HC Deb 11 May 1936 vol 312 cc148-63

Order for Second Reading read.

9.51 p.m.

The ATTORNEY-GENERAL (Sir Donald Somervell)

I beg to move, "That the Bill be now read a Second time."

The Bill carries out, in effect, the recommendations of two Committees, one the Land Transfer Committee and the other the Dormant Fund Committee, which dealt with certain insurance funds of the Land Registry. I will first deal with the recommendation of the Land Registry Committee. It is rather complicated, but I will be as precise as I can in explaining the nature of the Bill to the House. Under the Land Registry Act, as most hon. Members will know, the registration of the title to land in London is compulsory, and voluntary throughout the rest of the country. Section 120 of the Act of 1925 provided that its provisions, although they might be extended at any time to a locality at the request of a local authority, should not be extended by order of this House compulsorily to any area until after an interval of 10 years. Then it was provided that one Order could be made extending it to one county within a period of 11 years from the date of the Act. Actually Hastings and Eastbourne have adopted the compulsory system at their own request, and as the end of the 10 years approached the Land Registry Committee was appointed to consider whether there should be a compulsory extention to any, and, if so, what areas. The Committee were also asked to consider whether they recommended any Amendments of the machinery laid down in Section 122 of the Act. The Committee unanimously, without hesitation, recommended that there should be a compulsory extension to Middlesex.

That is the subject-matter of the Draft Order which appears on the Order Paper to-day, and which I shall move later, and it may be for the convenience of the House if I refer to it to that extent now. The fact is that in Middlesex already some two-thirds of the land is already registered under the voluntary provisions of the Land Registry Act, and it is on that and other grounds the most suitable county for the extension of the system. The Committee also recommend a small Amendment of the machinery, which will be found in Clause 1 of the Bill. Under the 1925 Act, it was provided that an Order such as that now before the House must be approved within 18 months of the time when the original notices were given. The repeal of that is proposed for this reason: Although things have gone very smoothly in the case of Middlesex, you might get a case where the making of maps and the whole of the inquiries took a considerable time, though it is hoped that it would not exceed 18 months. Under the Act of 1925, apart from the Amendment proposed, if the time occupied did exceed 18 months, you would have to start again.

Clause 2 deals with the Middlesex Deeds Registry. That Registry was set up originally in 1708 for the registration of deeds. It is not a system that has worked very well, and has been criticised from time to time. It will cease to be a Registry when the land registration system gets going, and Clause 2 is to provide for what is to happen to it once the land registration system starts. It will continue to exist as a Registry of past deeds. There is a period of two years during which deeds already executed can be registered, and there is a provision under which official search will be conducted by officials of the Land Registry. The House will realise that this is rather a complicated matter but, broadly speaking, the Clause provides for a change-over from the existing system of voluntary registration in the Deeds Registry to compulsory registry of title in the Land Registry.

I come now to the rest of the provisions arising out of the Committee's recommendations. There is the question of dormant funds, and the position of the Insurance Fund which were set up under the Act of 1897 to meet, in the first instance, claims which might be made by those who had claims against the Land Registry on the ground that the Land Registry had made a mistake in registering someone as the owner of land. In the case of most of the claims that could be made the Consolidated Fund stood behind the Insurance Fund, and if the claims arising exceeded the Insurance Fund the excess was borne by the Consolidated Fund. In these circumstances it may be asked why have an Insurance Fund at all? The Committee considered that point and came to the conclusion that for administrative reasons and possibly also for psychological reasons it was useful to keep such a Fund in existence, but they recommended that its amount should be fixed at £100,000, and there is machinery in the Bill for seeing that it should remain at or about that sum.

At present the assets stand at £430,000. Therefore under the Bill the excess over the £100,000 will go to the Treasury for the purpose of debt redemption. The claims against this fund in the past have been very small, something in the nature of £1,100. There may be one claim still outstanding, but not for a substantial amount. The House will, however, appreciate that the possible liabilities of the fund are very large. For instance, if a mistake was made in the case of a valuable property the fund might be called upon to pay a very large sum. Therefore, although the claims in the past have been small, it would be wrong to say that £400,000 was necessarily a figure beyond any claim that might be made on the fund.


