Written questions by Garnier.

Whether qualifying stablecoin issuers will be subject to (a) capital and (b) liquidity requirements under the provisions in the draft Financial Services and Markets Act 2000 (Regulated Activities and Miscellaneous Provisions) (Cryptoassets) Order 2025.

The Government’s forthcoming regime for cryptoassets will provide the Financial Conduct Authority with the necessary powers for effective regulation of cryptoassets, including the ability to set prudential capital and liquidity requirements for UK stablecoin issuers and other regulated cryptoasset service providers.

What assessment she has made of the readiness of the Financial Conduct Authority to (a) implement and (b) enforce the proposed regulatory regime for cryptoassets by the proposed commencement date.

HM Treasury has engaged closely with the Financial Conduct Authority in developing the future financial services regulatory regime for cryptoassets and the FCA published its discussion paper shortly after HM Treasury published its draft legislation. The FCA has also published a roadmap setting out their preparation in advance of the regime going live.

Whether she plans to make an assessment of the potential impact of new regulated activities for cryptoassets on (a) UK-based and (b) overseas firms offering services to UK consumers.

HM Treasury will publish a full impact assessment alongside its final legislation.

Whether she is making an assessment through the Pensions Investment Review of the potential merits of mandating pension fund providers to invest in British stocks and shares.

The Interim Report of the Pensions Investment Review was published in November 2024 and included a number of proposals to reform the UK pension system, delivering fewer, larger pension schemes or ‘megafunds’ better able to deliver for savers and better positioned to invest productively. Throughout the review process, we have taken the approach of working with the pensions industry to improve saver outcomes and increase investment in UK markets. The final report of the Pensions Investment Review will be published in the coming weeks, ahead of the introduction of the Pension Schemes Bill during this parliamentary session.

What information her Department holds on usage of the Lifetime ISA by region; and if she will make an assessment of the potential impact of the Lifetime ISA price cap on prospective first-time buyers in each region.

At the request of the Treasury Select Committee, HMRC recently released regional data on the Lifetime ISA.HMRC Letter to Treasury Select Committee Data from the latest UK House Price Index shows that while the average price paid by first-time buyers has increased, it is still below the LISA property price cap in all regions of the UK except for London, where the average price paid is affected by boroughs with very high property values. The Government keeps all aspects of savings tax policy under review.

Whether her Department has made an assessment of the potential merits of increasing the the Financial Services Compensation Scheme deposit protection limit for registered businesses.

Eligible deposits held by UK banks, building societies and credit unions that are authorised by the Prudential Regulation Authority (PRA) are protected by the Financial Services Compensation Scheme up to £85,000. This limit is set by the PRA and applies to eligible retail accounts as well as accounts of eligible registered businesses. The PRA is required to independently review the limit every five years. On 31 March, the PRA launched a consultation on the outcome of its most recent review and proposed an inflation-based increase in this limit to £110,000. Any changes to the limit must be approved by the Treasury and the Government would carefully consider any changes proposed by the PRA following the conclusion of this consultation.

Whether she has made an assessment of the potential merits of updating guidance on the lifetime ISA scheme to clarify the cost of early withdrawal penalties.

The Lifetime ISA supports younger people saving for their first home or later life by offering a generous government bonus on up to £4,000 of savings each year. These funds, including the government bonus, can be used to purchase a first home up to the value of £450,000, in the case of terminal illness or from age 60. Any other withdrawals are subject to a 25% charge on the amount withdrawn. This recoups the government bonus, any interest or growth arising, and a proportion of the individual’s subscriptions to discourage such withdrawals and protect the long-term nature of the account. While the Government’s website ‘gov.uk’ already explains the rules behind the Lifetime ISA, and includes a worked example of the withdrawal charge, we will consider whether any improvements can be made to that guidance. Lifetime ISA managers also have a responsibility for ensuring that communications with their customers are clear and concise as part of consumer duty requirements. As part of that communication the manager will normally provide details of the scheme, including the rules around withdrawing funds, whether any charge applies and how that charge is calculated.

What discussions she has had with social media and telecommunication companies on reducing Authorised Push Payment Fraud on online platforms.

The government is committed to ensuring that all key sectors play their part to better protect the public and businesses from fraud. In November, building on existing pledges to prevent fraud, the Home Secretary, the Secretary of State for Science, Innovation and Technology and the Chancellor wrote to signatories of the Online Fraud Charter and Telecommunications Fraud Sector Charter calling for technology platforms and telecoms providers to go further and faster in their efforts to tackle the fraud that exploits their services. The government will publish a fraud prevention strategy in due course, which will ensure a unified and coordinated response from government, law enforcement and industry.

