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The clause gives the Treasury the power to apply the bank insolvency procedure to building societies, with any necessary modifications. This will be achieved by secondary legislation using the affirmative procedure. Clause 118 that follows relates to credit unions. I hesitate to risk your wrath, Mr. Gale, but could the Minister respond in terms of credit unions as well as building societies? What is the Governments intention with regard to bringing forward secondary legislation by way of affirmative procedure? Do the Government intend a short time frame or does this provision give the Government power to introduce the secondary legislation in due course?
Yes, Mr. Gale. In line with our objectives of protecting all depositors and maintaining financial stability, clause 117 gives the Treasury a power to extend the provisions of the BIP to building societies and clause 118 gives it the power, if necessary, to extend it further to credit unions. We consulted widely on this issue and extending the special resolution regime to building societies and credit unions is strongly supported by stakeholders, including the Building Societies Association. The reason why detailed provision for applying the BIP to building societies has not been put on the face of the Bill is that insolvency legislation is complex and building society and credit unions have their own legal features, which differ greatly from those of banks.
We believe that time needs to be taken to ensure that procedures are brought forward that work for building societies and are fit for purpose. The Government will consult on the necessary regulations, which will be laid before the House in due course. The hon. Member for Gosport presses me on when that is likely to be. The best answer I can give is soon. That is not a definite response, but we do not intend to delay this matter. We want to continue to ensure protection for depositors, whether they are in banks, building societies or credit unions. The new insolvency procedures for building societies and credit unions will be very similar to the provisions in the BIP. That has been welcomed by stakeholders.