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The UK payment watchdog will be repealed by Ir Keel's priorities as part of his willingness to promote growth by discarding or merging parts of the patchwork of around 130 regulators.
The Prime Minister said his decision to scrap the payment system regulator and integrate its operations with the financial conduct authorities would help reduce the duplication and complexity of the UK regulatory system and stop it from acting as a block of innovation, investment and growth.
“For too long, the previous government has been hiding behind regulators. We have postponed the decision and allowed regulations to bloat and block the country's meaningful growth,” Starmer said Tuesday.
However, his choice of PSR, with 160 employees and already sharing offices with senior staff with FCA, is a sign of the challenges faced by priorities significantly freeing backregulation.
Starmer has told the Minister to run an audit of all regulatory authorities and see which organizations can be x. “It wasn't as easy as they thought,” a senior government official said.
Officials say the prime minister is not expected to name other victims of his regulator when he gives his speech later this week about creating a more “agile state.”
The PSR, which has a budget of £28 million for the current fiscal year, is expected to be integrated with the FCA after the government passes major legislation to enact change. The UK financial regulator will maintain the power of payment agencies after the merger, the government said.
Some officials doubt whether the disruptive and time-consuming process of officially disposing of PSRs is valuable if they are already a subsidiary of the FCA.
The PSR is housed at the same FCA headquarters in Stratford, East London. Since last year, payment watchdog has been led by FCA Director David Geale. The government has also been more responsible for payments to the FCA over the past few months.
Former FCA Chair Charles Landell said the regulators merged with “may be a crowd pleaser” for the government, but he added:
“It envisions a reworking of an organization that could mean a two-year period that's rarely done, but in the end people are doing the same while wearing different badges,” said Randell, who is currently a senior consultant at Slaughter, a law firm and said in May.
Companies have complained about several PSR decisions in recent years, but critics point out that few other countries have individual payment watchdogs.
Created in 2013 to promote innovation and competition in the sector, PSR received backlash last year for introducing a mandatory refund system for payment fraud.
The regulators have suggested that banks should pay off victims of fraud up to £415,000. Heavy lobbying ultimately forced it, cutting the threshold to 85,000 pounds in 11 hours.
Last week, Visa and Revolut submitted legal assignments to PSR, claiming they exceeded their authority at the proposed cap on international transaction fees.
James Daley, head of Consumer Group Fairer Finance, said the PSR has been “widely criticized as a regulator,” and that it “is not such a leap” for most of its activities to be folded into the FCA.
City minister John Glenn under the previous conservative government sympathized with the desire to reduce the number of regulators, but warned that “all changes will result in a long delay in disarray that is rarely useful.”
The UK government said it will continue to have access to statutory powers until a law passes in which the PSR joins the FCA.
Priority wrote to several regulators late last year and asked them to suggest growth strategies. In January, the minister pushed out the chairman of the Department of Competition and Markets after deeming the growth inadequate focus.
The Minister also calls for changes in the Financial Ombudsman service. This is under attack because it handles consumer complaints about the sector and is too quick to reinterpret regulations. FOS CEO recently resigned, and the chair is expected to resign this summer.
Prime Minister Rachel Reeves said the scrapping of PSR is part of a broader willingness to free business from the “strain” of the regulatory system “has a burden on suffocating innovation, investment and growth.”
Nikhil Rathi, CEO of FCA, said combining the two regulators is a “natural next step following recent work to improve coordination and clarity on regulatory responsibilities.”
The PSR states: “The law takes time, but there's no need to wait to realize the benefits of a more streamlined regulatory approach.”
