Land Registry

Alan Johnson Excerpts

Thursday 30th June 2016 Commons Chamber

[Alan Johnson (Kingston upon Hull West and Hessle) (Lab)]

I congratulate my right hon. Friend the Member for Tottenham (Mr Lammy) on securing this debate. It is also a pleasure to follow the hon. Member for Carlisle (John Stevenson), who has demonstrated its cross-party nature. I shall not keep the House for long as my right hon. Friend has done such a good job and covered practically every point.

The Land Registry office in Hull represents our only success in securing Government business in many years by bringing that business out of London. It came to Hull in the 1980s specifically because the Government of the time wanted to bring good, decent, well-paid jobs to an area that had been devastated by the collapse of the fishing industry. Incidentally, the collapse of that industry had nothing to do with the EU; it was the outcome of the cod wars with Iceland, for which Iceland gained retribution earlier this week on the football field.

The Hull office has taken its share of the overall two-thirds reduction in staffing that has taken place in an attempt to make the Land Registry more efficient. During my 20 years as an MP, I can almost plot my time in that role by the number of inquiries, examinations and investigations into the Land Registry. They come up about every two to three years. My right hon. Friend mentioned the wonderfully named quinquennial review of 2001, when I was a junior Minister at the old Department of Trade and Industry. Quinquennial reviews took place across Whitehall and I was responsible for the quinquennial review of the Patent Office in Cardiff. One of my bright young civil servants—obviously hugely qualified—asked me why quinquennial reviews only took place every five years, so I explained it to him. That review, as my right hon. Friend said, concluded by saying that

“privatisation should be firmly rejected”

and that it would

“be an act of considerable folly”.

Three quinquenniums later, we are being asked to commit this act of considerable folly by a Government whose motivation seems to be not to improve the service, but to raise a quick buck—and a fairly insubstantial buck in the scheme of things.

[Liz Kendall]

My right hon. Friend mentioned the quinquennial review, one of the most important findings of which was that the registry’s core functions—maintaining the land register, providing services to customers and operating its guarantees and indemnities scheme—hang together

“like the particles in an atom”

and that it would be “a great mistake” to contract out or split any of those core functions and threaten the whole enterprise. Does he believe that that argument remains true today?

[Alan Johnson]

I do indeed. The quinquennial review, like all quinquennial reviews, had to be carried out by a neutral Minister from a different Department and the procedure was quite rigorous. That conclusion has been said in different words in practically every other examination.

Since the quinquennial review, the Land Registry has been subjected to an accelerated transformation programme, a feasibility study, a proposal for public bodies reform and, a little over two years ago, a plan to make it a service delivery company which was supported by just 5% of those consulted. Never has an organisation been scrutinised so often to such little purpose.

In the meantime, the Land Registry has got on with its crucial work with unimpeachable integrity, registering 87% of the land mass of England and Wales, paying large dollops of cash to the Exchequer—over £119 million last year—building up its digital capability and achieving customer satisfaction ratings close to 100%. It was 95% last year and everyone was reaching for the Kleenex because it had gone down from 98%. That is an extraordinary level of customer satisfaction.

[Caroline Lucas]

The right hon. Gentleman is making a strong case. My understanding is that if the Land Registry was privatised, it would not be subject to the Freedom of Information Act. It would therefore be easier to conceal who owns our land and would stop the publication of datasets, such as the one that was so important for the Panama papers exposé. Does he agree that that is one of the many risks of privatising the Land Registry?

[Alan Johnson]

I agree with the hon. Lady, whose name is also attached to this motion. Indeed, the question of transparency, as my right hon. Friend the Member for Tottenham said, has become vital since the publication of the Panama papers and adds another reason why the proposal should be dropped.

As for the privatisation proposal, the important question hovering over the Chamber is “Why?” This jewel in our public sector crown has been operating successfully since 1862. It is literally world class. Previous Conservative Governments that sold off anything that was not nailed down did not flog off the Land Registry. When I wrote to the Minister for Small Business, Industry and Enterprise seeking an answer to the question, she said:

“The Government has been clear that where there is no compelling case for keeping an asset in public ownership…it is right to explore a change.”

But there is a compelling case. It has been highlighted by the Competition and Markets Authority, the Conveyancing Association, the Law Society, the HomeOwners Alliance, the British Property Federation and by countless solicitors, such as the hon. Member for Carlisle, who have hardly been known to unite on anything, but who are absolutely as one on this.

As the single authoritative record of ownership and the basis of the state’s guarantee of ownership, the Land Registry’s integrity must be beyond reproach. It is a natural monopoly. Whenever any title to a property is being transacted, a citizen can use only this register and then pays the appropriate fee accordingly. A commercial undertaking would seek to profit from this captive client base. We know that property can provide a convenient vehicle for hiding the proceeds of crime and we now know that all the potential bidders to own the Land Registry are linked to offshore tax havens. The Land Registry is crucial to tackling tax evasion and offshore ownership, as the hon. Member for Brighton, Pavilion (Caroline Lucas) said. Those are all compelling reasons for the Minister not to flog it off.

While the Minister for Small Business, Industry and Enterprise talked in her letter to me about it being

“right to explore a change”,

this is no exploration. We have had a consultation on an issue the outcome of which has been predetermined. The status quo—public ownership—has been ruled out from the start. If the Government are foolish enough to press ahead with privatisation, it must be defeated. This delicate and vital work must be entrusted to civil servants working for a public service in which trust and integrity are maintained.

