Land Registry

Madeleine Moon Excerpts

Thursday 30th June 2016 Commons Chamber

[Mr Lammy]

My hon. Friend makes an excellent point. In these troubled times, when confidence in this House and in major political parties is at a low ebb, it is important to recognise the institutions that the public hold dear, of which the Land Registry is certainly one. As a former Minister who had responsibility for the Land Registry, I am well aware of the valuable roles it plays.

[Mrs Madeleine Moon (Bridgend) (Lab)]

Does my right hon. Friend think that the privatisation proposal has been driven by a desire to maintain the professionalism, integrity and impartiality of the Land Registry or by a petty desire for a short-term and dangerous input of cash to the hard-pressed Treasury? Which is it?

[Mr Lammy]

I have a feeling that my hon. Friend is clear about which side of the argument she is on. This Minister is not a bad man. so we will be interested in what he has to say—and which side he will pick in the forthcoming leadership battle.

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[John Stevenson]

The Land Registry does make a profit, and it is quite rightly trying to modernise. It also continuously develops its programmes, and all conveyancers are aware of that.

Like many other practitioners, I acknowledge that the Land Registry plays a vital and central role in the property market. Practitioners greatly value and respect the services that it provides. As a legal practitioner, I see the worth of the Land Registry and its services. We should also not forget the many skilled people who work for the Land Registry, all of whom ensure that the legal profession, the owners of land and the financial institutions are well served.

As a Conservative politician, not unsurprisingly I believe in a market economy, in competition and in competitive markets. I have absolutely no issue with the privatisation of businesses or industries, as I firmly believe that, more often than not, private sector ownership leads to greater efficiency and innovation and better value for money for the taxpayer and the consumer. I do, however, believe in a strong liberal democracy, in the importance of the rule of law and in the significance of property rights in a market economy—in this case, the rights relating to the ownership of land. We must therefore tread very carefully when considering the future ownership of the Land Registry, given its central role in the property market.

The Land Registry is at the very centre of land and property rights in this country, and the integrity of the system is critical. Its importance is such that all solicitors, property owners, leaseholders, lenders and financial institutions must have complete confidence in its integrity, openness and honesty. It has to be trusted. Any doubts or concerns about its integrity, about possible conflicts of interest or about misuse of information could affect this central part of our capitalist system. We must also recognise the fact that the Land Registry is a natural monopoly, a bit like the police or other institutions that do not lend themselves to competition. Such monopolies, which are of great importance to the very fabric of our system, must be treated with great care.

[Mrs Moon]

A considerable number of my constituents work in the Land Registry in south Wales. Their concern is that they constantly have to adapt their practice on the basis of new policy guidelines from the Government. They work within an overarching public interest requirement, and they are worried that that ability to adapt will go if there is a constant need to renegotiate contracts and seek changes with a private sector company. How can we keep that integrity for my constituents if we have to factor in the profit motive of a private sector company?

[John Stevenson]

The hon. Lady raises an interesting point about the constant changes in the Land Registry. As practitioners, we have to deal with those changes as new rules are put forward by this place in relation to the Land Registry and other aspects of property transactions.

As I have said, the Land Registry is central to our property system in this country, and it is vital that it has absolute integrity and openness. It has to be trusted.

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[Mr Jenkin]

That is exactly the point. The former communist state had destroyed the old records to create a new order.

I have no objection in principle to privatisation, which has been a successful means of transforming large parts of the former public sector. Even the Labour party would have absolutely no intention of returning large parts of what is now in the private sector to the public sector.

Transforming the Land Registry into a modern, digitally-based service is crucial for making it more efficient and responsive to user needs. So far the digital transformation has been extremely slow. I have three main concerns about the present proposal. I hasten to add that I am speaking on my own behalf; this is not an agreed statement by my Committee. The Land Registry must continue to operate as an essential public service, the future owner of a privatised Land Registry must be committed to providing long-term stability, and the final deal, if there is one, must fulfil the Government’s own stated objectives for the use of open data.

In a submission to the Government’s consultation, I recommended that the quality of service provided to the public by the Land Registry must be prioritised above realising capital gains or transferring risk from the Government’s balance sheet. The primary concern must be to ensure that an accurate record of land use and ownership is maintained in public hands. The Land Registry’s core services should be protected from any real-terms price increases, and their quality must not suffer as a result of any transfer of operations to the private sector. The Land Registry is, and will remain, part of our critical national infrastructure. Its protection is crucial, and any public-private model or privatisation model must put in place safeguards to prevent the service being disrupted in the event of bankruptcy or commercial failure of any kind.

