• interest-free buy-now-pay-later agreements will be regulated by the Financial Conduct Authority
• government acts swiftly to protect consumers after review finds potential for harm
• lenders will be required to carry out affordability checks on customers and ensure the vulnerable are treated fairly

Buy-now-pay-later products are rapidly increasing in popularity, with the volume of transactions tripling in 2020 as the pandemic drove online shopping, and there is now a significant risk that these agreements could cause harm to consumers.

By announcing plans to legislate to bring interest-free buy-now-pay-later into regulation, the government is acting swiftly to ensure people can continue to benefit from these products with the right protections.

The announcement comes as a review of the unsecured credit market, led by Christopher Woolard, recommends bringing interest-free buy-now-pay-later into FCA supervision.

John Glen, Economic Secretary to the Treasury, said:

Buy-now-pay-later can be a helpful way to manage your finances but there is a real risk that consumers could be harmed as these agreements become ever more popular. By stepping in and regulating, we’re making sure people are treated fairly and only offered agreements they can afford – the same protections you’d expect with other loans.

Buy-now-pay-later has clear benefits – such as allowing people to manage their finances by spreading the cost of a purchase interest-free – but the Woolard Review found several potential harms which can be mitigated by bringing these agreements into regulation.

Many consumers do not view interest-free buy-now-pay-later as a form of credit, so do not apply the same level of scrutiny, and checks undertaken by providers tend to focus on the risk for the firm rather than how affordable it is for the customer.

Although the average transaction tends to be relatively low, shoppers can take out multiple agreements with different providers – and the Review finds it would be relatively easy to accrue around £1,000 of debt that credit reference agencies and mainstream lenders cannot see.

With several buy-now-pay-later providers planning to expand to higher-value retailers, or offer their products in-store, the risk that consumers could take on unaffordable levels of debt is increasing.

The government’s decision to bring buy-now-pay-later into regulation will mitigate these risks by giving the Financial Conduct Authority oversight of buy-now-pay-later providers and allowing people to escalate their complaint to the Financial Ombudsman Service if things go wrong.

Under these plans, providers will be subject to FCA rules so will need to undertake affordability checks before lending and ensure customers are treated fairly, particularly those who are vulnerable or struggling with repayments.

The Woolard Review made a series of additional recommendations across the unsecured credit market. The government welcomes these proposals, which it will examine and respond to in due course.

Further information

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Professor Sir Partha Dasgupta’s review presents the first comprehensive economic framework of its kind for biodiversity. It calls for urgent and transformative change in how we think, act and measure economic success to protect and enhance our prosperity and the natural world.

Grounded in a deep understanding of ecosystem processes and how they are affected by economic activity, the new framework presented by the Dasgupta Review – which was commissioned by HM Treasury – sets out the ways in which we should account for nature in economics and decision-making.

Professor Dasgupta said:

Truly sustainable economic growth and development means recognising that our long-term prosperity relies on rebalancing our demand of nature’s goods and services with its capacity to supply them. It also means accounting fully for the impact of our interactions with Nature across all levels of society. COVID-19 has shown us what can happen when we don’t do this.

Nature is our home. Good economics demands we manage it better.

The Prime Minister said:

This year is critical in determining whether we can stop and reverse the concerning trend of fast-declining biodiversity.

I welcome Professor Dasgupta’s Review, which makes clear that protecting and enhancing nature needs more than good intentions – it requires concerted, co-ordinated action.

As co-host of COP26 and president of this year’s G7, we are going to make sure the natural world stays right at the top of the global agenda. And we will be leading by example here at home as we build back greener from the pandemic through my 10 point plan.

The Exchequer Secretary to the Treasury, Kemi Badenoch said:

Protecting and enhancing our natural assets, and the biodiversity that underpins them, is crucial to achieving a sustainable, resilient economy.

That is why the UK is already investing more than £600 million in nature-based climate solutions, such as tree planting and peatland restoration.

I want to thank Professor Dasgupta for his landmark Review. We will examine the Review’s findings and respond formally in due course.

Environment Secretary, George Eustice said:

If we want to realise the aspiration set out in Professor Dasgupta’s landmark Review to rebalance humanity’s relationship with nature, then we need policies that will both protect and enhance the supply of our natural assets.

This is what lies at the heart of the government’s 25-year environment plan, our approach to future farming policy, efforts to embed biodiversity net gain in the planning system, and other initiatives such as £3 billion for climate change solutions that restore nature globally and our new due diligence law to clean up our supply chains and help tackle illegal deforestation.

