Land Registry

Siân C. James Excerpts

Tuesday 25th February 2014 Westminster Hall

[Mrs Siân C. James (Swansea East) (Lab)]

I am pleased to have secured this important debate and thank the Minister for attending. I will declare an interest at the top and state that the Land Registry has its largest facility in the UK in my constituency of Swansea East. That provides a substantial number of jobs and plays an important role in the socio-economic life of Swansea East and the surrounding areas.

On 23 January, the Minister announced plans to launch a consultation on ending the Land Registry’s status as a trading fund. The consultation exercise proposed two things: first, that Her Majesty’s Land Registry be separated into an office of the chief land registrar and a service delivery arm; and secondly that the service delivery arm be transferred out of the civil service and become a company, either a Government-owned company—a GovCo—or a private or quasi-private company.

Currently, the Land Registry, as a trading fund, is entirely self-funding and therefore no drain on the Government purse. Furthermore, year on year the service makes a surplus, which is passed on to the public by way of reduced costs for usage of the service and by way of providing the Treasury with significant income.

The Public and Commercial Services Union suggests, and I agree, that only by keeping the Land Registry’s trading fund status can the service maintain its necessary independence, impartiality and accountability. I also believe that the status of the organisation as it stands offers best value in providing a land registration service to the public. Given the success of the current service, not to include in the consultation a proposal to retain the current trading fund status seems ludicrous. It is certainly not a good business move and shows a distinct lack of forward thinking by the Land Registry executives.

Let me give some background. The Land Registry has been a non-ministerial Department since 1862. It was established as an Executive agency of the Lord Chancellor in July 1990 and as a trading fund in April 1993. The main aims and functions of Her Majesty’s Land Registry are set out in the framework document of 2008. As with other non-ministerial Departments, the Land Registry’s functions have always been entirely statutory. It has no prerogative powers. The Land Registry’s main statutory functions are to keep a register of title to freehold and leasehold land throughout England and Wales, and to provide the statutory service of registering, on a daily basis, the many thousands of new titles and dealings with land. That includes registering mortgages, changes of ownership and many other legal interests.

There are many challenges for the future. I repeat that the Land Registry’s managerial dilemma appears to be what sort of company the Land Registry should become—a GovCo or a private enterprise—but where is the evidence that changing from a trading fund to any sort of company would meet the Department’s objectives? None has been provided. The current system is tried, tested, evaluated and proven; and as the old adage goes, if it ain’t broke, don’t fix it.

[Mr Henry Bellingham (North West Norfolk) (Con)]

I have been approached by a number of companies in my constituency, including Norfolk Information Ltd, trading as the Property Search Group, Index Property Information and AW Searches, which is also trading as the Property Search Group. They all say that the changes being proposed are important and that a much longer consultation period is needed, particularly when we are talking about small and medium-sized enterprises, many of which are expanding. As the Minister correctly keeps reminding us, SMEs are the lifeblood of our economy.

[Mrs James]

I thank the hon. Gentleman for that intervention. I will come to the importance of SMEs, the role that they have in the process and how we must protect their interests.

[Mr Peter Hain (Neath) (Lab)]

I congratulate my hon. Friend on securing the debate and on the eloquence with which she is advancing her case. Is she aware that the proposal has cast a big shadow of uncertainty and job insecurity over the staff of the organisation, some of whom work in my constituency, which is nearby, and that when Tesco recently advertised for staff to open a local store in nearby Briton Ferry, 15 posts attracted 600 applicants? These are communities of very high unemployment, and job insecurity is therefore a big problem in the area.

[Mrs James]

It is. I thank my right hon. Friend for that intervention. The Land Registry jobs are quality, well paid and well respected posts, and it is very important that we retain them in a mixed economy and give job opportunities and a way forward to people from all sorts of backgrounds. I am very loth to lose one job, of any type or description, from my constituency when, as he has just pointed out, they are all very important.

Have the Government failed to notice that the Land Registry has a customer satisfaction rating of 98%—a rating that many large-scale, international and well known organisations would love to have—that it operates at no cost to the taxpayer and that it made £98.8 million last year for the Treasury? That was used to reduce fees and to invest back into our everyday lives. Why is the Minister not standing up and congratulating that organisation on its effectiveness rather than swinging the sword of Damocles over its head?

The service users—every person in the UK who owns property—need a reliable, low-cost and secure land registration service that also guards against the ever-increasing crime of property fraud. Nothing in the current proposal provides any evidence that moving to a commercial model will improve the existing service, so I ask again: why mend what is not broken? The talk is rhetorical.

[Alison McGovern (Wirral South) (Lab)]

My hon. Friend is, as has been said, making an excellent speech. On behalf of my constituents who work in the Birkenhead office, does she agree that her point—if it isn’t broke, why are we fixing it?—is apposite, and that, at a time of high levels of insecurity, especially in parts of the country such as the north-west, the proposal adds insult to injury for people such as my constituents who have worked incredibly hard for the satisfaction scores she mentions?

