Land Registry

Kevin Hollinrake Excerpts

Thursday 30th June 2016 Commons Chamber

[Kevin Hollinrake (Thirsk and Malton) (Con)]

It is a pleasure to follow the hon. Member for Glasgow South West (Chris Stephens), who made some very good points, and to congratulate the right hon. Member for Tottenham (Mr Lammy) on securing this important debate.

I absolutely support the principle behind this proposal. One of the Treasury’s principles is to maximise capital receipts, and we must not forget that this country is about £1.6 trillion in debt. In the right circumstances, it makes absolute sense to sell off assets to pay off liabilities; that is a sensible economic policy. Of course, the Government since 2010 have halved a deficit that was running at £153 billion—now it is £75 billion—and simultaneously grown the economy. We have one of the fastest growing economies in the developed world. Day after day, we debate how we will balance the books and how we will pay off the rest of the deficit or reduce it, and the Opposition oppose every single cut that we suggest. At the same time, they complain about the lack of deficit reduction. It simply does not stack up.

We have talked recently about a new politics. I had the great pleasure of serving on the same Committee as Jo Cox, who really set the tone for the future. I hope that we will take forward the sentiment that we should have challenge, but it should be a constructive challenge. We should not be sanctimonious. The majority of people who come into the House do so for absolutely the right reason: to improve the lot of the less fortunate in society and those who have the least opportunity. Members on both sides of the House should recognise that.

Many Labour Members have made the point about the Land Registry’s important role in providing secure title for people, but in the same breath they bring forward policies such as the mansion tax, which would take away the security of that title. It is a complete contradiction.

Nevertheless, I have concerns about this privatisation, because we may create a new private sector monopoly. We absolutely cannot have that. The Treasury’s criteria for sale of these assets—it is absolutely right to pay down our debt—are to maximise capital receipts, to provide better customer service and to reduce Government control. We would all agree with those principles, but may I add another: not to create any private sector monopolies? There is no effective competition in prospect if the Land Registry is privatised. We all encounter problems in our surgeries with a company called BT, which is a de facto private sector monopoly, certainly in the case of superfast broadband.

I believe that that business suffers from a culture of corporate obfuscation in pursuit of maximising profits and minimising investment, while maintaining desperately poor customer service. We must not let that happen in another private sector context, although privatisation is of course positive if it encourages competition in that it drives innovation, it drives investment and it should in itself drive great customer service.

Another of my concerns, which has been repeated many times, is the likely amount we would get for the Land Registry. The figure is around £1 billion to £1.5 billion, but it consistently produces a surplus of over £100 million a year. That represents a return of 8% to 10%, but the Government can borrow money at about 1%, so it does not make financial sense to sell it.

The Government have another very important role, which is to be a facilitator or enabler, and there are so many opportunities for open-source databases. Ordnance Survey has recently provided open-source data that could enable many technology companies to develop applications. One of those involves broadband because Ordnance Survey data are hugely important in allowing fixed wireless providers to provide remotely—at desktop level—superfast broadband in communities.

The Government have done such work in other areas. They have opened Department for Environment, Food and Rural Affairs databases to provide a free flow of information to enable the development of new technologies and applications. We are on the verge of what is called the fourth industrial revolution—the fusing of physical, digital and biological technologies—which could have huge benefits to the economy and to mankind. Given those real opportunities, the Land Registry should be kept in public ownership.

We should provide a more long-term and strategic approach in the public sector, rather than look for short-term profits. Our very own Tim Berners-Lee, a member of the Open Data Institute, has said that the sale

“could undermine the government’s bid to make more data publicly accessible”.

On that basis, it absolutely should not be considered.

As my hon. Friend the Member for Carlisle (John Stevenson) said, the Land Registry does need reform. It has a relatively new chief executive officer. The average tenure of the 4,500 staff is about 25 years, so it probably needs a bit of a shake-up if it is to make the best use of some of these opportunities.

Another point is about underpinning property rights, which are a fundamental component of economic success. The Land Registry has been in operation since 1862, and the average person in the street might be surprised to learn that it no longer has any paper deeds, but keeps everything digitally. I think the average person would be very concerned about that combination—the fact that the information is held digitally and that it would be kept by a private sector company.

The Land Registry does not only provide an administrative function. As the hon. Member for Glasgow South West keenly observed, the staff also use their knowledge and judgment. They are often asked difficult questions, and they need to be experienced and knowledgeable to provide a proper service.

The Government have introduced new initiatives on beneficial ownership, including consideration of a public register to make sure that foreign companies disclose the true ownership of UK property. That is revolutionary in that it is trying to tackle money laundering, corruption, crime and tax evasion. Those are all reasons why it is better for the Land Registry to be in the public sector than the private sector.

I am involved in the property sector. You must excuse me, Mr Deputy Speaker, for neglecting to draw the House’s attention to my entry in the Register of Members’ Financial Interests. Just about all the people in the property sector to whom I have spoken are against this move, whether they are members of the Conveyancing Association, or solicitors, house builders or property agents. Indeed, the Competition and Markets Authority has said that a private sector provider may fail to

“maintain or improve access to the monopoly data; and…weaken competition to its own commercial products.”

[Mary Robinson (Cheadle) (Con)]

The Government are committed to the ambitious target of providing 1 million new homes by 2020 and increasing home ownership. Does my hon. Friend agree that we should avoid any disruption to the Land Registry that might jeopardise its service to home buyers in the future?

[Kevin Hollinrake]

I totally agree. As we have heard, the Land Registry service is regarded as a very high-quality service and the housing market is such a critical component of our economy, particularly now that economic markets such as the housing market are looking a little more fragile.

I have significant reservations about the privatisation of the Land Registry, and—supportively and gently—I ask the Government to think again about these proposals.

--- Later in debate ---

[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.