Infrastructure Bill [HL]

Lord McKenzie of Luton Excerpts

Tuesday 15th July 2014 Grand Committee

[Lord Jenkin of Roding (Con)]

My Lords, my noble friend will recollect that I raised this point at Second Reading on 18 June at col. 856. I will not repeat what I said on that occasion, or indeed on the very important points that my noble friend Lord Tope has just made.

The Minister was as good as her word and replied to the points that she did not have time for when she responded at Second Reading. She wrote to me on 1 July about the points I had raised, including this one, which she headed “Mayoral Powers”:

“Government officials and the Greater London Authority are in ongoing dialogue to agree suitable ways to transfer public sector land in London. If amendment of legislation is required, we will explore this at an appropriate opportunity in the future”.

It is a long time since I have felt that I was pushing at a door that is not only half open but almost entirely open. I hope my noble friend will be able to give us a little more information this afternoon.

The need for housing, particularly affordable housing, in London is acute. There can be very few couples —potential homeowners—under the age of 35 or thereabouts who feel that without significant parental help, or whatever else might be available, they will ever be able to buy a house. Part of the reason for that is the shortage of building land within the Greater London area and in the area immediately surrounding it. The disposal of surplus public land has become a matter of huge urgency. I believe, as my noble friend has said—and he quoted the noble Lord, Lord Best—that the Greater London Authority has this whole issue very much in mind and on its whole agenda for the development of London. The case for it to be the body to initiate, promote and encourage this is very strong indeed and I hope my noble friend the Minister will be able to give us an encouraging answer this afternoon. I support the amendment moved by my noble friend Lord Tope.

[Lord McKenzie of Luton (Lab)]

My Lords, I congratulate the noble Baroness, Lady Kramer, on her extended role during the course of this Bill and indirectly congratulate the noble Baroness, Lady Stowell. The amendment moved by the noble Lord, Lord Tope—for the GLA to perform the role of disposal agency in London—on the face of it makes very good sense. As the noble Lords, Lord Tope and Lord Jenkin, said, the HCA’s objects simply do not run in Greater London as a result of the Localism Act 2011, and without a change you would have to retain the arrangements where transfers are made indirectly.

I took the opportunity to raise the matter with the Bill team, who have sent me a helpful note, which, if I may, I will just read from:

“I have been advised that under the Localism Act 2011, the GLA has responsibility for the HCA functions in London and the HCA does not have a remit to operate. The HCA has powers to operate in London but to do so would require delegated authority from the mayor. Under existing legislation, central Governments can transfer their land directly to the GLA; arm’s length bodies can also presently do so but would have to transfer the land to the parent department first”.

That is the inefficiency we are trying to tackle with this provision. The note goes on:

“DCLG are working with the GLA to determine what offer the GLA would be able to make to departments regarding land transfer. This will include whether statutory transfer is the most appropriate mechanism or whether an alternative approach is preferable”.

Could the noble Baroness just unpick that expression a little? Whatever arrangements are to be entered into, it does not seem to me to preclude supporting the amendment of the noble Lord, Lord Tope.

We have had a helpful briefing from the Mayor of London, which raised a number of points. The point about the GLA having to hold its land in a taxable subsidiary company would appear to have been addressed by government amendments, but there was also a point about transfers of land from the GLA, a mayoral development corporation or the HCA hitherto not having been able to pass on the override of third-party easements. This means that such owner-developers could be pursued for remedies by the previous owners and beneficiaries of such rights. Given that Clause 22(10) is to operate only where land is disposed of after the provision comes into force, how does the Minister see this point being addressed?

[The Minister of State, Department for Transport (Baroness Kramer) (LD)]

My Lords, it is a pleasure to stand here in the place of my noble friend Lady Stowell. I join the congratulations to her on her new role and apologise for the disappointment of noble Lords who were looking forward to debating these issues with her today. I will have to do for today’s purposes.

The public sector land programme aims to speed up the disposal of land and put disused land back into use for much needed homes. The current public sector land programme has identified land with capacity to deliver 100,000 new homes by March 2015. At the end of March 2014, it had released land capable of delivering more than 76,000 homes. As we move forward with the programme, we are aiming to reduce the bureaucracy involved in transferring land to the HCA and to speed up delivery of much needed homes and economic development.

The GLA has a pivotal role in delivering housing and economic growth in the capital, as my noble friend Lord Tope illustrated, and we are working with it to consider how its expertise can best be utilised in the disposal of surplus government land. In some cases, this may mean transferring sites from central government bodies to the GLA. Although the original clause, which is the one currently in the Bill, did not mention the Greater London Authority, we agree that there may be some benefit to exploring whether it should be included in the clause. There is an existing transfer process, but this might smooth the process of transferring sites from arm’s-length bodies to the GLA. There would need to be an agreement between the Government and the GLA that this is the best delivery mechanism for individual sites and the one that provides best value to the taxpayer.

One alternative, for example, would be to purchase land directly from the Government or their ALBs. All this needs further discussion and exploration with the various parties, and we need to work through whether there are stamp duty implications or other factors. Some resolution will be required before we can come to a definite decision on that process. We have been working closely with the GLA on the land disposal programme, as we will continue to do, so that we can work out how surplus public land can be better used to support housing and economic growth, alongside finding efficiency savings. We recognise what the noble Lord, Lord McKenzie, said—

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[Baroness Kramer (LD)]

The noble Lord, Lord Jenkin of Roding, makes clear that there are complexities in all this. We do not have set levels of affordable housing. That has to be for the local authority. It is best placed and will undoubtedly use its planning processes, which of course apply to any development, to make the relevant determinations. He is right that there are complexities that we have to iron out and work our way through. I just want to alert the Committee and to say that we are sympathetic to the underlying direction of this amendment, but there is work to be done to know whether this is the most effective way to achieve what I think everyone here is attempting to achieve.

[Lord McKenzie of Luton]

Will the Minister expand on what she said because I am not quite following? I can see that there may, in differing circumstances, be details to work out as to how particular parcels of land are put together and how they end up for the benefit of housing in London. But this amendment would simply include the possibility of the GLA being the beneficiary of a Secretary of State’s scheme. The Secretary of State does not have to enter into a scheme under these provisions in all circumstances. I am struggling to see why the amendment could not be accepted. It would not be mandatory. It would just be one route. If it is not picked up in this Bill, I wonder when it will be picked up by another local Bill coming down the path. I am struggling to see the logic in not making this adjustment.

[Baroness Kramer]

I say to the noble Lord, Lord McKenzie, that I will go back to the department and ask whether we can share any of that without disrupting the process of negotiation. I am sure that we would be willing to share those thoughts. This goes beyond my direct area of expertise and I would not want to mislead the noble Lord by taking him in a wrong direction. We will try to provide that clarification. The one thing that everyone here would be concerned about is making sure that it does not disrupt a negotiation process that would come to the conclusion that we are all seeking; that is, the efficient transfer of land to make sure that housing is made available at the earliest possible date.

I will be happy to work with your Lordships. The department is working with the GLA to consider whether these amendments would be beneficial or whether a somewhat different form is needed to deliver that public sector land programme in London. With that assurance, I hope that my noble friend Lord Tope will feel able to withdraw his amendment.

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Moved by

[Lord McKenzie of Luton]

84A: Clause 21, page 22, line 21, at end insert “or local authorities”

[Lord McKenzie of Luton]

My Lords, this is a probing amendment and it has been suggested to us by the Local Government Association. The purpose of the amendments in this group is to allow one or more schemes for the transfer of designated property rights and liabilities to local authorities, as well as to the HCA. The LGA is clear that local councils share the Government’s focus on using publicly owned land to support housing development, and it suggested that councils have a programme to release, between 2015 and 2018, assets amounting to some £13.3 billion.

