“No detailed evidence is provided to explain how any change to the current model could bring about increased efficiencies or effectiveness to an organisation that currently makes a significant profit.”
The Minister needs to provide evidence to support his proposals, and to address the following issues. If the move to more digital services leads to some job cuts through voluntary redundancy, can the Minister assure me that the Land Registry will continue to have a presence in the north-east, particularly in Durham? Can he explain why the delivery of land registration by a company that would permit
“greater flexibilities to operate around pay, recruitment and possibly provide other services”
would make the Land Registry’s business strategy more achievable? Will the taxpayer be getting value for money from the privatisation? I do not trust this Government to get it right, given their appalling track record on undervaluing Royal Mail. What if the same situation arises again?
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In addition, there may be long-term costs to the state and users of the service, which could undermine any sale price. If there are going to be new costs or restrictions on what information businesses, individuals and public sector agencies can access in relation to land programmes, how will that be monitored? No details have been provided as to the precise nature of how any of the options might operate, making it, as we have said many times, difficult to assess accurately the extent to which any new model will work better than the existing one.
I finish with one further question to the Minister. The Land Registry in this country—I wonder whether he is aware of this—has been giving advice to many other countries about how to set up land registry services. We are seen as a model of best practice around the world. I implore him to think very carefully before he severely disrupts a model that has been shown to work so well.
Mr Charles Walker (in the Chair): We have time for three more colleagues with about seven minutes each. Mr Bellingham, are you standing?
Mr Charles Walker (in the Chair): I apologise. Mr McDonnell.
Mr Charles Walker (in the Chair): Very well.
3.19 pm
John McDonnell (Hayes and Harlington) (Lab): I shall be brief, because it is important that everyone should have a say. My hon. Friend the Member for Swansea East (Mrs James) gave a marvellous exposition of the arguments. She should rethink her decision to stand down. The contributions that she has made in the House have always been based on sound common sense, and so was her speech today.
I chair the Public and Commercial Services Union parliamentary group and want to express the view that is coming back from PCS members. The PCS represents 3,000 staff in the Land Registry, and there is a drop-in briefing from half-past 10 to 12 tomorrow in Room W1; those who want to know what PCS members are concerned about should come. The hon. Member for Peterborough (Mr Jackson) said that he has had only 10 letters this time. He need not worry: we will sort that out for him. There is real anxiety among the professional, highly competent, dedicated and committed staff.
In debates under the previous Government we argued that of course it is open to any Government to review the administration of a service, but that they should not throw out the baby with the bathwater. If a service provides high standards of professionalism, brings income to Government—which is unusual for any Government service—and is respected not just in this country but throughout the world, the last thing to do is destabilise it with rushed or hurried reform. To give the previous Government their due, they carried out an exercise, and exhaustive consultation was carried out over a long period, with staff, the relevant small and medium-sized enterprises, and professional groups. They reached the conclusion that moving to a trading operation was the best way forward.
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We expected that there would then be a long period of stability. The last thing that is needed is a continuous round of reform and change, which destabilises an organisation. A professional with a family, whose job is threatened every four years will look for another profession or line of work, and I fear that that is what will happen. The professionals at the Land Registry will look elsewhere, because of the insecurity of their situation, and we shall lose the bedrock of expertise as a result of continual attempts at change—and why?
Everyone has asked the same question; what is the motivation? The service operates effectively, on every premise. It has 98% satisfaction rates. I would love that rating, for myself as an MP, and for any organisation, whether commercial, public or private. Even in the most difficult circumstances, in the trough of recession, the Land Registry still brought money to the Treasury, covering its costs and making a contribution. There was a short period of deficit, but that was overcome as soon as the economy began to lift. The Land Registry has won the respect of every professional body, and there is now an alliance: I am the chair of the Socialist Campaign Group, which is in that alliance with the Law Society and the other groups that are coming forward. That shows the breadth of the support. Yet again, however, an attempt is being made at destabilisation.
What is the motivation? We know what it is. As to the hedging of bets about the various consultation options, I am sorry, but there is one option that the Government want to pursue. It was in the report obtained by the PCS in a freedom of information request: the 2012 KPMG report, which said that the GovCo was the best way forward, to make it possible to move on to full privatisation. My concern is that that is the Government’s motivation; an attempt is being made at full privatisation, which will result in the siphoning off of the profitable areas of the service, job cuts, and the undermining of workers’ conditions of employment. The result of that will be to undermine their professionalism as well. The Government need to come clean about their long-term objectives, because, if they do not, the suspicions will remain. I should rather that they would publicly state that those are their intentions now—to follow the KPMG recommendations for full privatisation. At least then we could have an honest debate. At the moment I do not think that the debate is honest, and as a result suspicion is building. Suspicion leads to lack of confidence in the organisation and further destabilisation.
Lilian Greenwood (Nottingham South) (Lab): My hon. Friend makes a passionate plea on behalf of those who are worried about the future of the Land Registry. A concern expressed in response to the consultation is that it will become less accountable to the public. Does not the experience of my hon. Friend the Member for City of Durham (Roberta Blackman-Woods) heighten our fears about the Land Registry’s future and its responsiveness to MPs’ and the public’s concerns?
John McDonnell:
The reason the suspicion of privatisation is so clear in the minds of PCS members is that they cannot get access to information about the Government’s real plans—and nor can Members. When an organisation refuses to have a meeting with a Member
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of Parliament, just for some dialogue and discussion about their constituency concerns, it undermines the principles of parliamentary democracy. It is a disgrace. I do not know of any other Government organisation that has refused to meet Members, including bodies such as Her Majesty’s Revenue and Customs, where there are confidentiality issues. That refusal builds on people’s suspicions that the Government are not coming clean.
There is also suspicion about the point raised by the hon. Member for North West Norfolk (Mr Bellingham)—the short consultation period. Why is it so rushed? Why push it through so rapidly, other than to get to full privatisation before the next general election? That is unacceptable. Everyone is now asking the Government to stand back and carry out a full consultation with staff and the professional bodies that have expressed an interest; and to take into account something that has repeatedly been said—the fact that the staff in question are usually in locations where there is high unemployment and high need.
A range of examples about the impact on local economies came out of the previous consultation. My hon. Friend the Member for City of Durham (Roberta Blackman-Woods) mentioned the figure of £10 million. I think that the calculations about Wales made it something like £15 million the last time around. The impact is substantial. It is not acceptable to take a leap into the dark with respect to the organisation and the ramifications for towns and areas. Undertaking a consultation in such a way, in a rush and with the information not fully available to all the interested parties, is not good governance.
I urge the Government to stand back and think again. There are many other places where they can look for major reform, and there are areas worthy of examination, or whose long-term futures need to be discussed, in which Ministers can busy themselves: the Land Registry is not one of them. Why are 150 years of public service about to be thrown out? I think it is because of an ideological commitment to privatisation. I cannot think of any other reason. Any other Department would want to keep the Land Registry in-house because it is such a successful organisation. Any other Minister would be proud to represent such a successful area of work. Privatisation must be the motivation, and that is why PCS members are so anxious. I urge Members to come along to tomorrow’s drop-in meeting to meet the professionals and let them explain what they do, as well as the implications of the threat to their services and their own plans for making the Land Registry even more successful as a public service.
