The sister of the Conservative MP Jacob Rees-Mogg has been unveiled as a candidate for Nigel Farage’s new Brexit party in the European elections, as the former Ukip leader said he intended to put “the fear of God” into MPs.

Annunziata Rees-Mogg, who has twice failed to get elected as a Tory MP, was introduced by Farage at the party’s campaign launch at a factory in Coventry on Friday.

Addressing cheering supporters, the 40-year-old former Telegraph journalist said: “I joined the Conservative party in 1984 and this is not a decision I have made lightly – to leave a party for which I have fought at every election since 1987, from Maggie Thatcher through to Theresa May. I know which one I’d rather have representing us now.”

Rees-Mogg said Farage’s party must “rescue our democracy” and show that “the politicians are not our masters – they are to do our bidding”.

Rees-Mogg said she would be “stunned [and] unbelievably surprised” if her brother, who chairs the hard-Brexit European Research Group faction of Tory MPs, followed her out of the party. “He sees one way of achieving Brexit and a return to democracy, and I see a different one,” she said.

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‘No more Mr Nice Guy’: Nigel Farage launches Brexit party – video

Richard Tice, a multimillionaire property tycoon and founder of campaign group Leave Means Leave, was unveiled as the chair of the new party, which claims to have 40 “high-quality” candidates for the European elections on 23 May.

Tice was a co-chair of Leave.EU, which was fined £60,000 by the Electoral Commission in February for campaign violations in conjunction with Arron Banks’s firm Eldon Insurance.

Farage said earlier on Friday the party would not take any donations from Banks, who he said had been “very…