Land Registry

Bernard Jenkin Excerpts

Thursday 30th June 2016 Commons Chamber

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

I will be as brief as I can, speaking in this debate as the Chair of the Public Administration and Constitutional Affairs Committee—the successor to the Public Administration Select Committee, which considered the question of open data in the previous Parliament and produced a report on the matter.

What is the Land Registry? It is a part of our critical national infrastructure. It is an absolutely fundamental function of any civilised state. It is how disputes are resolved. In the most war-torn parts of the world, there is a land registry in every country—even for every town. It has been in the lexicon of military doctrine since the days of empire that when a town is taken, the land registry is taken first so that the disputes that arise between different factions and families after control has been taken can be resolved. The first building that the Black Watch took in Basra when the British Army went into southern Iraq was the land registry. That is how fundamental a land registry is to any civilised state.

[Victoria Prentis (Banbury) (Con)]

My hon. Friend and I share different views on the European Union, but I wonder whether he remembers the chaos that ensued when the former East Germany was unified with West Germany. There was no proper land registry for East Germany, making it difficult to ascertain who owned many houses in places such as Potsdam.

[Mr Jenkin]

That is exactly the point. The former communist state had destroyed the old records to create a new order.

I have no objection in principle to privatisation, which has been a successful means of transforming large parts of the former public sector. Even the Labour party would have absolutely no intention of returning large parts of what is now in the private sector to the public sector.

Transforming the Land Registry into a modern, digitally-based service is crucial for making it more efficient and responsive to user needs. So far the digital transformation has been extremely slow. I have three main concerns about the present proposal. I hasten to add that I am speaking on my own behalf; this is not an agreed statement by my Committee. The Land Registry must continue to operate as an essential public service, the future owner of a privatised Land Registry must be committed to providing long-term stability, and the final deal, if there is one, must fulfil the Government’s own stated objectives for the use of open data.

In a submission to the Government’s consultation, I recommended that the quality of service provided to the public by the Land Registry must be prioritised above realising capital gains or transferring risk from the Government’s balance sheet. The primary concern must be to ensure that an accurate record of land use and ownership is maintained in public hands. The Land Registry’s core services should be protected from any real-terms price increases, and their quality must not suffer as a result of any transfer of operations to the private sector. The Land Registry is, and will remain, part of our critical national infrastructure. Its protection is crucial, and any public-private model or privatisation model must put in place safeguards to prevent the service being disrupted in the event of bankruptcy or commercial failure of any kind.

Our report in 2014 was based on evidence from leading figures in the world of data management and statistics, as well as from Ministers. Although the Committee did not look in detail at the privatisation of the Land Registry, we did look into the future use of the Government’s major datasets, of which the Land Registry is one. The final report made several recommendations for the use of Government data. In particular, we stressed the need to ensure that datasets are easy to access, easy to read and free to use.

On the specific subject of the Land Registry, the Committee concluded:

“A radical new approach is needed to the funding of Government open data. Charging for some data may occasionally be appropriate, but this should become the exception rather than the rule. A modest part of the cost to the public of statutory registrations should be earmarked for ensuring that the resultant data . . . can become open data.”

Data held by the Land Registry are one such example. If this model is adopted by the Government, they must not allow a new privatised entity to expect to make money from the selling of those data. The expectation must be that the data will be freely available.

In public policy terms, it is important to understand the value of open data to the economy as a whole. Research commissioned by the Open Data Institute found that public sector open data will provide more economic value every year, equivalent to as much as 0.5% of GDP, than data that users have to pay for. For example, we all use the Postcode Address File. That has been privatised, but what makes it of such value to us is that we can get on a website and get it free. How outrageous it would be if we had to pay for that.

Unfortunately, when the Royal Mail was sold, we transferred those data to the private sector and now big businesses have to pay to use those data. The result is that new forms of open source data will be created, which will gradually take over from the Postcode Address File. By transferring those data into the private sector as we have, we have undermined their value and created a cost to the productive sector of the economy for accessing them. In our conclusions, we stated that the sale of the Postcode Address File was the wrong decision. We concluded that such an asset should have been kept in public ownership, where it would be a national asset, free for businesses and individuals to use for the benefit of the wider economy.

If the Land Registry is privatised, the land register itself—the actual data—must stay in public ownership. It is crucial that the Government preserve for themselves a substantial degree of policy flexibility with regard to any agreement made with a privatised organisation, and if they decide that the public interest is best served by a change in data policy, they must remain free to effect this and to do so without excessive cost.

I am deeply concerned that the future owner of a privatised Land Registry must be committed to long-term stability and continuity. That depends on the character of the operator, if there is to be a private sector operator. The operator should understand that it may derive profit only from some kind of long-term yield for a long-term contract with the Government and be prepared to invest in the organisation to achieve this aim. An investor with a more venture capital-style approach, aiming to make a capital gain out of the development of the business and then on-sale, would be a completely inappropriate form of ownership.

[Mrs Moon]

Given all that the hon. Gentleman has said about the importance of the integrity of the Land Registry, why is it not appropriate to build that flexibility for entrepreneurship into the current Land Registry so that it can make the profit that is necessary for the investment and modernisation that are needed? Why do we have to take this risk?

[Mr Jenkin]

I shall come to that. It is a perfectly reasonable question.

The type of owner of the infrastructure might be like the banks automated clearing system, which is a company that is owned by the banks. It is just an operating company that the banks fund in order to provide them with a service. That is much more the kind of privatisation that I would find acceptable, rather than a company called Land Registry plc, with its own board of directors thinking about how to develop its business. It is a service and there is a function that it needs to provide.

The final proposal should include a full assessment of what has happened in other countries where such a service has been transferred to the private sector. Additionally, in any privatisation plan the Office for National Statistics should have the power to take over the collation and publication of Land Registry data, effectively getting a daily feed from all new records and publishing them free online. If the Government decide to proceed with some kind of privatisation of the operations, in two years’ time I expect to be calling the Department for Business, Innovation and Skills and UK Government Investments, which is overseeing the process, to discuss with my Committee what effect this movement has had on the publication of open data.

Finally, in answer to the hon. Member for Bridgend (Mrs Moon), I hope the Government will explore alternative means of doing that by keeping the Land Registry in the public sector. Let us face it: it is only silly Treasury rules that prevent very cheap public money from being put into this with public sector involvement, but keeping it in public ownership, in order to develop the customer-responsive and properly capitalised system that we want. My mind is open, provided the data remain in public hands. My mind is open, provided the arrangement is stable, but I would not rule out transferring the service to some mutual or some existing consortium of banks or insurance companies or even keeping it in the public sector.