Land Registry privatisation falters in changing political environment
It was always likely there would be some fundamental changes after the EU referendum vote, although most of us were not anticipating them to be as far-reaching as they have been. With the resignation of David Cameron and the new PM, Theresa May, taking over we have the political equivalent of the phrase ‘a new broom sweeps clean’ and while Cameron’s legacy will not be completely swept away, there are without doubt some significant differences between the Conservative Government led by May and that which has gone before.
We perhaps should have realised what was to come when May so quickly jettisoned George Osborne as Chancellor from her Cabinet – it was a signal that the economic approach which we had witnessed over the past six years was (at the very least) going to be tinkered with, if not wholly reassembled.
The recent announcement that Phillip Hammond’s first Autumn Statement as Chancellor will take place on November 23rd provides us with a clear date on when we might hear just how different the approach will be. Even before Osborne had left office, the decision around running a budgetary surplus by the end of this Parliament had been changed; Hammond was quick to reiterate that the Government will no longer be attempting to achieve this and stated that he plans to ‘reset’ economic policy.
What this actually might mean in practice is very difficult to ascertain however when you make such pronouncements the anticipation is there may be some sizeable shifts made. Indeed, from a political sense this might be seen as an absolute necessity given that May, Hammond and the rest of her Cabinet will no doubt be wanting to distinguish this Conservative Government from the one that campaigned for ‘Remain’ and ultimately lost the argument. Nobody wants to be associated with the losers.
So, what we might see are a number of sharp moves and u-turns on policies which had once seemed set in stone. In our own sector we appear to have already seen one of these in terms of the proposed privatisation of the Land Registry. Under Osborne this appeared to be a central plan of his attempt to raise £5 billion from State asset sales although (publicly at least) it was said that such a decision was not based on the money it would raise.
Fast-forward to now and it would appear that privatisation of the Land Registry if not scrapped completely, has certainly been delayed. The privatisation was due to be part of the Neighbourhood Planning Bill but in its current guise it is nowhere to be seen. Officially we are being told that it’s been ‘delayed’ while Government ministers look more closely at the feedback received on the consultation – which, one would have thought, should have been the case anyway but this is politics after all where the cart is often put in front of the horse.
That said, we have to welcome this decision. The CA’s own response on the consultation echoed the views of the vast majority of our members who are not in favour of privatisation. The reasons for us not being in favour are many and varied – we certainly do not believe it would be in the best interests of clients, the conveyancing profession or the Land Registry itself. The Government did argue that such a move would maximise the capital return whilst maintaining high levels of quality and service, and reducing the burden of control – we politely disagree.
Our own view was that such ambitions could be achieved without privatisation suggesting a potential increase in fees, plus a repeal of the halving of fees for electronic registrations which would immediately increase revenue. Our view was that a Land Registration Tax would do the job of securing the revenue gain over the long-term and would exceed the capital return the Government was seeking to achieve by selling off the Land Registry. We also voiced concerns about how the new owner(s) of Land Registry would be held to account on service levels, whether its service range would be diminished in order to focus on profitability and what might happen to the delivery of innovation on its core Land Registration activities.
Judging by the public utterances of many other institutions, organisations and bodies, there was a widespread consensus that Land Registry privatisation was not merited. One would hope that this delay is based on the soundings already taken, and will result in any proposal being scrapped. It would certainly signal a move away from the policies of the previous Government and I’m sure would be widely welcomed across the entire industry.