Esmond Birine: The role of the European Court in Northern Ireland is an important matter, not just a legal technicality

Whatever view one takes of the current impact of the Northern Ireland Protocol or of this week’s re-negotiation proposals from London and Brussels, it is unfair to dismiss the question of European Court of Justice (ECJ) oversight as merely a legal technicality.

Wednesday, 13th October 2021, 10:08 am
Updated Wednesday, 13th October 2021, 10:27 am
The European Court of Justice in Luxembourg. If the court retains ultimate say on whether the UK/Northern Ireland is implementing single market EU competition law then that makes the EU judge in its own case

The role of the ECJ is not a sort of legalistic Jarndyce versus Jarndyce (the name of an interminable legal case which runs through Dickens’ novel Bleak House), which the UK government (Lord Frost) has now thrown into the negotiations.

If the ECJ retains ultimate say so as to whether the UK government/NI is appropriately implementing single market EU competition law then that gives the EU the privileged position of being judge in its own case.

It is often argued that natural justice requires that ‘no one is judge in his own cause’ (‘nemo judex in causa sua’).

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Dr Esmond Birnie is senior economist at Ulster University Business School

And EU law and how it is implemented (and the hence the question of whether policy and practice in NI has to be identical to that in the EU27 or could it be deemed ‘equivalent’, and linked to all of that, who judges all of that) has very practical implications for NI economy and society.

To take one example, which is topical given the current deliberations of the Fiscal Commission, tax devolution. EU market law requires that any reduction in level of taxation in a region requires a reduction in the cash transfer from the national exchequer to that a region equivalent to the reduction in revenue collected.

This was spelt out in the Azores Judgement at the ECJ. So, it was an ECJ ruling which implied that if the Stormont executive had chosen to reduce corporation tax in Northern Ireland there would be a corresponding (considerable) reduction in the block grant to NI. Under the protocol (as is) the Azores ruling still applies to NI. A similar principle is likely to apply to any other future proposals for tax reduction in NI.

It might be argued that HM Treasury would take the view, in any case, that if a tax rate is cut in NI compared to the UK average then it is only fair that the executive takes a hit to the block grant. Perhaps so but the point is that under the protocol the UK government has no scope to show any generosity to NI.

Dr Esmond Birnie is senior economist at Ulster University Business School

Other articles by Esmond Birinie below and beneath that information on how to subscribe to the News Letter:

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