If the EU backstop is put in place voters in Northern Ireland face the prospect of taxation without representation, with VAT rates and excise duties being decided by an unelected but all-powerful committee overseen by the European Court of Justice.
While the rest of the UK could make its own decisions about sales taxes, Northern Ireland would be required by law to follow the directives and rulings of the EU – over which the UK would have lost its say.
Commenting, Ian Murray MP, leading supporter of the People’s Vote campaign, said:
“The DUP’s decision to defy the majority of opinion in Northern Ireland and offer full support to Brexit means they are now backed into a corner. If they want to continue to back Brexit they are faced with either destroying the Agreement and any prospect of a return to devolved government, or they can instead put what they call the ‘precious union’ at risk by backing the Prime Minister’s draft withdrawal agreement.
“Neither choice serves the interests of unionism and both should be rejected.
“None of this is good news for Irish nationalists either – instead of creating a united Ireland, the backstop would turn Northern Ireland into somewhere where key decisions are taken not in Belfast, never mind Dublin, but by an unelected committee that may contain not a single Irish voice.
“It is delusion to see the backstop as any sort of advance. Only a People’s Vote on this whole sorry mess offers a way out.”
Article 9 of the Northern Ireland Protocol (the backstop) of the draft withdrawal treaty states:
The provisions of Union law listed in Annex 6 to this Protocol concerning goods shall apply to and in the United Kingdom in respect of Northern Ireland. The Joint Committee shall regularly discuss the implementation of this Article, and where appropriate, adopt the necessary measures for its proper application
Annex 6 lists many laws and regulations, but two key measures are:
- Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax.
- Council Directive 2008/118/EC of 16 December 2008 concerning the general arrangements for excise duty.
Taken together these mean:
- No additional goods or services could be VAT-exempted in Northern Ireland without the permission of the European Commission (and potentially the European Court) – though in Great Britain no such restrictions would apply.
- Minimum VAT rates in Northern Ireland would be set by the European Commission – whilst in Great Britain this would be a matter for the United Kingdom Parliament.
- There would be a legal obligation to seek to harmonise VAT rates in Northern Ireland with those in the EU while no such obligation would exist for the rest of the United Kingdom.
- It would be unlawful for, for instance, to offer duty free sales to passengers on any flight out of Northern Ireland to any part of the EU, while any airport operating in Great Britain could be given that right by the United Kingdom Parliament.
- Travellers on flights out of Dublin Airport, or any other airport in the Republic of Ireland, to the UK could access duty free shopping but no traveller from any airport in Northern Ireland could – creating a massive commercial disadvantage for airports in Northern Ireland (eg., travellers on flights from Donegal Airport could use duty free on flights to the UK, travellers from the City of Derry Airport could not).
- The United Kingdom Parliament would be reduced to a rubber stamp as the treaty makes it a binding obligation on the UK to enforce the decisions of the “Joint Committee” established to oversee the withdrawal agreement and the backstop.