Our report in 2014 was based on evidence from leading figures in the world of data management and statistics, as well as from Ministers. Although the Committee did not look in detail at the privatisation of the Land Registry, we did look into the future use of the Government’s major datasets, of which the Land Registry is one. The final report made several recommendations for the use of Government data. In particular, we stressed the need to ensure that datasets are easy to access, easy to read and free to use.

On the specific subject of the Land Registry, the Committee concluded:

“A radical new approach is needed to the funding of Government open data. Charging for some data may occasionally be appropriate, but this should become the exception rather than the rule. A modest part of the cost to the public of statutory registrations should be earmarked for ensuring that the resultant data . . . can become open data.”

Data held by the Land Registry are one such example. If this model is adopted by the Government, they must not allow a new privatised entity to expect to make money from the selling of those data. The expectation must be that the data will be freely available.

In public policy terms, it is important to understand the value of open data to the economy as a whole. Research commissioned by the Open Data Institute found that public sector open data will provide more economic value every year, equivalent to as much as 0.5% of GDP, than data that users have to pay for. For example, we all use the Postcode Address File. That has been privatised, but what makes it of such value to us is that we can get on a website and get it free. How outrageous it would be if we had to pay for that.

Unfortunately, when the Royal Mail was sold, we transferred those data to the private sector and now big businesses have to pay to use those data. The result is that new forms of open source data will be created, which will gradually take over from the Postcode Address File. By transferring those data into the private sector as we have, we have undermined their value and created a cost to the productive sector of the economy for accessing them. In our conclusions, we stated that the sale of the Postcode Address File was the wrong decision. We concluded that such an asset should have been kept in public ownership, where it would be a national asset, free for businesses and individuals to use for the benefit of the wider economy.

If the Land Registry is privatised, the land register itself—the actual data—must stay in public ownership. It is crucial that the Government preserve for themselves a substantial degree of policy flexibility with regard to any agreement made with a privatised organisation, and if they decide that the public interest is best served by a change in data policy, they must remain free to effect this and to do so without excessive cost.

I am deeply concerned that the future owner of a privatised Land Registry must be committed to long-term stability and continuity. That depends on the character of the operator, if there is to be a private sector operator. The operator should understand that it may derive profit only from some kind of long-term yield for a long-term contract with the Government and be prepared to invest in the organisation to achieve this aim. An investor with a more venture capital-style approach, aiming to make a capital gain out of the development of the business and then on-sale, would be a completely inappropriate form of ownership.

[Mrs Moon]

Given all that the hon. Gentleman has said about the importance of the integrity of the Land Registry, why is it not appropriate to build that flexibility for entrepreneurship into the current Land Registry so that it can make the profit that is necessary for the investment and modernisation that are needed? Why do we have to take this risk?

[Mr Jenkin]

I shall come to that. It is a perfectly reasonable question.

The type of owner of the infrastructure might be like the banks automated clearing system, which is a company that is owned by the banks. It is just an operating company that the banks fund in order to provide them with a service. That is much more the kind of privatisation that I would find acceptable, rather than a company called Land Registry plc, with its own board of directors thinking about how to develop its business. It is a service and there is a function that it needs to provide.

The final proposal should include a full assessment of what has happened in other countries where such a service has been transferred to the private sector. Additionally, in any privatisation plan the Office for National Statistics should have the power to take over the collation and publication of Land Registry data, effectively getting a daily feed from all new records and publishing them free online. If the Government decide to proceed with some kind of privatisation of the operations, in two years’ time I expect to be calling the Department for Business, Innovation and Skills and UK Government Investments, which is overseeing the process, to discuss with my Committee what effect this movement has had on the publication of open data.

Finally, in answer to the hon. Member for Bridgend (Mrs Moon), I hope the Government will explore alternative means of doing that by keeping the Land Registry in the public sector. Let us face it: it is only silly Treasury rules that prevent very cheap public money from being put into this with public sector involvement, but keeping it in public ownership, in order to develop the customer-responsive and properly capitalised system that we want. My mind is open, provided the data remain in public hands. My mind is open, provided the arrangement is stable, but I would not rule out transferring the service to some mutual or some existing consortium of banks or insurance companies or even keeping it in the public sector.