Apparently a number of councils have undertaken the pooling of their land assets with central government, and such activities could be facilitated if such assets could be transferred to local authorities rather than via the HCA. The LGA says that it has recently been asked by the Cabinet Office to help to transfer to local councils some 3,000 separate land and property assets held by government departments and agencies. These range in size and value and could be packaged for transfer. Would not these situations lend themselves to the types of schemes envisaged by Clause 21? Otherwise it would presumably involve the HCA as an intermediary.

There is a question of whether all local authorities would automatically be able to override relevant rights and restrictions on users and to secure these for third-party purchases. Doubtless the Minister will be able to help us on that. We may need to do more work on this before Report, but this is surely worth developing as a concept and I am interested to hear the Government’s position. I beg to move.

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As I say, we will explore the issues that are raised in this amendment; I will take it away and consider further whether we should extend our clause to include local authorities or whether an alternative route would be more effective. With that, I hope noble Lords will feel able to withdraw the amendment.

[Lord McKenzie of Luton]

My Lords, I am grateful for that response; frankly, it is more generous than I had anticipated. I accept that it is not an acceptance of the amendment, but it is an acceptance that it will be taken away and looked at seriously. The amendment was not designed in any way to diminish the role of the HCA; we see the importance of it.

I was not quite sure—perhaps this is something that could be looked at when the amendment is being otherwise addressed—of the extent to which local authorities are always able to pass on the benefit of easements that they have. Obviously, that is quite important for the development of process.

I am grateful to all noble Lords who supported the probe: my noble friend Lord Smith and the noble Lords, Lord Tope and Lord Jenkin. I think that the noble Lord, Lord Jenkin, told us that he was the chair of a housing committee 50 years ago. I remember that when I was first on my council I could not get on to its housing committee as it was seen as being quite senior. Committees in those days were made up of executive members; I think I was on the council for 10 years before I was given a sniff of it. Having said that, I am grateful for the Minister’s response and beg leave to withdraw the amendment.

Amendment 84A withdrawn.

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Moved by

[Lord McKenzie of Luton]

85B: Clause 21, page 22, line 24, at end insert “provided that any designated property, rights or liabilities to be transferred pursuant to a scheme—
(a) have been classified as surplus;(b) do not comprise land forming part of a common, open space or fuel or field garden allotment; and(c) do not extinguish any public rights of way.( ) “Common”, “open space” and “fuel or field garden allotment” have the same meaning as in section 19 of the Acquisition of Land Act 1981.”

[Lord McKenzie of Luton]

My Lords, I shall speak also to Amendments 86, 87 and 88, while my noble friend Lady Royall will address Amendment 89 in particular.

We are supportive of the thrust of the arrangements to ease complexity, bureaucracy and cost in marshalling surplus public sector assets, but we accept what the Government have asserted about land held by existing arm’s-length bodies not being capable of being transferred directly to the HCA and the fact that this could be addressed by one or more schemes to transfer property to the HCA from a specified public body. The need for this is obviously bolstered by the Government’s plans—as we have just discussed—for the HCA to be the centralised disposal agency for surplus public sector land.

In their Accelerating the Release of Public Sector Land report of October 2011, the Government estimated that 40% of land suitable for development sits with public sector—both central and local government—land banks. Our amendments are a way of seeking reassurance. Other than transfers being capable of being made directly to the HCA, it is understood that there will be no change to the type of assets otherwise to be involved and no change to the decision-making or approval process. In this regard, perhaps the Minister will just remind us what the process actually is—in particular, the process by which land is regarded as surplus.

Amendment 85B was proposed to us by the Open Spaces Society. The society is concerned that, whatever the warm words of the Government about the specific and limited application of Clauses 21 and 22, they are written in very broad terms. Under Clause 21, a “public body” means,

“a person … with functions of a public nature”.

It is true that they have to be specified in regulations but they are regulations that are currently just subject to the negative procedure. The assurance from the Minister thus far is that only surplus land can be subject to a scheme, but the term “surplus” does not appear in the clause.

Amendments 86, 87 and 88 do no more than put in the Bill what the Government have already said to be the case, and it is difficult to see why these amendments would not be accepted.

There are other matters requiring clarification. So far as the easements affecting land are concerned, perhaps the Minister will confirm that the power to override third-party rights exists with the HCA, local authorities, the GLA and the Mayoral Development Corporation. Is it correct that this power of override can be exercised after land has been sold but only by those bodies—that is, that a third-party private sector purchaser of land would not be able to initiate such overrides? Can the Minister also say a little about how the tax provisions are intended to work? Presumably they are to avoid spurious tax charges arising from the scheme transfers, given that the nature of the scheme is by way of an “internal” reorganisation of assets. However, will each of the specific public bodies be non-tax-paying entities, and what is the intent regarding assets acquired from the HCA? On what basis will someone acquire those assets?

There is a wider issue concerning where value will accrue under the transfers. Will it be in the Treasury? If the scheme means that transactions are bypassing the parent department, how is all this to work? I beg to move.

[Baroness Royall of Blaisdon (Lab)]

My Lords, I wish to speak to Amendment 89. I apologise for not having spoken at Second Reading but I am grateful to my noble friends Lord Adonis and Lord McKenzie of Luton for raising the issue of the public forest estate at that stage. The response given by the Minister did not assuage my fears or those of people up and down our land who are concerned about the future of this most precious of our assets.

Subsequently, the noble Baroness, Lady Stowell of Beeston, who of course is now Leader of the House, replied to a Written Question that I had tabled about the future of our public forest estate. Very strangely, I read the answer to the question as a government press release in response to concerns expressed about the Infrastructure Bill, and that was before I received an Answer from the noble Baroness. I should be grateful if the Minister could explain why that was the case.

I do not wish to detain the House with too many details about the chequered history of this Government’s approach to public forests and woodlands. Following the shameful Public Bodies Act, which would have enabled their sell-off, the Government, to their great credit, established the Independent Panel on Forestry, which, under the chairmanship of Bishop James, did a splendid job. Once the report was published, the Government said that they agreed with the recommendations and would be bringing forward a Bill in due course. Very sensibly, they spoke of draft legislation that would enable pre-legislative scrutiny and have the input of the wonderful grass-roots organisations throughout the country which rightly campaign on these issues.

However, here we are, two years after the publication of the final report of the panel, and we have not seen any draft legislation. I hope that the Minister will not be reduced to saying that that was because of pressures on the parliamentary timetable because, frankly, neither I nor thousands more will believe her. While Defra’s responsibilities are great, it promises only one piece of legislation this Session, which is a draft yet to be published. It is therefore not a wonder that people are both anxious and lack trust.

The case for sustaining and expanding our public forests and woodland was superbly made by the independent panel and endorsed by the Government. The social, environmental and economic opportunities that they can deliver are myriad. In my community, the forest is so much an integral part of our life, our culture and our heritage that we are called Foresters. The catalyst for the amendment is the fact that, whatever the Government’s policy may be, the Bill is capable of having an impact on the public forest estate.

At Second Reading, the Minister, the noble Baroness, Lady Kramer, said that these provisions,

“will not be used by bodies such as the Forestry Commission or National Parks, contrary to some recent, wholly unfounded, speculation”.—[Official Report, 18/6/14; col. 840.]

Will the Minister explain in greater detail why it is that they will not be used by the Forestry Commission? What safeguards are in place to ensure that that does not happen?