There has been mention of John Manthorpe, a former Chief Land Registrar and someone who has been associated with the Land Registry for 50 years in one capacity or another. He gave evidence to the Government’s consultation. We have not seen the results but he published his response, which is absolutely devastating. To quote from just one part, he says:

“The Registry’s independence from commercial or specialised interests is essential to the trust and reliance placed on its activities. It would not be possible for actual or perceived impartiality to be maintained or public confidence sustained, if a private corporation …were to assume responsibility for…the maintenance of a public register.”

That says it all. Parliament must not allow this piece of vandalism to proceed.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Life Sciences (George Freeman)]

I congratulate the Backbench Business Committee on picking this debate. I did not get here by rebelling against the Government often, but I am proud that one of my early rebellions was in support of that Committee. It has done us a service by bringing this debate to the House. Strong views have been expressed from all parties, except UKIP, which does not seem to have a view on this, and the Liberal Democrats. I also congratulate the right hon. Member for Tottenham (Mr Lammy) on securing the debate.

I want to say something about what the Land Registry does and why it is such an important office in this country, and to touch on why it is right that the Government review the basis for investment and leadership in different parts of the public sector. I will deal with several of the issues raised by hon. Members and confirm the Government’s position.

The Land Registry, as colleagues on both sides of the House have highlighted, underpins an important role of the state in keeping a safe, reliable and independent register of landownership. As every speaker has acknowledged, that goes right to the heart of our property-owning democracy. The rights of ownership of land and property and our ability as a society to enforce those rights were hard won, are much regarded around the world and are not taken for granted here. That is why the debate is important.

The Land Registry deals with more than £4 trillion of assets, with £1 trillion of mortgages depending on that clarity of ownership. Its 4,500 members of staff, to whom I pay tribute for carrying out an important function in our society, lead and manage the organisation. Accounts show that in the last year it generated £295 million of income, incurred slightly less in costs, and paid back to the Treasury a £14 million dividend—each year, it more or less turns over, washes its face and returns a small surplus operating profit. It is currently addressing issues of digitisation and efficiency, including through the much-commended map search and property alert products. It carries out a vital role at the heart of our system.

Colleagues, particularly on the Opposition Benches, have talked about privatisation, so it is worth reminding the House why successive Governments have embraced a bold programme of privatisation and the rationale for so doing. I stand as a proud member of a party that achieved much through that programme in previous decades. You do not need me to remind you, Mr Deputy Speaker, but privatisation was driven by the need to introduce competition and choice into key services on behalf of consumers, users and taxpayers; to draw additional investment into those services at time when Governments were not able to make that investment; to introduce new management into sectors of our economy that were failing, such as British Leyland and British Telecom; and to take off the Government balance sheet chronic liabilities that they were unable to meet and deal with.

That last point was one of the original rationales for the transfer of council houses from a state that was unable properly to maintain them to the citizens, who then showed how to maintain them and have been grateful to us ever since. People forget that a large amount of money was recycled back into the housing association revolution, which led a huge boom in public housing, albeit perhaps not a big enough boom. That reform was made to deal with a serious liability and to transfer a major asset—in that case, council housing—into the hands of the people who were paying for it through their taxes, and indeed to increase tax revenues for the Government. Many people—

[Alan Johnson]

Will the Minister give way?

[George Freeman]

I need to crack on—I am sorry.

Many people, probably including many Opposition Members, would admit that it would be strange to have a society—[Interruption.] Oh, I have lots to say. Very few Opposition Members would today be calling for the return of British Aerospace, British Telecom, British Gas, British Petroleum, British Leyland, British Steel and British Airways. We have achieved much in recent decades. I am merely reminding the House of the arguments for privatisation made at the time. We will come shortly to decide whether they are appropriate in relation to the Land Registry.

[Alan Johnson]

I am grateful to the Minister for his fascinating history of privatisation. Can he explain why, when the rabid privatisers in the Conservative party were privatising all those things, they did not go anywhere near the Land Registry?

[George Freeman]

The right hon. Gentleman makes an interesting point. I was just setting out the reasons for dealing with sectors such as aerospace, telecoms, gas and other utilities, and British Leyland. Does anyone seriously think we should still have a car industry in the hands of the management of British Leyland? I doubt it. I merely remind the House that the reasons for those privatisations were to do with competition and choice, investment, management and the reduction of liabilities on the public balance sheet.

What would be the rationale were the Government to take privatisation of the Land Registry forward? Well, I can confirm that the Government have absolutely no plans for this. We have carried out the consultation and we are in the process of hearing, loud and clear, what is said. For those watching from the Gallery and wondering why it is even being considered, the rationale would be to create a basis on which the Land Registry, if it needed it, could raise substantial extra investment that the Government could not provide. It could be a mechanism to get a substantial injection of new leadership, to help the Land Registry to deal with the opportunities of globalisation—around the world, newly liberated and fast-growing economies and societies are looking to copy the UK model in many respects, and this might be one of them. And yes, it could be a mechanism to help us to tackle a still ongoing and chronic debt and deficit crisis, which has saddled the next generation of this country with debts. The Government look all the time at the public balance sheet, so those are the reasons why an institution such as the Land Registry might be worth considering.