3.28 pm
Nia Griffith (Llanelli) (Lab): Thank you, Mr Walker. I shall try to be brief and not repeat too much of what has been said by my hon. Friends and, indeed, coalition Members. I congratulate my hon. Friend the Member for Swansea East (Mrs James) on today’s excellent exposé, and on all the work that she has done. We shall all miss her genuine feeling for the community, and the way she expresses that here.
I shall come straight to the point and talk about the Government-owned company being part-way to privatisation. That is what is on the agenda, and we
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should stop beating about the bush, and say it plainly. Privatising the Land Registry would be nothing short of daylight robbery. It would rob the taxpayer of millions of pounds. The Land Registry currently brings in close to £100 million a year. It makes a profit and does a good job. Why on earth would anyone want to hive it off to the public sector? It is madness to steal that money from the public purse. What would happen afterwards? We would stuff it into the pockets of private contractors; and what would they do? They want to maximise profits, so they would put up prices, and hike the fees for the customer. Of course, who is to say that this Government would not be wilfully incompetent and sell off the Land Registry at a bargain basement price, just as they did with the Royal Mail, depriving the public purse of the true value of this asset?
We are facing loss of income, potential privatisation and potential hikes in fees—and a monopoly—if we go down the route of a Government-owned company. Part of the argument for privatisation is always that competition will be a good thing and that prices can be driven down, but this is an invaluable asset, looking after the land assets of the country, and it is a monopoly. What would we have if that were put into private hands? There would be profiteering, just as we see with some energy companies, which have managed to make six into one—a monopoly.
It makes no sense to privatise the Land Registry, and that is before we come to the issue of trust. Currently, it has a customer satisfaction rating of 98%. Hon. Members have said that everybody would be overjoyed if their organisation had that rating. People can trust the Land Registry precisely because it is a public body. They know it is impartial. How can we possibly say we are surprised when there are bank scandals and when people whose job is to make money try to make money in all sorts of ways? Exactly the same situation would arise if the Land Registry were privatised. There would be conflicts of interest. Would we be surprised, then, if shilly-shallying were going on or there was a lack of integrity and, potentially, corruption, if people want to use such a strong word? People want there to be the utmost integrity in land transactions, but feel that the door would be left open for precisely the type of behaviour I have mentioned if it were put in private hands.
There is another issue: data protection. I am advised by the PCS that there would be nothing in law to prevent a private company from selling on personal data to buyers who wanted the information. I think we have all had a gutsful of this, with information here and there, and people’s details being sold on. The last thing people want is yet another source of data leaking out into places unnecessarily. I feel strongly that these are good reasons why we would not want the Land Registry to be privatised.
Of course, to maximise profits, private companies would look to reduce labour costs, worsen terms and conditions and make jobs more insecure. It would be harder to attract high-quality staff and there would be a greater turnover of staff, leading to loss of expertise and low morale. I make no apology for wanting to protect quality job opportunities: I do not want to see a race to the bottom. But much more than that, I do not want a poorer service. High turnover of staff, loss of morale and lack of expertise would result in a much
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poorer service. That is without even talking about whisking the jobs off to some far-flung place, as hon. Members have mentioned.
The point of moving some public sector jobs was precisely to offer quality job opportunities in a range of locations, where perhaps there had not been such opportunities because some main industries had closed down. What do we find in those areas? These are prestigious jobs that people want and that they try to keep for a long time, because by comparison with local rates they are good jobs. As has been mentioned, in some areas of the country where the economy has heated up, the top-quality people are being lost. That control would be lost if the Land Registry were privatised, because there would be no choice about where the jobs were; they would be put into the private sector and could go where they like.
Swansea has the largest Land Registry office. Many of my constituents work there and they have expertise. It does not take them three or four glances at a Welsh word to write it; they can write, type, speak it and say it on the telephone. They do not have to think twice about dealing with complex Welsh place names, even Llanfair-pwllgwyngyllgogerychwyrndrobwllllantysiliogogogoch. [Interruption.] I would say it again if there were time. It is essential that we keep these jobs in the public sector and do not go down the private sector route.
There is a wider role for the Land Registry. Surely, we value our land. Land is key to development and crucial to our economy. We have heard a lot about shortages of land for housing and about not being able to get planning and about land banking. If we are going to have a more strategic view and to have any opportunity to use the Land Registry in a much broader sense, again, we want to keep it firmly in the public sector.
Finally, on the consultation, why on earth are we going down this route? As has been said, past changes are just about beginning to bed in, but here we are going through some sort of phoney consultation all over again. I say “phoney” because there seems to be an agenda behind it and because we do not have the information available. There is a lack of clarity and insufficient information. We do not know why we are having this consultation.
We should strongly resist any attempt whatever to hive off the Land Registry into a Government-owned company, which would pave the way for privatisation. Privatisation would mean selling it off at a low price, as was done with the Royal Mail, ripping the public off with higher fees, leading to poorer terms and conditions for the work force and, ultimately, no doubt, some great scandal in future, which we could avoid by avoiding going down that path now.
Mr Charles Walker (in the Chair): Mr Bellingham, you have four minutes, but if you spoke for three minutes I am sure the Minister would be grateful.
3.36 pm
Mr Henry Bellingham (North West Norfolk) (Con): Of course, Mr Walker. It is a great pleasure to serve under your chairmanship for the first time.
This has been an interesting and important debate. It was brought to my attention by a number of constituents whose companies I mentioned at the start of this debate,
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when I intervened on the hon. Member for Swansea East (Mrs James). I spent quite a lot of time in the first part of this Parliament, when I was on Her Majesty’s Government’s payroll, going to developing countries. Quite often, I would ask them what more the Department for International Development could do to help in terms of capacity building and improving the standard of government. Time and again, we were told that they really respected our Land Registry and that they wanted help embedding expertise, knowledge and capacity in that area. Obviously, if there is no fit-for-purpose Land Registry system, it will be difficult to have a proper market in property.
I respect the Minister’s intent in all this, but it is incredibly important that we get it right when he finishes the process. I am concerned about a number of points. At the moment, there is no question but that public confidence in the organisation is high. As a number of colleagues have said, the public respect this organisation and have confidence in it. The chief land registrar—the chief executive—has said that the new strategy is all
“around customer needs”
and that the organisation needs to focus on
“our customer needs…to improve our service delivery”.
However, he must be careful, as must the Minister, not to take away home owners’ confidence.
Let me say just a word about this organisation, which is making substantial sums for the Treasury. I do not have any difficulty with privatisation, but I am concerned about an organisation that is successful and making money, remitting a dividend to the Treasury. If that continues, it is good for Government finances and for the Budget deficit. I accept that, if this organisation was privatised at a premium, it would perhaps help pay down the Government national debt by a small amount, but the Minister should also think about the recurring income to the Treasury from the organisation in its current place in the public sector. That is not to say that I rule out any changes in future.
I am concerned about the need for proper consultation. In addition to the names of the companies I mentioned earlier, I shall quote an e-mail from a constituent, who says that 12 months ago he invested in a new property information franchise, which he operates from his home, employing himself and his wife. He says:
“Due to the success of our business, only last week we took office space in Hunstanton”—
a small town in my constituency—
“and employed two local people (both out of work) to keep up with demand”.