My noble friend Lord McKenzie mentioned surplus. At Second Reading, the noble Baroness said:

“The measure that we discussed for the HCA is about transferring surplus land from government agencies. The public forest estate and our national parks are in use; they are therefore not surplus and none will therefore be transferred to the Homes and Communities Agency”.—[Official Report, 18/6/14; col. 899.]

Will the Minister help us by narrowing the definition of surplus? From the statement that I have read out, it is not at all clear what would need to happen for land to be considered surplus and then be subject to the provisions in Clause 21. It would also be useful if the Minister could say what would need to happen for land described as “in use” to cease to be thought of as in use.

My concerns extend beyond that. By virtue of the Housing and Regeneration Act 2008, the HCA, and any other person, has an existing right to undertake works on and to use land of the HCA, even if it involves interference with an easement, liberty, privilege, right or advantage annexed to land and adversely affecting other land. The Infrastructure Bill proposes to extend this power to,

“land which has been vested in or acquired by the HCA”.

The effect would seem to be that the power to override easements and so on is granted to successor owners of the HCA. It is my view and fear that freemining—ancient rights and privileges granted to Foresters by Edward I—could be caught by Clause 23 because it certainly falls within easement, liberty, privilege, right or advantage. Compensation would be payable in appropriate circumstances but this is little comfort to those who wish to protect our traditions and cultural heritage, who work the mines and want to maintain the right for future generations. I should be grateful for the noble Baroness’s view of the implications of this Bill for freemining. If the amendment were accepted and the public forests exempted from the provisions of the Bill, the threat would fall away.

We are told by the Government, in their response to Recommendation 27 of the Independent Panel on Forestry, that land transactions within the public forest estate are to be subject to the overriding principle that they would be in the further interests of the public forest estate. They said:

“We agree with the Panel that the new body should be able to buy and sell land where this serves the core purposes of the organisation and delivers public benefits. We also agree that major projects and land sales should be consulted upon, but do not want to fetter the commercial freedom of the new body by requiring it to consult on each and every proposal. One of the roles for Guardians might be to ensure that any significant projects and land transactions proposed by the management body are in line with the remit and interests of the Public Forest Estate”.

The Housing and Regeneration Act 2008, which the Bill proposes to amend, is based on fundamentally different concepts from this principle.

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[Baroness Kramer]

My Lords, first, I am sure that no discourtesy was intended to the noble Baroness, Lady Royall, over the timing of the letter that was sent. I cannot quite explain the sequence but I know that, in trying to co-ordinate the numerous questions that came to us following Second Reading, we tried to make sure that we had covered everybody’s questions and answered them fully, which may have delayed putting our responses in the post by a day or so. Therefore, I apologise if she was concerned by that.

The public sector land programme is about bringing disused land currently owned by central government back into better economic use, not about selling or building on community assets enjoyed by local communities. It is a continuation of our current programme, where we are on track to dispose of disused land with capacity for 100,000 homes. This clause is not about new policy, but merely the introduction of efficiency into the mechanism.

Surplus land can and already does transfer to the Homes and Communities Agency, but the process is more bureaucratic than is necessary. This clause is simply about increasing the rate of delivery by accelerating internal government procedures. The proposed amendments would actually slow down the process by adding further bureaucracy. For that reason, we would resist this amendment because our goal is to increase efficiency in this process, not to slow it down further.

On the issue of surplus land, it is important that land can transfer to, for example, the HCA while it is still in operational use but a decision has been clearly made that it will no longer be needed beyond a certain point. The HCA would then be able to start remediation works and marketing in parallel with the wind-down of operational activity. This minimises bureaucracy and ensures that we are making best use of our land at all times. Questions have arisen about the word “surplus”. There is not a definition in that sense because property-owning departments and arm’s-length bodies are expected to review their landholdings regularly to identify potential for rationalising their estates. When a landholding is no longer required by government, it is not just surplus to our requirements and there is no hard-and-fast definition of surplus beyond this because it varies so greatly from department to department and use to use. It is for individual departments to decide why they no longer require a piece of land.

I assure your Lordships that it is not possible for the Homes and Communities Agency to transfer land from other public bodies without the consent and co-operation of the transferring department. The transfer is direct but all statutory transfer schemes to the HCA must be signed by a Minister of the Crown or a delegated representative. Therefore, only land that the transferring public body has identified as surplus to its requirements will be transferred. This is standard government business and the noble Baroness will have been very used to this process when her party was in government. There is nothing new or different about the way in which it is being handled.

As I said, the clause is about accelerating internal government processes to transfer surplus land so that it can be disposed of more quickly and effectively for appropriate development. It does not override existing planning policy or community rights. The Government fully appreciate the importance of amenity land to both nature and our communities. Common land is central to our national heritage and we value it for agriculture, recreation, nature conservation, landscape and its historical and archaeological significance.

Public rights of way in the country are the primary means by which people access the countryside and engage in outdoor recreation, which in turn promotes improved health and well-being, as well as sustainable transport. Our amendment will not affect public rights of way. Normal planning procedures will apply to protect open spaces and other amenity land. The National Planning Policy Framework makes clear that open space should not be built on unless it is surplus to requirements, can be replaced or the benefits outweigh the loss. Planning policies should also protect and enhance public rights of way and access. Where the Homes and Communities Agency owns such land, it seeks to transfer it to the local authority or other community group to continue to manage the land for the community. It is also worth noting that the Homes and Communities Agency often facilitates the creation of new open spaces, allotments and amenity land, which over time become an important asset to the community.

I will talk more directly about the public forest estate in response to the amendments that address this and which are intended to prevent the transfer of land from the public forest estate to the Homes and Communities Agency. We made clear our policy on the public forests at Second Reading and again in the letter that we provided to the noble Baroness, Lady Royall. The forest estate is not for sale and we will not transfer the public forest estate to the Homes and Communities Agency.

The noble Baroness, Lady Royall, asked about future Governments. Future Governments have always been able to make their own decisions, and this Parliament could not prevent their doing so. We can give an absolute assurance about the position that this Government take. Were she in government, she would have to make that decision on a democratic basis for herself.

In my published response to the Parliamentary Question from the noble Baroness relating to Clause 21, I said:

“Clause 21 of the Infrastructure Bill is completely unconnected to the Government’s stated policy to establish a new public body to hold the Public Forest Estate”.—[Official Report, 30/6/14; col. WA 214.]

The Government have no intention of transferring land from the new body to the Homes and Communities Agency, as the public forest estate is currently in use and not declared surplus. As such, the powers will not be used in relation to this body and will therefore have no effect on it.

I also refer to our forestry and woodland policy statement, published in January 2013, which built on the recommendations made by the independent panel on forestry, chaired by the then Bishop of Liverpool. It confirmed that the PFE will continue to benefit from public ownership. Nothing has changed. We remain committed to this and are continuing to work closely with stakeholders.

I believe that we shall have a discussion on the group that begins with Amendment 91A which will address some of the issues of easements. Just for the purposes of the issues that were raised by the noble Lord, Lord McKenzie, third-party purchasers will be able to override easements in any land sold by the HCA, the GLA and the MDCs, the mayoral development corporations. That has always been clear from this legislation.

[Lord McKenzie of Luton]

I apologise for intervening on the Minister but I wonder if we can clear that up, as it is before us. Did she say that third-party purchasers can override those easements?

[Baroness Kramer]

I think that a better way to express it is that where they have been overridden by the HCA, the GLA and the MDC, they are sold, as it were, with the override in place. I believe that that is correct; I will write to the noble Lord if it is not, but that is my understanding of the situation.

