneration are being or have been exercised.””
Baroness Kramer
My Lords, I shall reply first to the comment from my noble friend Lord Jenkin of Roding that the Minister did not meet stakeholders. That was during the consultation period. I think that Ministers often make the decision that they should not distort a consultation by meeting with some particular parties and not others. Meetings have subsequently been put into the diary with both Mr Lester and BIS. As I say, this was a matter of propriety during a period of consultation, as many noble Lords will recognise was necessary.
We have a problem with the local land charge system. At present, each of the 348 local authorities in England and Wales maintains its own local register, and they are kept in a variety of formats. Some are digital but do not use the same digital systems, while many are still paper-based. The fees for searching the register vary from £3 to £96. Since the rule applying here is that the local land charge service should be provided on a cost-recovery basis over a three-year period, it is quite hard to understand why there is that discrepancy and range of difference in pricing. Some of the services respond in a day or so; some take more than 20 days. That has led to the buyer of a property or someone remortgaging a property—who is, in all honesty, probably not that conscious of who their local authority happens to be—not being able to rely on an efficient service in every part of the country. It is, in a sense, a genuine postcode lottery if you are sitting in the position of the person trying to buy a property or seeking to remortgage one. I suggest that we have a serious problem there.
To give the Committee an example, Camden Council is taking 38 days to process searches. You can imagine what that is doing in a process where house prices move while people are trying to get mortgage approvals and are often in chains of buyers. It is clearly jeopardising people’s ability to buy a house. We have had other reports—
Lord McKenzie of Luton
I apologise; did the Minister say that it was 38 days for Camden?
Lord McKenzie of Luton
Was that the local land charge search or the CON29 search?
Baroness Kramer
My understanding is that it is the local land charge search, not the CON29 search, but we have had reports of problems of varying degrees in Scunthorpe, Erewash, Exeter and Sutton. It is not confined to one particular local authority. Users of this service have said in surveys that only 24% of local land charge search results are returned within a day and only 50% within two to five days. I thought that I had some of the numerous responses from people who use the service and thought it was an incredibly good idea to start trying to centralise it and provide some degree of consistency; if I find them later, I will quote them.
I should point out that the Land Registry’s performance for a similar range of preliminary searches and copy register and copy document services is that over 95% were returned within one day. The Land Registry, in its central form, is exceedingly efficient. It has a flat fee of £3 and most queries are dealt with instantly by online access. I now have the number that I was looking for. I am told that 63% of users were supportive of trying to rationalise and centralise this system. We are living in the 21st century and people expect to be able to access information in the most efficient way, and that supports the property market. If we want to increase the availability of housing, surely that has to be a service that we look at seriously, making sure that it is as efficient as it can be.
In this day and age, it is crucial that public services are available online. The DVLA now processes driving licence applications online, and I see no one calling for us to change that to a system in which in each local community there is a separate application for a driver’s licence through the local authority. It is time for the local land charges system to be modernised and made fit for purpose in a digital era. A single digital register held by a single provider will reduce overheads and eliminate regional variations in the speed, format and costs of the local land charges service. The solution will improve turnaround times to mere minutes and improve data accessibility for the property sector. By reducing overheads, in effect we will make sure that there is a lower fee for the customer, and the standardised process means that the fee will not change based on location.
The poll that I cited a moment ago, conducted by Ipsos MORI, showed that 63% of customers found the Land Registry proposal “appealing” or “very appealing”. Customers want to benefit from a standardised service. They want faster turnaround times, reduced running costs and lower fees. These proposals will make it quicker and easier for people to buy a property, remortgage their home and even, in many cases, start up a business.
The Land Registry has a proven track record in providing digitised information to the public. I say that to provide reassurance that this is a body capable of putting together the system that we require of it. It safeguards almost 24 million registered titles, has a customer satisfaction rate of 98% and already processes around 22 million applications electronically annually. It has extensive experience of digitising registers and a central position in the conveyancing process, as the single largest source of property information. That is why it makes it right for this body to take over the local land charges service.
History shows that this kind of step change to a modern, standardised service, with the benefits that brings to the public, simply cannot happen if the service remains split between 348 local authorities. It will require a single digital register held by a single provider to get that reduction in overheads and eliminate the endless variations in the format—never mind in the costs—of the local land charges service. We of course accept that there is a role for local knowledge; that must be maintained. Therefore, local authorities will continue to be responsible for collecting and updating all the information in the register.
