David Lammy
Main Page: David Lammy (Labour - Tottenham)Department Debates - View all David Lammy's debates with the Department of Health and Social Care
(8 years, 4 months ago)
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Mr David Lammy (Tottenham) (Lab)
I beg to move,
That this House notes the important role the Land Registry plays in registering the ownership of land and property in England and Wales; further notes that the Land Registry has made a surplus in 19 of the last 20 years and paid back £120 million to the public purse in 2015 alone; believes that any privatisation of the Land Registry will have serious consequences for transparency and accountability in the UK property market and hinder efforts to crack down on corruption and money entering the UK property market via offshore jurisdictions; expresses grave concern that all the potential bidders for the Land Registry have been found to be linked to offshore tax havens; notes that the Government has acknowledged that property can provide a convenient vehicle for hiding the proceeds of criminal activity; notes that the Prime Minister stated in July 2015 that there is no place for dirty money in Britain; regrets the Government’s decision to seek short-term profit at the expense of the public interest; opposes the proposed privatisation of the Land Registry; and calls on the Government to reconsider that proposed privatisation.
I thank the Backbench Business Committee for enabling me to bring this important debate before the House. In supporting this motion, signing the letter I sent to the Business Secretary on 2 June and signing early-day motion 160, well over 100 Members drawn from eight political parties have made clear their opposition to the privatisation of the Land Registry. I hope that the Government take note of the strength of opposition to the proposal before it is too late.
Robert Flello (Stoke-on-Trent South) (Lab)
I congratulate my right hon. Friend on securing this important debate. I am sure that, like me and almost every Member of this House, he has been inundated with emails on the subject. Our constituents are up in arms.
Mr Lammy
My hon. Friend is absolutely right: the strength of the deep concern felt in the country is expressed in the letters that hon. Members have received. I look forward to hearing what the Minister says, because he will be aware that it is with regret that I must bring the debate to the House today, so soon after the Government last attempted to privatise the Land Registry in 2014.
Frank Field (Birkenhead) (Lab)
I thank my right hon. Friend for initiating this debate. Has not the Government’s position moved since they announced the privatisation, in that they say they want to stop properties being used for money laundering? He may know that I and our hon. Friend the Member for Dagenham and Rainham (Jon Cruddas) have a Bill to achieve precisely that, but we need a service that is not corrupted and on which people can rely. Without the Land Registry, where are we going to find a service we can rely on?
Margaret Greenwood (Wirral West) (Lab)
I congratulate my right hon. Friend on securing this important debate. I too have been inundated with responses, and indeed I met a constituent who was proud to have worked for the Land Registry for many years. Does he agree that public confidence is vital, particularly for our housing industry, and that in these times of real uncertainty about the economy and the future of house building in this country, the Government are taking an unnecessary risk?
Mr Lammy
My hon. Friend makes an excellent point. In these troubled times, when confidence in this House and in major political parties is at a low ebb, it is important to recognise the institutions that the public hold dear, of which the Land Registry is certainly one. As a former Minister who had responsibility for the Land Registry, I am well aware of the valuable roles it plays.
Mrs Madeleine Moon (Bridgend) (Lab)
Does my right hon. Friend think that the privatisation proposal has been driven by a desire to maintain the professionalism, integrity and impartiality of the Land Registry or by a petty desire for a short-term and dangerous input of cash to the hard-pressed Treasury? Which is it?
Mr Jim Cunningham (Coventry South) (Lab)
I congratulate my right hon. Friend on securing this debate. Does he agree that the proposal is an ideologically driven attempt to reduce transparency?
Mr Lammy
My hon. Friend makes a serious point. According to the Government’s answer to my written questions tabled earlier this month,
“No decision has been taken on the future of Land Registry”.
I fully expect that line to be trotted out later today, but the serious questions that hon. Members are raising about transparency in this important institution must be heard.
Caroline Lucas (Brighton, Pavilion) (Green)
I congratulate my right hon. Friend on securing this debate. Does he agree that privatisation would give the new owner essentially a monopoly on commercially valuable data, with no incentive to improve access to it? Does he also agree that information about land and property ownership is vital for local communities and that they should have more access to it, not less?
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
Further to the point made by the hon. Member for Brighton, Pavilion (Caroline Lucas), does my right hon. Friend accept that many businesses that work in property and data are also concerned about the possible privatisation of the Land Registry? They worry that a privatised Land Registry would see the new business owner seeking to extract maximum value from the business, rather than trying to improve access to the data.
