Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps his Department is taking to help regulators implement their secondary objectives set out in the Financial Services and Markets Act 2023.

The Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) are responsible for operationalising their new secondary objectives to facilitate the international competitiveness of the UK economy, and its growth in the medium to long-term.

The regulators have already begun to set out how they will approach the new objectives, for example, in the PRA’s September 2022 discussion paper on its future approach to policy (https://www.bankofengland.co.uk/prudential-regulation/publication/2022/september/pra-approach-to-policy) and the FCA’s December 2022 paper on its implementation of the outcomes of the Future Regulatory Framework Review (https://www.fca.org.uk/publications/corporate-documents/future-regulatory-framework-review-reforms).

To support the introduction of the new objectives, the Government published a Call for Proposals, which closed on 4 July, seeking views on what additional metrics the regulators should publish to support scrutiny of their work embedding and advancing their new secondary objectives. The Treasury is analysing the responses and will respond in due course.

The Financial Services and Markets Act 2023 requires the regulators’ Annual Reports to include an explanation of how they have advanced the new secondary objectives. In addition, the Act requires the regulators to publish separate reports on how they have embedded and advanced the new objectives 12 and 24 months after they come into force. This will support scrutiny of how the new objectives have been operationalised.

The Government is confident that the introduction of the new growth and competitiveness objectives will lead to a step-change in the regulators’ approach.