You can read the full debate on the privatisation of the Land Registry here. I have copied my speech below:
May I first take the opportunity to thank the backbench business committee for enabling me to bring this very important debate before the House today.
I would also like to place on the record the that well over 100 Members of this House drawn from 8 political parties have all made clear their opposition to the privatisation of the Land Registry by supporting this motion, signing the letter that I sent to the Business Secretary on 2nd June or by signing Early Day Motion 160.
I hope that the Government takes note of the strength of opposition to this proposal before it is too late.
Mr Speaker, it is with regret that I must bring this debate today so soon after the Government last attempted to privatise the Land Registry in 2014.
As a former Minister with responsibility for the Land Registry I am well aware of the valuable role that it plays, the expertise and diligence of its staff, and most of all of the damage that would be done if it was to be privatised.
According to the Government’s answer to my written questions tabled earlier this month, “no decision has been taken on the future of the Land Registry”. I fully expect that line to be trotted out again later.
This may well be the official line. Yet we know from previous experience that this Government are itching to privatise it. Unlike the 2014 consultation, this time around the status quo is not even offered as an option.
The wording of the consultation document is very much focussed on “how” and not “if” Land Registry operations should be moved to the private sector.
We know that the Government have commissioned bankers at Rothschild to size it up. We also know that the potential buyers are linked to offshore tax havens.
So Mr Speaker, I am here today, alongside colleagues from across this House to make our opposition known and to call on the Government to think again.
Mr Speaker, the recording of land and property ownership is integral to the functioning of our economy and has been carried out with integrity and impartiality by the Land Registry since 1862.
Indeed, the Land Registry’s reputation as being wholly independent from the influence and pressures of the market is crucial to its work.
The current consultation exercise tries to preserve this necessary independence by attempting to create an artificial distinction between “Land Register ownership” and a new company which “delivers Land Registry services”.
This is totally meaningless in practice. Whilst the Government claims it will retain ‘ownership’ of the Land Register, a private company would be free to grant title and make changes to the register as transactions occur.
The consultation document talks of putting “the right protections in place” to ensure that the Land Registry would continue to deliver an impartial service to customers.
However, there is no detail about what these protections and safeguards are or might be.
In the words of John Manthorpe, former Land Registrar, “at the heart of this is the nonsense that a private company should have the power to decide the legal land and property title rights for others”.
The Department for Business Innovation and Skills is yet to publish the responses to this latest consultation, but I have taken the time to read through the responses to the January 2014 consultation.
And I quote Clifford Chance LLP – certainly no stranger to the profit motive or enemy of the private sector – who said that privatisation would create:
“An inherent conflict between a private sector company, whose main purpose is to maximise shareholders’ profits, and the need of consumers for a low cost, high quality and risk free service”.
Mr Speaker, there is no doubt that a private company would seek a profit from what would be a compulsory monopoly business by driving up the fees charged to users.
A sale price of around £1 billion has been mooted in the press. A private company would therefore look to recoup this investment through the fees that it charges, and then turn a profit for its shareholders.
The argument we often hear in favour of privatisation is that competition will drive prices down.
But this completely disregards the fact that the Land Registry is a unique asset and is one of a kind. Users are compelled to pay the fees during any transaction involving land or property and there is only one Land Registry. So it is a compulsory monopoly.
What would we have if this public monopoly became a private monopoly? We would have profiteering by ripping off the public with inflated fees, pure and simple.
The Minister refused to answer my written question of 6 June about what steps will be taken to ensure that Land Registry service fees do not increase in the event of privatisation.
So we are left to assume that the “protections” and safeguards that the Secretary State mentions in the foreword to the consultation document do not include any protection from vastly inflated service fees.
So, in time, whatever sum the Government might secure from a sale today will ultimately paid for by the people and businesses who use and depend on the Registry’s services tomorrow.
We therefore reach the crux of the issue Mr Speaker.
The Government are looking to sell off the family silver to turn a short-term profit to try and make their sums add up. As the most recent Budget showed, the Government’s plan to close the deficit is dead in the water, so now they are looking around for assets to cash in on.
This privatisation is a purely political exercise, with absolutely no regard for what is right for the Land Registry or the people of this country.
The short-term profit derived from any sale will be dwarfed by the increased costs that are ultimately paid by all of us in the form of increased fees, and it will also be dwarfed by the lost revenue to the public purse in the medium to long-term.
There is no economic rationale for the privatisation. If the Land Registry were making a loss and being subsidised by the taxpayer I could understand the Government’s enthusiasm for privatisation, but it has made a surplus in 19 of the last 20 years and returned over £100 million to the Treasury last year alone.