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[Lord McKenzie of Luton]

I am grateful; that is helpful. It is what I understood the position to be likely to be—that third party purchasers could not create those overrides.

[Baroness Kramer]

That was the issue at dispute. My understanding is that they cannot create. I am now looking for some clarification on this so that I can come back to the noble Lord with a more correct answer. I just have a note that says, “If Clause 22 goes ahead, they will”. I believe that we are going to address that under Amendment 91A, in which case I may be able to give the noble Lord a more substantive answer shortly. If not, I will ensure that he gets complete clarification on this issue.

On the tax issues that the noble Lord raised, tax provision to produce a tax-neutral result will be made in secondary legislation under new Section 53B. Again, we can provide more detail on that than I have at my fingertips at this moment.

To return to the heart of Amendments 85B, 86, 87, 88 and 89, we believe that the necessary safeguards are in place to ensure that land transfers only when agreed by the Secretary of State and when the transferring department has deemed the land to be surplus to its requirements. The clause sits within the wider planning framework, which offers sufficient safeguards to protect any open spaces or other amenity land. For that reason we will resist these amendments, and I hope that what I have said provides some assurance.

On the Edward I freemining rights, we will indeed follow up in writing. I confess that that is beyond my general knowledge of these issues, so this may be the most helpful way to provide that information to the noble Baroness, Lady Royall.

[Lord McKenzie of Luton]

I am grateful to the Minister for that detailed response. I accept that there are some points on which we shall have some follow-up, particularly on easements. On matters of tax, the particular point I sought to probe was: at the point when the land goes from the HCA—or the GLA, if that is what it is—to a private sector developer, what is the basis on which it acquires that land? Is the developer thereby getting a tax break? Is the value of its land uplifted or is it reduced somehow? I do not expect the Minister to deal with that in detail today but I would be grateful if there could be some follow-up on it. We accept the assurance that there will be procedures in place to make sure that the owning department will have to sign off on any transfer and that it would only be surplus, as the Minister described.

[Baroness Kramer]

Perhaps I might make a small correction for the noble Lord, Lord McKenzie, because I want to be absolutely clear on this point. It would be a Secretary of State, a Minister or somebody delegated. Because the Government act as a whole, I cannot guarantee to him that the owning department would necessarily provide that signature but I will look for clarification.

[Lord McKenzie of Luton]

I am grateful and perhaps we could have some follow-up on that as well, if necessary. I also accept that the different approaches to when land is identified as surplus mean that it may be difficult to have an all-embracing definition in the Bill.

However, that leaves two issues around the forest estate, which my noble friend Lady Royall spoke about with a great passion, as indeed did the right reverend Prelate the Bishop of St Albans. Given the generality of the assurances that the Minister has given, is there not the possibility that we could at least have something specific in the Bill in relation to the public forest estate, as an example of where it simply will not be transferred? That would ease the genuine concerns of many who are not happy about the broadness of this clause as it is drafted. Could that, at least, not be included in the Bill? We accept that there are issues around surplus and the processes of transfer.

[Baroness Kramer]

I apologise for bobbing up constantly but the noble Lord will understand that I am trying to catch information as rapidly as I can to ensure that we do not leave him with an inaccurate picture. In terms of that sign-off to which I referred a few moments ago, if the land is surplus, it is the Minister for the DCLG who provides the signature in all cases. It is important that I share that, rather than leaving the noble Lord misinformed on this issue.

[Lord McKenzie of Luton]

We need to think about that. Is it the Minister for the DCLG in all cases, wherever the land was originally owned or used and whichever department it was?

[Baroness Kramer]

That is the understanding that has just been passed to me.

[Lord McKenzie of Luton]

I am grateful for that. It is news to me but it is helpful to have it. I should like to press again on the issue of the public forest estate and why that cannot be specifically included as an exemption from the operation of these clauses. I am sure the Minister will recognise that that would ease the very real concerns that have been raised. She may say that those concerns are unnecessary, given the assurances that have been provided, but notwithstanding that, there would be clarity and certainty in the Bill. What is wrong with that?

[Baroness Kramer]

My Lords, I feel that at this point we have given real clarity on this issue. As I say, this mechanism simply makes more efficient a process that is currently in place. The assurances that stood yesterday and stand today are the assurances that will stand tomorrow, and it seems to us that those are clear and unequivocal. We therefore cannot see what is gained by putting this into the Bill.

[Lord McKenzie of Luton]

My Lords, we have reached the stage where it is necessary to withdraw the amendment but I cannot believe that we will not return to this matter at a later stage. I beg leave to withdraw the amendment.

Amendment 85B withdrawn.

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Moved by

[Lord McKenzie of Luton]

90: Clause 21, page 24, line 4, leave out paragraphs (a) and (b) and insert “after subsection (7) insert—
“(7A) An instrument containing (whether alone or with other provisions) regulations under section 53A(2) may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.
(7B) An instrument containing (whether alone or with other provisions) regulations under section 53B may not be made unless a draft of the instrument has been laid before and approved by a resolution of the House of Commons.””

[Lord McKenzie of Luton]

My Lords, this is a straightforward amendment that would require the regulations specifying public bodies to be subject to the affirmative procedure. These provisions are focused on identifying which public bodies’ assets can be the subject of a scheme for transfer to the HCA. In other amendments, we have just discussed the sensitivity around these schemes, which should be clear. The affirmative procedure is still limited but it seems to us that it should apply, at the very least on the first use.

[Baroness Kramer]

My Lords, I gather from general conversation that there are many arm’s-length bodies—certainly several hundred of them. A process whereby adding them or subtracting them from a list would require affirmative actions in your Lordships’ House and the other place seems excessive, frankly, when the whole purpose of this is to speed up the process of land disposal and ensure that appropriate developments can happen quickly. Maximising the release of surplus public sector land is critical to support our ambition to reduce the deficit and, even more importantly, increase the number of homes being built.

We are already releasing surplus public sector land under the current public sector land programme, and have an ambition to dispose of land with the capacity to build 100,000 homes. The language in the Bill lets us do that better and faster, getting much needed land developed quickly. We already utilise the expertise of the HCA to remediate and market surplus land, and it will continue to play an important role in speeding up development. The purpose of the clause is to eliminate needless bureaucracy and get surplus developable land to the HCA quickly.

An amendment specifying that the regulations about bodies transferring land to the HCA would have to pass through the affirmative procedure would merely slow that whole process down again and defeat the whole point of what we are attempting to do. We are cutting out a middleman, and it is important to resist various attempts to slow this process back down again. Needing a debate in both Houses every time a new set of regulations was made or when names were added to a list would have the effect, frankly, of wasting parliamentary time. There is a process in place that allows for objections to be made if concerns are sparked by any particular change.

The proposed programme is not a one-time programme but a continuing one, and new sites can be identified by departments and arm’s-length bodies. The transfer could come from an arm’s-length body that currently either does not exist or is not on the list because it has not at present identified land to transfer. We really do not want to exclude land because those names are not on the list—we want to make sure that development can happen. This amendment is at odds with the aims of the Bill, and for that reason we ask that the amendment be withdrawn and that it be accepted that these regulations should remain subject to the negative procedure.

As I say, when there are genuine concerns about a body specified in the regulations, the negative resolution procedure allows a challenge to be made and a debate to take place, in either House. The regulations can be challenged and dealt with in that way. In our view, the negative procedure is proportionate and in line with our policy aim to accelerate the pace of land disposal and to remove bureaucracy. I therefore ask that this amendment be withdrawn.

