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Throughout the Conservative leadership race between Rishi Sunak and Liz Truss, the economy has been a focal point in the bid to be the next Prime Minister and Leader of the Conservative Party. As we submerge further into a cost-of-living crisis brought on by the pandemic, the war in Ukraine and high inflation, economic policy is more important than ever to win public support. As such, both Sunak and Truss are keen to “unleash the full potential of Britain post-Brexit”.  

Perhaps one of the only proposals that the two candidates are both in agreement with is the promise to distance the UK from EU law. Both Truss and Sunak have promised to scrap or reform all EU law still on the statute book, with Truss pledging to do so by the end of 2023 and Sunak committing to getting the job done by the next general election scheduled for January 2025. The rationale behind this is for the UK to have its own set of rules, which Sunak and Truss argue will give the country an ‘economic edge’. 

Truss promises to get rid of ‘outdated’ EU law if elected, with a review of all EU law that hinders growth, whilst Sunak insists he will use “the freedoms Brexit has given us to cut the mass of EU regulations and bureaucracy holding back our growth.” Sunak has suggested that EU law needs to be evolved in three major ways; firstly, he proposes to scrap the EU financial service regulations (including the EU’s Solvency II rules) to help investors put money into assets that will accumulate to long term economic growth. Sunak also wants to replace the EU’s General Data Protection Regulation (GDPR) with “the most dynamic data protection regime in the world”, as he believes the EU’s GDPR is “preventing British tech companies from innovating and public services from sharing data to prevent crime.” Thirdly, Sunak has a focus on speeding up the clinical trials approval process which he claims “is still complicated and slowed down by EU red tape.” Similarly, Truss has called for a ‘red tape bonfire’, to set alight overly complex EU law to encourage investment and growth. 

When reviewing these proposals, it appears that Brexit has given the UK the freedom to leave EU law, which can indeed be overly complex. However, does a complete re-writing of EU law pose the risk of the UK becoming an unreliable and untrustworthy international partner? 

One may wonder if both contestants are being overly-hasty in their pledges to completely transform EU law to accelerate the economy. These pledges have been met with a mixed reception, with there being some criticism that suggests the proposed reforms are too costly. For instance, scrapping the EU regulatory regime for the chemicals industry in favour of a UK-only version is likely to cost the business industry some £2 billion, which is just the bill for a single industrial sector. 

However, not all deviation is negative since it can also serve to uphold the protection of British businesses. The New Procurement Bill, which will replace 350 EU laws “with a single, simple and flexible framework for securing public sector contracts” aims to level the playing field for small and medium-sized enterprises (SMEs) and drive economic growth across the UK. Therefore, this amendment both helps the British economy and does not really impact Britain’s reputation as an international partner, as it is concerning domestic affairs. 

On an international scale, Catherine Barnard from the UK in a Changing Europe think tank states that the more divergence there is [from EU law], the more trade friction there will be.” Therefore, both Sunak and Truss will have to consider how far they are willing to diverge from EU law, and whether diverging truly is the most beneficial way of giving Britain an international ‘economic edge’, whilst protecting its own businesses. 

After all, the EU will continue to control what can be sold in the single market, and if our new legislation is too deviating, trading with EU countries could become limited and may result in detrimental effects for UK businesses. Joint regulation (within the EU markets) rather than complete deviation appears to be the best route to strengthen the UK economy as it allows for greater trade freedoms. Previously, whenever British companies faced sales adversities in other EU markets, they petitioned governments to press for EU rules. 

Thus, to progress economically in the most effective manner does not necessarily call for a ‘bonfire’ or ‘race’ to diminish EU law.  In reality, scrapping EU law only appears to be doing more harm than good in costing not only a lot of money, but potentially Britain’s reputation and economy on an international scale. Sunak and Truss should therefore think twice before taking an axe to EU law. 

Ella King is currently undertaking work experience at Bright Blue. Views expressed in this article are those of the author, not necessarily those of Bright Blue. [Image: Call Me Fred]