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Truss Pledges to Scrap EU Rules If She Wins Race to Be UK Leader

(Bloomberg) --

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Liz Truss vowed to scrap all remaining EU laws by the end of 2023 if she becomes prime minister, as she vies for votes with Rishi Sunak in their battle to win the Conservative Party leadership election and succeed Boris Johnson.

European Union rules “hinder” British businesses, Truss said in a statement late on Friday, as she promised to set a sunset deadline or every piece of EU-derived regulation. That includes scrapping the Solvency II rules governing insurers that critics say are too onerous, curtailing their ability to invest in long-term assets such as infrastructure.


The Foreign Secretary’s promise matches one made last week by Sunak, who wrote in the Telegraph that he’d task a new Brexit delivery department with reviewing the remaining 2,400 EU laws on the British statute book with a view to scrapping or reforming them all by the next general election, due in January 2025 at the latest.

Truss is also setting her sights on potential changes at the Bank of England. In an interview with the Telegraph published late Friday she said some inflation forecasts have been wrong, adding that she would look at best practices from other central banks, and wanted to be sure there was sufficient focus on inflation and money supply.

“I believe it is right that inflation will come down because inflation was caused by a global supply shock. But it was exacerbated by monetary policy,” she told the Telegraph. “What I have said is in the future I’m going to look at the Bank of England’s mandate.”

Read more: UK Leadership Contenders Suggest Changing BOE Mandate

Brexit is shaping up to be a key battleground in the race to become the next prime minister. While Truss campaigned for remain in the 2016 referendum, she’s embraced the divorce with the zeal of the convert and burnished her credentials by introducing a bill designed to scrap large parts of the Brexit deal governing Northern Ireland. That helped secure the backing of the European Research Group of Brexit-backing Conservative MPs.

That Truss is more trusted within the Tories to deliver on Brexit is frustrating for Sunak, who campaigned and voted for the UK to leave the bloc.

The former chancellor on Saturday turned to another crisis facing Johnson’s successor: the backlogs in the National Health Service that have left 6.6 million people waiting for cancer screenings, surgery and consultations. If chosen, Sunak will announce plans on his first day in office to create a task force focused on reducing waiting times, aiming to get the number of people waiting for appointments falling by next year and one-year waits eliminated by September 2024.

Speaking in Grantham, the birthplace of Margaret Thatcher, Sunak also vowed he would deliver more tax cuts, but only once spiraling prices were under control.

“I will not put money back in your pockets knowing that rising inflation will only whip it straight back out,” he said. “There is nothing noble or good about racking up bills on the country’s credit card that we then pass on to our children and grandchildren.”

Read more: Traders See Losses in Pound, Gilts Market If Liz Truss Wins

Truss is also focused on the NHS. She will keep Johnson’s £36 billion in additional funding for the NHS and social care, even while reversing the instrument for raising the money -- the 1.25% increase in National Insurance which kicked in this April, according to the Telegraph.

The money will initially go to the NHS but Truss is resolute that it should then go into social care to help relieve the pressure on the health service, the Telegraph reported.

Sunak and Truss now face six weeks of hustings around the country to win over the votes of the about 175,000 Tory Party members who will choose between them. The new prime minister is elected Sept. 5.

EU Ramps Up Legal Pressure on UK Over Breaches of Brexit Deal

Tensions between the UK and EU over Brexit escalated on Friday after the bloc launched four more infringement proceedings against Britain, claiming the government has failed to comply with customs and value added tax rules it signed up to. Truss’s bill to override parts of the agreement was approved by the House of Commons without amendments earlier this week, and now heads to the House of Lords for debate in the fall.

How to manage the tricky relationship with the EU -- and whether to resume Brexit negotiations -- will be a significant test for Johnson’s successor. On Thursday, the Treasury said in a statement that the cost of the UK’s divorce bill had jumped to £42.5 billion ($51.1 billion) from a previous estimate of £35 billion to £39 billion.

(Adds details from Sunak on inflation in ninth paragraph.)

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