Mr Lammy
My hon. Friend is absolutely right. There is deep concern about a hike in fees and a profit motive distorting a public institution that we all value. I hope that the Minister will take that on board and give the House some comfort on that in the coming hours. I give way to the right hon. Gentleman.
Sir Peter Bottomley (Worthing West) (Con)
My wife is right hon., not me.
Were I not going to a Somme service in my constituency, I would try to take part at length in this debate. Is not the issue this? Whatever safeguards the Government want to build, commercialisation should be the Land Registry’s decision, not the decision of some commercial owner of the Land Registry. The issue is, therefore: can Government understand—I know that my hon. Friend the Member for Brighton, Kemptown (Simon Kirby), who is on the Front Bench, understands because I have written to him about it, as my Whip—that many of us here want the Land Registry to have the opportunity of creating innovative, value-creating enterprises? It should not be sold off for that to happen—it is not necessary.
Mr Lammy
The hon. Gentleman is demonstrating why he should be a Privy Counsellor and why he has been knighted. The Government should accept the cogent case being made by esteemed Members on the Government Benches. We are aware that there is a general sense that the Government are itching to privatise the Land Registry. Unlike with the 2014 consultation, this time around the status quo is not even being offered as an option. The wording of the consultation document is focused on how, not if, the Land Registry operation should be moved to the private sector. We know that the Government have commissioned bankers at Rothschild to size it up. We also know that potential buyers are linked to offshore tax havens. I am here today, alongside colleagues across the House, to make our opposition known and to call on the Government to think again.
Valerie Vaz (Walsall South) (Lab)
I congratulate my right hon. Friend on securing the debate. As a solicitor, I have often had to use the Land Registry. He is making the economic case for non-privatisation. Does he agree that the Land Registry is entirely self-funding? In fact, it has returned £126 million to the Treasury.
Several hon. Members rose—
Mr Lammy
If the House will forgive me, I will make some progress, because so many Members want to speak.
The recording of land and property ownership is integral to the functioning of our economy and has been carried out with integrity and impartiality by the Land Registry since 1862. Indeed, the Land Registry’s reputation as wholly independent from the influence and pressures of the market is crucial to its work. The current consultation exercise tries to preserve that necessary independence by attempting to create an artificial distinction between “Land Register ownership” and a new company which “delivers Land Registry services”. That is totally meaningless in practice. While the Government claim they will retain “ownership” of the land register, a private company would be free to grant title and make changes to the register as transactions occur. The consultation document talks of putting
“the right protections in place”
to ensure that the Land Registry would continue to deliver an impartial service to customers. However, there is absolutely no detail about what those protections and safeguards might be. In the words of John Manthorpe, former Chief Land Registrar,
“at the heart of this is the nonsense that a private company should have the power to decide the legal land and property title rights for others”.
The Department for Business, Innovation and Skills is yet to publish the responses to the latest consultation, but I have taken the time to read through the responses to the January 2014 consultation. I quote Clifford Chance, the law firm, certainly no stranger to the profit motive or enemy of the private sector, which said that privatisation would create:
“An inherent conflict between a private sector company, whose main purpose is to maximise shareholders’ profits, and the need of consumers for a low cost, high quality and risk free service”.
Liz Kendall (Leicester West) (Lab)
Does my right hon. Friend agree that although the Government say that they will retain ownership of the land register, that is completely meaningless while millions of changes are progressively made to it by the private company? Is that not the key issue? In the words of John Manthorpe, the former Chief Land Registrar whom my right hon. Friend has quoted, the proposal does not stand up to “any reasoned scrutiny”.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
My right hon. Friend mentioned the 2014 consultation, in which only 5% of respondents thought that privatisation was a good idea. My right hon. Friend and I are both London MPs, and the market in London is complicated enough as it is. Anything that will complicate things even further cannot be a good idea. If every professional in the sector is condemning these proposals, surely the Government should listen.
Lilian Greenwood (Nottingham South) (Lab)
Will my right hon. Friend give way?
Lilian Greenwood
I thank my right hon. Friend and congratulate him on securing this debate, which is very much welcomed by the 400 or more people in my constituency who work at the Land Registry. Does he agree that this proposal not only flies in the face of professional opinion, but comes at the worst possible time, demonstrates short-term thinking and represents poor value for money? Is the economic uncertainty created by the referendum result last week not an additional reason for the Government to drop these proposals?
