Bank Resolution (Recapitalisation) Bill [Lords]: Amendment 2

Parliament voted on 24 April 2025 to reject Amendment 2 to the Bank Resolution (Recapitalisation) Bill, which would have required the government's code of practice to include specific guidance on how the Bank of England should handle the resolution of building societies, particularly where using its new recapitalisation powers might result in demutualisation. The amendment also sought to require the Bank of England to consider finding a buyer from the mutual sector before proceeding with any demutualisation. The vote fell 89 in favour to 230 against, defeating the amendment. The practical effect of the defeat is that the code of practice accompanying the Bill will not be statutorily required to address the specific circumstances of building society resolutions or the protection of mutual structures. Because building societies have no shares, applying the recapitalisation power to one would necessarily require demutualisation, converting a member-owned institution into a shareholder-owned one. Without the guidance the amendment sought, the Bank of England retains discretion over how it weighs the interests of building society members and the mutual sector when exercising its resolution powers during a crisis. The vote divided almost entirely along party lines. All 198 Labour MPs and 17 Labour and Co-operative MPs who voted opposed the amendment, while all 60 voting Conservatives and all 19 voting Liberal Democrats supported it. Plaid Cymru, the Green Party, and several independents also voted in favour. There were no notable cross-party rebels on either side.