[Lord McKenzie of Luton]

My Lords, I think I am convinced. I beg leave to withdraw the amendment.

Amendment 90 withdrawn.

--- Later in debate ---

[Baroness Kramer]

My Lords, maximising the release of surplus public sector land is critical to supporting the Government’s ambitions to reduce the deficit, increase the number of houses being built and help to drive economic growth.

We have introduced Clause 22 to speed up the process of land disposal and ensure that appropriate development can happen quickly. The ability to remediate and sell surplus public sector land is critical to the supply of much needed new homes. I think this is going to address the question raised a few moments ago: our clause will bring the powers of purchasers of land from the HCA, the GLA and the MDCs into line with those presently enjoyed by purchasers of land from local authorities and other public bodies involved in regeneration and development, such as urban development corporations, when overriding easements. This now picks up the issue that I stumbled upon a few minutes ago.

The ability to override easements is often necessary to the development of a site. It is in the wider public interest that we support development that brings much needed homes and jobs. We have tabled this amendment to ensure that the power can be used as intended by the Greater London Authority. The bulk of GLA land is held and managed by GLA Land and Property. We need to ensure that it is able to use the powers as intended, which is what the amendment will do. I beg to move.

[Lord McKenzie of Luton]

My Lords, I think that I am happy with this. Do I understand that it relates just to dealing with the GLA problem and its need to operate through a taxable subsidiary?

[Lord Jenkin of Roding]

My Lords, while my noble friend is contemplating the answer to that, she wrote to me about this in her letter of 1 July. She said:

“The intention is for the HCA to dispose of its freehold interest on the open market”.

I completely understand that. She said that,

“the HCA retains a strong policy interest in what happens on its land once it is sold to market”.

I think that that picks up the point I raised earlier about the need to ensure that the land is in fact used for purposes consistent with public policy. She continued:

“Where public land can be put to better use—say in supporting the delivery of much-needed new homes—it will transfer to the HCA. The HCA will then typically seek to set the parameters for future development on the land, by obtaining planning consent with the local authority prior to sale, and selling its land with certain conditions attached”—

that is the point that I think the noble Lord, Lord McKenzie, was asking about—

“to ensure that the building carried out on its land is done so in line with public policy (say by specifying the number of affordable homes to be built)”.

That all seems extremely sensible. This is not just bringing land in and then saying that anyone can do anything they like with it. If it is public land already, the question is to get it into use for public purposes as quickly and efficiently as possible, but for purposes consistent with public policy. That seems to be quite right. Can the Minister confirm that her amendment is indeed intended to achieve that?

--- Later in debate ---

[Lord McKenzie of Luton]

I am grateful to the Minister for her explanation. I think that I have got it but I want to make absolutely sure. This amendment deals with the GLA situation but outside that, in the example being pursued by the noble Lord, Lord Jenkin, if there is a disposal to a third party by the HCA with planning permission and all the constraints presumably being in the contract, can the third party purchaser in those circumstances take the benefit of overrides that have been provided by the HCA or a local authority but not create new overrides itself? That is the particular issue that I am trying to get clarity on.

[Baroness Kramer]

Perhaps I might write to the noble Lord, Lord McKenzie, on that issue because I think that I am getting myself caught up in circles, which is not an appropriate way to give him the answers that he needs.

--- Later in debate ---

Debate on whether Clause 23 should stand part of the Bill.

[Lord McKenzie of Luton]

My Lords, there will be a subsequent debate in respect of Clause 24 so I will speak generally to both clauses and pick up any further points in the subsequent debate. Clause 23 transfers responsibility for local land charges to the Land Registry, while Clause 24 confers additional powers on the Land Registry. Neither of these propositions can be divorced from the parallel proposition for a new model of a Land Registry delivery company, which is widely believed to be a step along the way to privatisation of the service.

Just yesterday the Government pulled the plug—at least for the time being and, I am bound to say, not with good grace—by recognising that they would have to give further consideration to the complexity of their proposed new business strategy, including moving complex applications online and automating processes. There were high levels of disagreement anyway with the suggestion that an arm’s-length model would enable operations to be more efficient and effective or that such models would have the right checks and balances to protect the integrity of the registry. While reaffirming that they are moving ahead with the digital transformation, the Government have stated,

“at this time, no decision has been taken to change Land Registry’s model”.

While we should not be under the misapprehension that the threat has gone away, we should recognise that the news, unnecessarily delayed as it is, will come as some relief to the staff and to those who campaigned against the folly which privatisation would represent.

Mr John Manthorpe, a former Chief Land Registrar, has stated in a letter:

“The Land Registry is a successful and highly regarded department of government with a 150 year history. It makes no call on the exchequer and has a 97% customer satisfaction rating … It conducts its business impartially and free from any conflicts of interest. It grants and guarantees title on all transactions so providing the security of tenure and conveyancing machinery on which a stable society depends and without which the property, transfer and mortgage markets could not function”.

I could rest my case for this clause and Clause 24 not remaining part of the Bill at this point. If the Government have to hold back on their proposed plans for the Land Registry because they need to revisit the model to deliver their new business strategy, it is difficult to see how it could possibly take on responsibility for local land charges and more, largely unspecified, powers relating to that. There are some 20 million local land charges registered, with 65,000 updates every month.

There are further detailed arguments that deserve to be heard. For a start, the consultation on wider powers and local land charges was flawed. It was conducted by the Land Registry itself, which clearly had an interest in the outcome. There were concerns that it was overly focused on what would add value to the Land Registry, and that it was undertaken with at least half an eye to privatisation.

The Land Registry proposal is to take over the maintenance and searches of the register of local land charges. It argues that this is necessary because of a perceived lack of consistency and standardisation in the provision of local land charges. The World Bank ease of doing business survey marked the UK down on the ease of registering a business, including the speed of registering and transferring commercial property. This was also prayed in aid of the proposal.

However, the Law Society, in its submission to the consultation, expressed the view that in recent times local authorities and other providers have been producing search results in a timelier and more consistent manner and at a predictable cost. Indeed, the impact assessment noted that there had been annual productivity gains of 2%. The Law Society expressed the view that while there is merit in seeking to create a single local land charge and CON29 service, most practitioners would not regard it as a priority for the Land Registry to address. It says:

“Having more consistent processes for discharging charges … could markedly improve and de-risk the process”.

Dealing with searches is just part of the conveyancing process. The Law Society’s conclusion is that the research conducted by the Land Registry does not demonstrate that there is a problem that needs to be resolved.

It is suggested that the speed of service conducted by local authorities is causing a problem in the conveyancing market. This is despite a recent survey indicating that the turnaround time for 96% of searches that involve only local land charges is less than 10 days, with three-quarters being returned within five days. Searches involving local land charges and CON29 have slightly less speedy performance but, as it is proposed that the latter stay with local authorities, it does not seem that overall search turnaround times will improve.

The District Councils’ Network has expressed concerns at the proposed separation of land charges to be undertaken by Land Registry from CON29 searches, which will remain the responsibility of local authorities. It considers that this fragmentation creates a risk of inconsistency, with the potential for errors and omissions. It says that insufficient weight has been given to the local knowledge that resides with local authorities, which are still generally the originators of the data. Local authorities will still incur costs in collating and supplying data, in maintaining a database and, presumably, for indemnity insurance—when there is no income stream from search fees. It also instances that many local authorities have made recent investments in digitalisation, for which no recovery is promised by the Land Registry.

