Brexit outrage: UK powerless to cut hated VAT while still shackled to EU – MPs told to act

Northern Ireland Protocol: 'We'll look for alternatives' says Truss

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Boris Johnson’s withdrawal agreement effectively kept Northern Ireland in the single market – a move with has outraged its unionist community. Now the protocol has created another problem as the skyrocketing price of gas threatens to help exacerbate a looming cost of living crisis.

Unlike the rest of the UK, Northern Ireland cannot currently cut VAT below five percent.

This is because it is bound by Article 8 of the Northern Ireland Protocol, which deems the province within the European Union rules for VAT and excise.

Current EU legislation deems five percent the minimum threshold VAT can be levied at, which itself is the existing UK rate on energy and so it could not be cut here.

This means that a Scrap the VAT campaign on energy bills being run by broadcaster and economic commentator Liam Halligan would not be allowed to apply in the province.

Embarrassingly, it is being backed by Sir Keir Starmer’s Labour Party.

It is estimated that scrapping VAT on energy bills the average British household between £100 and 150 saving per year.

Writing to the Belfast Newsletter, Colin Berry said: “It could not apply in Northern Ireland, because existing VAT itself disproportionately punishes the poorest in society and any reversal benefits low earners and low income families more than any other demographic.

“Can MPs such as Stephen Farry, Colum Eastwood and Claire Hanna offer an alternative to the reduction in VAT on energy bills that benefits ordinary people?

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“Are they prepared to back the opposition in calling for a pan-UK reduction in living costs or will they yet again demand a rigorous implementation of a protocol that legislatively limits the positive impact a nation state can have in helping ordinary people with their everyday lives?”

Alliance MP Mr Farry, along with SDLP MPs Mr Eastwood and Ms Hanna have all criticised Brexit in the past.

Earlier this week a Labour motion calling for VAT to be scrapped on energy bills was dismissed in the House of Commons.

MPs voted by 319 to 229 — a majority of 90 — against the proposal, with Anne Marie Morris the only Conservative MP to rebel and support the measure.

Labour argued that the move – which would be funded through a tax on North Sea oil and gas companies – could “save households £200 off their bills, with up to £600 in total for those who need it most”.

Speaking afterwards, Sir Keir said Conservative MPs had been given the “opportunity to put families, pensioners and struggling businesses first, with a VAT cut on energy bills”.

“They voted against it.

“Instead of providing security for those who need it the most, the Conservatives are abandoning them”. has contacted all three MPs for comment.

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