§ Mr. Anthony Coombs (Wyre Forest)I beg to move.
That leave he given to bring in a Bill to enable Her Majesty's Land Registry to gain agency status; to thereby improve the flexibility with which is uses externally generated funds for fees; to improve its accountability to consumers; to make its fees more responsive to customers' demands; to provide guarantees of service; and to reduce the present case backlog.This is an important subject which had the attention of the Public Accounts Committee in July of last year, a report from the Auditor-General in 1987 and an Adjournment debate initiated by my hon. Friend the Member for Mid-Staffordshire (Mr. Heddle) in 1987; and it was, of course, dealt with at some length by the Farrand committee on conveyancing in 1985.
The purpose of my Bill is first to give greater flexibility and freedom of management to the Land Registry by giving it agency status, so that it can better deal with the huge number of applications that it receives, which on present evidence appears likely to be sustained. Secondly, it is to make the fee-charging system more responsive to the changes in the property market, eliminating the £103 million Treasury surplus which has been generated over the past 10 years, and giving customers better value for money.
Thirdly, the Bill will increase the registry's delegating ability to recruit staff according to local needs and to retain them to increase the calibre of staff and thereby to improve the turnaround of work, much of which is complex. Fourthly, given the fact that even on an agency basis it will constitute a statutory monopoly, the Bill will set down a framework for outside standards for speed and quality of customer service and a rate of return on the registry's financial assets.
In the past 125 years, the Land Registry has made it its business to register land and thus to give certainty to the title of real estate and changes in it. In a qualitative sense, it does that well. It has at present on the register 11.8 million of 20 million estimated titles. Last year, there were only 231 indemnity claims, totalling £226,000. It carries out those functions from about 16 full offices, with 9,300 staff, which is an increase of 2,000 in the past three years.
The registry's registration work is divided basically into two areas. First are the pre-contract and pre-completion inquiries from solicitors, which check on the validity of title. There were 5.2 million of those last year, which was an 85 per cent. increase over the past three years. At present, 90 per cent. of those inquiries are dealt with within four days, and they represent about 30 per cent of the Land Registry's work. The other 70 per cent. of its work, which causes serious concern to the house building industry and to home owners generally, is the treatment of substantive applications to register for the first time or to change registration when properties are sold. Since 1982, the boom in house building, the sale of council houses, inner-city regeneration and the securitisation of mortgages have meant that these applications have more than doubled on an annual basis from 1.2 million to 2.8 million last year—and the number is still rising.
Surpluses averaging £10 million a year have been made from this increasing business. Inevitable manpower constraints have seen staff increased in that period by 50 per cent.—from 6,000 to 9,000—against the doubling of the business.
1001 There have been three results of that. First, the backlog of work has increased to the extent that it damages the productivity improvements needed to make inroads into past backlogs. The Public Accounts Committee heard from the Land Registry last year that there were 900,000—itself a record—outstanding substantive applications. I am told that there are now 1.147 million outstanding applications. As a result, although productivity is improving by 2 per cent. a year, it has not yet reached the levels achieved in 1982–83.
Secondly, that will result in delays in getting registration through, which holds up the completion of land sales. On Land Registry figures, the time taken for first registration is 35 weeks, against a 14-week target, and for other registrations it is 33 weeks. That causes delays and increased costs to builders and vendors—many of whom have to take out bridging loans. It has a detrimental effect on house prices, restricts the mobility of labour and, in many cases, causes considerable personal anguish.
The upshot is that the public are still providing the Land Registry with a substantial surplus every year, but are receiving a service which is unsatisfactory, at least in its speed of response, and one which does not look as though it is getting any better.
It is only fair to say that the Land Registry, assisted by the Government, has been making efforts to counteract these problems. It has introduced a £25 million computerisation programme; it has opened new offices—two more were opened last year—it has reduced and rationalised its fee structure—there was a fee change only last year—and it has tried to assist house builders by introducing development title certificates, which speed up new registrations where there are multiple applications from house builders. So far, however, those have only produced the prospect of improvement.
I believe, as do many people in the Land Registry, that it is constrained by a number of factors. First, it is unable to put its surpluses to effective use. Although, in April last year, it was freed from gross running cost control by the Treasury, it is still subject to annuality. It is not, therefore, able to carry over its surpluses or effectively its spending plans between years rather than within years. Secondly, it feels constrained by Civil Service rules on pay and recruitment, especially for senior staff. Professional entrants, and especially people on professional and executive grades, cannot be recruited locally, but must be recruited through the Civil Service Commission, which leads to delay. As a result there is a 40 per cent. under-establishment in executive and professional grades. I am told, too, that there are only 100 qualified solicitors among the 9,000 people working in the service.
