Land Registry

Christian Matheson Excerpts

Thursday 30th June 2016 Commons Chamber

[Nia Griffith (Llanelli) (Lab)]

A few weeks ago, I joined Public and Commercial Services Union members and representatives from the campaigning group 38 Degrees to hand over a petition with more than 200,000 signatures to the Department for Business, Innovation and Skills, calling on the Government to abandon plans to privatise the Land Registry, which has its main offices in Swansea, where many of my constituents work. Why on earth are we here again, just two years after the previous attempt at privatisation?

It is not simply employees of the Land Registry and their PCS and First Division Association representatives who are very concerned about the privatisation. Back in 2014, we had a meeting in the House of Commons—it was organised by my hon. Friend the Member for Chesterfield (Toby Perkins), who then shadowed the BIS Minister with responsibility for the Land Registry—at which real concerns were expressed by representatives of the Law Society and the Council of Property Search Organisations. Jonathan Smithers, deputy vice-president of the Law Society, and James Sherwood-Rogers from the Council of Property Search Organisations explained that, in their analysis, a privatised land registry would inevitably end up being a private monopoly that could impose rip-off fees and provide a worse service for its clients.

We then discovered from leaked documents that the Government were determined to push ahead with privatisation plans and that the recent consultation had in fact been a sham. They had clearly not listened to respected independent bodies, such as the Law Society, never mind to their employees, who were represented by the First Division Association and the Public and Commercial Services Union. Two years later, it seems that the Government are determined to push through privatisation of the Land Registry, because the consultation is focused on how to do so, not whether to do so.

To me, privatising the Land Registry would be nothing short of daylight robbery: it would rob the taxpayer of millions of pounds. The Land Registry currently brings £100 million into the Treasury in profits each year, so it is madness to steal that from the Treasury and stuff it into the pockets of private contractors, who would probably then add insult to injury by hiking the fees and ripping off the public. The enthusiasts of privatisation cite the benefits of healthy competition in providing a better service for the public, but we all know what happens to a privatised monopoly, which is exactly what the Land Registry would become. There would be no control over the service provided, and prices would be hiked.

[Christian Matheson (City of Chester) (Lab)]

Does my hon. Friend agree that this is part of a pattern with this Government in which debt is nationalised and profit is privatised?

[Nia Griffith]

Indeed. My hon. Friend puts it concisely.

Let us remember what happened with Royal Mail. Who is to say that this Tory Government will not be wilfully incompetent and will not sell off the Land Registry at a bargain basement price, as they did with Royal Mail, depriving the public purse of the true value of the asset? Even worse, we hear that the private companies interested in taking over the Land Registry have links with tax havens. It would be a double whammy: first, the Treasury may lose the revenue that the Land Registry brings in; and then, to add insult to injury, the Treasury may lose out because profits are offshored. We would lose not only the revenue but some of the tax take. As other Members have pointed out, in situations such as that with the Panama papers the public interest would be seriously hampered if FOI did not apply, as I understand it would not were the Land Registry a private company.

All in all, it would be an absolute disaster, and that is before we even come to the issue of trust. Currently, the Land Registry’s customer satisfaction rating is enormously high—some 98%. People trust it because they know it is impartial, as only a Government body can be. How could we possibly guarantee that there would not be conflicts of interests if it were a private company? Then there is the issue of data protection. I am advised that there is nothing in law to prevent a private company from selling on personal data to buyers who wanted that information.

For all the reasons mentioned both by me and by my hon. Friends, I implore the Minister to think again. He should listen as well to Government Members who also have concerns. Privatising the Land Registry is simply not the right thing to do. It is not just us who are saying that. The Law Society has set out its concerns very clearly. We have already heard concerns from practising solicitors. We really must keep the Land Registry in public ownership, so that we can maintain its integrity.

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[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.

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[George Freeman]

The right hon. Gentleman is a canny parliamentary operator. Let me continue my speech and deal with the various points that have been raised, because in so doing I may be able to reassure him that this Business Minister is listening and has heard what has been said loud and clear.

[Christian Matheson]

I am a little confused. If the Government have no plans to privatise the Land Registry, why hold the consultation in the first place?

[George Freeman]

I am glad the hon. Gentleman asks that. Let me explain.

It may have escaped the hon. Gentleman’s notice for the purposes of this debate that the present Government and our predecessors, the coalition Government, have had to confront a very serious crisis in our public finances on behalf of us all, but on behalf in particular of the young of this country, whose debts these are not and who did not make the decisions and are not responsible for incurring them, but who have entered a society and an economy mired in debt. That creates a situation that any responsible Government have to deal with. If the Opposition want to form an alternative Government, they will have to deal with this question, which sits at the heart of the reality confronting any serious candidate for Government. As a Business Minister in the present Government, I would not be doing my job properly if, with my colleagues, I did not keep under review the functions that we currently carry out within Government and ask whether there is a way to put them on a footing where they can raise the investment they need off the public balance sheet and attract stronger and better management—Whitehall is not always the best place to manage every function in the state. We have to be creative about how to generate more revenue, so that we can support higher quality services for UK customers, citizens and taxpayers. I do not think a modern Government would be doing their job if they did not ask those questions.

A Government also have to consider the points made by parliamentarians and take into account the issues that might arise from such a move in terms of the delivery of the service. That is what the Department is doing right now. We are considering the responses to the consultation and the submissions made today in this debate, which is why I thank the right hon. Member for Tottenham for securing it. Let me reply now to the points raised.

