Land Registry

Richard Drax Excerpts

Thursday 30th June 2016 Commons Chamber

[Richard Drax (South Dorset) (Con)]

It is a pleasure to speak in this debate and to follow the hon. Member for City of Durham (Dr Blackman-Woods). I thank the Backbench Business Committee and the right hon. Member for Tottenham (Mr Lammy) for securing this debate, which I have co-sponsored. My name would not usually appear alongside the others on the list, which shows that this is very much a cross-party debate.

I feel sorry for the Under-Secretary of State for Life Sciences, my hon. Friend the Member for Mid Norfolk (George Freeman). I thought that he would be somewhere else at midday, seeking help from colleagues to go for the top job, but he is here instead, listening to us talk about the Land Registry. It is a pleasure to see him in his place.

I thank Andy Woodgate, our union representative in Weymouth, which is in my constituency. The Weymouth office is one of 14 in the country. That number has come down from 22 over the past 10 years, due to efficiencies and reorganisations, including digitisation and computerisation, which many hon. Members have mentioned. Weymouth has certainly gone down that road: it has made huge advances and is meeting the technical challenges in the computer age. In fact, it has been described as a “beacon” of the civil service. It is ironic that a beacon of the civil service should be proposed for privatisation, but there we go.

The office occupies one floor of a building that once held 600 members of staff over three floors. There are now 200 members of staff working on one floor, yet their workload is increasing, not decreasing. It is one of the biggest employers in my constituency and I am proud to represent those 200 members of staff. I have spoken to them and listened to their concerns. I am acting, as we all should be, without fear or favour. Having listened to their views, I concur with and share their concerns about the Government’s proposal to privatise. Given everything that is going on in the country, I hope that the issue can be shovelled aside and—dare I say it?—that we can get on with the bigger issues facing the country at this very exciting time.

An Englishman’s home is his castle. The very territory that we live on is the biggest investment that any of us makes. This sell-off would undermine that absolute, fundamental basis of security.

The proposal and consultation fail to register the fact that the Land Registry is quasi-judicial. The integrity of the organisation’s database is paramount. Its quasi-judicial nature is one very good reason why it should not be sold off, and it is on that basis that all other activities occur. That is why it should be allowed to continue its excellent work. Land Registry data are fully accessible to Ministers and the public, with all the checks and balances required. It is the largest database in western Europe. It underpins the housing and property market, and it is a cornerstone of our economy. A sell-off could destabilise the housing market for a short-term return—there is no point in doing that.

The Land Registry is self-financing, returning approximately £100 million to the Treasury, although that was never intended because it is a non-profit-making organisation. Privatisation would inevitably introduce a profit-seeking motive, which might lead any new owner to take short cuts to reduce costs and to maintain the database less well, thereby leaving its integrity at risk. Once those data are corrupted, the situation would be irretrievable.

The Land Registry is a public monopoly. As every speaker has asked, why should it now become a private monopoly? That just does not make sense. Hedge funds and overseas buyers are not interested in the greater good or the stability of the country—that is the risk. They want to make a return. I have nothing against privatisation per se—I run a business myself, and if we did not make a profit, we could not reinvest in the business—but this business should not be put under that sort of speculation. Selling to a foreign company might well be against the national interest.

Interestingly, only the Treasury thinks that this is a good idea; no one has even asked for it. Yet the consultation is written in such a way that submissions must choose between alternative sale models—in other words, the status quo is not represented. Nowhere is it suggested that the whole idea may be wrong. As we have heard, of the 30,000 responses to the consultation, sampling shows that about 95% of them are against the proposal.

At present, Land Registry mistakes or errors that result in owners suffering a loss are underwritten or insured by the Government through a state guarantee fund. Big mistakes could cost millions in compensation—in effect, the figure is unlimited. What new company would be willing to underwrite that risk? That would be factored into the sale price, thereby lowering it.

The Land Registry has been valued at just over £1 billion, which is only 10 times the current revenue it produces. That is not enough. Once the indemnities and the safeguards are factored in, would a private buyer spend that sort of money anyway? I suggest not; I think they would ask for a lower price because of all the indemnities that would have to be in place.

The proposal also makes a false distinction between a land register and the Land Registry. The register is the database of 20 million-plus titles, to be kept in public ownership according to consultation document. The registry is the operational arm that creates and maintains the database, which would be sold off. There is no suggestion as to how that separation could be achieved or how it could make money.

Land Registry fees are kept reasonable and are constantly reviewed. If new owners must make a profit, they will inevitably rise, as will conveyancing costs. There is very little slack in the system, given that the Land Registry has already been pared down over the past 10 years from 10,000 to 4,000 employees.

The employees that I have met are extremely skilled and knowledgeable, and it takes at least two years to train them in conveyancing law, ordnance survey maps, digital learning and all the rest. The situation is complex, because the decisions they make are quasi-judicial decisions at a basic level, in that once ownership is registered it is guaranteed.

Interestingly, I understand that the Land Registry is going to employ 200 more staff, which suggests that there is more, rather than less, need for the organisation. A private employer is likely to look at cutting costs, so there is a risk that staff, who would be most vulnerable—they are certainly the most expensive part of any business—could be laid off at a time when more are needed.

The Law Society—a highly respected organisation with no vested interests—has opposed the proposed sell-off in a submission. So too does the Competition and Markets Authority, which says that a sell-off would introduce a profit motive that would affect the Land Registry’s ability to provide a good service at a low price.

The UK Land Registry is world-renowned and respected. It consults on establishing land registries in developing nations and abroad through its international arm. We must be most careful not to bring it into disrepute. That is particularly pertinent now, when the UK is taking a leading role in tackling corruption and money laundering. Offshore investment in UK properties must be very carefully monitored. Currently, we have free public access to freely available information in the Land Registry in cases of investigation. If it were privately owned, would that be the case? I doubt it. Interestingly, some tenders have reportedly already come in from interests in offshore tax havens—a subject that is particularly volatile in this House—and I do not think that they would be apt owners of an organisation such as the Land Registry.

Many excellent points have been made by other speakers. I will conclude at this stage, because others wish to speak. I urge the Minister, with all that is happening to this great country—with the wonderful opportunities that lie ahead and the far bigger fish that we will have to fry—to ensure that this little tiny fish is left alone to swim in the sea for years to come, as it has done successfully.