He is looking to expand and hopes to take on another four. Over the next few months he may have increased numbers further. He continues:
“These types of jobs are rare in this area and there will be no shortage of local candidates of all ages.”
He wants to build his SME up, but says:
“Needless to say, until we know exactly where Land Registry is going with its plans I am reluctant to push on with my plans”.
I hope that the Minister will meet these SMEs, which are the lifeblood of our constituencies. Will he also ensure that he has a meeting with the Council of Property Search Organisations? If he has already met CoPSO,
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will he update us on exactly what it said? I hope that he will take on board the strong points that have come out of this debate and, above all else, allow further time for the consultation.
3.40 pm
Mr Iain Wright (Hartlepool) (Lab): It is a pleasure to serve again under your chairmanship, Mr Walker. I remember with fond affection the Committee on the Education Act 2011. My mother sends her regards.
I congratulate my hon. Friend the Member for Swansea East (Mrs James) on securing this excellent and sensible debate. I reiterate what others have said by saying that I will be sorry to see her go. She will be a huge loss to the House. She has served her constituents diligently, and it has been an absolute pleasure to work with her.
The recording of land and property ownership is vital and has to be done with integrity, impartiality, professionalism and consistency, which has been provided by the Land Registry since 1862. The Land Registry serves a population of more than 55 million, and as its annual report stated last year, it
“facilitates one of the most active property and mortgage markets in the world”.
More than 23.5 million titles are recorded by the Land Registry, which is an essential part of the home buying market. Any changes to the service must be made with clarity and purpose and must be backed up with empirical evidence, and it is clear from today’s debate that the Government have not provided that clarity.
I have a series of questions for the Minister based on three themes: the consultation, the process and the impact on staff. The Minister published a written ministerial statement announcing the consultation on 23 January 2014. The consultation, as we have heard, is to last eight weeks until 20 March 2014. Cabinet Office advice on consultations issued in November 2013 said that consultation periods should be decided on a case-by-case basis but that:
“For a new and contentious policy, 12 weeks or more may still be appropriate.”
Employees of the Land Registry and the millions of people like us who rely on the integrity of the data held by the organisation will find the Government’s proposals new and contentious.
I hope the Minister saw the letter in The Times last week by Ms Hilary Mobbs of Leeds, which stated:
“The consultation has not been widely advertised and the (very short) consultation period ends in March.”
The hon. Member for North West Norfolk (Mr Bellingham) made a pertinent intervention reflecting the concerns of businesses in his area. Will the Minister respond to Ms Mobbs and explain why only eight weeks was decided upon? What sort of wide-scale communication campaign was put in place to alert stakeholders, including many members of the public, of the proposed changes?
On the consultation document, it appears that the Government are fairly agnostic on which option to choose, but there is some doubt about that. My hon. Friend the Member for Hayes and Harlington (John McDonnell) asked the Government to come clean on whether the GovCo is the preferred option for ultimately getting to privatisation. What is the Minister’s preferred option? In the interest of greater scrutiny and transparency,
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will he publish the KPMG report, as has been asked? If he does not have a preferred option, how on earth does he know how the perceived benefits of greater flexibility to deliver, greater focus on service delivery and more flexibility on pay, recruitment and the provision of other services will be achieved? How will the outcome of the short consultation affect the Government’s thinking? If there is overwhelming support from stakeholders for maintaining the status quo, will the Minister pledge to ensure that that will be the Government’s policy? What happens after the consultation? There will be a period of Government consideration, and then presumably, if necessary, legislative changes will be outlined. Does the Minister anticipate that something will be in the Gracious Speech before the next Session? Does he ultimately think that legislation will have to be enacted before the next general election?
The big theme of today’s debate is what problem the consultation is trying to solve. As we have heard time and again, the Land Registry does not seem to be a failing and inefficient organisation—quite the reverse. If the Minister thinks otherwise, perhaps he will say so. It is required by statute that income from fees charged to customers covers all the Land Registry’s expenditure. There is no burden on the taxpayer whatever, and there is no need for a call on moneys from the House.
The annual report states that the previous chief executive left the organisation
“in a healthy financial position with improving staff morale and a signed-off Business Strategy.”
The Land Registry, as we have heard, achieved a surplus of £98.8 million, showing that the organisation is on top of weeding out inefficiencies. Cost per unit is £23.36, which is significantly better than the key performance target of £28.41. The return on capital employed was a hugely impressive 23.4%. Many good private sector organisations would kill for such a return on capital employed. Net assets approach £0.5 billion and the cash-flow position at year end is positive, with £472 million cash in the bank. This year, the Land Registry paid a dividend back to the Treasury of £26 million. Under no possible criterion could the Government claim that there is a need for private sector financial rigour to be injected into the organisation. The Land Registry is well run and the financial metrics are sound.
As we have heard time and again, the Land Registry has 98% customer satisfaction and, to quote the annual report again, enjoyed
“target-beating performance in terms of the quality and speed of our registrations.”
In such circumstances, I do not understand what the Government are doing. That is especially pertinent when paragraph 37 of the consultation document explicitly states:
“The proposals outlined in this document would have a very limited impact on customers”.
If that is the case, why on earth do it? Is it really to ensure that the Land Registry is fit for purpose in the digital age, with a central focus on digitising land registration services? If that is the case, why cannot it be done under the present statutory arrangements? The Land Registry seems to be diversifying its business model and being more innovative. Why is a change in corporate and statutory status necessary? Given the high level of customer satisfaction, will the Minister say how he anticipates
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fees will move in the next few years? Does he anticipate that fees will increase and, if so, to what extent?
The consultation document states that there is scope for additional services and refers to amending the Land Registration Act 2002. Will the Minister provide more detail? What other services does he anticipate and what services would he like the new entity to provide? There is talk in the consultation document of
“greater access to a richer data set.”
What does that mean? It is vital that customers have faith in the integrity of registering land. To quote Ms Mobbs from Leeds again:
“One could envisage a situation, as has arisen with our power providers, whereby the registered title to all properties would be in the hands of an overseas company or one with its own commercial interests in the property market. This concerns me.”
I can understand Ms Mobbs’s concern. What will the Minister do to address that concern? Will a vertically integrated business model, whereby a company provides the full range of property services to the customer, whether conveyancing, land registry or otherwise, be acceptable to the Government? Would the Minister be concerned if, say, Zoopla owned the company? What about a bank? What will the Government do to put safeguards in place to prevent that from happening? How will data protection be safeguarded? There is no clarity whatever on that in the consultation documentation.
Finally, I want to address the Land Registry’s staff. More than 4,000 people spread across the country provide a prompt, professional and efficient service. We have heard a number of hon. Members talk about the great work that their constituents do for the Land Registry. I have constituents from Hartlepool who work for the Land Registry in Durham. What will happen to those staff? The consultation document states that
“we expect that the majority of staff would transfer to the service delivery company and would cease to be civil servants.”