Thirdly, because its incentives to improve productivity are cash-limited, the registry sometimes runs out of funds, which can be infinitely demoralising for staff. Fourthly, it is constrained by what the land registrar called the cumbersome nature of fee-making machinery. That means that the Treasury must be consulted, and the matter must then go through a rules committee on which is represented such bodies as the Law Society. That makes the progress extremely slow and non-responsive to the changes in a fast-changing market. The average time taken is about six months.
1002 Fifthly, the registry is constrained by a perception of an adequate level of service which is based upon the problems and backlog of the past five years, rather than the prompt service for which the public are paying. The chief land registrar admitted to the Public Accounts Committee that the 14-week target for first registration—which has more than doubled in practice—was worse than the previous targets set by the Land Registry.
I believe that those problems can only be tackled by deep-seated changes, which my Bill is intended to introduce. The first change would be the introduction of agency status, which would improve managerial accountability, the freedom to manage, the ability to recruit staff of the right calibre and the ability to respond to local labour markets. I believe that that change would also improve staff morale, because staff turnover would fall.
The Bill would also improve the Land Registry's financial flexibility in two ways. First, it would allow the registry to invest its surpluses more quickly in the recruitment and retraining of staff. That would mean that there would be greater continuity in the staff between one year and the next. Secondly, the fees should more accurately reflect the state of the market. Therefore, the customer would get a better deal.
Although the Land Registry is a statutory monopoly, such changes must be buttressed by externally set performance indicators to measure response time, quality of service and even the repayment of fees in extreme circumstances. An externally set rate of return, either based on the registry's assets or its income, must be established to maintain its financial discipline.
Among the Government, the Law Society, the legal profession and home owners there is demand, and approval, for the pragmatic changes included in my Bill. Those changes will make registration and, therefore, house conveyancing much quicker. I hope that those changes will command the support of everyone in the House.
§ Mr. Bob Cryer (Bradford, South)The hon. Member for Wyre Forest (Mr. Coombs) has set out the Land Registry's record of considerable success, even on his own terms. Any delays arising at the Land Registry derive from the huge increase in the work that it now undertakes. The hon. Gentleman has already said that the number of cases for registration of title have increased from 1.1 million to 2.8 million and that that figure is still rising.
From experience, everyone knows that any reorganisation will not reduce delays but almost certainly increase them until that reorganisation is complete. The hon. Gentleman has complained that surpluses cannot be carried forward, but the answer does not lie in agency status, in a change in the Treasury rules or through some statutory instrument introduced rapidly by the Government. If the Government had a mind to deal with the problem, it could be eliminated within a matter of hours.
The hon. Gentleman has accepted that the Land Registry has reduced its fees, but I am concerned that he believes that those fees should be more sensitive to the changes in property values. In recent years, however, property values have only gone up; they have not come down. It is likely that the fees would also go up if one had an agency that was directed to make money.
1003 The second important feature about agency status is that it is the first step towards privatisation. The hon. Gentleman is concerned about accountability, but the Land Registry is accountable to the House. Privatisation would remove such accountability. Parliamentary questions may be asked about the Land Registry, but a study of the number of such questions asked shows that concern about it has diminished. Between June 1987 and June 1988, 52 parliamentary questions were asked, but from November 1988 only four questions have been asked. The hon. Gentleman has troubled to table only two questions. It is clear that his worries about the Land Registry have not produced, as one might suppose, a great swathe of parliamentary questions.
The Land Registry is essentially a service. I am aware that agency status has been granted to Her Majesty's Stationery Office and to Companies house, but to award such status to the Land Registry could lead to a worsening of terms and conditions of service, especially as there has been an influx of temporary employees to HMSO and Companies house. Such people could not, because of the lack of training, provide the efficient service and rapid response which the hon. Gentleman desires.