--- Later in debate ---

[Mrs James]

I thank my hon. Friend for that intervention. Yes, the proposal beggars belief and causes me concern. It causes me even greater concern when I consider that that is how hard work and loyalty are repaid. We hear much about the training of staff and the investment in staff and training, but now we are considering losing an excellently trained and efficient work force, and at what cost? That is of great concern. It is of even greater concern that we could even think about moving these people out of a job that is doing such great and good things for us as a society.

No comparisons have been made to show how a company would achieve more than the organisation does with the current trading fund status. No information is being offered as to how the supposed benefits of change, said to be agility, alignment and capability, will be achieved or even what those mean. The Government claim that a change in status from a trading fund would allow

“greater flexibilities to operate around pay, recruitment and possibly provide other services”.

I suggest that there is ample scope in the current model to accommodate all of those.

The Minister has declined to provide vital information to Parliament, as demonstrated in his responses to written parliamentary questions on 13 February on the Land Registry’s business strategy and new plans for service delivery. I crave your patience now, Mr Walker, because I would like to quote directly two of the responses. The first states:

“The way in which Land Registry’s services are delivered will likely change as the business pursues a digital, efficiency and modernisation agenda through its Business Strategy. This will continue irrespective of the outcome of the consultation—including if the status quo is maintained.”

He continues on the theme of service delivery, stating: “The target operating model”, which is the Land Registry service delivery plan,

“includes initial operational planning based on the number of LR business delivery assumptions. The consultation reflects a broader and different range of issues, as it considers and seeks views on a range of Land Registry commercial models. Some parts of the TOM will be affected by the consultation’s outcome. Therefore, it would be misleading to provide further details.”—[Official Report, 13 February 2014; Vol. 575, c. 773-774W.]

The Minister cannot have it both ways. If, as he claims, the proposed changes to service delivery will continue irrespective of the outcome of the consultation, he can hardly refuse to reveal those changes on the basis that they would be misleading.

The PCS has provided me with its formal consultation response, which demonstrates that part of the rationale for moving from a trading fund to a company is tied to “speeding up” new methods of service delivery. That new service delivery, which is part of the Government’s digital by default agenda, appears to be a plan to remove the vast majority of the service provision of land registration from the Land Registry and move it to the customers—conveyancers and solicitors. Those solicitors and conveyancers will have to self-serve and they, not the Land Registry, will have to register legal interests in dealing with land on behalf of the public. If that is what is planned, where is the evidence that solicitors and conveyancers have been consulted?

The Government purport to be a friend of small businesses, but what evidence is there that small and medium-sized high street firms can make those changes and become self-servers in land registration for the public without incurring massive costs in IT equipment and increased staffing? If the Government put an end to the current low-cost, efficient public service of land registration and make solicitors and conveyancers undertake that work, how will that change be reflected in the prices paid by the public? How will such momentous changes fit in with the aim of making the system less vulnerable to increasing property fraud? We need answers to those questions.

The Minister for the Cabinet Office and Paymaster General once accused the previous Labour Government of losing control of IT procurement and locking out small, innovative and efficient IT firms from supplying services to Government. The current Government claim they have changed all that and that they support procurement from SMEs in the form of the Government Digital Service. Why, therefore, has the Land Registry board, which includes non-executive directors from the shareholder executive—part of the Department for Business, Innovation and Skills—said that it wants the “unfettered” agility to avoid the Government’s alleged preference for using SMEs for procurement? How is that consistent with being a friend of small businesses?

I said at the beginning of the debate that land registration involves the granting of title to land and the guarantee of legal interests that it registers on a daily basis. Those are fundamental to every home owner in England and Wales and an essential part of the UK economy, and there is much potential to expand. The Land Registry’s reputation is its greatest asset. As a public service, the trust that has always been placed in it assures the public that it is independent and has authentic credentials of honesty. It is entirely focused on its service to users and not distracted by profits, outside interests or political interference. Given that it provides the state guarantee of title, it must surely remain entirely free from commercial influence.

The case against changing the Land Registry into a company, whether a GovCo or a privately financed company, is that doing so would create a body with unclear commercial status, which would lose the necessary independence from commercial influence. The proposed funding changes might easily negate the current controls—statutory and Treasury—on surpluses, which serve as checks and balances on trading funds and control what surpluses can be retained. Those all feed into the argument that there are disadvantages to shifting the delivery of land registration to a commercial profit model.

In conclusion, I emphasise that plans to make the Land Registry a commercial enterprise are unclear. We are not yet sure whether such an enterprise would be fit for purpose, because we do not know what the aims are. The proposal is uncosted, so we do not know whether any savings would result. It is untested, so we do not know whether it would work. We know, however, that the current Land Registry trading fund model is self-funding, profitable, reliable and trusted, tested, secure and in a good position for development. Once again, if it ain’t broke, don’t fix it.