As the Local Land Charges Institute points out, the original intention of the Land Registry was to take over and maintain the database for local land charges and CON29. However, having studied the proposition for over a year, it decided to abandon the idea. Therefore, as things stand, Clause 23 would mean a fragmented service, with no credible alternative being offered. The Council of Property Search Organisations—CoPSO—offers the view that the sector is currently operating well, with healthy competition. It says that the claimed postcode lottery is illusory and that there is no real problem to fix. Moreover, it suggests that the threat to local authority jobs could result in increased waiting times for searches, with consequent detriment to the housing market.

The Local Land Charges Institute argues: that the perceived problems with the land charge function has been overstated; that such problems as there are can be resolved more simply and with less cost; that the demand for the Land Registry takeover has been overstated; and that the Land Registry has failed to demonstrate a clear understanding of the processes and risks involved in the local land charge function and is proposing a worse service. It says that the Land Registry has failed to demonstrate how it will actually provide the service and that the Land Registry has proposed a number of unsatisfactory business models over the past three years and now proposes to take over only half the service, providing less information to customers than local authorities currently do, leaving local authorities to undertake the more complex work and providing a fragmented service to customers.

The LGA expresses opposition, in particular making the point that the proposals will leave councils with the expense of adjusting systems, breaking existing contracts and paying redundancy costs. It says that over the longer term the costs to councils of compiling, checking and verifying data have not been properly accounted for in the analysis.

The opposition is glaringly obvious from the Government’s own consultation: 94% of respondents do not think that the Land Registry has considered all feasible options and 95% do not support the Land Registry taking over the local land charge function from local government. It is time to think again, as even the Government have recognised on their delivery company. It is time to remove the clause from the Bill.

[Lord Tope]

My Lords, I confess to relative ignorance on the subject of the Land Registry, so I have been trying to understand better. Naturally, I wish to support my Government, and particularly want to support my noble friend the Minister, who has to reply to this. I have a number of concerns, some of which the noble Lord, Lord McKenzie, set out very fully when making his points. Like him, I, too, have had representations from the Local Land Charges Institute and from the Law Society, which have made a number of points to which I am sure the Minister will reply.

Certain things increase my concern. First, of course, this takes functions away from local authorities and centralises them. There are two things that instinctively trigger me as a localist, and I find them difficult. I therefore need to understand better than I currently do, not just what the problem is that we are trying to fix, but what the scale of the problem is, as the Government see it, that makes it necessary to take these functions away from local authorities and centralise them. Throughout history, the experience of centralising does not necessarily automatically lead to greater efficiency, nor does it seem immediately to be in keeping with the Government’s commitment to localism.

On a similar and related point, I have seen several times the awful phrase “postcode lottery” used with reference to the current situation. I hate that phrase; if we put it rather differently, so-called postcode lotteries mean we recognise that different factors apply in different areas and that local people—local authorities, in this instance—are able to determine their priorities, their way of doing things and, for that matter, what charges they wish to set for local services. If that is called a postcode lottery then I am all in favour of it but I would prefer to call it real localism.

My next point was raised by the noble Lord, Lord McKenzie. He referred to the results of the consultation, which came out significantly against the Government’s proposals. That has been dismissed as self-interest. In a sense, that is true; it is pretty obvious that the Local Land Charges Institute has an interest. You can call it a self-interest if you like, but I have to say that the responses to most consultations come from organisations or people with what could be called a self-interest. It just so happens that that self-interest means that they usually know very much more about the subject than most of us do. The fact that they have a self-interest—or, as I would put it, a greater knowledge—certainly does not mean that they are by definition wrong or that their views should be dismissed. Certainly, the context should be recognised.

--- Later in debate ---

[Baroness Kramer]

My Lords, I shall reply first to the comment from my noble friend Lord Jenkin of Roding that the Minister did not meet stakeholders. That was during the consultation period. I think that Ministers often make the decision that they should not distort a consultation by meeting with some particular parties and not others. Meetings have subsequently been put into the diary with both Mr Lester and BIS. As I say, this was a matter of propriety during a period of consultation, as many noble Lords will recognise was necessary.

We have a problem with the local land charge system. At present, each of the 348 local authorities in England and Wales maintains its own local register, and they are kept in a variety of formats. Some are digital but do not use the same digital systems, while many are still paper-based. The fees for searching the register vary from £3 to £96. Since the rule applying here is that the local land charge service should be provided on a cost-recovery basis over a three-year period, it is quite hard to understand why there is that discrepancy and range of difference in pricing. Some of the services respond in a day or so; some take more than 20 days. That has led to the buyer of a property or someone remortgaging a property—who is, in all honesty, probably not that conscious of who their local authority happens to be—not being able to rely on an efficient service in every part of the country. It is, in a sense, a genuine postcode lottery if you are sitting in the position of the person trying to buy a property or seeking to remortgage one. I suggest that we have a serious problem there.

To give the Committee an example, Camden Council is taking 38 days to process searches. You can imagine what that is doing in a process where house prices move while people are trying to get mortgage approvals and are often in chains of buyers. It is clearly jeopardising people’s ability to buy a house. We have had other reports—

[Lord McKenzie of Luton]

I apologise; did the Minister say that it was 38 days for Camden?

[Baroness Kramer]

Yes.

[Lord McKenzie of Luton]

Was that the local land charge search or the CON29 search?

[Baroness Kramer]

My understanding is that it is the local land charge search, not the CON29 search, but we have had reports of problems of varying degrees in Scunthorpe, Erewash, Exeter and Sutton. It is not confined to one particular local authority. Users of this service have said in surveys that only 24% of local land charge search results are returned within a day and only 50% within two to five days. I thought that I had some of the numerous responses from people who use the service and thought it was an incredibly good idea to start trying to centralise it and provide some degree of consistency; if I find them later, I will quote them.

I should point out that the Land Registry’s performance for a similar range of preliminary searches and copy register and copy document services is that over 95% were returned within one day. The Land Registry, in its central form, is exceedingly efficient. It has a flat fee of £3 and most queries are dealt with instantly by online access. I now have the number that I was looking for. I am told that 63% of users were supportive of trying to rationalise and centralise this system. We are living in the 21st century and people expect to be able to access information in the most efficient way, and that supports the property market. If we want to increase the availability of housing, surely that has to be a service that we look at seriously, making sure that it is as efficient as it can be.

In this day and age, it is crucial that public services are available online. The DVLA now processes driving licence applications online, and I see no one calling for us to change that to a system in which in each local community there is a separate application for a driver’s licence through the local authority. It is time for the local land charges system to be modernised and made fit for purpose in a digital era. A single digital register held by a single provider will reduce overheads and eliminate regional variations in the speed, format and costs of the local land charges service. The solution will improve turnaround times to mere minutes and improve data accessibility for the property sector. By reducing overheads, in effect we will make sure that there is a lower fee for the customer, and the standardised process means that the fee will not change based on location.

The poll that I cited a moment ago, conducted by Ipsos MORI, showed that 63% of customers found the Land Registry proposal “appealing” or “very appealing”. Customers want to benefit from a standardised service. They want faster turnaround times, reduced running costs and lower fees. These proposals will make it quicker and easier for people to buy a property, remortgage their home and even, in many cases, start up a business.

The Land Registry has a proven track record in providing digitised information to the public. I say that to provide reassurance that this is a body capable of putting together the system that we require of it. It safeguards almost 24 million registered titles, has a customer satisfaction rate of 98% and already processes around 22 million applications electronically annually. It has extensive experience of digitising registers and a central position in the conveyancing process, as the single largest source of property information. That is why it makes it right for this body to take over the local land charges service.