The Land Registry pays rich dividends to the public purse and there is absolutely no reason why it should pay dividends only to wealthy investors and shareholders in the future.
HM Land Registry customer satisfaction is currently running at 96% - this is far from a basket case of public sector inefficiency, but actually a shining example of a successful public service being run efficiently and effectively.
So I must state in the clearest possible terms that privatising the Land Registry would be daylight robbery and a national scandal. Sadly Mr Speaker, we know that the Government has previous – just look at what they did with Royal Mail.
Mr Speaker, I would like to briefly turn to the conclusions of earlier studies, particularly the Government’s Quinquennial Review, which took place in 2001 and found that privatisation of the Land Registry “should be firmly rejected” and would be “an act of considerable folly”.
We can see from the responses to the consultation on proposals of transfer the Land Registry into a Service Delivery Company in 2014 that proposed privatisation was decisively rejected by respondents:
“91% of respondents did not agree that creating a more delivery-focused organisation at arms-length from Government would enable the Land Registry to carry out its operations more efficiently and effectively” and
“89% would not be comfortable with non-civil servants processing land registration information”
So despite the overwhelming majority of respondents making it clear that the Land Registry must remain publicly-owned the Government are back again – disregarding the clear views expressed 2 years by those who use and depend on the Land Registry’s services – because the response wasn’t what the Government wanted to hear.
I must raise a further point of vital significance and that is the impact that a privatised Land Registry would have on transparency in our property market.
The Panama Papers leak earlier this year brought to light the industrial use of tax-haven shell companies by tax evaders, oligarchs, corrupt crooks, drugs traffickers and arms dealers looking to conceal their wealth. More than half of the 214,000 companies whose details were leaked were incorporated in the British Virgin Islands, and many channel their money into the UK property market.
100,000 properties, worth £170 billion, have been registered by shady and opaque overseas entities in the UK to hide their true owners. Meanwhile, the Prime Minister and Members of his Government have consistently spoke of a crackdown on offshore tax evasion and dirty money.
Indeed, last year, the Prime Minister has himself declared that:
“There is no place for dirty money in Britain… London is not a place to stash your dirty cash”.
Members of this House who read The Guardian will have noted with interest the Prime Minister’s article of Wednesday 11 May, in which he said:
“We know that some high value-properties, especially in London, are being bought by people overseas through anonymous shell companies, using plundered or laundered cash.”
Again, the Department for Business Innovation and Skills itself acknowledged in a consultation document published in April of this year that:
“Property can provide a convenient vehicle for hiding the proceeds of crime”, and that
London property in particular “presents an opportunity for criminals to launder considerable sums of money”.
Perhaps the team who wrote that consultation document could let the Minister know!
I listened with interest to the Queen’s Speech this year, which promised that:
“Legislation will be introduced to tackle corruption, money laundering and tax evasion.”
Mr Speaker, I say this is in the strongest possible terms, and I say it as a warning to this Government.
We are faced with a severe housing crisis and institutional tax avoidance on a huge scale. We need serious steps that first of all make it harder to shady offshore entities to buy up property in this country, and second of all we need to make it harder for these opaque shell companies to shield themselves from scrutiny and investigation.
Privatising the Land Registry would achieve the complete opposite.
Surely, the most basic common sense tells us that the first step in any crackdown on tax evasion, money laundering and corruption would be to ensure that the data about who owns what is public, not privately-held information.
The Minister for the Cabinet Office, the Right Honourable Member for West Suffolk as recently as last month told the Open Government Partnership in South Africa that:
“The UK is a leader on transparency…and increasing openness and tackling corruption are 2 sides of the same coin”.
A public Land Registry could open up its data to support efforts to tackle this endemic corruption and abuse of our property market.
Currently, the average fee for the searching and provision of Land Registry data is £3. Journalists and campaigners have made use of this function to lay bare the true scale of offshore ownership of UK property – much of it derived from shell companies set up to avoid tax or to launder dirty money.
A private organisation would have no obligation to open up its data, and would be able to charge whatever it liked for providing such data. Crucially, a private company would not necessarily be subject to the Freedom of Information Act so would have no duty to provide such data when asked.
Confidence in land and property in our society depends on a land registration system that is administered with integrity, neutrality and absolutely no conflict of interest.
It is a nonsense that a private company should be given an adjudicatory role on the land rights of citizens, other companies and government.
It is a nonsense that a publicly-owned Land Register that is performing well and returning healthy dividends to the public purse should be turned over to a private owner.
It is a nonsense that this is being forced through by a Government apparently committed to tackling offshore tax evasion and corruption in this country.
This privatisation is not only woefully misguided but it is plain wrong and should be abandoned before the public interest is abandoned in favour of a short-term profit.