Land Registry

Iain Wright Excerpts

Tuesday 25th February 2014 Westminster Hall

[Mr Iain Wright (Hartlepool) (Lab)]

It is a pleasure to serve again under your chairmanship, Mr Walker. I remember with fond affection the Committee on the Education Act 2011. My mother sends her regards.

I congratulate my hon. Friend the Member for Swansea East (Mrs James) on securing this excellent and sensible debate. I reiterate what others have said by saying that I will be sorry to see her go. She will be a huge loss to the House. She has served her constituents diligently, and it has been an absolute pleasure to work with her.

The recording of land and property ownership is vital and has to be done with integrity, impartiality, professionalism and consistency, which has been provided by the Land Registry since 1862. The Land Registry serves a population of more than 55 million, and as its annual report stated last year, it

“facilitates one of the most active property and mortgage markets in the world”.

More than 23.5 million titles are recorded by the Land Registry, which is an essential part of the home buying market. Any changes to the service must be made with clarity and purpose and must be backed up with empirical evidence, and it is clear from today’s debate that the Government have not provided that clarity.

I have a series of questions for the Minister based on three themes: the consultation, the process and the impact on staff. The Minister published a written ministerial statement announcing the consultation on 23 January 2014. The consultation, as we have heard, is to last eight weeks until 20 March 2014. Cabinet Office advice on consultations issued in November 2013 said that consultation periods should be decided on a case-by-case basis but that:

“For a new and contentious policy, 12 weeks or more may still be appropriate.”

Employees of the Land Registry and the millions of people like us who rely on the integrity of the data held by the organisation will find the Government’s proposals new and contentious.

I hope the Minister saw the letter in The Times last week by Ms Hilary Mobbs of Leeds, which stated:

“The consultation has not been widely advertised and the (very short) consultation period ends in March.”

The hon. Member for North West Norfolk (Mr Bellingham) made a pertinent intervention reflecting the concerns of businesses in his area. Will the Minister respond to Ms Mobbs and explain why only eight weeks was decided upon? What sort of wide-scale communication campaign was put in place to alert stakeholders, including many members of the public, of the proposed changes?

On the consultation document, it appears that the Government are fairly agnostic on which option to choose, but there is some doubt about that. My hon. Friend the Member for Hayes and Harlington (John McDonnell) asked the Government to come clean on whether the GovCo is the preferred option for ultimately getting to privatisation. What is the Minister’s preferred option? In the interest of greater scrutiny and transparency, will he publish the KPMG report, as has been asked? If he does not have a preferred option, how on earth does he know how the perceived benefits of greater flexibility to deliver, greater focus on service delivery and more flexibility on pay, recruitment and the provision of other services will be achieved? How will the outcome of the short consultation affect the Government’s thinking? If there is overwhelming support from stakeholders for maintaining the status quo, will the Minister pledge to ensure that that will be the Government’s policy? What happens after the consultation? There will be a period of Government consideration, and then presumably, if necessary, legislative changes will be outlined. Does the Minister anticipate that something will be in the Gracious Speech before the next Session? Does he ultimately think that legislation will have to be enacted before the next general election?

The big theme of today’s debate is what problem the consultation is trying to solve. As we have heard time and again, the Land Registry does not seem to be a failing and inefficient organisation—quite the reverse. If the Minister thinks otherwise, perhaps he will say so. It is required by statute that income from fees charged to customers covers all the Land Registry’s expenditure. There is no burden on the taxpayer whatever, and there is no need for a call on moneys from the House.

The annual report states that the previous chief executive left the organisation

“in a healthy financial position with improving staff morale and a signed-off Business Strategy.”

The Land Registry, as we have heard, achieved a surplus of £98.8 million, showing that the organisation is on top of weeding out inefficiencies. Cost per unit is £23.36, which is significantly better than the key performance target of £28.41. The return on capital employed was a hugely impressive 23.4%. Many good private sector organisations would kill for such a return on capital employed. Net assets approach £0.5 billion and the cash-flow position at year end is positive, with £472 million cash in the bank. This year, the Land Registry paid a dividend back to the Treasury of £26 million. Under no possible criterion could the Government claim that there is a need for private sector financial rigour to be injected into the organisation. The Land Registry is well run and the financial metrics are sound.

As we have heard time and again, the Land Registry has 98% customer satisfaction and, to quote the annual report again, enjoyed

“target-beating performance in terms of the quality and speed of our registrations.”

In such circumstances, I do not understand what the Government are doing. That is especially pertinent when paragraph 37 of the consultation document explicitly states:

“The proposals outlined in this document would have a very limited impact on customers”.

If that is the case, why on earth do it? Is it really to ensure that the Land Registry is fit for purpose in the digital age, with a central focus on digitising land registration services? If that is the case, why cannot it be done under the present statutory arrangements? The Land Registry seems to be diversifying its business model and being more innovative. Why is a change in corporate and statutory status necessary? Given the high level of customer satisfaction, will the Minister say how he anticipates fees will move in the next few years? Does he anticipate that fees will increase and, if so, to what extent?

The consultation document states that there is scope for additional services and refers to amending the Land Registration Act 2002. Will the Minister provide more detail? What other services does he anticipate and what services would he like the new entity to provide? There is talk in the consultation document of

“greater access to a richer data set.”

What does that mean? It is vital that customers have faith in the integrity of registering land. To quote Ms Mobbs from Leeds again:

“One could envisage a situation, as has arisen with our power providers, whereby the registered title to all properties would be in the hands of an overseas company or one with its own commercial interests in the property market. This concerns me.”

I can understand Ms Mobbs’s concern. What will the Minister do to address that concern? Will a vertically integrated business model, whereby a company provides the full range of property services to the customer, whether conveyancing, land registry or otherwise, be acceptable to the Government? Would the Minister be concerned if, say, Zoopla owned the company? What about a bank? What will the Government do to put safeguards in place to prevent that from happening? How will data protection be safeguarded? There is no clarity whatever on that in the consultation documentation.

Finally, I want to address the Land Registry’s staff. More than 4,000 people spread across the country provide a prompt, professional and efficient service. We have heard a number of hon. Members talk about the great work that their constituents do for the Land Registry. I have constituents from Hartlepool who work for the Land Registry in Durham. What will happen to those staff? The consultation document states that

“we expect that the majority of staff would transfer to the service delivery company and would cease to be civil servants.”

There is a lot of ambiguity in that short sentence. What does the Minister mean by “majority of staff”? Does he mean that all current staff who want a job will have a job, whether it is in the new service delivery company or in the proposed office of the chief land registrar? If so, what about location? Would my constituents who travel to Durham be required to travel to Swansea if they want to keep their job in the new organisation? Will the Minister provide clarity? Does it mean that there will be rationalisation of both work force and locations? What is the TUPE situation? Can the Minister make any comment on pension entitlements for current staff?

The Government have poor form on such things, whether one considers the botched change in respect of the GoCo for the defence procurement function—that change was very similar to that proposed for the Land Registry—or the Royal Mail privatisation, which short-changed the taxpayer. The Government are in danger of making the same mistakes again. It is difficult to avoid the conclusion that, regardless of the organisation’s performance and given the absence of evidence, the process is merely a means of privatisation. I ask the Minister to exert caution, provide more evidence before making a decision and consult widely—that has currently been eluded—before embarking on such important yet irreversible changes.