There is a lot of ambiguity in that short sentence. What does the Minister mean by “majority of staff”? Does he mean that all current staff who want a job will have a job, whether it is in the new service delivery company or in the proposed office of the chief land registrar? If so, what about location? Would my constituents who travel to Durham be required to travel to Swansea if they want to keep their job in the new organisation? Will the Minister provide clarity? Does it mean that there will be rationalisation of both work force and locations? What is the TUPE situation? Can the Minister make any comment on pension entitlements for current staff?
The Government have poor form on such things, whether one considers the botched change in respect of the GoCo for the defence procurement function—that change was very similar to that proposed for the Land Registry—or the Royal Mail privatisation, which short-changed the taxpayer. The Government are in danger of making the same mistakes again. It is difficult to avoid the conclusion that, regardless of the organisation’s performance and given the absence of evidence, the process is merely a means of privatisation. I ask the Minister to exert caution, provide more evidence before making a decision and consult widely—that has currently been eluded—before embarking on such important yet irreversible changes.
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3.50 pm
The Minister of State, Department for Business, Innovation and Skills (Michael Fallon): I, too, congratulate the hon. Member for Swansea East (Mrs James) on securing this debate on an important subject. I am also sorry that she is leaving us at the next election. I am sure that she is not considering retirement, and I wish her well in whatever form of public politics she continues to pursue. I thank all hon. Members who have participated in the debate. I will try to reply to a number of their points, but if I may, as there were a number of questions—not least those fired at me by the hon. Member for Hartlepool (Mr Wright)—I will reply by letter to some in the interests of time.
A well-functioning property market is critical to the UK economy. Ensuring that the market functions properly has long been one of the Land Registry’s main tasks. It recently celebrated a landmark 150th year and continues to be a cornerstone of property ownership in England and Wales. It undertakes a range of functions and responsibilities that are critical to the property market operating effectively. In the past, successive Governments have been at pains to ensure that land registration procedures keep pace with a dynamic and rapidly-changing property market. As we look to the future, it is important that the Land Registry is able to modernise successfully and move into the digital age. The Land Registry already provides a number of services through digital channels, but it is looking to become a leader in digitising land and property services, and in the management and reuse of land and property data.
Accordingly, its ambitious new business strategy is focused on a number of areas: the digitisation and re-engineering of its core registration services, which should reduce processing times, risk of error and the costs of those services; playing a wider role in the land and property market, including being able to take on other adjacent registers; and maximising the reuse of property data for the benefit of the wider economy. Reduced processing times, errors and costs, and wider services and better access to public sector data, will all bring significant benefits for customers and make it easier to register land in England and Wales.
The strategy also reflects our broader digital, efficiency and modernisation aims and as such is a key priority. The experience of other countries in modernising their property services makes a compelling case for us to realise those benefits at an early stage. A number of other countries and states have already successfully digitised their land registries, so it is important that England and Wales do not fall behind where there are useful lessons that could be learned.
Before I turn to the commercial models, I will say something about local land charges. The Land Registry is looking to become the sole registering authority for local land charges, a job that is currently undertaken separately by each of the 348 local authorities. The benefit of the Land Registry providing a single central solution is that it would result in cheaper, quicker and more standardised services, so avoiding the current postcode lottery.
Commercial models dominated the debate. The hon. Member for Swansea East fairly asked: “If it ain’t
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broke, why fix it?” I will reply directly to that. Of course, the Land Registry is profitable, but we have a responsibility to review continually whether the business can drive further benefits to its customers and the wider market by driving digital by default services, which could deliver lower-cost services and reduce processing time.
The proposal in the consultation to introduce a new service delivery company is aimed at supporting the business in delivering its business strategy in the best way possible. We have been working with the business to consider whether the current model is fit for purpose or whether there may be benefits in considering alternative commercial models. Following that, there should be a number of benefits through a greater focus on service delivery, greater operational flexibility and a more clearly defined relationship with Government. Central to any change in the commercial model is the guiding principle that we must continue to protect the integrity of the registry in such a way that its role in underpinning the property market by giving confidence to buyers, sellers and lenders is not compromised.
Mr Stewart Jackson: I am sure the Minister would like to reassure us on the comments made by the then Lord Chancellor at the time of the feasibility study in 2011. He said that
“the registry’s state guarantee of title to land and property is essential, and that it must be retained in any arrangements that we make.”—[Official Report, 29 March 2011; Vol. 526, c. 151.]
Michael Fallon: Indeed. The proposal being considered in the document is to introduce a new Land Registry service company that would have responsibility for the performance of the service delivery functions. There would be a separate office of the chief land registrar retained within Government primarily to perform the regulatory and fee-setting functions. It is also envisaged that the indemnity arrangements will continue to be state-backed. The new company, if we choose to go down that particular road, could focus on delivery. Its ability to carry out additional activities would no longer be narrowly constrained by legislation. It would be outside the civil service and would have greater flexibility on pay and recruitment.
I emphasise that no decision has yet been taken about the ownership of such a new company, should we move forward with the proposal to create it following the consultation. A number of models are being considered, but the oversight that will be retained by the office of the chief land registrar would ensure that Land Registry companies and the integrity of the register would be protected irrespective of ownership. Models being considered include a wholly owned Government company, a joint venture and a contracting-out model. It is Government policy to assess options for moving assets to the private sector where there is no longer a strong policy reason for continued public ownership or where there is potential for an asset to operate more sensibly and efficiently in the private sector.
I was asked what the transition period means—it means the digital transformation phase. During that phase, we see benefits in partnering with the private sector, whether the status quo is maintained or whether there is a change in model, as considered by the consultation. The form of that partnership with the private sector would be different under each scenario. Looking
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internationally, a range of commercial models have been adopted to deliver the digitisation of land registration, but in each case there has been partnership with the private sector to bring in the capacity and capability needed.
I was asked about data protection. I confirm that the data protection procedures that currently apply would apply to any new service delivery company, to ensure that personal information is not mishandled. I was asked about the KPMG report, which was prepared in March 2011. Many parts of it are no longer relevant, but I understand that a redacted version of the report has been supplied to one of the unions under a freedom of information request.
My hon. Friend the Member for North West Norfolk (Mr Bellingham) asked me specifically about conveyancing self-service. I make clear to him that the current customers of the Land Registry will have their views sought before any new or revised services are launched. They would certainly be consulted again before any such services were mandated by the Land Registry. I hope that that reassurance will be of use to him.
I was asked about meetings with MPs. I say to the hon. Members for City of Durham (Roberta Blackman-Woods) and for Darlington (Jenny Chapman) that I do not think it is satisfactory that the meeting was refused. I am asking the management of Land Registry to look at that again to see whether, as we come to the close of the consultation period, those meetings can now be organised with the hon. Member for Darlington and her colleagues. I hope that it offers some comfort to her that my former constituents are still at the forefront of my mind.
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Local Television Stations
4 pm
Mrs Madeleine Moon (Bridgend) (Lab): It is a delight to speak under your chairmanship, Mr Walker.
The plans to introduce local television throughout the United Kingdom had cross-party support. The Minister had previously concluded that legislation on local television came as a result of “all-party support”. He said that, in his opinion, it was one of the Government’s “more popular policies”. Given the lack of competition for that dubious honour, I am not exactly sure how wonderful an accolade that is, but nevertheless.