Your Lordships have asked whether we are removing a valuable source of revenue for local authorities by, as it were, leaving with them an element of cost. We are in detailed discussions because we are concerned that local authorities should not bear an undue burden by providing the input that only local knowledge can provide. Local authorities would be responsible for collecting and updating the information in the register, and obviously that should not be an undue burden on them. However, if they came to us and said, “But we’re losing a source of revenue”, we would point out that the rules have made it absolutely clear that this is not meant to be a revenue-raising service; it is a cost-recovery service. Therefore, the argument that there is a loss of revenue really does not hold water, as surplus revenue is not the purpose of the current pricing system.
Some noble Lords asked about CON29 searches. I can explain that the Land Registry is examining the feasibility and developing the policy of providing CON29. However, it is important to be clear that for a property transaction, customers already go to the Land Registry for searches, so providing local land charges searches through the Land Registry portal does not add another step for them. Over time, the CON29 searches may be added to those channels but our intention is to do that in a responsible way, as an incremental phased approach. The Land Registry is well placed to bring about the benefits envisaged. For a property transaction, customers already go to the Land Registry and, as I said, it has a proven track record. While local authorities are focused on a whole range of activities, property information and serving the conveyancing market is the sole purpose of the Land Registry and its specialised expertise.
The noble Lord, Lord Jenkin, raised the question of whether this is a step towards privatisation. Noble Lords will be aware that a consultation on the ownership structure of the Land Registry was begun in January and completed in March, and the Government have provided their consultation and see no reason to change the current ownership arrangements. I want to be clear on that point. The process we are proposing here—to bring new efficiency into the Land Registry system—is part of moving into the efficiency of the 21st century by taking advantage of digital technology, which has not historically been available but which is available today for the benefit of the user. Noble Lords will be aware that to some degree a whole industry has grown up which negotiates the current search process for individuals who want to buy properties, because they currently find that process so cumbersome and complex. Surely transferring that to an online system, which the ordinary user can use with ease and clarity, is the direction in which we absolutely have to go.
Noble Lords made a number of comments about the off-payroll breach. Adequate response has been given to those comments in the various letters that have been provided. However, the sort of determination to go to a centralised and digitised Land Registry system is not the work of one individual or a particular chief executive of the Land Registry, but part of a much broader process of bringing real efficiency into government. The new world of digitisation offers us all kinds of opportunities. We have to use them when they are available and when we can carry them out effectively. Therefore this is not the whim or ambition of one individual but a consistent pattern that one finds throughout government to improve implementation, delivery and efficiency.
The noble Lord, Lord McKenzie, raised the question of potential job losses at local authorities. I should point out that on average just over two people work on this at a local level, but many of them carry out other roles and will have some continuing role in providing the input data. The consequences from a job perspective therefore cannot be ruled out absolutely but are unlikely to be dramatic in the circumstances. I do not think that anybody in this Room, under any circumstances, would wish us to preserve inefficiency to protect jobs. However, in this instance, the consequences are not likely to be significant.
I believe that I have covered most of the issues that have been raised. If I have not, I will be glad to follow up and do so in writing. This clause is an important move forward that will assist people who are attempting to purchase property, to get a mortgage and to remortgage property. That group deserves to get the best service that we can provide it with. I therefore hope that your Lordships will agree that the clause should stand part of the Bill.
Lord McKenzie of Luton
My Lords, I thank the Minister for her response. I am disappointed but not surprised by the position taken. I was not sure whether she was clear that there is going to be no change to the Land Registry’s model during the course of this Parliament. The press release that we had yesterday just says that no decision has been taken to change the Land Registry’s model; that means that it could be changed next month, the month after or indeed tomorrow. I wonder if she might just clarify that point.
Baroness Kramer
I feel very comfortable in replying that the Government’s response on this topic makes it clear that we are not going to change the Land Registry’s model at this time or—I think that I can say this with complete confidence—for the rest of this Parliament. It is not the intention of this Government to change the model.
Baroness Kramer
Baroness Kramer
My Lords, there are two minor and technical amendments to paragraph 3 of Schedule 4. These are to ensure that following the transfer of responsibility for the local land charges system to the Land Registry, the local land charges register will include all local land charges that may be registered in the future, whether under Sections 5 or 6 of the Local Land Charges Act 1975 or other relevant legislation. I do not think that I need say a great deal in support of these amendments because the tracking-though of these documents is fairly technical and will provide a clear trail. It will obviously be necessary that legislation should ensure that all future local land charges can be included in the register. The purpose of these two amendments is simply to clarify the position under existing registration. In other words, they are to make sure that everything which needs to be on the register actually gets on to the register, so I hope that your Lordships will be able to support Amendments 92 and 93. I beg to move.