History shows that this kind of step change to a modern, standardised service, with the benefits that brings to the public, simply cannot happen if the service remains split between 348 local authorities. It will require a single digital register held by a single provider to get that reduction in overheads and eliminate the endless variations in the format—never mind in the costs—of the local land charges service. We of course accept that there is a role for local knowledge; that must be maintained. Therefore, local authorities will continue to be responsible for collecting and updating all the information in the register.

Your Lordships have asked whether we are removing a valuable source of revenue for local authorities by, as it were, leaving with them an element of cost. We are in detailed discussions because we are concerned that local authorities should not bear an undue burden by providing the input that only local knowledge can provide. Local authorities would be responsible for collecting and updating the information in the register, and obviously that should not be an undue burden on them. However, if they came to us and said, “But we’re losing a source of revenue”, we would point out that the rules have made it absolutely clear that this is not meant to be a revenue-raising service; it is a cost-recovery service. Therefore, the argument that there is a loss of revenue really does not hold water, as surplus revenue is not the purpose of the current pricing system.

Some noble Lords asked about CON29 searches. I can explain that the Land Registry is examining the feasibility and developing the policy of providing CON29. However, it is important to be clear that for a property transaction, customers already go to the Land Registry for searches, so providing local land charges searches through the Land Registry portal does not add another step for them. Over time, the CON29 searches may be added to those channels but our intention is to do that in a responsible way, as an incremental phased approach. The Land Registry is well placed to bring about the benefits envisaged. For a property transaction, customers already go to the Land Registry and, as I said, it has a proven track record. While local authorities are focused on a whole range of activities, property information and serving the conveyancing market is the sole purpose of the Land Registry and its specialised expertise.

The noble Lord, Lord Jenkin, raised the question of whether this is a step towards privatisation. Noble Lords will be aware that a consultation on the ownership structure of the Land Registry was begun in January and completed in March, and the Government have provided their consultation and see no reason to change the current ownership arrangements. I want to be clear on that point. The process we are proposing here—to bring new efficiency into the Land Registry system—is part of moving into the efficiency of the 21st century by taking advantage of digital technology, which has not historically been available but which is available today for the benefit of the user. Noble Lords will be aware that to some degree a whole industry has grown up which negotiates the current search process for individuals who want to buy properties, because they currently find that process so cumbersome and complex. Surely transferring that to an online system, which the ordinary user can use with ease and clarity, is the direction in which we absolutely have to go.

Noble Lords made a number of comments about the off-payroll breach. Adequate response has been given to those comments in the various letters that have been provided. However, the sort of determination to go to a centralised and digitised Land Registry system is not the work of one individual or a particular chief executive of the Land Registry, but part of a much broader process of bringing real efficiency into government. The new world of digitisation offers us all kinds of opportunities. We have to use them when they are available and when we can carry them out effectively. Therefore this is not the whim or ambition of one individual but a consistent pattern that one finds throughout government to improve implementation, delivery and efficiency.

The noble Lord, Lord McKenzie, raised the question of potential job losses at local authorities. I should point out that on average just over two people work on this at a local level, but many of them carry out other roles and will have some continuing role in providing the input data. The consequences from a job perspective therefore cannot be ruled out absolutely but are unlikely to be dramatic in the circumstances. I do not think that anybody in this Room, under any circumstances, would wish us to preserve inefficiency to protect jobs. However, in this instance, the consequences are not likely to be significant.

I believe that I have covered most of the issues that have been raised. If I have not, I will be glad to follow up and do so in writing. This clause is an important move forward that will assist people who are attempting to purchase property, to get a mortgage and to remortgage property. That group deserves to get the best service that we can provide it with. I therefore hope that your Lordships will agree that the clause should stand part of the Bill.

[Lord McKenzie of Luton]

My Lords, I thank the Minister for her response. I am disappointed but not surprised by the position taken. I was not sure whether she was clear that there is going to be no change to the Land Registry’s model during the course of this Parliament. The press release that we had yesterday just says that no decision has been taken to change the Land Registry’s model; that means that it could be changed next month, the month after or indeed tomorrow. I wonder if she might just clarify that point.

--- Later in debate ---

[Lord McKenzie of Luton]

I am grateful for that. I think that I heard the words “during this Parliament” and I understand that that is as far as the Minister can go.

This is not about preserving inefficiency; it is about working out the best way to create efficiency. The Minister talked about services remaining split as they are at the moment. That is precisely what is going to happen under these proposals; there will be a separation of the local land charges and the CON29. We have heard that a feasibility study is going to be done. We have to address the possibility of bringing in CON29 in a responsible and incremental way. When I heard the phrase “responsible and incremental”, I immediately thought of universal credit.

The reality is that the Land Registry has looked at this for three years. Its original concept was to have both bits of the service in—was it not?—but it has decided that it does not know how to deal with CON29 and, therefore, to move ahead with the other bits without knowing or indeed caring what is going to happen to the separated bit left with local authorities. That seems to be foolhardy, at the very least.

The Minister made the point that this should not be revenue-generating. I accept the point that people involved in local land registries may have other duties—they may spend time on electoral registration, for example—but that does not mean that the loss of a fee does not have a financial consequence. If you are using only one-third of a person’s time, you cannot get rid of one-third of a person, although you can cut hours down in some circumstances, so the contribution to the overhead is going to be less. There is a potential ramification there.

With regard to timing, it would be interesting to know how aware the people who buy, sell or mortgage a house are of how much of the conveyancing time is actually taken up with the search process. Certainly the Law Society’s convention is that it is just a part of the total conveyancing process, which on average takes between six and eight weeks. The Minister quoted the amount of time that Camden council takes, and I am sure that there are areas where people are outside the norm, but the Government’s own impact assessment shows the general speed with which searches are returned.

I well understand the concern and growing anxiety of the noble Lord, Lord Jenkin, the more that he considered this matter. He raised the issue of the £1 million fine that was imposed. I do not necessarily want to dig into that except that to say that for an organisation that is looking to digitalise, modernise and so on, it does not seem to bode well that it does not have the management systems in place to avoid these catastrophes.

It is right that the previous Government looked at the prospect of privatising the Land Registry. My noble friend Lord Wills was the Minister involved at the time; I spoke to him about it, and he said that it was knocked back pretty sharply. One of the driving forces behind that idea is that, frankly, it could be a nice little earner. Who knows what that database is worth? There are suggestions of £1 billion-plus, which, in an election year, obviously would not go amiss.

The users of the service, including the Law Society, the conveyancing firms and the search firms, are not supportive of this approach. From the Government’s press release when they moved back from changing the model, we know that they recognised that the Land Registry has embarked on the complex application of online and automated processes. It is going through that journey in respect of its existing business, without adding local land charges and the interface with around 350 authorities to it.

I accept that there should be a move towards digitisation. Many local authorities have done it and many are in the process of doing it. Some have started that process and I understand from the impact assessment that, if they have to pull the plug, there will not be any recompense for the investment that they have made in trying to do it. Can the Minister give any assurance on that? The real fear in all this is that this was considered in the context of a change of model. One of the changes would have quite readily led to privatisation. I think that there are some other background papers which clearly indicate that this was the path that some in the Land Registry were moving along. It seems to me that that has coloured the assessment of much of what has gone on.

The point made about the impact assessment and the consultation being undertaken by the Land Registry or the Chief Land Registrar is exactly right. Surely, if we are going to contemplate and revisit opportunities or proposals such as this, there should be an independent assessment on which this is based. Ultimately, whether they agree with it or not, people should have confidence that no ulterior motive was driving what was going on.

