The Financial Services and Markets Bill, announced in the Queen’s Speech is expected to deliver the government’s ‘Future Regulatory Framework‘, which proposes fundamental changes to the purpose of the rules that shape the critical financial services sector, and who holds power over them.
The Treasury has announced that the bill will include new laws to protect access to cash “by ensuring continued access to withdrawal and deposit facilities across the UK”.
Consumer groups and civil society organisations such as mine have long campaigned for stronger laws to guarantee access to cash, which is still relied on by millions for everyday payments.
But the government has also indicated that it plans to push ahead with plans to introduce new objectives for regulators to promote the ‘growth and international competitiveness’ of the financial sector.
The proposal has come under fire from civil society groups, who warn that it could erode the ability of regulators to act in the public interest. It could also catalyse a global ‘race to the bottom’ on social and environmental standards.
New polling released last week by the Finance Innovation Lab reveals that two thirds of the public believe the government’s proposal is out of touch and elitist, while nearly seven in ten (67%) people think the proposal puts the needs of the City of London first, undermining the government’s levelling-up ambitions.
After years of banks and card companies waging a war on cash to boost their own profits, legislation to protect people’s access to this vital means of payment is long overdue.
The government’s commitment to protecting cash is welcome, but its plans to force regulators to promote the ‘growth and international competitiveness’ of the City of London is at odds with such efforts to increase financial inclusion, as well as the government’s climate and ‘levelling up’ goals.
A focus on the growth and ‘competitiveness’ of the finance sector is what led us down the path to the 2008 financial crisis.
It will mean regulators prioritising banks’ profits over the public’s access to financial services, as well as the wider health of the economy.