Land Registry

Bill Esterson Excerpts

Thursday 30th June 2016 Commons Chamber

[Bill Esterson (Sefton Central) (Lab)]

Everyone who has spoken in this excellent debate has consistently come to the conclusion that the Government consultation should conclude that the Land Registry should remain in public hands, and that privatisation should be rejected. That has been the very clear message from speakers from all parts of the House. The proposal to privatise the Land Registry highlights the choice between a quick buck and long-term stability. It gives us the chance to consider the importance of an impartial register for the ownership of 24 million UK properties. It has revealed, yet again, overwhelming public opposition.

I congratulate my right hon. Friend the Member for Tottenham (Mr Lammy) on securing both the debate and such strong cross-party support. His opening remarks were comprehensive. He said that in bringing this proposal forward the Government had shown that they were itching to privatise, that the status quo had not been offered and that the proposal amounted to profiteering. I am afraid that that is very good summary of what will happen should the proposal go forward.

I will respond to some of the excellent speeches we have heard. The hon. Member for Carlisle (John Stevenson) described the Land Registry’s natural monopoly and pointed out that just as we would not privatise the police service, so too this was a privatisation too far. I agree.

My right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson) talked of considerable folly. He mentioned the benefits that the people of Hull have derived from the location of Land Registry offices there, which generate Government business and deliver good, well-paid jobs, helping to replace lost industry in Hull, not least the fishing industry. The locating of the Land Registry around the country is a good example of how Governments in previous generations have located offices up and down the country, in an attempt to devolve to and support the regions. I hope the Government will take note of his comments on the importance of continuing that policy in relation to the Land Registry, or indeed in relation to the offices of the Department for Business, Innovation and Skills, such as the one in Sheffield which, sadly, is closing. He made the point well about how Government jobs and Government offices support the economy outside London.

The hon. Member for Harwich and North Essex (Mr Jenkin) talked about the importance to any country, not least ours, of having a reliable registry, and referred to what happened in Iraq. Another hon. Member made a similar point in an intervention about what happened in East Germany after reunification. This is an incredibly important point that underlines the importance of the Land Registry and secure data to the economy and to the reliability of property title.

My hon. Friend the Member for Swansea East (Carolyn Harris) talked about the importance to her constituents of the jobs the Land Registry delivers. She also talked about profitability and the harm that privatisation would do to Government finances, with annual profit being lost to the Exchequer.

The hon. Member for Colchester (Will Quince) said that he was elected to balance the books and was against this privatisation. I am pleased that he understands the economic argument between a one-off capital receipt and a sizeable annual return to the Exchequer. If we want to balance the books, we need to keep that strong annual flow of revenue to the Exchequer.

My hon. Friend the Member for City of Durham (Dr Blackman-Woods) talked about the importance of the register as a live document of the way that transactions are always being added, and the potential danger of a conflict of interest if a private company were to take over responsibility, especially given that it is a monopoly.

The hon. Member for South Dorset (Richard Drax) spoke of the potential destabilisation of the housing market that a sell-off could cause. He said that privatisation might lead to shortcuts by a private operator that could undermine the integrity of the data. He felt that the risks of such changes were too great to be considered.

The hon. Member for Glasgow South West (Chris Stephens) said—the hon. Member for Brighton, Pavilion (Caroline Lucas) made a similar point in an intervention— that the Land Registry would not be subject to freedom of information requests. He urged the Government to abandon what he called damaging plans. I completely agree with him on that.

The hon. Member for Thirsk and Malton (Kevin Hollinrake) made the point that asset sales might cut the debt as a one-off, but that the loss of annual receipts would not help deficit reduction in the long run. I am pleased to hear Conservative Members recognising the importance of economic credibility. I thought, when he talked about BT, that he was going to recommend renationalisation, but he did not quite go that far.

[Kevin Hollinrake]

My point was in favour not of public ownership and renationalisation, but of the introduction of more competition into the telecoms market.

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[Bill Esterson]

Yes, I rather thought the hon. Gentleman might say that— [Interruption.] The Minister correctly points out that was an opportunity for mischief that could not possibly be missed.

