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Analysis

Dyson and Banks run to EU law when it suits them

by Luke Lythgoe | 13.11.2018

Two prominent Brexiters, Arron Banks and James Dyson, have both appealed to European law in their recent legal battles. Dyson won his dispute, while Banks lost. But the strategies undermine some of their favourite arguments against the EU.

Banks’ case was an unsuccessful attempt in UK courts to overturn an HMRC decision to charge inheritance tax worth £163,000 on his donations to UKIP. The charge was based on a long-standing UK rule that only gives exemptions to those parties which win seats at a general election.

Banks, who was also the biggest donor to the Leave campaign, claimed this was against European values and human rights, using articles in the EU treaties which set out the values of the bloc to make part of his case. His lawyer argued that UK rules discriminated against political parties that did well in European Parliament elections compared with those that did well in UK general elections – and that this was a breach of the UK’s obligations in the EU treaties to “democracy and equality” and the proper functioning of the European Parliament.

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The judge agreed that the UK tax code “does not strike a fair balance” but that “these are matters for (the UK) Parliament” and that his tribunal was “not able to rewrite the legislation”. Essentially, Banks’ case proved the sovereignty of the UK Parliament over the EU treaties in matters of tax law.

Another interesting point is that if these values had been spelled out in a fully fledged EU regulation, rather than just the broad strokes of articles in the EU treaties, Banks might have had a case. But would such an ardent Brexiter have been supportive of that?

In Dyson’s case, his company was disputing the EU’s own energy efficiency labelling for vacuums, which allowed testing to be done with empty new machines. Dyson claimed this discriminated against its bagless machines in favour of continental rivals which used bags and filters, because bags and filters clog up with dust over time, reducing efficiency. Dyson argued this ignored the EU’s own directive, which says efficiency must be calculated to “reflect normal conditions of use”.

Dyson won the case and the labelling is expected to be taken out of use in a couple of months. Not only that, but Dyson achieved this after an initial defeat in the EU’s General Court, by appealing to the European Court of Justice. The ECJ sent the case back to the lower court after finding it had “distorted the facts” in the original ruling.

Dyson, who has repeatedly advocated for stripping away European rights and protections, is naturally celebrating this as a victory against EU regulations which stifle business. But these rules are in place to protect consumers and the environment. What Dyson’s case really proved was that, when EU rules don’t make sense, the EU is able and willing to change them.

Edited by Hugo Dixon

2 Responses to “Dyson and Banks run to EU law when it suits them”

  • The author of this article is claiming to prove a general thesis by reference to a single instance: “What Dyson’s case really proved was that, when EU rules don’t make sense, the EU is able and willing to change them.” Does this case also prove that it always takes five years to get something like this sorted out?