As ever, the noble Lord, Lord Tope, was trying to be helpful to his Government. I had to get my mind around the Land Registry as did the noble Lord. He made reference to 15 years but I understand that the government consultation may knock that on the head and that that will not now be a cut-off point. Some of the fears that his colleagues in local government expressed are real fears. The fear that the loss of local knowledge may be dismissed as being not important is a real issue.

I am not sure that we will have a meeting of minds this afternoon. I am sure that we will have another discussion about it at a later stage. There is a substantial head of steam opposed to these proposals, as I am sure the Minister is aware. Perhaps we could hang on to the point that the Law Society, as well as others, is saying that this is not the issue that needs to be addressed. If we are worried about conveyancing issues and the time that that takes, we should look elsewhere to the process and not be looking at this. It acknowledges that processing times have speeded up and that in recent times there has been greater standardisation of response. There has been a reduction in fees and the Government’s impact assessment has recognised the productivity gains that have been made and passed on to customers. Local land charges is not the problem that is creating concerns about conveyancing.

Clause 23 agreed.

--- Later in debate ---

Debate on whether Clause 24 should stand part of the Bill.

[Lord McKenzie of Luton]

My Lords, we have had a substantive debate on the Government’s proposals for the Land Registry and local land charges being removed from the Bill. We covered much of the ground in relation to Clause 24 in that same debate. Clause 24 seeks to confer additional powers on the Land Registry. It was acknowledged in the Government’s response to the wider powers consultation that the focus was on the principles of extending the powers of the Land Registry. However, Clause 24 would appear to be more than that and if it were retained, would it not be sufficient for the Land Registry to act without any further legislative approval?

This clause substitutes for certain services,

“consultancy or advisory services about land or other property in England and Wales or elsewhere … information services about land or other property … or … services relating to documents or registers which relate to land or other property in England and Wales”.

If that were carried through, would it not be within the remit of the Land Registry to act on it without further legislative processes? I see that in the responses to the consultation, the challenge was that the consultation did not provide sufficient detail of the services that the Land Registry intends to undertake under its proposed wider powers. The Government’s response was that the part of the consultation on wider powers related to the principle of Land Registry powers being extended to enable it to provide new services. Frankly, what is in the Bill does not seem to correspond with that. What is provided for there is an expansion of the types of services that may be provided.

In any event, in the response to the delivery company consultation the Government made it clear that they consider there to be,

“benefits in creating an arm’s length service delivery company to … modernise”,

the Land Registry and,

“to support new opportunities for the business to play a wider role in the property market”.

There is clearly a linkage between the commercial model and the additional powers. However, as it is agreed that the service delivery company model needs further consideration and there is a commitment to consult again if it is taken forward, should this not apply to Clause 24 so that it can be removed from the Bill, at least for the time being, even if it has to be reinstated in due course?

Either this provision is simply widening the services that can be provided or it is dealing with the principle that is tied up with the service company delivery model which the Government have taken away to consider further. The only safe thing in those circumstances seems to be for that clause not to stand part of the Bill. If there are going to be changes to the model in due course, there will need to be further legislation in any event. If this is tied to that, it needs to be dealt with at that same time.

[Baroness Kramer]

My Lords, Clause 24 gives wider powers to the Land Registry to enable it to play a greater role in the property sector. The Government’s goal is to make the conveyancing process quicker, cheaper and easier to complete. As we have said before, the Land Registry is the single largest source of property information. It has a proven track record of digitisation of registers, 98% customer satisfaction and a record of reducing fees, with almost 22 million applications processed electronically last year. Most importantly, it sits at the heart of the conveyancing process.

At present, the Land Registry is limited in the services it can offer, not by what is in the public interest but by its statutory powers. This clause corrects that. Giving wider powers to the Land Registry will enable it to provide a range of property information services for businesses and citizens, helping to manage records, keep track of markets and identify business opportunities. The needs of the customers and stakeholders of the Land Registry are constantly changing, and allowing it to meet those changing needs must surely benefit both the property market and the overall economy.

The Land Registry’s ability to engage in new services is not a new concept. The Land Registration Act 2002 already enables it to provide consultancy and advisory services related to the registration of land. It is already using those powers to provide services such as international consultancy on land registration and a range of add-value services relating to land registration information. The new services would be provided on a cost-recovery basis, and the Land Registry would consider undertaking new services and activities only where that could bring savings, efficiencies and other benefits to the property market. This is part of the current move to make sure that we maximise the benefit of the information that is available within government entities in order to benefit residents and, in the case of the Land Registry, particularly those involved in property arrangements.

I also want to make it clear that this is not a necessary mechanism for the digitisation that we have been discussing or for providing services to taxpayers. The process that we have been describing—the core change here—is not dependent on any sort of commercial model, but we think it is rational to permit these additional powers. Given the breadth and depth of its expertise, the Government want to allow the Land Registry to broaden its activities to provide that kind of additional information as part of the infrastructure which others in the property market can then build on and innovate from. This is relatively straightforward and very much in keeping with the whole direction in which access to information, transparency and various kinds of support are now being provided by many parts of government. It recognises that the Land Registry is very much at the heart of conveyancing and central to the whole property industry, and that therefore it has the potential to benefit the sector by expanding the services that it offers, based on needs as they arise and as they change.

Therefore, there is no sinister motive behind this. As I said, it is very much in keeping with modern practice. It is very important that this clause stands part of the Bill so that we can gain the greatest benefits for the property market, for the economy and for the many members of our communities who use that market.

[Lord McKenzie of Luton]

I thank the Minister for her reply but perhaps I may just be clear. Does she consider that what is set down in Clause 24 is sufficient for the Land Registry to commence some of these services, having done its internal assessment? Obviously it is not going to embark on something which it believes will make a profit. Where does that leave the comment in the Government’s response that the Land Registry,

“would consider undertaking new services and activities only where it could bring savings, efficiencies and other benefits … An assessment would be made on market need and LR would engage with stakeholders and, where appropriate, consult on any significant initiatives”?

In a sense, is the Minister saying that these provisions are subject to that response?

[Baroness Kramer]

Is this a question about whether we are intending to change the commercial model of the Land Registry? Clearly we are not. If that is an answer to the question asked by noble Lord, Lord McKenzie, then I can give that assurance. I think that I made it clear in describing the kinds of services that the Land Registry would seek to offer that those services would be in response to market need. Obviously that requires extensive engagement with the various stakeholders and others who would use the services. It seems to me that that is the kind of partnership relationship, as one could almost call it, that there would be. The Land Registry would therefore consult on any major change precisely because its goal is to make sure that it provides the most appropriate kind of response.

The sorts of factors that would be considered before a new service was introduced would include things such as the impact on the property market, any competition issues, and capability and capacity issues. At this point in time, it is difficult to detail those proposals because we are in a dynamic environment. Therefore, this is essentially an enabling provision but, I think, an entirely appropriate one.

[Lord McKenzie of Luton]

I thank the Minister for that. I do not want to make a meal of this but perhaps I may ask for a final clarification. Are we saying that these services are distinct from any change in the Land Registry’s model—that there might be a change in the Land Registry’s model but these services would still go ahead on some basis or another—or that there would be no change to the model and these services might still be commenced?

[Baroness Kramer]

Perhaps I can be clear. The whole issue of the model, by which I assume the noble Lord means ownership, is an entirely separate question. The two are not interlinked.

[Lord McKenzie of Luton]

I take the model to be in the sense of not only the corporate structure but the separation of the office of the chief registrar and what was termed in the consultation as a delivery company.

[Baroness Kramer]

I have an assurance that they are not linked.