My Lords, I am grateful to all noble Lords. Debating the nice light subject of taxation for our last group is exactly what the doctor ordered. But I am extremely grateful for the brevity shown, and I will seek the same in my response.
I will respond to Amendment 33, in the name of the noble Lord, Lord Purvis of Tweed. Clause 17(1) is drafted to enable Ministers to make provision about VAT, excise duty and other taxes in connection with the Northern Ireland protocol when they consider it appropriate. The Bill maintains the current baseline of EU rules in this area. The clause is required to enable the Government to make changes that, for example, lessen or eliminate ensuing tax discrepancies between Northern Ireland and Great Britain, support frictionless trade on the island of Ireland and preserve the essential state function.
As EU tax rules are dynamic, it is impossible to specify every circumstance where the Government may need to take such steps, and it will also not be possible to anticipate the precise nature of those steps for all possible scenarios. However, we have already set out some examples, such as alcohol duty and the tax treatment of energy-saving materials, where Northern Ireland cannot benefit from the same policies as the rest of the UK, despite these policies posing no risk to north-south trade.
The noble Lord asked about Section 54 of the cross-border trade Act—that is my favourite subject. But, in all seriousness, I will write on the specific nature of the question that the noble Lord posed to ensure that he gets a complete answer. Of course, I will share that letter with noble Lords and make sure that it is in the Library.
I turn fleetingly to Amendments 34 and 35 in the name of the noble Baroness, Lady Chapman. We have covered the government position on this before, but I add that we feel that appropriate discretion is a necessity if the Government are able to facilitate consistent VAT, excise and other relevant tax policies between Northern Ireland and Great Britain. It would be inappropriate to leave the people of Northern Ireland unable to benefit from the support available to those elsewhere in the UK.
I turn briefly to Amendment 35A, in the name of the noble Lord, Lord Dodds, which would make Article 8 of, and Annexe 3 to, the Northern Ireland protocol excluded provision. I am sympathetic to the amendment’s intentions. It would disapply relevant EU VAT and
excise rules in domestic law, allowing a new VAT and excise regime to be implemented in its place. However, the Government’s view is that a blanket removal of EU VAT and excise rules is not the intention in this area. Instead, the Bill maintains the current baseline of EU rules but introduces Clause 17, in conjunction with Clause 15, to grant Ministers the power to disapply or override any restrictive EU VAT and excise laws that apply in Northern Ireland. I briefly explained why we believe that this is necessary.
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Continuing to reflect some elements of EU VAT and excise laws protects the EU single market by helping to avoid the risk of economic distortion on the island of Ireland. It also ensures continued access to shared IT systems and cross-border VAT and excise processes, which are important in protecting Northern Ireland consumers and businesses against the risk of fraud. Finally, it also gives Northern Ireland traders who trade with businesses and consumers in Ireland access to EU VAT and excise simplifications and accounting mechanisms. This approach, in our view, ensures that Northern Ireland businesses and consumers can benefit from the same tax policies as those in the rest of the UK, while also guaranteeing stability and an open border on the island of Ireland.
I can see why the noble Lord, Lord Dodds, tabled this amendment, but it is the Government’s view that it will not improve our ability to align VAT and excise duties in the UK. Compared to the current approach, it would risk distorting trade on the island of Ireland. That is why I hope my noble friend will be able to withdraw his amendment.
Briefly, I turn to the question of whether Clause 17 stand part of the Bill, which is included in this group of amendments—