Will the Attorney-General make clear what he means when he says that the surplus is to be used for debt redemption? Does he mean redemption of the cost of buildings, or is it to be transferred to the Consolidated Fund?


It will be transferred generally to the Consolidated Fund, which has a, liability in respect of claims, and go generally to the redemption of debt. I think with that explanation I may go through the Clauses. Clause 3 deals with a small subsidiary matter. Section 75 of the Land Registry Act, 1925, dealt with the special position of a person who obtained what is called a squatter's title. Under that Act a person in that position was for some reason restricted in the compensation he could get to the amount obtainable from the Insurance Fund. He did not have the advantage of the Consolidated Fund being behind the Insurance Fund if the Insurance Fund was insufficient. That person who has a title will in future be placed in the position that if there is not enough money in the fund to pay his claim the Consolidated Fund will pay. It was not clear in the Act of 1925 whether he had, as other claimants had, a right to go to the court, if aggrieved. That point has been made clear. If he is dissatisfied with any compensation awarded by the registrar he can go to the court.

Clause 4 provides that the assets of the Insurance Fund, except assets to the value of £100,000, shall be applied towards the redemption of the National Debt. Clause 5 sets up a provision for standardising the value of assets to round about £100,000, and provides that the excess shall go to the Treasury. Under Sub-section (2) the liability of the Consolidated Fund to meet any claim which exceeds the amount in the Insurance Fund, is laid down, and there is the necessary machinery for keeping it up to the standard. The Consolidated Fund will have a slightly wider liability than before, because it has to meet any claims which may be in excess of the Insurance Fund, in respect of squatter's rights.


Will the Attorney-General explain why in Subsection (1) any surplus should go to the Exchequer and not to the Consolidated Fund?


The reason is that it is not contemplated that there will be much surplus. The present surplus of £300,000 will go to the redemption of debt. There is machinery for seeing that the fees should not be such that there should be a surplus. Then Clause 6 corrects what, I think, is obviously a small slip in the drafting of the 1925 Act. Section 85 of that Act, which provides for the indemnities payable, did not cover the whole of the liabilities of the fund. Clause 7 deals with the question of the fees and re-enacts in rather clearer words than were in the Act of 1925 the principle upon which the Land Registry fees are settled, namely, that the fees should cover the cost of the Land Registry, the salaries and so on which fall upon it, give the necessary sum to produce the Insurance Fund to meet any claims should they arise, and cover small extra administrative expenses. The principle is embodied in the Act of 1925, but the words here make the position a little clearer. Clause 8 merely deals with the determination of values, and Clause 9 with the short title, construction, citation and repeal. I think I have substantially covered all the ground, but if any hon. Member has any question to ask I hope with the permission of the House to be allowed to deal with it.

10.6 p.m.


I do not think there is anything very controversial in this Bill, but perhaps it is unfortunate that the law should not provide for compulsory registration of land without the necessity for local authorities having to make orders from time to time. But there it is. The law does provide for the making of these orders and at any rate there is still the protection afforded by the six months provision as to notice. There are just two points I should like to raise. I should like to know in the first place, whether the Attorney-General could assist me in a matter that arises under Section 75 of the 1925 Act. Under that Clause compensation is payable out of what is called the Indemnity Fund, but I find in this Bill a provision is made that the compensation is to be paid out of the Insurance Fund established under the 1897 Act. I am wondering why it has become necessary to transfer that liability from the Indemnity Fund to which reference is made in Section 75 of the 1925 Act to the Insurance Fund under the 1897 Act. The second point I would like to raise is in connection with the provision contained in Section 5 (3) of this Bill which says: …'the expression the standard value' means one hundred thousand pounds or such greater or less sum as may from time to time be fixed by the Lord Chancellor and the Treasury. That Sub-section as it stands gives power to the Lord Chancellor and the Treasury to raise that standard value from £100,000 to any sum within their discretion. Is it not preferable, and in fact desirable, that Parliament should retain some control. As the Clause stands there is no limit, and while the Lord Chancellor and the Treasury would, I am sure, always use their discretion reasonably, I would ask the learned Attorney-General whether he would not accept the suggestion that some provision should be inserted either to fix a definite maximum beyond which the Lord Chancellor and the Treasury may not go, or a provision that if they do exceed it the approval of the House must be secured. If the Attorney-General could give us some satisfaction on these points, I feel sure that we on this side of the House would accept the Bill.