Baroness Kramer
“relevant enactment” means a provision which is made by or under an Act and which provides for the registration of a charge or other matter as a local land charge.”
Baroness Kramer
My Lords, Clause 24 gives wider powers to the Land Registry to enable it to play a greater role in the property sector. The Government’s goal is to make the conveyancing process quicker, cheaper and easier to complete. As we have said before, the Land Registry is the single largest source of property information. It has a proven track record of digitisation of registers, 98% customer satisfaction and a record of reducing fees, with almost 22 million applications processed electronically last year. Most importantly, it sits at the heart of the conveyancing process.
At present, the Land Registry is limited in the services it can offer, not by what is in the public interest but by its statutory powers. This clause corrects that. Giving wider powers to the Land Registry will enable it to provide a range of property information services for businesses and citizens, helping to manage records, keep track of markets and identify business opportunities. The needs of the customers and stakeholders of the Land Registry are constantly changing, and allowing it to meet those changing needs must surely benefit both the property market and the overall economy.
The Land Registry’s ability to engage in new services is not a new concept. The Land Registration Act 2002 already enables it to provide consultancy and advisory services related to the registration of land. It is already using those powers to provide services such as international consultancy on land registration and a range of add-value services relating to land registration information. The new services would be provided on a cost-recovery basis, and the Land Registry would consider undertaking new services and activities only where that could bring savings, efficiencies and other benefits to the property market. This is part of the current move to make sure that we maximise the benefit of the information that is available within government entities in order to benefit residents and, in the case of the Land Registry, particularly those involved in property arrangements.
I also want to make it clear that this is not a necessary mechanism for the digitisation that we have been discussing or for providing services to taxpayers. The process that we have been describing—the core change here—is not dependent on any sort of commercial model, but we think it is rational to permit these additional powers. Given the breadth and depth of its expertise, the Government want to allow the Land Registry to broaden its activities to provide that kind of additional information as part of the infrastructure which others in the property market can then build on and innovate from. This is relatively straightforward and very much in keeping with the whole direction in which access to information, transparency and various kinds of support are now being provided by many parts of government. It recognises that the Land Registry is very much at the heart of conveyancing and central to the whole property industry, and that therefore it has the potential to benefit the sector by expanding the services that it offers, based on needs as they arise and as they change.
Therefore, there is no sinister motive behind this. As I said, it is very much in keeping with modern practice. It is very important that this clause stands part of the Bill so that we can gain the greatest benefits for the property market, for the economy and for the many members of our communities who use that market.
Lord McKenzie of Luton
I thank the Minister for her reply but perhaps I may just be clear. Does she consider that what is set down in Clause 24 is sufficient for the Land Registry to commence some of these services, having done its internal assessment? Obviously it is not going to embark on something which it believes will make a profit. Where does that leave the comment in the Government’s response that the Land Registry,
“would consider undertaking new services and activities only where it could bring savings, efficiencies and other benefits … An assessment would be made on market need and LR would engage with stakeholders and, where appropriate, consult on any significant initiatives”?
In a sense, is the Minister saying that these provisions are subject to that response?
Baroness Kramer
Is this a question about whether we are intending to change the commercial model of the Land Registry? Clearly we are not. If that is an answer to the question asked by noble Lord, Lord McKenzie, then I can give that assurance. I think that I made it clear in describing the kinds of services that the Land Registry would seek to offer that those services would be in response to market need. Obviously that requires extensive engagement with the various stakeholders and others who would use the services. It seems to me that that is the kind of partnership relationship, as one could almost call it, that there would be. The Land Registry would therefore consult on any major change precisely because its goal is to make sure that it provides the most appropriate kind of response.
The sorts of factors that would be considered before a new service was introduced would include things such as the impact on the property market, any competition issues, and capability and capacity issues. At this point in time, it is difficult to detail those proposals because we are in a dynamic environment. Therefore, this is essentially an enabling provision but, I think, an entirely appropriate one.
Lord McKenzie of Luton
I thank the Minister for that. I do not want to make a meal of this but perhaps I may ask for a final clarification. Are we saying that these services are distinct from any change in the Land Registry’s model—that there might be a change in the Land Registry’s model but these services would still go ahead on some basis or another—or that there would be no change to the model and these services might still be commenced?
Baroness Kramer
Perhaps I can be clear. The whole issue of the model, by which I assume the noble Lord means ownership, is an entirely separate question. The two are not interlinked.
Lord McKenzie of Luton
I take the model to be in the sense of not only the corporate structure but the separation of the office of the chief registrar and what was termed in the consultation as a delivery company.