Boris Johnson urged to strip out all traces of EU law to escape Brussels’ clutches

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Barnabas Reynolds has also urged Parliament to appoint a panel to monitor the activities of UK regulators whom he fears will otherwise have too much power over rules governing financial services. Mr Reynolds, a partner at City-based law firm Shearman and Sterling, will discuss his new paper, Restoring UK Law: Freeing the UK’s Global Financial Market at a webinar organised by the Politeia think tank tomorrow.

He will be joined by among others, Attorney General Suella Braverman and former Conservative Party leader Iain Duncan Smith.

Speaking prior to the event, Mr Reynolds told it was crucial for rules and regulations relating to financial services to be streamlined and simplified.

He explained: “The UK’s traditional method has been for principles-based regulation, focusing on high standards, predictably applied, but with fewer rules.

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“The EU’s approach is based on the continental civil law, code-based systems, where every aspect of financial business is smothered by a blanket of regulations.

“What is more, the ECJ’s purposive method of interpretation makes those regulations unpredictable in their meaning.

“The approach ossifies the law, with the European Commission constantly attempting to update and upgrade the codified scheme to catch up with new business activity. 

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“It also dampens innovation.”

The UK may no longer be a member, but in many areas, EU laws which previously superseded common law have simply been adopted by the UK and therefore remain in force, stifling innovation, undermining entrepreneurship and adding layers of regulation, Mr Reynolds said.

He added: “Now we have left, we need to strip out the unattractive elements of EU law – and there are many – and revert to the traditional UK approach, which is far more attractive and beneficial to business.”

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There was another, equally crucial point relating to regulators who Mr Reynolds said had attempted to “fill in the gaps in EU law” through their use of “vague regulator principles”, in order to avoid making yet more rules.

Mr Reynolds said: “However, this has left matters uncertain.

“Now the regulators will be getting more powers, there will need to be more checks and balances.“

Since the financial crisis of 2007-2008, the regulators had been engaged in what Mr Reynolds called “regulatory challenge” of financial firms.

He stressed: “This needs to be counterbalanced with oversight of the regulators themselves.

“That should happen in two main ways.

“First, the Treasury Select Committee should appoint a sub-committee, which can draw on a panel of experts to oversee the activities of the regulators.

“Secondly, the regulators’ powers and objectives should be better defined, so that their rule-making and supervision can be subject to greater judicial review in the courts.

“If we do these things we’ll have a fully predictable legal and regulatory regime, allowing businesses to innovate and prosper, whilst protecting the consumers, the system and the country.”

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