Wales, rightly, has a reputation for the quality of its contribution to the television industry. We are proud to be associated with genuine screen legends such as Richard Burton, Anthony Hopkins, Michael Sheen and, more recently, Rob Brydon, an ex-Porthcawl comprehensive school pupil—the school is in my constituency—and Ruth Jones, from the popular “Gavin and Stacey” programme.
Those individuals have not just left Wales and gone to develop their careers outside Wales; they have come back to Wales and invested in developing the ability of Welsh people to get into television, theatre and film. For example, Ruth Jones has set up Tidy Productions, which specialises in comedy and comedy drama set and always filmed in Wales. New investment is coming all the time.
Television companies are recognising the benefits that Wales can bring to their work. Pinewood Studios announced in 2012 that it would move the bulk of its studio facilities to Cardiff. It has brought the largest indoor film studio in Europe to Swansea, where top dramas such as “Da Vinci’s Demons” are filmed. Wales is also the home of some of the BBC’s most successful programmes recently, such as “Doctor Who” and “Sherlock”, which were filmed and made in Wales.
Wales has become the home to innovative production companies and companies developing local talent and skills. It’s My Shout Productions, headed by ex-Porthcawl drama teacher Roger Burnell, seeks out and showcases emerging talent and skills. The company produces around 30 short films a year for Welsh television and has won several awards. It also has a training programme to pair young people with professionals in their chosen area of interest, so that their skills can be developed. All that shows how Bridgend and Wales as a whole have contributed to our television industry
From the start, Welsh Members of Parliament have recognised that the introduction of local television services would bring us new opportunities, which we were eager to embrace. The introduction of local television in Wales moved relatively quickly. Made Productions was given a 12-year licence as the first local TV station to be based in Cardiff, called Made in Cardiff. As part of its agreement with Ofcom, it will provide a wide range of programming, focusing on local news, sport, traffic, community affairs and local entertainment.
Welsh MPs recognised the opportunities to showcase our skills and talent. From the Royal Welsh College of Music and Drama to the engineering department at Bridgend college, there were opportunities to be grasped. We recognised the wide range of employment opportunities
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for our constituents that the new and emerging talent, production and TV opportunity offered. The creative industries are not just for performers or just about actors or musicians; they bring work for writers, caterers, handling crew, set designers, movers, drivers, electricians, scaffolders and costume designers, as well as lawyers, salespeople, web designers and economists. All would have opportunities for work, thanks to Made in Cardiff coming to Wales.
Unfortunately, as the process moved forward, it became clear that the situation in Wales—as opposed to England and Northern Ireland—was not as positive as we had hoped. It is particularly disheartening that Made in Cardiff will be allocated channel 26 on Freeview, compared with its counterparts in England and Northern Ireland, which will be allocated channel 8.
Channel numbers have a direct impact on viewing figures—the lower the number, the more likely a viewer will turn to that channel. The majority of all viewings on Freeview take place on the first 10 channels. England and Northern Ireland have been included within the first 10, so will the Minister tell us why Wales is being disadvantaged by being allocated a channel that few viewers will ever explore?
As recently as two weeks ago, the Minister reaffirmed his personal commitment to maintaining the prominence of our public service broadcasters. Both the Secretary of State and her predecessor have regularly spoken about the importance of such broadcasters. Therefore, why are public service broadcasters in Wales and Scotland being treated in this way, with services in England and Northern Ireland given a higher priority on Freeview?
The Minister has previously admitted that the criterion for public service broadcasting—appropriate prominence —is “a relatively vague term”. He said that it was important that we update the regulations. Will he tell us when that will be done, and why it was not done before the roll-out of local television?
The Minister also claimed that the presence of S4C in the Welsh television market is “an idiosyncratic situation”, a description I am not sure S4C or indeed the people of Wales feel particularly flattered by. Is the Minister claiming that the existence of S4C means that, while local television in England and Northern Ireland will be able to occupy the channel 8 slot, local television in Wales must be satisfied with channel 26? S4C does not operate in Scotland, so why is Scottish local TV also going to be placed at 26? The argument about S4C simply does not make sense to me.
The Minister has said that we should be grateful to be at channel 26, as when the plans were originally tabled, it was the intention that local television in Wales should be allocated channel 45, and that 26 is a huge improvement. While it is undeniable that going from channel 45, which most viewers would never find, to channel 26 is better than nothing, that will still place the channel below shopping and music channels. If the local television station is placed below those sorts of programming, will anyone ever find local television in Wales? Does the Minister feel that that will bring appropriate prominence? If channel 26 is good enough for Wales and Scotland, why is it not good enough for England and Northern Ireland?
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Kevin Brennan (Cardiff West) (Lab): I associate myself with the points being made by my hon. Friend and wish to add to them. One of the problems for local television is the marketing of a new and important service. Some of the first 10 channels in Wales—such as ITV2 at channel 6 on Freeview, BBC3 at channel 7 or ITV3 at channel 10—have lots of opportunities for cross-marketing, such as by ITV1 or other ITV services, whereas local television does not have such opportunities. That is why it is crucial for local television not to have to spend lots of money on marketing because it is on an obscure channel lower down on the dial.
Mrs Moon: My hon. Friend made a point that I intend to come on to, but one that I hope the Minister is listening to, because this matters a great deal to us in Wales.
Wales has experienced a double injustice. Services in Scotland will also suffer from being placed on channel 26, but they will join England and Northern Ireland on Sky channel 117, while Wales has been given channel 134. That is a double reduction in prominence for Wales compared with the other nations. Will the Minister explain why? Why is Wales being singled out in that way?
The reduction in viewers will severely harm the income that local television services will receive and use to make and develop programmes, taking up the point made by my hon. Friend the Member for Cardiff West (Kevin Brennan). Made Television will be forced to allocate more of its resources to market its position on channel 26, because that is so low down the list, and that will result in reduced programme output and employment opportunities—the absolute opposite of what the Minister was trying to achieve and which we in Wales were desperate to be provided.
The responsibility for channel allocation on Freeview lies with Ofcom. Clearly, it does not have the powers to force any type of change to the position that Made in Cardiff will be placed in on Freeview. The Minister has previously spoken of his desire to update the regulations. Is he consulting with Ofcom and will he grant it the necessary powers?
The previous debate in Westminster Hall left us with a guarantee that the Minister would go away and keep us updated on a consultation to grant Ofcom those powers. He expected the consultation to take about three months, but he gave no indication of when it was likely to begin. Since then, while he has been working on the issue, has a date been set? If not, will he explain why we are still waiting for a consultation to begin?
The Made in Cardiff channel launches this summer. Unless a consultation is about to start in the next few days, no decision will be made in time for the company to do the marketing necessary before the launch of its new channel. The argument is not esoteric, but about basic business, and it could demonstrate a greater chance of success for Made in Cardiff. It is important for the Minister to address the matter as soon as possible.
This is the second Westminster Hall debate on local television in two months. The channel in Cardiff, and the one in Glasgow to which the previous debate referred, launch in the summer. How can we allow that launch to take place with the channels at a lower level on the electronic programme guide than in England and Northern
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Ireland? Why are the two devolved Administrations in Wales and Scotland being dealt with in a totally different manner?
