Question to the HM Treasury:

To ask His Majesty's Government whether the powers conferred on the Financial Conduct Authority in the Financial Services and Markets Bill in schedule 2, paragraph 18, inserted new section 131Z12, are consistent with their objective of strengthening the UK's position as a global financial centre; and what assessment they have made of the impact of those powers on long-term investment in payments infrastructure.

The Government is committed to maintaining the UK’s position as a leading global financial centre, supported by a competitive, innovative and well-regulated payments ecosystem that delivers good outcomes for consumers, businesses and the wider economy.

The Financial Services and Markets Bill simplifies how payment systems are regulated by abolishing the Payment Systems Regulator and transferring its functions to the Financial Conduct Authority. The Bill gives the FCA objectives and powers that are equivalent to those currently held by the PSR, ensuring there is continuity in regulation and that the FCA can carry out its new responsibilities effectively.

The price control provision is not an expansion of regulatory powers. It clarifies and replicates powers already exercisable by the PSR, so the FCA has the same tools where intervention is justified to protect service-users and support effective competition.

At the same time, the Government recognises that regulators must act proportionately and that their powers should be subject to appropriate safeguards. The Bill therefore strengthens the framework by requiring the FCA to consult before exercising this power, a safeguard that is not always required under the current regime. This will help ensure decisions are transparent, evidence-based and proportionate.