Sir David Attenborough said:

The survival of the natural world depends on maintaining its complexity, its biodiversity. Putting things right requires a universal understanding of how these complex systems work. That applies to economics too.

This comprehensive and immensely important report shows us how by bringing economics and ecology face to face, we can help to save the natural world and in doing so save ourselves.

The Review argues that nature is our most precious asset and that significant declines in biodiversity are undermining the productivity, resilience and adaptability of nature. This in turn has put our economies, livelihoods and well-being at risk.

The Review finds that humanity has collectively mis-managed its global portfolio of assets, meaning the demands on nature far exceed its capacity to supply the goods and services we all rely on.

The Review makes clear that urgent and transformative action taken now would be significantly less costly than delay and will require change on three broad fronts:

• Humanity must ensure its demands on nature do not exceed its sustainable supply and must increase the global supply of natural assets relative to their current level. For example, expanding and improving management of Protected Areas; increasing investment in Nature-based Solutions; and deploying policies that discourage damaging forms of consumption and production.
• We should adopt different metrics for economic success and move towards an inclusive measure of wealth that accounts for the benefits from investing in natural assets and helps to make clear the trade-offs between investments in different assets. Introducing natural capital into national accounting systems is a critical step.
• We must transform our institutions and systems – particularly finance and education – to enable these changes and sustain them for future generations. For example, by increasing public and private financial flows that enhance our natural assets and decrease those that degrade them; and by empowering citizens to make informed choices and demand change, including by firmly establishing the natural world in education policy.

The Review will launch formally later today (2 February) at an event hosted by the Royal Society, with guests including His Royal Highness the Prince of Wales, the Prime Minister and Sir David Attenborough. The government has welcomed the Review’s final report and is expected to respond formally to the Review’s findings in due course.

Further information

• The UK Government commissioned Professor Sir Partha Dasgupta to lead an independent, global Review on the Economics of Biodiversity in Spring 2019.
• The Review published its interim report in April 2020.
• Professor Dasgupta has been supported by an Advisory Panel, drawn from academia, public policy and the private sector. More information about the Panel is available.
• The publication of the Review comes ahead of COP15 for Biological Diversity, where new long-term international targets for addressing biodiversity loss are expected to be agreed; and COP26 for climate change, where Nature and nature-based solutions to climate change are expected to play a prominent role.

Local authorities are being urged to take advantage of a £20 million cash injection to boost the number of on-street electric vehicle chargepoints in towns and cities across the UK.

In a letter to councils across Britain, Transport Secretary Grant Shapps has today (2 February 2021) announced that funding for the On-Street Residential Chargepoint Scheme (ORCS) will continue into 2021/22, allowing residents without private parking to reliably charge their vehicle.

Since its inception in 2017, more than 140 local authority projects have benefitted from the scheme, which has supported applications for nearly 4,000 chargepoints across the UK. This funding boost could double that, adding nearly 4000 more chargepoints in our towns and cities, tackling poor air quality and supporting economic growth as we build back greener from the pandemic.

Local councils play an essential role in providing electric vehicle infrastructure and so in partnership with Energy Saving Trust, the Department for Transport is welcoming applications from councils which are yet to apply for funding, as well as those that have already benefitted.

Transport Secretary Grant Shapps said:

From Cumbria to Cornwall, drivers across the country should benefit from the electric vehicle revolution we’re seeing right now.

With a world-leading charging network, we’re making it easier for more people to switch to electric vehicles, creating healthier neighbourhoods and cleaning up our air as we build back greener.

The UK is already a global frontrunner in the shift to electric vehicles. The Prime Minister’s Ten Point Plan set out that we will accelerate the transition to electric vehicles, ending the sale of new petrol and diesel cars and vans by 2030, which could create 40,000 extra jobs by 2030, and transforming our national infrastructure to better support electric vehicles, backed by a total of £2.8 billion and supporting around 169,000 jobs. Of this funding, £1.3 billion is set to be invested in charging infrastructure over the next 4 years.

Nick Harvey, senior programme manager at Energy Saving Trust, said:

The confirmation of £20 million of funding for the ORCS in 2021/22 is great news. This funding will allow local authorities to install convenient and cost-effective electric vehicle charging infrastructure for those who rely on on-street parking. This helps to support the fair transition to the increased adoption of low carbon transport.

We’re therefore encouraging local authorities to access this funding as part of their plans to decarbonise transport and improve local air quality.