My hon. Friend the Member for Llanelli (Nia Griffith) made an excellent speech. She talked about the petition containing 300,000 names that was handed in to the Department for Business, Innovation and Skills. I was there with her on the day, as were a number of our hon. Friends. She rightly asked what on earth we are doing here just two years after the last attempt at a privatisation, at which time very clear and widespread opposition to it was demonstrated.

[Dr Blackman-Woods]

Does my hon. Friend agree that when many of us, with a whole range of organisations and unions, including the PCS, turned up at the Department, it would have been really helpful if the Minister had come out to meet some of the people who wished to hand over that huge petition? [Interruption.]

[Bill Esterson]

The Minister, from a sedentary position, points out that that would not have been him. Perhaps we can take that as him agreeing that the Minister responsible should have been there to meet us all on that day. He can choose whether to respond to that point when he replies to the debate shortly.

The hon. Member for Telford (Lucy Allan) made a point about the importance of the Land Registry’s success to her constituency. That is true for each and every one of us in every constituency in the country.

The Land Registry has existed for 150 years. Currently it does not cost the taxpayer a penny. It makes a significant profit and delivered a surplus in 19 of the past 20 years. A one-off fee from its sell-off is no strategy for deficit reduction, as Conservative Members have acknowledged. It would allow for only a one-off reduction of debt. This is not an economically coherent approach to Government finances. Worse, it is cynical to pretend to taxpayers that the proposal constitutes the responsible management of the economy. I am afraid that, driven by the Treasury and the Chancellor, privatisation is exactly what the Government appear to be trying to do.

The consequences of selling off the Land Registry are far wider and more dangerous than losing a profitable public sector enterprise. Having a trusted impartial register of land underpins our economy. I do not need to repeat to Members the uncertainty and danger that has been caused by the Brexit decision that was taken a week ago. We have seen that uncertainty in the markets and it is spreading to the real economy, with job losses already announced. That uncertainty applies right across our economy, as well as to the role the Land Registry plays.

Any house that families or companies buy or sell relies on the Land Registry granting and transferring title deeds. It is the only proof of title or ownership recognised by law for £3 trillion of UK property. By virtue of it, every property sale, purchase, repossession and mortgage in the UK is carried out transparently and in confidence by the seller, buyer and lender. The Land Registry’s independence is fundamental to the trust that homeowners, mortgage lenders and solicitors place in it. How could that trust remain if the very basis of that trust—the knowledge that the Land Registry is utterly impartial—is removed? How could the Government maintain that its impartiality will remain if it is taken over by private interests?

Let us look at the potential buyers who are showing an interest. Of the private investment firms reported last month by The Times to be interested in running the Land Registry, all have links to offshore tax havens. That makes a mockery of the Government’s claims of being serious about clamping down on tax avoidance and tax evasion. Canadian pension company OMERS, American private equity firms Advent International and Hellman & Friedman, and General Atlantic each have links to such jurisdictions, not least the Cayman Islands. When the Minister responds, will he tell us if he agrees that the Land Registry’s absolute transparency and independence from private interest is fundamental to the trust placed in it by homeowners and mortgage lenders? Does he also agree that this trust would be fundamentally undermined if such firms took over? That is what people up and down the country can see happening.

[Christian Matheson]

It strikes me that the companies that my hon. Friend has just cited as potential owners are also all foreign based. Does he share my concern, apart from their being tax dodgers, that we should resist placing something so fundamental to the UK in foreign hands?

[Bill Esterson]

My hon. Friend is right. Of course, we have seen a steady direction of travel towards foreign ownership of British interests for a great many years. It is surprising that we have anything of any substance left in this country that is not foreign owned, given the way the Government proceed. He puts his finger on an important aspect of the debate and another good reason why the proposal should be turned down.

My hon. Friend the Member for Swansea East (Carolyn Harris) mentioned the timing. The way in which the Government time their announcements is normally a good indication of how conscious they are that they are on thin ice. The proposal to relax Sunday trading laws is one such example, because they slipped out that unpopular policy at the last possible moment—the night before it was debated and after legislation had gone through the Lords, where the relevant Bill started its life.

[Mr Gordon Marsden (Blackpool South) (Lab)]

It did not do them much good.

