Plans to override Northern Ireland protocol set scene for explosive Brexit row with Brussels

Legislation will target European judges and tax powers – as well as border checks – fuelling risk of trade war with EU

A new bill to override the Northern Ireland Protocol will target the role of European judges and give UK big tax powers, setting up a momentous clash with the EU.

Liz Truss revealed the legislation will go much further than seeking to ease border checks in the Irish Sea – increasing the chances that it will provoke a damaging trade war with Brussels.

It would go to the heart of the 2019 agreement, hailed as “fantastic” by Boris Johnson at the time, by removing European Court of Justice jurisdiction over disputes relating to Northern Ireland.

And it would allow the government to set VAT rates and decide on subsidies in the province, the foreign secretary told MPs.

The legislation has not yet been published, but is expected to be released within weeks – at which point the EU is likely to set out its plans to retaliate.

In a statement to the Commons, Ms Truss argued it is “necessary to act to ensure the institutions [in Northern Ireland] can be restored as soon as possible”.

And, to some jeers, she insisted the dramatic move is “consistent with our obligations in international law”.

Labour warned of “wide-ranging and damaging repercussions”, questioning whether future potential trade partners would want to strike deals with a country that breaks its word.

And it raised fears of “fuelling divisions with our European allies”, when the priority should be to help Ukraine fight back against the Russian invasion.

Justifying the move to seize back control of tax-setting powers in Northern Ireland, Ms Truss pointed to the inability to cut VAT on “solar panels”, in line with the rest of the UK.

“The rules on taxation mean citizens in Northern Ireland are unable to benefit fully from the same advantages as the rest of the UK,” she argued.

Although she did not specifically mention the European Court of Justice, Ms Truss said ”governance” would be overhauled – code for ending the remit of the ECJ.

The legislation would create new ‘green’ and ‘red’ channels for goods travelling from mainland Britain to Northern Ireland, setting up a “trusted trader” scheme.

Only goods destined for the Republic of Ireland would be subject to customs checks and tough penalties for any traders attempting to dodge the rules.

Ms Truss is inviting Maros Sefcovic, the European Commission vice-president, for talks in London to discuss the new proposals.

However, there appears to be little hope of progress, after the UK rejected EU proposals to remove many of the current checks.

The UK has refused to sign up to EU veterinary rules, seen by many as the key to reducing the need for much of the bureaucracy, which hits transport of food goods hardest.