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The clause states:
The Treasury may by order provide for this Part to apply to building societies . . . as it applies to banks.
In what circumstances would the Government consider it necessary to do so? Why, as a precautionary matter, do the Government not seek to set up a building society administrative procedure? Why not grasp the nettle?
The approach to building societies set out in the clause is consistent with that taken in clause 117 for applying the bank insolvency procedure to building societies.
Detailed procedures for applying the provisions of the bank administration procedure to building societies have not been put in the Bill, principally because insolvency legislation is complex, and building societies have unique legal and commercial features that differ from those of banks. It will therefore be necessary to spend time ensuring that procedures are introduced that work for building societies and are fit for purpose.
However, it is envisaged that the new procedures for building societies will in practice be similar to the provision of the bank administration procedure, and a building society administration procedure would be used only in connection with a partial transfer of a failing building societys business. The Government will consult on the necessary regulations, which will be laid before the House in due course. The legislation will be subject to the affirmative resolution procedure, allowing full parliamentary scrutiny.
Building on the strength and effectiveness of the existing insolvency regime, the procedures for building societies will also closely follow existing UK insolvency law and practice, and will be familiar to building societies and their professional advisers. I do not think that I need say more. I have explained why the procedures are not in the Bill, and have indicated the Governments strong willingness to work with building societies and to consult on the regulations that will be presented to the House in due course.