Tory leadership race: Liz Truss promises ‘red tape bonfire’ with review of all EU law by end of 2023

Liz Truss has vowed to review all EU laws retained after Brexit by the end of next year if she becomes prime minister, and to scrap or replace those that are deemed to hinder UK growth.

The Tory leadership hopeful “believes that a red tape bonfire will encourage business investment and boost growth”, her campaign said.

But critics warned the proposal could damage workers’ rights.

The policy commitment from Ms Truss came as the European Union launched fresh legal action against the UK for failing to comply with the post-Brexit Northern Ireland Protocol.

Foreign secretary and Conservative leadership candidate Liz Truss leaving her campaign office in Westminster. Picture: Aaron Chown/PA Wire

Four new infringement procedures were triggered by the European Commission as relations further soured on Friday.

The EU argued it was forced to act because the UK had been unwilling to take part in “meaningful discussion” over the protocol since February.

It also struck out again at the controversial Northern Ireland Protocol Bill that is making its way through Parliament, which the bloc says breaks international law.

The commission accused the UK of failing to comply with customs requirements, not imposing EU rules on VAT for e-commerce and failures over rules on alcohol excise duties.

In a statement, the European Commission said: “Despite repeated calls by the European Parliament, the 27 EU Member States and the European Commission to implement the Protocol, the UK Government has failed to do so.

“In a spirit of constructive co-operation, the commission refrained from launching certain infringement procedures for over a year to create the space to look for joint solutions with the UK.

“However, the UK’s unwillingness to engage in meaningful discussion since last February and the continued passage of the Northern Ireland Protocol Bill through the UK Parliament go directly against this spirit.”

Ms Truss, who voted Remain in the 2016 referendum, is pitching herself as the “best candidate to deliver on the opportunities of Brexit” in a bid to gain the votes of Conservative members required to win the race for No 10.

The foreign secretary said that, if elected, she would set a “sunset” deadline for every piece of EU-derived business regulation and assess whether it stimulates domestic growth or investment by the end of 2023.

Industry experts would be tasked to create “better home-grown laws” to replace those that fail the test, if they are not ditched altogether.

Questions are likely to be raised over the feasibility of combing through more than 2,000 pieces of legislation in under a year and a half while the Civil Service faces cutbacks.

Plans set out last month by Jacob Rees-Mogg, the Cabinet Office minister responsible for “Brexit opportunities”, to axe all remaining EU laws by June 2026 were met with criticism for this reason.

Ms Truss said: “As prime minister I will unleash the full potential of Britain post-Brexit, and accelerate plans to get EU law off our statute books so we can boost growth and make the most of our new-found freedoms outside of the EU.

“I have proved as trade secretary and in the Foreign Office that I am the candidate who can be trusted to deliver on the promise of Brexit and make Britain a higher-growth, higher-productivity powerhouse.

“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”.

Frances O’Grady, the general secretary of the TUC federation of trade unions, warned the “cynical and reckless proposals threaten hard-won workers’ rights”.

“Holiday pay, equal pay for women and men, safe limits on working hours and parental leave are just a few of the rights underpinned by retained EU law. These are all essential – not a nice to have,” she said.

“Let’s call this out for what it is – ideological posturing at the expense of ordinary working people.”

Catherine Barnard, deputy director of the UK in a Changing Europe think-tank, warned that greater divergence from EU law would create further barriers to trade, both between the UK and the bloc and between Britain and Northern Ireland.

“The more divergence there is in practice the more checks that the EU will want to impose,” she said. “The more divergence there is, the more trade friction there will be.”

She also raised concerns the plans work on the assumption that “any retained EU law is bad, but of course some of it has worked well”, such as the Equalities Act.

“Is it going to be turned off entirely?” the EU law professor asked, adding that if it is to be replaced then there are questions over parliamentary time and Civil Service capacity.

The Truss campaign said the Equalities Act would not be included in their plans, arguing it is not EU law, though this is disputed.

Rishi Sunak has said he would appoint a Brexit minister to go through the remaining 2,400 EU laws still on the statute book if he were to beat Ms Truss in the contest to replace Boris Johnson.

The minister would be instructed to come forward with the first set of recommendations for rules to be scrapped or changed within 100 days of Mr Sunak entering No 10.

Liberal Democrat foreign affairs spokesperson Layla Moran said the Tory candidates’ plans amounted to “pointless posturing over Europe” at a time when people are struggling with soaring bills.

She said: “The Conservative Government would do better to focus on fixing their botched trade deal with Europe which is drowning our businesses in red tape and raising prices in the shops.

“Neither Liz Truss or Rishi Sunak have got a plan to get the country through the cost-of-living emergency and NHS crisis. It shows why we need a general election as soon as the new prime minister is in place, so we can kick out this failing Conservative government for good.”

Ms Truss also said she would scrap EU Solvency II rules, which make pension funds and insurers set aside capital to prove they can withstand a major shock, to “unlock billions of investment into UK infrastructure”.

But she would introduce new regulation to preserve the Solvency II’s original goal of protecting people’s investments.

Mr Sunak has also pledged to ditch the Solvency II regulation to help investors put money into infrastructure assets.

The final two candidates for prime minister will tour the UK over the summer to take part in 12 hustings for the Conservative Party members who will vote for their next leader, with the result being announced on September 5.