Last updated: July 14, 2014 3:41 pm

Coalition abandons plan to privatise UK Land Registry

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UK property for sale©Bloomberg

The government has dropped plans to privatise the Land Registry after heated rows between the Tories and Liberal Democrats in the wake of the Royal Mail sell-off.

The government-owned business, which controls records of all property sales in England and Wales, has been considered by ministers for privatisation for the past six years.

In January the government began an urgent consultation examining whether to create a joint venture or a new company – a “GovCo” – to run land registration services.

The most likely candidates to purchase the agency were thought to be big-data companies in geographical mapping and information, or personal and consumer data.

David Cameron, the prime minister, had hoped that the sell-off – through the creation of a joint venture with the private sector – would value the business at about £1.2bn. The group made a surplus of £98.8m in 2012-13 on revenue of £347m.

The deal could have raised substantial money for the Treasury as part of a wider privatisation drive of government-held assets and was being pushed hard by Michael Fallon, the Tory business minister.

But parliament was told on Monday that the proposals had been put on hold, after the Lib Dems in effect put the brakes on the idea. “They have been really difficult over the whole thing,” one senior Tory figure said.

Mr Fallon said in a statement that the coalition government had concluded that “further consideration would be valuable” given the responses to the consultation. “At this time no decision has been taken to change Land Registry’s model,” he said.

The government would continue its ambition for an effective, “digital-by-default” data service which had already seen the group’s workforce cut in half over the past 20 years, he said.

One Lib Dem aide said: “It is clear the organisation needed to modernise but it is doing so already. We are not in favour of privatisation for ideological reasons. It is not the case that public is bad and private is good.”

Vince Cable, the Lib Dem business secretary, had urged caution over the deal after his department was criticised over the handling of the Royal Mail sell-off. MPs on the business select committee found that the government had cost taxpayers £1bn by undervaluing the group.

In depth

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The company was floated on the stock market in October when the government sold 60 per cent of its stake at 330p a share, valuing it at £3.3bn.

The stock closed on Monday at 482p, meaning the company is now priced at about £1.5bn above the flotation price.

In a sign of the political tensions surrounding privatisations after the “botched” Royal Mail deal, Mr Cable last week ordered a review into the sell-off of state assets.

Lord Myners, former City minister, will lead a panel of experts to examine alternatives to initial public offerings for privatising state assets, as well as whether the process of finding out what investors are willing to pay for shares can be improved.

Unions had fought against the sale of the Land Registry, which employs 4,500 people and has information on all house sales in England and Wales.

The PCS union, along with the Law Society, had run the campaign, with many union members at the Land Registry walking out in protest at the plans in mid-May.

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