Land Registry privatisation vetoed by Vince Cable
The service employs 4,500 civil servants and made a surplus of £98.8m in 2012-13.
Plans to privatise the Land Registry have been abandoned by the government after business secretary Vince Cable vetoed the scheme following a series of rows between Tory and Liberal Democrat ministers..
It had been hoped that a sell-off would raise at least £1.2?bn for the Treasury, with ministers deciding on the appropriate structure, such as creating a deal with a joint venture company.
But this week, ministers will tell parliament that the planned move has been suspended indefinitely. The Conservatives had been in favour of a partial sell-off via the creation of a joint venture.
The cancellation comes a day after Cable’s department and its City advisers had to face a highly critical parliamentary report over their handling of the sell-off of Royal Mail. MPs found that by undervaluing the Royal Mail, it had cost taxpayers up to £1bn.
The shelving of the plan has a political dimension with Lib Dems keen to distance themselves from pro-privatisation Conservatives before next year’s general election – and it will come as a blow to several private equity firms and outsourcing companies that were interested in buying into a highly profitable agency.
But the move will be praised by solicitors and unions who have campaigned against the privatisation.
The Land Registry for England and Wales, which employs 4,500 civil servants, has had a monopoly on recording land and property information in England and Wales since 1862. It is the country’s most comprehensive source of house prices as all buyers have to use it to register ownership of property.
It made a surplus of £98.8m in 2012-13, up from £86.1m the previous year, while revenue slipped by 3% to £347m.
The ministry, headed by Cable, had been examining privatisation proposals for several months and City firms had been approached and asked for their advice. It had also looked into the possibility of setting up a joint venture between the government and a private company to take charge of the Land Registry together.
The Department for Business had also been considering a plan to turn the Land Registry into a state-owned company that could then be sold off. Another option was to let a private company run the body as a so-called “GovCo”.
Michael Fallon, the Tory business minister, was in favour of a joint venture company while Cable had doubted whether it needed to be sold off to be modernised..
A public row over the agency’s impending privatisation began after minutes disclosed by the Guardian showed that civil servants believed the government could raise £1.225bn from entering a deal with a joint venture company, marginally higher than the £1.1bn vaulation placed on the GovCo scheme.
They also showed that in March, the registry’s board appointed their head of legal services as a company secretary for a new venture but had not yet announced it.
Under the heading “business strategy”, the board appeared to discuss a KPMG presentation on the possibility of a private sector partner. The minutes also warned that if a joint venture company were to be created, there might be “insufficient risk transfer to the PSP [private sector partner]” as well as a “significant risk of industrial action.”
But nowhere in the minutes did the board consider the possibility of keeping the body as an executive agency of government.
A major campaign involving the PCS union and the Law Society was launched against the privatisation. Thousands of union members at the Land Registry walked out in protest at the privatisation plans in 14 locations across England and Wales on 14 and 15 May.
Mark Serwotka, general secretary of the PCS, said: “This is a hugely significant victory for our members and the industry professionals who ran a fantastic campaign, together exposing the emptiness of the government’s case. It’s also a victory for businesses and the public who need the Land Registry to remain in state hands, free from any profit motive and conflict of interest.”
- The Guardian,