What estimate she has made of the annual cost to the Exchequer of the Lifetime ISA in terms of (a) reduced tax revenue and (b) value paid bonus payments in (i) 2024–25 and (ii) 2025–26.

The cost of the tax relief element of the Lifetime ISA is included within tax relief cost of all ISAs, which can be found in the Non-structural tax relief statistics publication, specifically table 5.16. A forecast of estimated bonus paid is published within the OBR’s Economic and fiscal outlook, in the ‘detailed forecast tables: expenditure’ table. Specifically, this can be found within the detailed table breakdown in tab 4.11, row 7. Links:https://www.gov.uk/government/statistics/main-tax-expenditures-and-structural-reliefs/non-structural-tax-relief-statistics-december-2024 https://obr.uk/efo/economic-and-fiscal-outlook-march-2025/

What recent discussions she has had with the Prudential Regulation Authority on the potential merits of changes to the Financial Services Compensation Scheme deposit protection limit.

Eligible deposits held by UK banks, building societies and credit unions that are authorised by the Prudential Regulation Authority (PRA) are protected by the Financial Services Compensation Scheme up to £85,000. The PRA sets this limit and is required to independently review the limit every five years. On 31 March, the PRA launched a consultation on the outcome of its most recent review and proposed an inflation-based increase in this limit to £110,000. Any changes to the limit must be approved by the Treasury and the Government would carefully consider any changes proposed by the PRA following the conclusion of this consultation.

What discussions she has had with the mid-tier banking sector on the Bank of England’s consultation on changes to thresholds for the minimum requirement for own funds and eligible liabilities, published on 15 October 2024; and if she will meet with sector representatives to discuss how it can support the (a) growth and (b) international competitiveness of the economy.

The Bank of England sets MREL requirements independently, though the government takes a close interest in the policy and engages regularly on it both with the Bank of England and with the banking sector, including mid-tier firms. The government’s engagement has included and will continue to include consideration of the impacts of MREL policy on the UK’s economic growth and international competitiveness. In recent months, the Chancellor and I have hosted a series of forums, including with small to mid-sized quoted companies, as the government works towards developing the first Financial Services Growth and Competitiveness Strategy, which forms part of the government’s modern Industrial Strategy.

What the (a) scope and (b) remit is of the Treasury review into Financial Ombudsman Service.

The Treasury will examine whether the Financial Ombudsman Service (FOS), is delivering its role as a simple, impartial dispute resolution service which quickly and effectively deals with complaints against financial services firms, and which works in concert with our Financial Conduct Authority which regulates the sector. The review will focus, in particular, on a range of points that have been raised through the recent Call for Evidence on the Growth and Competitiveness Strategy. This will include addressing concerns around: The framework in which the FOS operates which has led to it acting, at times, as a quasi-regulator;Whether the FOS is applying today’s standards to actions that have taken place in the past; andThe practices that have grown up over time on compensation. The review builds on the announcements the Chancellor made at Mansion House, as well as modernising the FCA’s rules for dispute resolution. As part of the review, the government will consider whether any legislative changes are necessary to ensure that we have a dispute resolution system in the UK which is fit for a modern economy.

What recent progress her Department has made on the development of digital gilts; and what assessment she has made on their potential impact on the UK financial system.

On 18 March 2025, the Chancellor of the Exchequer launched the procurement process for the pilot Digital Gilt Instrument (DIGIT) issuance. Following the announcement, HMT and UK Debt Management Office published the first step in the process, which seeks views from industry to inform the development and delivery of the pilot DIGIT issuance. HMT issued a Preliminary Market Engagement Notice through the contract finder service. These publications provide further information on the scope of the pilot and seek views from potential suppliers and the financial services sector, to inform the development and delivery of DIGIT. This includes information on the current landscape of services available or in development in the UK and what potential investors want to see from a DIGIT issuance. The market engagement exercise is the first step in our process. A formal tendering process is expected to be launched in late Spring 2025, with DLT suppliers being appointed by late Summer 2025. The government bought forward secondary legislation at the end of the last year that will enable changes to be made to existing regulations relevant to issuing Government debt within the Digital Securities Sandbox (DSS). The current regulations may be unsuitable for a digital issuance and need to be temporarily modified to enable an issuance. Our market engagement is also intended to assist with understanding what elements of these laws need to be changed. Any necessary amendments will require HMT to lay a Statutory Instrument.

Whether her Department has a planned timeline for the implementation of digital gilts; and when she expects to lay legislation before the House.