10.11 p.m.


I would like to congratulate the Attorney-General on the enormous range and variety of his work. I criticised him last Friday for his association with a Bill very much outside his Department, but now he is in his proper sphere and with his usual lucidity he has made this Bill clear even to laymen. I happen to have taken an interest for many years in this Department. It is a very remarkable Departments and the Lord Chancellor who is the Law Officer responsible for it to Parliament has every reason to be proud of it. In the very early days of its existence the work it aimed to do was very much criticised and very much opposed by solicitors who thought it would infringe their interests and reduce the amount of their income. As a result of the efficient running of the Department, I think it is now recognised that where its powers are compulsory it cheapens the transfer of land and makes it easier to transfer land because the owner feels secure in his title. For that reason it stimulates transfers. There has been an enormous increase in the number of transfers of property, particularly in the London area. That should be welcomed, because I think we should all like to see the time when land can be transferred as easily as any other form of property. By making transfer easier it is made easier for property owners to put land to its best use.

Not only has there been during the last 10 or 12 years an enormous increase in transfers in the London area where it has been compulsory, but it must be very satisfactory to the Lord Chancellor as the head of the Department that there has been a steady decrease—I think I am right in saying this—in the cost of transfers. It is that steady decrease in cost, together with the large increase in the number of transfers and the improvement in the efficiency of the organisation, that has enabled the Attorney-General to come to the House with his nice little surplus. He does not talk about it with great pride and satisfaction. He speaks of it almost with modesty. After all, this surplus really arises from a little bit of what I think we may call State trading—useful law work done by the State that has proved profitable. My hon. Friend above the Gangway when he was speaking about it referred to the insurance fund and the possible liability to the State. I think I am right in saying that the State has made a, very good bargain in this Department. I do not blame the State which has to look after the interests of the taxpayers as a whole. They took over a liability and have got a substantial surplus of over 400,000, part of which is to go to the Consolidated Fund and the rest to the ordinary working account. If the Department is run on present lines there is every prospect of an annual surplus being available which will more than compensate the State for any risk they may take over in the Insurance Fund. I think the hon. and learned Gentleman should have spoken with more emphasis of the good investment which this Department is proving to the State and Treasury.

The Attorney-General referred to the acceptance of compulsory registration by the county of Middlesex. We have had it for over 30 years in London. Two modest experiments have been made by towns in the south of England. The enterprising towns of Eastbourne and Hastings asked to have compulsory registration applied to them. Now Middlesex is having the same principle applied. Too much publicity cannot be given to this branch of the Department. Although there has been an increase in the amount of voluntary registration in the provinces we are still awaiting applications for compulsory registration. H owners of property and those interested in the transfer of land would only realise the great advantage which this is proving to property owners and lawyers as a result of the experiment in London, applications for compulsory powers would, I think, be requested by the rest of the country. I congratulate the Department on its most successful and efficient administration. It speaks very well of the land registrar and his able and competent staff. The Attorney-General said that there had not been many claims. They are infinitesimal, and the reason of course is that every year the Department gets more experienced, and., therefore, the claims will not be more but less. It is a good Bill, and I hope the hon. and learned Member will make it quite clear that the Treasury has made a good bargain.

10.19 p.m.


The hon. Member for South-West Bethnal Green (Sir P. Harris) has congratulated the Attorney-General on his nice little surplus. I have no knowledge beyond my own personal experience of the efficiency with which the Department is carried on, but I should be grateful if the Attorney-General will tell us where this surplus of £448,000 comes from. To a man with little knowledge of insurance work it would seem that as the claims since 1897 are only £1,189 15s. 1d., the surplus now before us of £448,000 is rather out of proportion. Unfortunately I did not know the point was going to be raised, and I have not with me the Land Transfer Act of 1897. Could the Attorney-General, if he replies, tell the House where that sum has come from, to what extent it is due to the fees which have been paid, and to what extent it is due to sums which have been very properly contributed on an insurance basis by the members of the most efficient staff in the Land Registry?

10.21 p.m.