[Bill Esterson]

As my hon. Friend reminds me, the approach did not do the Government much good on that occasion. I suspect, following today’s debate, it is not going to do them much good this time either.

They chose to release the proposal on the Land Registry on the afternoon of the last day of Parliament before the Easter recess. Were you a cynical man, Mr Deputy Speaker, you might think that that was done deliberately to avoid attention, but of course you are not cynical, so there is no way you would think that.

The Government are fully aware that the public do not want this and that the proposal will not stand up to scrutiny. This is not the first time they have tried to railroad through Land Registry privatisation. The public response that they received last time could not have been more overwhelmingly negative: 91% of those asked in 2014 said that privatisation would not provide a more efficient service, while just 5% thought that it would. Survation’s more recent polling—not that we should necessarily believe everything we read in polls—delivered the same message, with opposition outstripping support among the public by more than 4:1. The online petition that was signed by 300,000 people was handed to BIS just the other week. Those 300,000 people made it clear within a month of the opening of the consultation that they, like many others, were against the privatisation.

If the Government think that they can mask an economically incoherent proposal with a “public sector bad, private sector good” mantra, nobody is going to be fooled. Do they honestly think that a private operator would create a more profitable Land Registry and therefore support broader economic growth? In public hands, it is generating £100 million-plus for the Treasury each year, so that simply does not stack up as an argument. The New Economics Foundation has pointed out that state assets—not just the Land Registry, but Ordnance Survey, NATS and Channel 4—are all examples of publicly owned services that are delivering lean, efficient and profitable business models. If the Government have any interest in long-term growth and stability, they should hold on to those assets, not sell them off. Securing this annual revenue is the economically responsible and more stable approach at a time when we lack the certainty on which the economy and business depend.

Do the Government honestly believe that a private operator would create a more efficient Land Registry? The Open Data Institute says that moving the body out of public hands would build barriers in our data infrastructure, reduce efficiency not just in the Land Registry but across Departments and other public services, and have clear consequences for public confidence. Do the Government honestly believe that a private operator would support a more transparent Land Registry? If it was privatised, it would cease to be subject to the Freedom of Information Act. It beggars belief that the Government can seriously suggest that, in the wake of the release of the Panama papers, it would be reasonable to pursue policies that make it easier to conceal landownership for non-doms?

If the privatisation happens, the Land Registry will go to private interests that are not subject to the same checks and balances, such as freedom of information provisions, as any remaining public sector body. As my hon. Friend the Member for City of Chester (Christian Matheson) said, we are not just talking about any private interests. Judging from the interested parties so far, these are interests that are already tied up overseas, including in tax havens. Given that we are dealing with trillions of pounds of property that underpins our whole housing sector, this can only be downright dangerous.

Privatisation would deny homeowners, mortgage lenders and buyers an independent national register of title deeds. It would be destabilising. The consultation asks how, not whether, privatisation should go ahead. We should enable the Land Registry to continue innovating, and delivering savings and revenue to the Government. It is already a success, so why does the consultation not consider the option of encouraging further improvement, development and success in our public sector, both to improve service and to generate further revenue, if that is what is driving what the Government want?

As I understand it, the Minister for Small Business, Industry and Enterprise has told constituents that this is a ridiculous idea driven by Treasury capital receipts. I agree. Labour will fight this privatisation, and I hope that the Government will once again perform a U-turn in the face of widespread pressure from professionals and the public alike.

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[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.

[Bill Esterson]

The Minister is giving reasons why the Government might look at something. If the Government do not have a view, why was the consultation framed as it was—in terms of how to privatise, not whether to privatise? Does that not suggest a fundamental commitment to the privatisation?

[George Freeman]

I suggest that the best indication of our commitment is what I am saying at the Dispatch Box right now. I will comment in a moment on events going on outside this Chamber, which will determine how this is ultimately taken forward.

I was making the point that the Government have carried out a consultation. It is right that, as a responsible Government, we keep under review whether and how functions that are currently the monopoly responsibility of the state can be better financed and thrive more with new freedoms, and by so doing put the public finances on a stronger footing. I merely set out the rationale on which such matters have been addressed in the past and confirm once again that the Government have no plans. This is merely a consultation. We have received no bids; no decision has been made.