Liz Truss vows to review all EU law on British statute

Liz Truss, Tory leadership contender, vowed on Friday to review all EU law retained on the British statute book by the end of 2023, and to scrap measures deemed to be holding back the City of London.

The foreign secretary promised a “red tape bonfire” if she became prime minister, including reform of the Mifid II trading rules which she has argued are too onerous for small firms. Her advisers noted she does not intend to scrap the whole regime.

In a statement Truss pledged to “unleash the full potential of Britain post-Brexit”, adding: “EU regulations hinder our businesses and this has to change. In Downing Street, I will seize the chance to diverge from outdated EU law and frameworks and capitalise on the opportunities we have ahead of us.”

The EU brought in Mifid II in 2018 to offer greater protection for investors and bring more transparency to financial markets.

This week Truss and Rishi Sunak became the remaining contenders in the leadership race following another round of eliminations. The vote now goes to Tory party members who will chose the UK’s new prime minister to be announced on September 5.

A regulatory expert who declined to be named said financial services providers wanted to see “efficient regulation” but not a bonfire of rules which UK regulators had played a key role in creating before Brexit.

John Glen, former City minister, said the Treasury was already tweaking Mifid II after consultation in the City through the financial services and market bill which passed its first reading in the House of Commons this month.

“Deregulation for deregulation’s sake is not where the City is,” said Glen who is a supporter of Truss’s leadership rival ex-chancellor Rishi Sunak.

Truss, a former Remainer, has courted the Tory Eurosceptic right and is the favourite to beat Sunak according to bookmakers and pollsters. YouGov said 62 per cent of Conservative members surveyed expressed support for Truss compared with 38 per cent who backed the former chancellor.

This weekend Sunak is expected to outline his vision for the NHS in an attempt to broaden his appeal among party members. In a speech, he will set out pledges including the creation of a task force to reduce bureaucracy and waste, and delivering 200 “community diagnostics hubs” by March 2024.

Some MPs have privately warned that Sunak’s resignation from Johnson’s cabinet alongside his refusal to commit to sweeping tax cuts have reduced his appeal among the Tory base.

“I’m hearing from association members that there is a perception that Rishi stabbed Boris in the back and is pursuing socialist tax policies and that is why I think Liz will do better when it comes to the membership,” one senior Tory said.

Meanwhile, Conservative party activists have grown frustrated with the acrimonious tone of the leadership campaign, which has seen stark divisions emerge between the finalists over economic policy.

“There has been so much mud slinging and it’s gotten really nasty,” one Conservative activist told the FT. “A leadership contest should be about ideas and bringing something fresh to the table and it doesn’t feel like that right now.” 

“I don’t know any member who has a positive outlook about the future of the party at the moment,” they added. “Younger members are worried about lack of focus on issues such as housing and older members are annoyed that Boris was removed in the first place”. 

Johnson remains a popular figure among some of the Tory grassroots. The Telegraph newspaper has reported that thousands of party members have backed a petition calling for Johnson to be added to the ballot in the upcoming leadership vote.