Thank you to all those who have contacted me about PayPal closing the accounts of several organisations, including the Free Speech Union, and about a proposed new clause to the Financial Services and Markets Bill.

I understand that PayPal said the accounts had been closed down because the organisations in question had broken its acceptable use policy. However, as you will know, on 27 September PayPal said it would reinstate the closed accounts and apologised for the inconvenience caused. It said this was based on ongoing review of information and feedback from customers and stakeholders.

As you know, at the Financial Services and Markets Bill’s Committee Stage, a new clause was tabled setting out that no payment service provide would be able to refuse to supply that service to a customer in the UK on the basis of the customer exercising their right to freedom of expression. It would have enabled the Financial Conduct Authority (FCA) to fine or censure a provider breaching this rule.

The Government has said, including in response to the proposed new clause, that under existing regulations, a payment service provider can terminate a contract, but that this must be covered in the provider’s terms of services and the customer must be given advanced notice. It also notes that a service provider had the right to deny service immediately on reasonable grounds relating to, among other things, fraud, money laundering or terrorist financing. It has noted that nothing of this nature appears to have happened in the case in question and that it hopes the FCA will look at whether this is a legislative or compliance issue.

The Government says it is due to review the relevant regulations in January 2023 and that it intends to examine whether existing protections in this regard are adequate as part of that review. It also says it needs to look in detail at how the proposed new clause would operate in practice, including whether the FCA has the expertise to adjudicate over matters of freedom of expression. It nevertheless said it would potentially revisit the issues raised by the proposed new clause at a later stage. Following these commitments, the new clause was withdrawn and not put to a vote in committee.

I can assure you that I will continue to monitor developments on this issue. Thank you once again for contacting me.