I regret that I was not present when the. Attorney-General spoke, and I do not therefore know whether he paid due tribute to the county of Yorkshire, which first established land registration. I am told that the Attorney-General did not mention Yorkshire, but I will take it upon myself to do so and to give credit to that county, more particularly the West Riding, for the introduction of this system of land registration about which so much of a congratulatory nature has been said during the last few minutes. I would like to say, as a practising solicitor, that undoubtedly the land registration system is a very great convenience to the legal profession and to the public, and is a great safeguard. I think that if ever there were any worthy grounds for the suggestion which the hon. Baronet the Member for South-West Bethnal Green (Sir P. Harris) made, that the legal profession was rather against land registration, the objections have now very largely disappeared, at any rate among the younger practitioners. All that we have heard about its having being a good investment for the State and so on only goes to show that the State ought to play a greater part in many of these matters than it plays to-day.

There is another point I would like to make. It would appear, subject to anything which the Attorney-General may say, that in a period of about 39 years a sum totaling £448,000 has been accumulated, for the most part, I assume, from the fees paid by those doing business in the registry. Although only £1,189 has been paid out in claims during the whole of that period, it is still proposed to retain some £100,000 in the Registry, to hand the balance over to the State, and still to continue charging the fees which have resulted in a period of 39 years in the accumulation of that very large sum. I suggest to the Attorney-General that he ought at any rate to consider with the Departments whether it would not be possible to add to the convenience of and lessen the expense to the public—because, of course, all these fees are charged to those who have dealings in land—by reducing the amount of the fees. It appears to me that it ought to be possible to make a very considerable reduction in the fees.

The only other comment I would like to make is that it is not quite correct to say that the business of the Land Regis- try has always been carried on without there being complaints. There have been complaints in one respect. It may be that my experience of London is not very large, but I have had fairly lengthy experience of registration in Yorkshire, where the expedition is much greater than it is in London. There are complaints from the legal profession in London of the delay which takes place at the Land Registry in registering and in furnishing the particulars required, and in other matters of that sort. I agree that in general the administration is of a very high character, but there are complaints with regard to delays. I would like to ask the Attorney-General, first, whether the matter of delay could be looked into; arid, secondly, whether in the circumstances in which this Bill is introduced, it would not be possible very materially to reduce the fees, to the still greater convenience of the public.

10.25 p.m.


I want to say of the principle of this Bill in general—I heartily welcome the Bill—that the House should realise that there has been a very strong vested interest, the good old-fashioned type of conveyancing interest, which has been systematically fighting the cheapening and simplification of the registration of land for years and years, simply in the defence of their own selfish interests, like anybody else who finds his own immediate personal interests threatened. It has been a long battle between the public interest and common sense, on the one side, and the vested interest of conveyancing on the other. I say this frankly in favour of the moderate mood which the Attorney-General represents, that on the whole the battle has been an interesting and succesful example of what can be done by "slow and steady" against vested interests rather than by more violent steps. I want, however, to join in the criticism that has been made of the proposals in Clause 5 in regard to the insurance fund and to reproach the hon. Member for South-West Bethnal Green (Sir P. Harris) for unorthodox finance, which was the one thing which one would not expect from a, Member of the party of which he is an ornament. It is important, although it is a small matter, that the transfer of land, sometimes of very modest capital value, should not cost more than is necessary. If you make a little levy for insurance it is right and proper, so long as you do not regard it as a method of making some sort of rake-off, as the hon. Baronet seemed to suggest you should do.


On the contrary, I wanted to make it clear that the Attorney-General was trying to conceal the pinching of a nest egg which really belongs to the Department.


The hon. Baronet reinforces what I say, for he wants somebody to have a nest egg laid by the golden goose who is the modest person who wants to sell his cottage to his neighbour. I say that it is right to charge a levy for a genuine insurance on principles of underwriting which are, I believe, familiar to the Attorney-General. It is quite reasonable, if you discover that you have spent a good many years building up too large an insurance fund, that you should say, "Well, the Government have to carry the burden of any unexpected loss, and they may as well have this money." One would be an exceptional purist to object to that, but is it right to object to any idea of saying, "Of course, we will keep £100,000 there, because there may be a big loss at any moment, but let us go on collecting these fees and year by year hand over the surplus to the National Debt." That is simply levying an unorthodox and concealed taxation on a small section of a particular class of the community.


It is going to be handed over to the Chancellor of the Exchequer.