The right hon. Gentleman spoke about the public concern and questioned the motive for having the consultation. I hope I have dealt with that: there is no illegitimate motive. It is appropriate for a Government to ask the question. He made a really important point, which others have echoed, about transparency. The register sits at the heart of our democracy because it is a register of land ownership. It is important that it is transparent and interrogatable and that people can see that it is.

The right hon. Gentleman raised the need to ensure that the operating surplus is reinvested and to allow the organisation to grow and develop. The right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson), who was very amusing in his summary of the quinquennial reviews that plague all Governments, asked the important question: what is the compelling case for this? I have tried to set out the bones of what a case might be; whether it is compelling or not, it is required to be considered alongside the other points that are being made.

My hon. Friend the Member for Harwich and North Essex (Mr Jenkin) made an interesting speech. As he pointed out, he is someone who one would normally expect to be on the barricades for more privatisation. Indeed, he was a great champion of it in decades past. He made the point that this is critical infrastructure and goes right to the heart of our ability as a society and a political economy to keep track of our land rights.

Issues were raised about integrity, stability and the importance of open data and transparency. I am the Minister who, with other responsibilities, is in charge of ensuring that the country is able to use our health data to modernise the NHS, to attract the investment we need in new medicines, and to make the NHS and the UK world leaders in developing new medicines. We are absolutely clear that, in doing that, one of the things that we will not do is sell any state or private data. We are building databases on which industry can work with us to interrogate the conditions for new diseases, but we are seeking to take royalties and rights from commercialisation to put that money back into providing additional services. However, we are absolutely clear that it is a reference library, not a lending library. That principle of not selling core data is important. We want data to be open and used to support innovation and greater research. I know that my hon. Friend cannot be here for my speech; he did give me his apologies—he had to be somewhere else.

My hon. Friend the Member for Carlisle (John Stevenson), a solicitor himself, who has used the Land Registry and indeed relied on it, was pretty powerful when he referred to this as a privatisation too far. My hon. Friend the Member for Colchester (Will Quince), who has been a property lawyer—once a property lawyer, always a property lawyer—made a similar point and echoed the concerns, referring to this as potentially anti-competitive and said that he would have concerns on those grounds.

My hon. Friend the Member for South Dorset (Richard Drax) raised a chuckle or two when he referred to his belief that every Englishman’s home is his castle. He referred to this as quasi-judicial, which may be a reference to the name of the new Lord Chancellor in the next Administration, but he talked powerfully about the Government having bigger fish to fry. He is right that any Government formed to deal with the scale of the ongoing crisis, which is affecting this economy and others across western Europe, with ageing societies, the need to reform and update our public services, and to get rid of deficits and to pay off the debt, will face substantial issues, and this is one small part of looking at how we can refresh and modernise our approach to 21st century Government.

My hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) made a powerful point about this debate being something of a symptom or an emblem of a new politics and mentioned our late, much lamented and respected colleague Jo Cox, whom I suspect would have spoken in the debate with her much respected blend of passion and local responsibility. She would have spoken for her constituents. My hon. Friend made the point that if any reforms were to be put in place, it would be important not to make the mistake of creating a private sector monopoly. That is partly why I repeated the rationales for those early privatisations. They were never about creating private monopolies; they were about choice and competition where those would be advantageous for the consumers and users of the service. My hon. Friend the Member for Telford (Lucy Allan) powerfully endorsed those points.

I am conscious that the House’s time is precious. Although I would love to stand at the Dispatch Box all afternoon and talk about how we might embrace more interesting, bolder and innovative models for delivering private and public sector innovation, I am conscious that colleagues are distracted by events beyond this Chamber. [Interruption.] I assure Members that whoever it is, is not behind me, in more ways than one.

I confirm that the Government have merely consulted in the last few weeks and months on this question; for the avoidance of any doubt, I also confirm that no decision has been taken and that Ministers are listening carefully to the views that have been expressed. As a Government we have a serious responsibility to ensure that we constantly keep under review the arrangements we have in place for the delivery of services such as these.

As my hon. Friend the Member for Colchester said, we were elected on a mandate to balance the books. That requires some careful judgments about the timing and the way in which we do it. My ministerial portfolio is all about driving a different model of innovation between private and public, working together and ending the apartheid of private productive and public not; I do not think that that is appropriate or sensible for 21st Government. We need to find ways of working together. It is right that we constantly look at these issues. Colleagues have touched on a range of different models. Were one to look at taking forward a way to put the Land Registry on a footing that allows it to invest faster, to develop new services and new leadership and to tap into global markets, one could consider a range of models, including mutualisation and the new structures that are being developed.

We have heard the concerns expressed in the House loud and clear. Others elsewhere, in those other rooms I referred to, will determine in due course what the Government will decide to do in this case later in the year. I am aware, as all of us painfully are on the Government Benches, that the majority is 12. It does not require many people to take a different view from the Government of the day in order for us to assess the likelihood of getting a measure through. I have no idea what those currently looking to form the new Administration will want to do when they are in office, but anyone listening to the debate will have heard loud and clear the view of those who have spoken on both sides of the House. If anything is to be done to look at the future of the Land Registry, it will need to be clearly focused on solving particular problems that exist today and dealing with specific issues that need to be addressed. I think it was one of the Members on the Opposition Benches who said, “If it ain’t broke, don’t fix it.” The right hon. Member for Kingston upon Hull West and Hessle called for clarity on what the case would be. I hear him loud and clear. We would need to set out clearly the problem that we were trying to solve to take the matter forward.

I hope that I have addressed the points that have been raised. I again thank the right hon. Member for Tottenham for securing the debate.