§ Mr. Portilloasked the Chancellor of the Exchequer what representations he has received about the ability of building societies to make preparations for the new legislation; and if he will make a statement.
§ Mr. Ian StewartA number of representations have been received about whether building societies have the power to do preparatory work before Royal Assent for their new powers under the Bill. In the light of these concerns, and for the avoidance of doubt, I am proposing that the Building Societies Bill should contain appropriate provisions.
It is clearly sensible for a building society to be able to do preparatory work, provided that its scale is reasonable and takes account of the possibility that the Bill might not be enacted in precisely its present form or that the members might not pass the special resolution necessary for the adoption of a particular power. Many societies have done preparatory work in good faith on the correct presumption that the provisions already in the Bill against anticipation of powers are intended to catch the provision of services to the public, not such preparatory work.
I have accordingly tabled an amendment to schedule 16 to the Bill which treats societies as having had powers to do such preparatory work since 19 December 1985, the date of Second Reading of the Bill. A new clause provides that societies will have a similar preparatory power in respect of additional powers conferred in future by a statutory' instrument under the Bill, in the case of a resolution requiring approval in draft from the date of an affirmative resolution by either House, and in other cases from the date of laying.