“La Reine le veult” - with those few antique words of Norman French signifying the Royal Assent, the Building Societies Act 1997 became law exactly 25 years ago, on 21 March 1997, after an extremely rapid passage through both Houses of Parliament as the legislative decks were cleared ahead of an impending dissolution and general election. As we await some further amending legislation for building societies, it is timely to reflect on what lessons might possibly be learned from that exercise that could still be of value today.
This is the first in a series of blog articles I am writing to mark the quarter century since the Building Societies Act 1997. I will cover the sequence of events, then attempt deeper dives into the major policy changes introduced by that Act and some of the key decisions involved. Concluding with the learnings of possible relevance today, the series will, I hope, contribute to the further optimization of the legislative framework within which building societies operate and serve their members.
The matter is of more than simply professional interest to me, as in 1995-1997 while working as one of the full-time Commissioners at the former Building Societies Commission, I was leading the combined Treasury / BSC Bill team that dealt with the 1997 Act. Some of the recollections, from what seems like another age of the world, remain extremely vivid!
Turning first to the actual sequence of events in February - March 1997, the Bill was the result of an initiative to amend and reform the highly prescriptive original version of the Building Societies Act 1986. Started through a consultation by the Treasury in 1994 -95 that initiative gathered a fair consensus across not only the building society movement, but most other stakeholders and almost all political parties. After consultation on the policy principles, analysing the changes, and careful consideration of the responses, the next stage was the publication of a draft Bill showing exactly how the existing Act would be amended. But there things might have halted, as parliamentary time was not immediately available. The draft Bill could well have languished on the shelf for some years.
But in a stroke of luck for the Economic Secretary of the day, in the dying days of that government and with a general election looming, a “slot”arose. Probably one or more complex Bills had had to be jettisoned or were not ready. The relevant Cabinet Committee was able to offer a slot for a fairly short, uncontroversial Bill, if it was ready for almost immediate introduction to Parliament. The Building Societies Bill fitted the case as it was fully drafted, enjoyed cross party support, and could realistically complete all its parliamentary stages quickly, with a fair wind. It was, in any case, worth a try.
The bill was introduced in early February 1997 and romped through both Houses : its Commons stages were completed on 10th and 17th March, and the Lords dealt with it on 19th March. Parliament would be prorogued from the 21st March. Consequently, it was on 21st March 1997 that the quaint pageantry of the Royal Assent was completed, and by a combination of far sight, hard work, and good luck, the building societies’ legislative framework was reformed into something which has lasted pretty well for 25 years.
That is enough for today. Future articles will delve into various aspects of the Bill and the policy behind it, to see what can be learned for the future.