City watchdog considers formal proposal to increase Britain’s £100 contactless spending limit as part of response to prime minister’s order for regulators to remove barriers to economic growth.
Sky News has learned that the Financial Conduct Authority’s response to a Christmas Eve letter from Sir Keir Starmer, Chancellor Rachel Reeves and Business Secretary Jonathan Reynolds included potential reforms to contactless payments among its ideas.
The £100 limit has been in place since autumn 2021, and any move to increase it could be controversial among retailers and consumer debt groups.
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City sources said the FCA’s consideration was in its early stages and may not lead to a formal proposal, while it was unclear whether the watchdog would consider removing the payment cap altogether without contact.
The FCA is reportedly considering whether to publish its response to Sir Keir’s letter.
Sky News revealed days after Christmas that the Prime Minister, Chancellor and Business Secretary had written to more than a dozen economic regulators, including the Competition and Markets Authority, Ofgem and Ofwat, in a bid to remove unnecessary obstacles to growth.
Recipients of the letter had until January 16 to respond with five proposals aimed at meeting the government’s target.
On Thursday, Ms Reeves and Mr Reynolds met with a number of watchdog leaders, who were told that “economic growth is the Government’s top priority, as part of the plan for change to put more ‘money in the pockets of citizens’. according to a press release published by the Treasury.
He said that in the coming weeks, the bosses of 17 regulators would be summoned to have their ideas considered.
According to the Treasury statement, the watchdogs represented at Thursday’s meeting “agreed with the Chancellor that they have a role to play in growth, but highlighted that there are some obstacles, including the need to balance growth with their other legal responsibilities.
“The Chancellor noted that regulators’ responsibilities had built up over time and said she was open to this preventing them from taking clear, consistent and balanced action to drive growth,” the statement added. .
Ms. Reeves also emphasized during the discussions “the importance of leadership in bringing about a regulatory mindset shift, calling on each of the CEOs in the room to drive cultural change based on contributing to growth.” rather than an excessive focus on risk.”
Among the ideas presented, according to the Treasury, were “grants administered by Ofwat to drive innovation in the water sector supply chain; energy tariff reform; increasing access to rail operator efficiency data and innovative drone solutions that would unlock public sector growth.”
“There is no substitute for growth,” said the Chancellor.
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“It’s the only way to create more jobs and put more money in people’s pockets, which is why it’s at the heart of our Plan for Change.”
“Every regulator, regardless of sector, has a role to play in removing regulatory barriers that inhibit growth.
“I want this mission to be embedded in the very fabric of our regulators through a cultural shift from an excessive focus on risk to contributing to growth.”