Liz Truss will “empower the City to drive economic growth” through tax cuts and regulatory reform as Prime Minister, she exclusively told City A.M..
The newly-appointed Conservative leader said, who will be appointed formally by Her Majesty the Queen at Balmoral today, she wanted to maintain the Square Mile’s competitive edge and “supercharge growth and investment” here.
The comments mark a change in tone from that of the previous Prime Minister Boris Johnson, who many in the City felt ignored the needs of the capital and the sector.
Truss, who was foreign secretary said that the City is a “jewel in the crown of the UK economy but for too long its potential has been held back by onerous EU regulation, which have stifled growth and stunted investment.”
Truss said she would push through “bold” reforms of Solvency II and MiFID regulation, which have been held up since the UK left the European Union.
“By unleashing investment and revitalising the City’s research expertise, we will be able to offer the tools businesses need to invest in the dynamic companies that will get our economy moving,” she told City A.M.
I will empower the City to drive economic growth and put more money back into hard-working people’s pockets.Liz Truss speaking to City A.M.
Insurance giants in particular have been keen to amend Solvency II regulations in order to free up cash to invest in larger-scale UK projects, but have run into Treasury opposition over the detail of what a future regime might look like.
The newly-elected leader said “we need to ensure that regulators work to encourage growth,” hinting at previous reports that she would conduct a review into the workings of the various City watchdogs.
“A successful City is key to a successful country,” she said. She further pledged to keep the position of City minister, held by John Glen for a number of years, who would “have a clear mission: deliver growth, boost investment and drive innovation.
Truss’ comments come after the Mayor of London Sadiq Khan told City A.M. it was time for a “reset” of relations between the capital and central government after a series of public rows over Brexit, Transport for London funding and Covid-19 regulations.
“We desperately need a reset in the relationship between the Government and our great capital city. The next Prime Minister must lead a government that is less divisive, less antagonistic and that doesn’t crudely seek to play London off against other parts of our country for political gain,” he told City A.M.
Liz Truss committed again to her reversal of a planned corporation tax hike, saying it would make the City as well as the rest of the country a more attractive place to do business.
“London is a leading global financial centre, but for it to remain one, we must maintain its competitive edge. Raising corporation tax to the same level as France isn’t going to attract new businesses that will supercharge growth and investment,” she said.
“Instead, my plan to scrap this hike will make sure the City has one of the most competitive tax regimes in the world so we can compete with other global economies.”
The results of the Conservative leadership election were announced on Monday, with the new PM sworn in on Tuesday after meeting with the Queen at Balmoral.
*This article was originally published on 31 August, and republished upon Liz Truss winning the Conservative leadership race.