Prominence on the EPG has been used to ensure that local services in England and Northern Ireland will be given the spot that they deserve, without detriment to Channel 4. The Minister also places a lot of importance on the prominence of public service broadcasters. Can we therefore agree today that action will be taken to ensure that Wales does not get a worse deal than the rest of the UK? Any consultation needed by the Minister in order to make changes to the regulations affecting Ofcom, so that it can address greater prominence for Made in Cardiff, should begin, so that the three-month period indentified for the consultation can be completed and a decision made before the marketing for Made in Cardiff starts.
I hope that the Minister understands that for us in Wales the matter is of grave importance. We have a huge reservoir of talent and we want the opportunities for people, in particular young people, to find work in the creative industries across a wide spectrum of job and skills. I hope that the Minister has some positive news for us today.
4.15 pm
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr Edward Vaizey): It is a great pleasure to serve under your chairmanship, Mr Walker. It is one of those moments to realise that someone I came into the House with is now of such august importance that he is chairing a Westminster Hall debate.
I am grateful to the hon. Member for Bridgend (Mrs Moon) for initiating the debate. She started with her glass half full, but by the end her glass was half empty. I hope to refill her glass, or at least to persuade her to take a slightly different perspective to the one suggested by the tone she took later in her speech. I join her in paying tribute to the many Welsh stars mentioned in her opening remarks, in particular Michael Sheen, Rob Brydon and Ruth Jones. I thank her for noticing the fact that Pinewood Studios last week signed a deal to develop in Cardiff.
It is also probably worth noting that one of the reasons for such a renaissance in television production is this Government’s decision to continue the film tax credit and to extend it to high-end television drama and animation. There has been a real renaissance in the animation industry even over the past six months since the tax credit was introduced. We hope to have some news shortly on our application to the European Commission for a tax credit for the video games industry. The Chancellor has also announced proposals to extend a tax credit to the visual effects industry, as well as to regional and touring theatres. There is therefore good news for the creative industries, which the statistics show are flourishing, and Wales—south Wales in particular—is one of the hotbeds of their development. In saying such things, I am echoing the hon. Member for Bridgend, who was setting the context for local television not only in Wales, but throughout the country.
The last time we debated local television was in connection with its prominence in Scotland, when I generously said that I regard it as a cross-party issue. I hope that I am not considered churlish, however, in
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pointing out that the genesis of the policy emerged under the previous Secretary of State, my right hon. Friend the Member for South West Surrey (Mr Hunt), who is now the Secretary of State for Health. His passion in opposition was to introduce local television, and his energy and drive as Secretary of State saw it come about. We are on the verge of realising his vision, albeit with support from all parties.
Last year, I went up to Grimsby to visit Estuary TV, one of the first local television stations to start broadcasting. It is working in partnership with local media and local universities. Local television therefore has the enormous opportunity to provide not only the chance of yet another media outlet for us, but so many community organisations with the kind of media coverage that they need and deserve. The local television companies also have the opportunity to forge strong partnerships with many of those community organisations.
The hon. Lady rightly referred to Made Television, which will be running the Cardiff local television service. It will serve a wide area stretching to her constituency. I gather that it is due to launch as early as this summer. Along with Bay TV, it was awarded the Mold and Swansea licences by Ofcom in January. It has set out a range of plans to develop a wide range of compelling programming, with local services broadening the choice for viewers.
That is just the tip of the iceberg: over the next three months we will see the start out of the roll-out of local TV in earnest. As well as Estuary TV, which I have already mentioned, London Live will launch shortly, as will Mustard TV in Norwich and Notts TV in Nottinghamshire. We hope that the majority of the 19 phase 1 channels will be on air by autumn.
Significant public money is being invested in the launch of local television services. In 2011, as part of the most recent licence fee settlement, which runs until March 2017, the Government made £40 million available, £25 million of which has been allocated to the development of the local TV transmission network. That work is being undertaken by Comux, which was awarded the local TV multiplex licence by Ofcom in January 2013. The remaining £15 million has been allocated for the purchase by the BBC of the local TV content that will be generated. Detailed arrangements for the distribution of that funding have now been agreed with the BBC executive. That investment will give local TV the best possible chance of establishing itself against the ever- increasing choice that viewers have, whether watching on traditional linear channels or watching catch-up and downloadable content available on other platforms.
So far, I hope that everybody’s glass remains firmly half full. The creative industries are thriving, and are supported by generous and ever-growing tax credits brought in by this Government. They will be supported by the vision of the former Secretary of State, my right hon. Friend the Member for South West Surrey, for the introduction of local television for the first time in the UK.
At this point, however, the glass becomes half empty, as we debate the prominence of local television, particularly in Wales. In her speech, the hon. Lady tried to give the impression that I was somehow saying that Wales should be duly grateful for what we are giving it. I certainly would not seek to give the impression that I thought that S4C was somehow an idiosyncrasy. What I meant
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was that S4C is a unique channel for Wales. It represents something like £100 million of annual investment in Welsh language programming, much of which is of an extraordinarily high quality and is exported around the world. However, that leads to difficulties in trying to find an appropriate slot for local television.
When initial bids were being sought for licences, the slot was at channel 41. As a Government, we are keen to see local television succeed, and we want to see it move up the EPG rankings where possible. As slots have become available I am delighted that local television has moved up the rankings and that Scottish and Welsh local television channels have moved from channel 41 up to channel 26. But there is a debate going on about this matter—the hon. Lady is aware of the recent debate led by the hon. Member for Linlithgow and East Falkirk (Michael Connarty) on 18 December.
It is anomalous for local TV to have a different channel slot in different parts of the UK. It means that local television is less prominent in Wales and Scotland, and causes problems for local television in developing promotional activities collectively around a single channel number. But local television was not coming into a greenfield site. We need to balance the needs of important services that already exist in Wales and Scotland and currently occupy the channel 8 slot. There is also the importance of certainty in the EPG regime for commercial broadcasters so that they can maintain their levels of investment in programming.
We made it clear in our strategy paper “Connectivity, Content and Consumers”, which we published last summer, that it is important that public service content should have prominence on TV platforms, in order to achieve our wider broadcasting objectives, but the Communications Act 2003 makes it clear that Ofcom rather than Government should determine the appropriate level of prominence. The Government’s role is to determine which PSB channels should be included in the prominence regime, and local TV was duly designated to be included in 2011.
Ofcom’s code of practice on EPGs, which was produced as a result of the 2003 Act, requires EPG providers to comply with three general principles. One is that Ofcom will
“have regard to the interests of citizens and the expectations of consumers in considering whether a particular approach to listing public service channels constitutes appropriate prominence”.
That system has hitherto broadly worked well, but it is important to recognise that it is not for Government or Ofcom to require a channel to have a specific slot on an EPG, but for the EPG providers to draw up a fair policy on how to use free slots.
Kevin Brennan:
The problem is that, as the Minister has quite rightly said, this idea is the Government’s baby—although it has had support from all parties—and he is rather neglecting its birth in Wales and Scotland. In the past, he has promised a consultation on the matter, and in a recent answer to a written question from me, his Department said that the consultation was
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due to start “shortly”, but it was due to start shortly before Christmas. Before he concludes his remarks, will he tell us exactly when the consultation will begin and whether in his view the channels should ultimately be in the top 10 on Freeview at the very least?