If the hon. Member will read the Bill more carefully, I think he will find that he is mostly wrong, that in most cases it will be handed over to the Commissioners of the National Debt, not to the Treasury. But whatever it is that is going to be worked upon that basis, it is a concealed form of fraudulent taxation—the Attorney-General will understand that I do not use that term in any offensive sense—on a section of the community. If he says that Clause 5 makes no provision for anything of that sort, and that anybody who intelligently works Sub-section (3) of that Clause would work it merely on a definite insurance basis, I agree that there is nothing in Clause 5 to show that there is going to, be any taxation on the sly.

There is an atmosphere about the Bill which justifies my suggestion that there is going to be a. little profit. The hon. Baronet certainly thinks that there will be. I ask the Attorney-General to say that it is no part of the policy of the Government to claim from persons who happen to be selling or buying land anything more than a proper charge for underwriting the risk which the fund and the Government between them are bearing. I should be happier still if the hon. and learned Gentleman said that he proposed at some stage to put in Clause 5, Sub-section (3) something to show that the £100,000 is not going to be dealt with by the gentlemen who have control of it of their own sweet will, but will be dealt with simply on underwriting principles.


Sub-section (1) of Clause 5 says: If at the end of any financial year the value of the assets of the insurance fund exceeds the standard value an amount equal to the excess shall, at such time as the Treasury may direct, be paid out of the insurance fund into the Exchequer. It seems to me that if there is to be any substantial surplus it should go to the Consolidated Fund and not to the Exchequer. If there is any loss over and above the 100,000 remaining in the fund, the Consolidated Fund would presumably have to bear it. Therefore, any surplus should go to the Consolidated Fund.

10.32 p.m.


I should not have spoken had it not been for the speech of the hon. and learned Gentleman opposite, who tried to cast the usual aspersions on the two branches of the legal profession in connection with conveyancing. I believe that, so far as my branch of the profession is concerned, I am the only Member who had anything to do with conveyancing in his younger days. It is a common charge made by persons who desire to criticise the legal profession, and it is one which is very much resented by those persons who have been engaged in conveyancing. Neither branch of the legal profession has any power whatever to decide whether or not the compulsory provisions of the Registration Act shall be brought in for any district in the country. They have nothing whatever to do with it. What has happened is that, until the great reforming Acts of 1925 were passed, it was an extremely expensive thing for any landowner to present a clear title to the Land Registration Office and get an absolute title. Very many landowners who would willingly have had their land registered were deterred from so doing until these reforms were passed.

The fact that so many more persons have gone in for registration of later years is very largely due to the beneficial effect, as I believe, of those Acts, although many members of my profession would not agree with me. The reason why compulsory registration is difficult in this country as opposed to Scotland, where it has been in existence for hundreds of years, is that people in this country are for some reason shy of the publicity which they believe is attached to it. They think that their neighbours may come to know the prices they have got for their land. I believe it is very largely a completely unfounded prejudice, and I firmly believe that no more benecial thing can happen than that the compulsory registration of land should be encouraged as much as possible. Finally, I should like to add my portion of praise to the Attorney-General for having at any rate taken one step forward in trying to facilitate this change in this country, and I hope that in time to come this House may be able to do still more to make the transference of land easier and less expensive than it is at the present time.

10.36 p.m.


I am of the opinion that when the Law of Property Acts were passed in this House one of the best supplements that could have been added to that monumental legislation would have been to have compelled—almost—every area in England to establish a registry of its own. We have heard tonight of the timidity of the owners to confess the value of their land; they do not like it to be made too public. I know why. It is inconvenient that the public should know the market value of the land when it was last sold. I think that if registries were established all over the country not merely would it facilitate the transfer of land, but it would be of definite advantage in respect of legislation which this House must contemplate sooner or later. I have heard to-night for the first time in my life that conveyancing lawyers and solicitors generally have been very anxious for this change. Surely we all know of cases where the search may take a man all his life and all the life of his children after he is dead. However, I am glad to hear that there is no vested interest here in any of the upper or lower stratas of the legal profession, and that they are all anxious to have this registration.