Mr Lammy
My hon. Friend makes a very serious point. Even if there were a case for these proposals—I suspect all of us agree that there is no case—now cannot be the time to continue with them. There is no doubt that a private company would seek a profit and become a compulsory monopoly business, driving up the fees charged to users—the point raised by my hon. Friend the Member for Harrow West (Mr Thomas). A sale price of about £100 billion has been mooted in the press. A private company would therefore look to recoup this investment through the fees it charges and then turn a profit for its shareholders.
The argument we often hear in favour of privatisation is that competition will drive prices down, but this completely disregards the fact that the Land Registry is a unique asset in our lives. It is one of a kind, and users are compelled to pay the fees during any transaction involving land or property. There is only one Land Registry; it is a compulsory monopoly and we need to reflect on what would happen if this public monopoly became a private monopoly. We would have profiteering—pure and simple—by ripping off the public with inflated fees.
The Minister refused to answer my written question of 6 June about what steps would be taken to ensure that Land Registry service fees did not increase in the event of privatisation, so I hope we will hear something from him today. We are left to assume that the “protections” and safeguards that the Secretary State mentioned in the foreword to the consultation document do not include any protection from vastly inflated service fees. In time, whatever sum the Government might secure from a sale today will ultimately be paid for by the people and businesses who use and depend on the Land Registry’s services.
Mr Lammy
I must make some progress.
We therefore reach the crux of the issue: the Government are looking to sell off the family silver to turn a short-term profit to try to make their sums add up. As the most recent Budget showed, the Government’s plan to close the deficit is dead in the water, so now they are looking around for assets to cash in. This privatisation is purely political, with absolutely no regard for what is right for the Land Registry or indeed the people of this country. The short-term profit derived from any sale will be dwarfed by the increased costs that are ultimately paid by all of us in the form of increased fees, and it will be dwarfed by the lost revenue to the public purse in the medium to long term.
There is no economic rationale for this privatisation. If the Land Registry were making a loss and being subsidised by the taxpayer, I could understand the Government’s enthusiasm for privatisation, but it has made a surplus in 19 of the last 20 years, and it returned over £100 million to the Treasury last year alone. The Land Registry pays rich dividends to the public purse, and there is absolutely no reason why it should pay dividends only to wealthy investors and shareholders in the future.
Satisfaction with the Land Registry is currently running at 96%. Far from being a basket case of public sector inefficiency, it is a shining example of a successful public service being run efficiently and effectively. I must state in the clearest possible terms that privatising it would be daylight robbery and a national scandal. Sadly, we know that this Government have previous: just look at what they did to Royal Mail.
Let me deal briefly with the conclusions of earlier studies. In particular, the Government’s quinquennial review of 2001 found that the privatisation of the Land Registry
“should be firmly rejected”,
and would
“be an act of…considerable folly”.
It is clear from the responses to the consultation on proposals to transfer the Land Registry to a service delivery company in 2014 that the proposed privatisation was decisively rejected by most of the respondents. We are told that
“91% of respondents did not agree that creating a more delivery-focused organisation at arm’s length from Government would enable Land Registry to carry out its operations more efficiently and effectively”,
and that
“89%...not be comfortable with non-civil servants processing land registration information”.
However, although the overwhelming majority of respondents made it clear that the Land Registry must remain publicly owned, the Government are back, disregarding what was said just two years ago and making their case again.
A further issue of vital significance is the impact that a privatised Land Registry would have on the transparency of our property market. The Panama papers leak earlier this year brought to light the industrial use of tax haven shell companies by tax evaders, oligarchs, corrupt crooks, drug traffickers and arms dealers seeking to conceal their wealth. More than half the 214,000 companies whose details were leaked were incorporated in the British Virgin Islands, and many channel their money into the UK property market. A total of 100,000 properties worth £170 billion have been registered by shady and opaque overseas entities in the UK to hide their true owners.
Meanwhile, the Prime Minister and Members of his Government have consistently spoken of a crackdown on offshore tax evasion and dirty money. Indeed, the Prime Minister himself declared last year:
"There is no place for dirty money in Britain... London is not a place to stash your dodgy cash.”
How, then, can we be in this situation? I noted with interest the Prime Minister's article in The Guardian, in which he said:
“We know that some high-value properties—particularly in London—are being bought by people overseas through anonymous shell companies”
using
“plundered or laundered cash.”