Mr Vaizey: I will conclude my point and then come on to when we are planning to publish the consultation.
It is important to stress that the situation is different in England and Northern Ireland, because the channel 8 slot used there for local television is used by BBC Alba in Scotland and by Channel 4 in Wales since the usual slot for Channel 4 is occupied by S4C in Wales. That is why the channel 8 slot is not available for local television services in Scotland and Wales. When we originally put together the policy on local television, the slot available was channel 45, so there have been significant changes.
I hate to give a response to the hon. Member for Cardiff West (Kevin Brennan) that he will almost certainly regard as inadequate, but I will have to answer in the same way as I have answered him before, which is that we are due to publish the consultation shortly. We have it drafted and have had discussions with Ofcom to clarify exactly what powers it currently has so that we can make it crystal clear in the consultation what powers we seek to change. The consultation will go for Whitehall clearance shortly, so we are on the verge of publishing it. I hope that will be in the next few weeks.
Mrs Moon: I will be brief. Will the Minister tell us whether that “shortly” will be short enough to let Made TV hang back from putting out publicity on which slot the channel will have, in the possibility that it will have an opportunity to move up to another slot before its launch in the summer? That is the dilemma being faced at the moment.
Mr Vaizey: It is important to emphasise that those people who have bid for local television licences—and we welcome the people who bid and who have been awarded the licences and will run those pioneering services—have gone into the process with their eyes open. They knew what the slot was when we began the consultation. They have seen the slot change as we have encouraged Freeview to push local television up the rankings when slots became available. The hon. Lady will have worked out that if we publish a consultation in March, there will be a period of consultation and then decisions about making changes will have to be taken. There is no way I can offer any kind of guarantee to Made TV or any other local television provider that changes will happen rapidly enough to move its slot up. It is, in any event, a consultation, and I cannot prejudge its outcome. I am sorry to disappoint her.
To return to my earlier theme, we should look at local television from the perspective of the glass being half full. It is a fantastic innovation that has brilliant cross-party support. We are going to see pioneers and innovators take to the airwaves over the next six months. I hope that the next debate we have on the matter will be celebrating the successful launch of a first for the UK broadcasting ecology.
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Council Tax Banding
4.30 pm
Mr Mark Spencer (Sherwood) (Con): I congratulate the Minister on his impeccable timing. I welcome this opportunity to set out my concerns about council tax banding. The topic may not fill the whole half hour, but it is too wide to explore in an oral question.
Sherwood is seeing an enormous amount of development, with new houses being built throughout the constituency. The new occupants are keen to see which band their house falls into when the local authority sends its council tax bill. They are usually fairly content with the band they are given, as long as it is consistent with those of their neighbours.
Council tax bandings are obviously subjective and are decided by the valuation office. Most people accept that they must pay council tax and accept the band they are put into, but when one of their neighbours in a similar or larger house is given a lower banding, that causes enormous frustration. That is happening to a great extent on a new estate in Hucknall in my constituency. Will the Minister tell us how the valuation office reaches its decisions and how we can obtain more consistency in the bandings so that my constituents understand the valuation office’s decisions?
There have been several successful and unsuccessful applications for changes to council tax bandings for properties on the housing estate just off Papplewick lane in Hucknall. Perhaps you will indulge me, Mr Walker, by allowing me to talk through some examples from my constituents. I have been contacted by Mr Paul Wennington of 11 Falcon way, Mr and Mrs Paine of 7 Falcon way and Mr Gary King of 8 Hobben crescent on the same estate.
Mr King’s case is particularly interesting because of several references to the locality of his property near social housing and whether that should or should not have an impact on the banding of a property. Mr King has come to a conclusion about that and there is a strong argument, which I will come back to, about social housing and its relevance. In the evidence, the valuation office was clear. It said that the listing officer’s representative contended that band E was correct for Mr King’s dwelling because it was in line
“with the established tone of value/band for such properties based on its size on the appeal property’s estate and the adjoining development built by Bellway Homes which also had social housing in the locality.”
There is nothing too controversial about that. The listing officer’s representative then said that in view of the evidence he
“considered that the tone for properties of the appeal property size supported band E notwithstanding the proximity of the social housing and asked the panel to dismiss the appeal”.
At that point the valuation office was clear that social housing in the locality of Mr King’s property did not have an effect on its value and the band it should be in.
Reference was later made to other properties on Peregrine road, where an appeal was allowed. The panel noted:
“Regarding the appeal property’s specific position on the estate…the views from the front of the property looked directly down Falcon Way and overlooked the social housing, which was only several houses away. The panel was of the opinion that this view disadvantaged
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the appeal property more than those which did not overlook it in a similar way. The panel also noted that all access to and from the social housing was past the appeal property”.
There seems to be some inconsistency: in one appeal, social housing next to someone’s property was considered to lower the value to band E, but on another occasion it was not. I am not here to discuss whether social housing in proximity to a property should or should not reduce council tax; there is an argument for saying that the landlord is irrelevant. What is relevant is how tenants conduct themselves, and I am sure that many owner-occupiers in very expensive properties could be considered to be antisocial neighbours. I am not sure whether having an antisocial neighbour is a consideration in deciding what band a property is in.
I am asking for clear guidance to the valuation office on the bands. I am aware that banding was set in 1991 and that it is difficult to compare various bands, but my constituent has gone to the trouble of researching properties with similar values back in 1991 in the Hucknall area and most of them come out with an average value of around £70,000, which instead of putting them in band E puts them nearer the top end of band C. One can imagine the frustration when my constituent’s bill and those of several of his neighbours arrived showing that their properties were in band E, particularly when some of his neighbours appealed against that decision and had their appeal granted, dropping to band D when other neighbours’ appeals were rejected and they were told that their banding would remain where it was.
When developers propose new properties, they come up with a plan and allocate names to the types of properties. A three-bedroom detached house will be given a style name and a value. A four-bedroom house will be given another style name and value. On the same estate, the developer built properties identical in every way, shape and form, including the design, type of bricks and type of tiles, yet some have been put into a different council tax band.
In summary, I want to draw the attention of the Department for Communities and Local Government to the frustration that my constituents feel at the council tax banding that the valuation office is implementing. If the Minister can do anything to give it more support and guidance so that its approach to banding is more consistent, that would be greatly appreciated. If that guidance were forthcoming, perhaps some of my constituents could re-appeal the decisions against their banding on a more level playing field.
4.39 pm
The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis): It is a pleasure to serve under your chairmanship, Mr Walker. I thank my hon. Friend the Member for Sherwood (Mr Spencer) for securing the debate, as it provides an opportunity to discuss the council tax banding system and the processes of the Valuation Office Agency. My hon. Friend has, as always, fought hard in his speech to ensure that he gets the best result for the residents of Sherwood. I know that he does that on a daily basis across the House, lobbying myself and other Ministers. He is right to do so.
I want to be clear: I am keen that the council tax banding process is seen to be open, fair and transparent, and that council tax payers are clearly able to see and
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know their rights if they want to challenge those bands. It goes without saying that a person’s council tax bill should be based on the correct council tax band for their property. None of us could possibly want to argue against that.