When agency status is established as a step towards privatisation, there is much fear, based on experience, that it will lead to an increase in charges. The Financial Times today states that statutory water companies plan to impose price rises of between 30 and 50 per cent. That has been announced as the privatisation legislation is being discussed in the House. It points out:
The Government's difficulty is that ministers have no legal powers to control their price increases".Once the gas supply industry was privatised, its charges increased. We already know that electricity charges have been increased by 15 per cent. as a prelude to privatisation.House buyers who will use the services of the Land Registry perhaps once or twice in their lives need certainty and need to know that service is the priority rather than increased profits demanded by an agency as a step towards privatisation. Given the current situation, house owners and potential house owners need certainty and low charges above all else. In May 1988 the interest rate was 9.5 per cent. Since then those who have a £30,000 mortgage for 25 years have had to face a 32 per cent. rise in their mortgage repayments. In January, the interest rate was 13.75 per cent., which means that those with a £30,000 mortgage have seen their payments increase by £66.59. The repayments for those with an £80,000 mortgage held for 25 years have increased by 34 per cent., which is equivalent to £221.82. In those circumstances, we should make every endeavour to keep any additional charges that must be met on house sales to the absolute minimum. The hon. Gentleman has already demonstrated that the Land Registry has done that.
We do not want the reorganisation of the Land Registry, but we want its service expanded and developed. That should be done under the accountability that the House can provide. Therefore, I hope that the Bill will be opposed.
Question put, pursuant to Standing Order No. 19 ( Motions for leave to bring in Bills and nomination of Select Committees at commencement of public business):—
§ The House divided: Ayes 104, Noes 127.
| Division No. 85] | [4.45pm |
| AYES | |
| Adley, Robert | Kellett-Bowman,Dame Elaine |
| Alison, Rt Hon Michael | Kilfedder, James |
| Alton, David | Knapman, Roger |
| Arnold, Jacques (Gravesham) | Knight, Dame Jill (Edgbaston) |
| Ashdown, Rt Hon Paddy | Latham, Michael |
| Atkinson, David | Lawrence, Ivan |
| Beggs, Roy | Leigh, Edward (Gainsbor'gh) |
| Beith, A. J. | Livsey, Richard |
| Bennett, Nicholas (Pembroke) | Lloyd, Sir Ian (Havant) |
| Bevan, David Gilroy | McCrindle, Robert |
| Blackburn, Dr John G. | Maclennan, Robert |
| Blaker, Rt Hon Sir Peter | Martin, David (Portsmouth S) |
| Bowden, Gerald (Dulwich) | Michie, Mrs Ray (Arg'l & Bute) |
| Boyson, Rt Hon Dr Sir Rhodes | Molyneaux, Rt Hon James |
| Brown, Michael (Brigg & Cl't's) | Monro, Sir Hector |
| Browne, John (Winchester) | Montgomery, Sir Fergus |
| Bruce, Malcolm (Gordon) | Page, Richard |
| Buchanan-Smith, Rt Hon Alick | Pattie, Rt Hon Sir Geoffrey |
| Burns, Simon | Pawsey, James |
| Butler, Chris | Raison, Rt Hon Timothy |
| Campbell, Menzies (Fife NE) | Rhodes James, Robert |
| Carlisle, John, (Luton N) | Riddick, Graham |
| Carrington, Matthew | Shaw, David (Dover) |
| Churchill, Mr | Shaw, Sir Giles (Pudsey) |
| Clark, Sir W. (Croydon S) | Shaw, Sir Michael (Scarb') |
| Coombs, Anthony (Wyre F'rest) | Shepherd, Richard (Aldridge) |
| Coombs, Simon (Swindon) | Shersby, Michael |
| Critchley, Julian | Skeet, Sir Trevor |
| Dickens, Geoffrey | Smith, Sir Dudley (Warwick) |
| Dicks, Terry | Smith, Tim (Beaconsfield) |
| Emery, Sir Peter | Stanbrook, Ivor |
| Evans, David (Welwyn Hatf'd) | Steel, Rt Hon David |