On 18 March 2025, the Chancellor of the Exchequer launched the procurement process for the pilot Digital Gilt Instrument (DIGIT) issuance. Following the announcement, HMT and UK Debt Management Office published the first step in the process, which seeks views from industry to inform the development and delivery of the pilot DIGIT issuance. HMT issued a Preliminary Market Engagement Notice through the contract finder service. These publications provide further information on the scope of the pilot and seek views from potential suppliers and the financial services sector, to inform the development and delivery of DIGIT. This includes information on the current landscape of services available or in development in the UK and what potential investors want to see from a DIGIT issuance. The market engagement exercise is the first step in our process. A formal tendering process is expected to be launched in late Spring 2025, with DLT suppliers being appointed by late Summer 2025. The government bought forward secondary legislation at the end of the last year that will enable changes to be made to existing regulations relevant to issuing Government debt within the Digital Securities Sandbox (DSS). The current regulations may be unsuitable for a digital issuance and need to be temporarily modified to enable an issuance. Our market engagement is also intended to assist with understanding what elements of these laws need to be changed. Any necessary amendments will require HMT to lay a Statutory Instrument.

Whether her Department plans to require (a) technology and (b) telecommunication firms to contribute to the cost of (i) fraud prevention and (ii) the reimbursement of victims of fraud on their platforms.

Fraud is a costly crime for citizens, consumers, and businesses.I welcome existing pledges to prevent fraud made by tech and telecoms firms.At Mansion House, the Chancellor announced this government would work with tech and telecoms companies to stop their platforms and networks being exploited by criminals.We are monitoring progress, including work on the second Telecommunications Fraud Sector Charter and implementation of the Online Safety Act.To balance the requirement on Financial Services to reimburse victims of fraud, Section 72 of the Financial Services and Markets Act enables the sector to manage risk through due diligence checks before releasing payments.The department will continue to work with the Home Office and Department for Science, Innovation and Technology to unlock further prevention efforts across all sectors in the forthcoming update to the fraud strategy.

What recent discussions she has had with the Bank of England on the Financial Services Compensation Scheme's compensation limit for (a) consumer and (b) business accounts.

Eligible deposits held by UK banks, building societies and credit unions that are authorised by the Prudential Regulation Authority (PRA) are protected by the Financial Services Compensation Scheme up to £85,000, with joint accounts protected up to £170,000. This limit is set by the PRA and applies to both retail and business accounts. The PRA is required to independently review the limit every five years and will be publishing a consultation on the outcome of its most recent review shortly. Any changes to the limit must be approved by the Treasury and the Government would carefully consider any changes proposed by the PRA.

What assessment her Department has made of the potential impact of merging the Financial Conduct Authority and the Payment Systems Regulator on costs to the Exchequer.

The Payment Systems Regulator (PSR) has carried out important work to support the UK’s world leading payments sector. However, moving forward, the Government wishes to see a more streamlined regulatory environment with minimal overlap between regulators’ responsibilities. That is why the Government has announced its intentions to consolidate the PSR and its functions primarily within the Financial Conduct Authority (FCA). The Government will consult on the detail of this proposal in the summer and legislate as soon as possible. The Payment Systems Regulator is funded by fees levied on industry.

What estimate her Department has made of the cost of merging the Financial Conduct Authority and the Payment Systems Regulator.

The Payment Systems Regulator (PSR) has carried out important work to support the UK’s world leading payments sector. However, moving forward, the Government wishes to see a more streamlined regulatory environment with minimal overlap between regulators’ responsibilities. That is why the Government has announced its intentions to consolidate the PSR and its functions primarily within the Financial Conduct Authority (FCA). The Government will consult on the detail of this proposal in the summer and legislate as soon as possible. The Payment Systems Regulator is funded by fees levied on industry.

If she will make an estimate of the potential impact of (a) reducing the cash ISA limit to £4,000 and (b) creating incentives to put money into stocks and shares ISAs on the amount of money that will be put into stocks and shares ISAs in each of the next three years.

The Government is committed to incentivising greater saving and investment. Individual Savings Accounts (ISAs) help people save for their future goals and build greater financial resilience. The Government recognises the important role that cash savings play in helping households build a financial buffer for a rainy day. The Government also wants to see more consumers participate in capital markets and benefit from the long-term financial security and returns that investing can provide. The Government continues to keep all aspects of savings policy under review.

When her Department plans to lay the Statutory Instrument for the introduction of the PISCES Sandbox.

As the Chancellor announced at Mansion House in November 2024, the government intends to lay the statutory instrument which will provide the legal framework for the PISCES Sandbox before Parliament by May 2025.