I want to reiterate the Government’s position that we do not plan at the moment to make any changes to the banding system; I appreciate that that is not the point my hon. Friend was making. We are looking to do nothing of the sort, either by adding more bands or splitting them, but I appreciate that there has been a lot of talk about that. We are aware of media reports calling for extra bands to cover higher-value properties. Just a couple of weeks ago in the Chamber, Labour refused to rule out adding more bands and increasing council tax.
We have no plans to introduce anything such as a mansion tax or anything else, and we have made it abundantly clear that there will be no general revaluation during the lifetime of this Parliament, because that would be costly and increase council tax bills. We have seen how that worked in Wales in 2005, when four times as many people moved up the bands as down. Wholesale revaluation is simply not the answer; it just causes more problems.
Jonathan Lord (Woking) (Con): Like the Minister, I congratulate my hon. Friend the Member for Sherwood (Mr Spencer) on securing the debate. I am delighted that the Minister is ruling out any further council tax bands. Our hard-pressed council tax payers are paying quite enough as it is.
This debate is timely; in my constituency of Woking, we have a number of new developments—by the way, I thank the Minister for ensuring that some of the new homes bonus money is going to local authorities rather than to local enterprise partnerships. The debate is timely and important. Thousands of houses are coming on stream in Woking and there must be an absolutely transparent process that works, so that people are allocated to the right band and those bands are of equivalence to the other properties in my constituency.
Brandon Lewis: My hon. Friend makes a valid and fair point, particularly regarding transparency. It would be useful for me to set out how the system works, how bands are assigned—which will help deal with the direct point raised by my hon. Friend the Member for Sherwood—and what the taxpayer can do to challenge their banding.
In England, the main role of the Valuation Office Agency—or the VOA, as we all know it—is to provide the valuations and property advice required to support taxation and benefits. There are eight bands—A to H—and every single one of the 23 million properties in England that are subject to council tax is assigned one of those bands by the VOA. They are based on the open market value as of 1 April 1991, as my hon. Friend mentioned.
Each band has a range of values. For example, band D is for properties valued between £68,001 and £88,000 in 1991. That highlights that a property could have its value changed and still not change bands. It could be valued at £87,999 and be in band D, then it could be
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reassessed and revalued, and considered to be worth £70,000—more than a 10% change—but still stay in the same council tax band. That could be one reason why residents can see no change in band despite a review on value, but I shall come back to that.
The common valuation date of 1991 means that all properties, including newly built properties, are valued on a fair and consistent basis. That applies equally to all homes, regardless of general fluctuations in the property market since then. The banding system provides a link between the value of a dwelling and the level of council tax. Homes will vary according to a range of factors; some are obvious and some not so. If we think about the value of a property that any one of us may own, its age and size will all have an effect on the value, as might the level of modernisation and improvement. That can again lead to a variation in valuation between two properties that, at first glance, may look very similar— or, indeed, the same.
The VOA looks at the property details for a property, and then looks at sales that took place on or around the valuation date of 1991. Sales from around that time on comparable properties are the strongest indicator of value. As the bands cover a range of values, many different types and styles of property can fall in the same band. Equally, fairly similar properties can fall into different bands, depending on their value in 1991. For example, if the band level is £68,001, the property could be in a different band for the sake of being £10 or £15 apart in value, in theory.
When council tax was introduced in 1993, the Government of the day did not want to discourage people from improving their properties for fear of incurring additional council tax liability. Council tax is not, and should not be, a tax on home improvement or extensions, but such changes are taken into account when a property is sold. That is intentional and there are no plans to change it.
Mr Spencer: I am grateful for the Minister’s time and for his explanation. I hope that he recognises that I am talking about brand new properties on the same housing estate, built to the same set of drawings, using the same bricks and the same tiles—they are identical apart from the fact that they are 100 yards apart—that are in a different band. That is what is causing the frustration.
Brandon Lewis: I understand my hon. Friend’s point and I will turn to that specifically in a moment. Having said that, in various parts of the country, literally being a few yards apart on opposite sides of the road can make a difference in valuation, even for the same properties. I appreciate that that can be frustrating for residents, but it can have an impact—it is about the valuation. It is important to be clear about how the system works, as that will feed through to give a better understanding, enabling me to give a clearer answer to where we are and what my hon. Friend’s residents can do.
As my hon. Friend rightly pointed out, there can be inconsistencies. Taxpayers can at times find themselves living in properties, new or old, that seem identical or even smaller than a neighbour’s that is in a lower band. The property has a different band level because improvements have been made to it, or there are changes that are not clear at first. Even if it is only because it is on the other side of the road, there can be a difference in valuation.
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It is clear from my hon. Friend’s comments that he has called today’s debate because there is a specific issue around new-build properties for his constituents, who find themselves in a situation in which the bandings are different for similar or, as he outlined, effectively identical properties nearby. I can understand why that would be frustrating not only for them, but for him in his work to represent them.
If council tax payers believe that their band is incorrect, they can contact the VOA with their concerns—I appreciate that there is an issue with that, which I shall come to—and the VOA will review a property’s banding and amend it if the evidence suggests it is incorrect. While I am here on the record—this is not so much for my hon. Friend’s benefit—I want to be clear that council tax bandings can be challenged in two ways. First, the council tax payer has formal challenge rights in the first six months of either becoming the taxpayer of a property, or against a change made by the VOA, or where a material reduction in the value of the property or locality has happened since council tax was introduced.
When council tax payers do not have those formal rights, taxpayers can have their band reviewed by the VOA for free, if there is something to suggest that the banding might not be right. The VOA uses its statutory duty to maintain fair and accurate bandings as the means to provide a free banding review service, which applies to all occupiers, whether or not they have proposals rights.
I make that point clear because I know that some agencies out there—an increasing number of companies acting as agents—are promising council tax payers that they can get their bands reduced. I want to be clear: although some of those are charging up-front fees, I am keen for taxpayers to know that they can approach the VOA directly to challenge their banding. Full details are on the VOA’s website.
There is also the ability to have the case appealed to the valuation tribunal when the taxpayer and the VOA cannot agree. It seems to me, from the comments made
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by my hon. Friend the Member for Sherwood, that that is where the crux of the issue in his area may lie. The valuation tribunal is independent from the VOA and will hear evidence from both sides before making a final decision. That can then be appealed to the High Court on a question of law, but that does not necessarily help the residents.
I say to my hon. Friend that after listening to what he said, he has outlined a potentially apparent inconsistency in the valuation tribunal decisions, rather than in relation to the VOA. I would like to invite him to come and see me, and I will arrange for him to have a meeting on behalf of his residents to look at that specific issue.
If there is an inconsistency, we want to make sure that that is driven out; if there is not, we want the residents to have a good understanding of why they have been banded differently. It may be for some of the reasons that I outlined in the past few minutes, about differences that are not necessarily apparent at first between properties. If there is an inconsistency, we can make sure we drive to the bottom of that and deal with it for my hon. Friend’s residents. I have also written to all billing authorities to remind them of their statutory duty to include the VOA contact details on council tax bills.
This is a complex system. It can be daunting and frustrating, as we have heard this afternoon. However, it is also very important. That is why I am so determined that we will ensure that it is as open and transparent as possible and why I very much welcome today’s debate and look forward to my hon. Friend coming and having a conversation with us about the specifics of his case.