For my own part I think it ought to be imposed by Act of Parliament upon every part of this country. The difficulty in town planning or developing certain parts of England is that the local authorities constantly find themselves struggling to arrive at some basis of valuation. In Committee upstairs and elsewhere one cannot help noticing that when London is attempting to get a new roadway made out of London so that, in the ease of a gas attack—which God forbid—we should have wider roadways for the safety of the public apart from ordinary traffic problems local authorities are handicapped in making agreements with regard to the land. Registration would help all that and, therefore, I feel that I should not be quite living up to my reputation if I did not add my benediction to the praise which the Bill has already received. As to what we have heard about, shall we call it, unjustified taxation, I shall not weep about that. The people who dabble in the holding up and selling of land can well afford to pay the fees. If they did not get the service of the registry for that fee one can realise, by doing a little proportion sum, what they would have to pay for the searching solicitor if he were called in. I am not at all concerned about those people.

10.40 p.m.


The hon. Member for Kingswinford. (Mr. A. Henderson) asked a question about Section 75 of the Act of 1925, and pointed to that Section as referring to the Act of 1897. The two funds are of the same kind. For some reason into which I need not enter one was called an Indemnity Fund. The hon. Member also suggested a lowering or raising of the amount of the fund without a special order of the House. As I explained to the House, those are rather Committee points, and there is no reason why the House should postpone the Second Reading of the Bill in order to deal with them. I cannot think of any sinister reason which might have actuated anybody who might have benefited by that process.

I would associate myself with the tribute paid by the hon. Baronet for South-West Bethnal Green (Sir P. Harris) to the Land Registry and the work they have done. It is not an exaggeration to say that the scheme under which the Land Registry works solved a problem which had exercised the minds of people for two centuries, as to what would be a satisfactory scheme for the registration of land. The success of the scheme is due not only to its merits, but to the way in which it has been worked and administered by those responsible for it. The hon. Baronet and several other speakers referred to the fact that there has been a surplus. It comes out of fees and, of course, interest on invested money. Whether or not it is a surplus depends upon whether the record of the past 37 years, or whatever it is, with regard to the claims, continues. There is no intention on the part of my noble Friend the Lord Chancellor to adopt the principle of providing a little nest-egg for the Chancellor of the Exchequer every year. The suggestion of the hon. and gamant Member for South-East Leeds (Major Milner) will be borne in mind. There was pandemonium when the Land Registry was first taking over this new business. It was impossible to reduce fees because of the expenses incurred in consequence of that fact. It was thought advisable to wait for a year or two to see what extra expenses are placed upon the Registry upon the existing scale of fees.

Captain DOWER

Is the hon. and learned Gentleman suggesting that there will be a reduction of fees and that the Land Registry will find that they are in a position to reduce them?


I think that what I am saying is clear. If, over a period of years, the receipts have been larger than the expenditure, one is entitled to ask whether that is likely to go on for ever, and the answer is clearly in the negative. Indeed, Clause 7 of the Bill lays down principles which are inconsistent with a continuing surplus year by year. It is thought inadvisable to consider a reduction of the existing fees at the moment, until there has been at any rate a year or two's experience of the new arrangement. What the result of that experience will be I cannot say.


Would there not be a much greater chance of the fees being reduced if the surplus went into the Consolidated Fund than if it went to the Chancellor of the Exchequer?


One never speaks of money going into the Consolidated Fund; it always goes into the Treasury, and it always goes out of the Consolidated Fund. These are the appropriate words when we are dealing with an annual sum. It is not the intention of my Noble Friend that the fees should continue on such a basis that they regularly exceed the expenses of the Land Registry, but I think it will be agreed that it would be the worst possible thing to reduce the fees and then find that the work had become more expensive. With regard to the complaints of delay referred to by the hon. and gallant Member for South East Leeds (Major Milner), all I can say is that the appropriate place to go into such matters is not really the Second Reading of this Bill, but perhaps the hon. and gallant Member will bring them to our attention later. The hon. and learned Member for North Hammersmith (Mr. Pritt) paid a tribute to the slow and steady progress which the Land Registry has made, and I, of course, agree with that part of his speech. I think I have dealt with his comments on the fund in what I have already said. The hon. Member for Burslem (Mr. MacLaren) closed his speech on a note of benediction for the Bill, and I do not think he gave me any question to answer. I should, perhaps, have drawn the attention of the House in my first speech to the Financial Resolution, which is the next business on the Order Paper, and which is necessary to give effect to the Clause I have already explained.