David Gauke (Shadow Minister, Treasury; South West Hertfordshire, Conservative)

Given that the Bank of England may require operators of inter-bank payment systems to pay fees, is it the intention that supervision of the payment  systems will be essentially self-financing? Will the fees more or less equate with the costs incurred by the Bank, and will the Minister state the Bank’s likely costs of supervising and overseeing the systems, notwithstanding any fees that it may levy?

Ian Pearson (Parliamentary Under-Secretary, Department for Business, Enterprise & Regulatory Reform; Dudley South, Labour)

The clause, as the hon. Gentleman rightly says, enables the Bank to require the operators of recognised inter-bank payment systems to charge fees. The Bank does not currently intend to charge fees for its routine oversight of payment systems under this part of the Bill, and instead will meet its costs from its overall budget for financial stability policy functions, as is the case for its non-statutory oversight. However, the clause ensures that the Bank could continue to resource its oversight activity if the overall funding model changed.

In addition, if the Bank incurred exceptional expenses on its oversight activities—for example, due to the engagement of an expert to carry out an inspection under clause 179—it would aim to recover those costs from the system concerned. The scale of fees would be set by the Treasury in regulations to ensure that they are proportionate. The provisions are sensible and straightforward.