The Department for Business, Innovation and Skills has also said that it is aware of the problem. Perhaps the team who wrote its consultation document could let the Minister know.
I listened with interest to this year’s Queen's Speech, which promised that
“legislation will be introduced to tackle corruption, money laundering and tax evasion.”
I say this is in the strongest possible terms, and I say it as a warning to the Government.
We are faced with a severe housing crisis and institutional tax avoidance on a huge scale. First, we need serious steps that will make it harder for shady offshore entities to buy up property in this country, and secondly, we need to make it harder for opaque shell companies to shield themselves from scrutiny and investigation. Privatising the Land Registry would achieve the complete opposite. Surely the most basic common sense tells us that the first step in any crackdown on tax evasion, money laundering and corruption should be to ensure that data about who owns what are made public and are not privately held. As recently as last month, the Minister for the Cabinet Office told the Open Government Partnership in South Africa:
“The UK is a leader on transparency...Increasing openness and tackling corruption are 2 sides of the same coin.”
A public Land Registry could open up its data to support efforts to tackle the endemic corruption and abuse of the property market.
Currently, the average fee for the searching and provision of Land Registry data is £3. Journalists and campaigners have made use of that function to lay bare the true scale of offshore ownership of UK property, much of it derived from shell companies set up to avoid tax or to launder dirty money. A private organisation would have no obligation to open its data and would be able to charge whatever it liked for providing such data. Crucially a private company would not necessarily be subject to the Freedom of Information Act, so would have no duty to supply such data when asked.
Confidence in land and property in our society depends on a land registration system that is administered with integrity, neutrality and absolutely no conflict of interest.
It is a nonsense that a private company should be given an adjudicatory role on the land rights of citizens, other companies and the Government. It is a nonsense that a publicly owned Land Registry that is performing well and returning healthy dividends to the public purse should be turned over to a private owner. And it is a nonsense that this is being forced through by a Government apparently committed to tackling offshore tax evasion and corruption in this country.
This privatisation is not only woefully misguided, but plain wrong and should be abandoned before the public interest is sacrificed in favour of a short-term profit. I look forward to what the Minister has to say and the many contributions from Members in this House this morning.
Several hon. Members rose—
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.
Mr Lammy
When the Minister says the Government have no plans, is he in fact pronouncing on the consultation? He has heard the House this afternoon: no one has risen to speak in favour of privatisation. Obviously, one is reflecting carefully on whether to test the strength of feeling by putting the matter to a vote. It is important to understand what the Minister is saying, because the real concern is that this is a Treasury-driven proposal—that was one of the reasons he gave. If that is the case, it probably is right that the House of Commons demonstrates to the Treasury that it probably would not get the privatisation through.
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.
Mr Lammy
This afternoon, the strength of feeling in the House has been conveyed. Across the House, there is opposition to the privatisation of the Land Registry. I think we can describe the Minister as one of the Government’s more eloquent junior Ministers. I think he acknowledged that he was making a case for looking at the matter, but that he clearly had not made a compelling case for privatising it. He used phrases such as “listening very carefully to the House” and “merely looking at it.” On that basis, those who read the debate in Hansard and reflect on what he has said and on what he has not been able to say in any convincing form might conclude that it is unlikely that the Government will move forward in this way. Certainly with the majority as it is, it is clear that the Government would not command the strength of the House. I hope that the debate gives some comfort to those deeply concerned across the country and to those who work for this great institution. With that, we can perhaps move on to the next debate.
Question put and agreed to.
Resolved,
That this House notes the important role the Land Registry plays in registering the ownership of land and property in England and Wales; further notes that the Land Registry has made a surplus in 19 of the last 20 years and paid back £120 million to the public purse in 2015 alone; believes that any privatisation of the Land Registry will have serious consequences for transparency and accountability in the UK property market and hinder efforts to crack down on corruption and money entering the UK property market via offshore jurisdictions; expresses grave concern that all the potential bidders for the Land Registry have been found to be linked to offshore tax havens; notes that the Government has acknowledged that property can provide a convenient vehicle for hiding the proceeds of criminal activity; notes that the Prime Minister stated in July 2015 that there is no place for dirty money in Britain; regrets the Government’s decision to seek short-term profit at the expense of the public interest; opposes the proposed privatisation of the Land Registry; and calls on the Government to reconsider that proposed privatisation.