| Fearn, Ronald | Stewart, Allan (Eastwood) |
| Fishburn, John Dudley | Stradling Thomas, Sir John |
| Forsythe, Clifford (Antrim S) | Summerson, Hugo |
| Fox, Sir Marcus | Taylor, Teddy (S'end E) |
| Franks, Cecil | Thorne, Neil |
| Fry, Peter | Thornton, Malcolm |
| Gale, Roger | Townend, John (Bridlington) |
| Gill, Christopher | Vaughan, Sir Gerard |
| Glyn, Dr Alan | Walden, George |
| Goodhart, Sir Philip | Walker, Bill (T'side North) |
| Gorst, John | Wallace, James |
| Gow, Ian | Waller, Gary |
| Greenway, Harry (Ealing N) | Walters, Sir Dennis |
| Greenway, John (Ryedale) | Watts, John |
| Hicks, Mrs Maureen (Wolv' NE) | Wheeler, John |
| Holt, Richard | Widdecombe, Ann |
| Hordern, Sir Peter | Wilshire, David |
| Howells, Geraint | Woodcock, Mike |
| Hughes, Simon (Southwark) | |
| Irvine, Michael | Tellers for the Ayes: |
| Janman, Tim | Mr. John Bowls and |
| Jones, Robert B (Harts W) | Mr. David Nicholson. |
| NOES | |
| Adams, Allen (Paisley N) | Clarke, Tom (Monklands W) |
| Anderson, Donald | Clay, Bob |
| Archer, Rt Hon Peter | Clelland, David |
| Ashley, Rt Hon Jack | Clwyd, Mrs Ann |
| Ashton, Joe | Cohen, Harry |
| Barnes, Harry (Derbyshire NE) | Cook, Frank (Stockton N) |
| Barron, Kevin | Corbett, Robin |
| Battle, John | Corbyn, Jeremy |
| Beckett, Margaret | Cummings, John |
| Benn, Rt Hon Tony | Cunliffe, Lawrence |
| Bennett, A. F. (D'nt'n & R'dish) | Dalyell, Tam |
| Bermingham, Gerald | Darling, Alistair |
| Blair, Tony | Davis, Terry (B'ham Hodge H'ff) |
| Boyes, Roland | Dewar, Donald |
| Brown, Nicholas (Newcastle E) | Dixon, Don |
| Brown, Ron (Edinburgh Leith) | Dobson, Frank |
| Buchan, Norman | Doran, Frank |
| Caborn,Richard | Duffy, A. E. P |
| Callaghan, Jim | Dunnachie, Jimmy |
| Campbell, Ron (Blyth Valley) | Ewing, Harry (Falkirk E) |
| Campbell-Savours, D. N. | Ewing, Mrs Margaret (Moray) |
| Canavan, Dennis | Fatchett, Derek |
| Fisher, Mark | Moonie, Dr Lewis |
| Flannery, Martin | Morris, Rt Hon A. (W'shawe) |
| Foot, Rt Hon Michael | Nellist, Dave |
| Foster, Derek | O'Neill, Martin |
| Fyfe, Maria | Orme, Rt Hon Stanley |
| Galbraith, Sam | Parry, Robert |
| Golding, Mrs Llin | Patchett, Terry |
| Grant, Bernie (Tottenham) | Pendry, Tom |
| Griffiths, Nigel (Edinburgh S) | Radice, Giles |
| Grocott, Bruce | Redmond, Martin |
| Hardy, Peter | Rees, Rt Hon Merlyn |
| Hattersley, Rt Hon Roy | Reid, Dr John |
| Haynes, Frank | Richardson, Jo |
| Heffer, Eric S. | Robertson, George |
| Hinchliffe, David | Rooker, Jeff |
| Hogg, N. (C'nauld & Kilsyth) | Ruddock, Joan |
| Home Robertson, John | Sedgemore, Brian |
| Hoyle, Doug | Sheldon, Rt Hon Robert |
| Hughes, John (Coventry NE) | Shore, Rt Hon Peter |
| Hughes, Roy (Newport E) | Short, Clare |
| Hughes, Sean (Knowsley S) | Skinner, Dennis |
| Illsley, Eric | Smith, Andrew (Oxford E) |
| Janner, Greville | Smith, C. (Isllon & F'bury) |
| Kinnock, Rt Hon Neil | Steinberg, Gerry |
| Lambie, David | Stott, Roger |
| Lamond, James | Strang, Gavin |
| Leighton, Ron | Straw, Jack |
| Lofthouse, Geoffrey | Thompson, Jack (Wansbeck) |
| Loyden, Eddie | Turner, Dennis |
| McAllion, John | Wall, Pat |
| McAvoy, Thomas | Walley, Joan |
| McKelvey, William | Wardell, Gareth (Gower) |
| McNamara, Kevin | Wareing, Robert N. |
| McWilliam, John | Williams, Rt Hon Alan |
| Madden, Max | Wilson, Brian |
| Mahon, Mrs Alice | Winnick, David |
| Marek, Dr John | Wise, Mrs Audrey |
| Marshall, David (Shettleston) | Worthington, Tony |
| Marshall, Jim (Leicester S) | Young, David (Bolton SE) |
| Maxton, John | |
| Meacher, Michael | Tellers for the Noes: |
| Meale, Alan | Mr. Bob Cryer and |
| Michie, Bill (Sheffield Heeley) | Mr. Ian McCartney. |
| Mitchell, Austin (G't Grimsby) |
§ Questions accrodingly negatived.