The City watchdog is considering a formal proposal to increase Britain’s £100 contactless spending limit as part of a response to the prime minister’s order for regulators to tear down barriers to economic growth.
Sky News has learnt that the Financial Conduct Authority’s response to a Christmas Eve letter from Sir Keir Starmer, chancellor Rachel Reeves and business secretary Jonathan Reynolds includes potential reforms to contactless payments among its ideas.
The £100 limit has been in place since the autumn of 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 thinking was at an early stage and may not lead to a formal proposal, while it was unclear whether the watchdog would consider removing the contactless payments ceiling altogether.
The FCA is understood to be considering whether to publish its response to Sir Keir’s letter.
Sky News revealed a few days after Christmas that the PM, 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 barriers to growth.
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The letter’s recipients were given a 16 January deadline to respond with five proposals to achieve the government’s objective.
On Thursday, Ms Reeves and Mr Reynolds met a number of the watchdogs’ chief executives, who were told that “economic growth is the absolute top priority for the government, as part of the Plan for Change for put more money in people’s pockets”, according to a statement released by the Treasury.
It said that in the coming weeks, the bosses of 17 regulators would be called in to have their ideas scrutinised.
According to the Treasury statement, the watchdogs represented at Thursday’s meeting “agreed with the chancellor that they have a role to play in driving growth but highlighted that there are some barriers, including the need to balance growth with their other legal responsibilities”.
“The chancellor noted that the regulators’ responsibilities had accumulated over time and said she was open to hearing about where this was preventing them from taking clear, consistent and balance actions to drive growth,” it added.
Ms Reeves also placed emphasis during the talks on “the importance of leadership to deliver a mindset shift on regulation, calling on each of the CEOs in the room to institute cultural change based on helping to deliver growth instead of excessively focusing on risk”.
Among the ideas presented, according to the Treasury, were “grant funding 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 which would unlock growth in the public sector”.
“There’s no substitute for growth,” the chancellor said.
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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, no matter what sector, has a part to play by tearing down the regulatory barriers that hold back growth.
“I want to see this mission woven into the very fabric of our regulators through a cultural shift from excessively focusing on risk to helping drive growth.”
