11 December 2008 Edition
All-Ireland solution to cross border shopping the only solution
Who really thinks shopping for bargains is patriotic sabotage?
TAOISEACH Brian Cowen’s appeal to patriotism to try and stem the tide of pre-Christmas shoppers going North in search of making their euro go further has fuelled the debate on cross-border shopping.
An Phoblacht’s ROBBIE SMYTH, a 35-year-veteran of Six-County retail incursions, offers his analysis and proposes some solutions for disgruntled 26-County patriots.
MY first unpatriotic act happened in a sweet shop in Warrenpoint in 1974. It was the realisation that Wrigley’s gum north of the border came in seven-stick packets compared to the paltry five on sale in the South. Who couldn’t resist? (But I did only buy the green double mint brand.)
My patriotism also extended to buying 7up rather than C&C orange from Belfast until I realised as a teenager that Coca Cola bottled it north of the border in their Lambeg plant, so instead my brand loyalty turned temporarily to the now-defunct Cavan Cola. Some say it was banned as a toxic substance but that is (I think) an urban myth.
The campaign escalated with pocket money splurges on British comics that were sold for the actual cover price, a practice I have yet to experience south of the border. In fact, sometimes when perusing newsagent shelves in Dublin it seems the retailers just think of a number and double it when pricing magazines.
Regular visits to the Jonesborough and Newry outdoor markets supplemented the sweets and comic-buying and have now turned into a lifetime spent weighing up the comparative prices and exchange rates north and south of the border.
There were no patriotic calls to the thousands of Irish shoppers flying to out-of-town discount fashion malls in New Jersey and upstate New York in recent years
As a teenager, I could impress Northern relatives with tales of McDonalds in Dublin. For years they were deprived of this delicacy as it turns out that McDonalds don’t do war zones (although the Peace Process has changed all that). It was Wimpy burgers or the local chippie for them.
I too take responsibility for endless trips to Argos in the late 1980s and early ‘90s, but they were never of my own volition. How was I to know that every home south of the border would have the catalogue stacked neatly between the RTÉ Guide and the phone book waiting for the hapless victim (that’s me) to stumble in and be tasked with an expedition to bring back some unwieldy, cumbersome and always heavy package?
Particularly memorable was one child’s high chair, which I (then carless) carried from Great Victoria Street up the Falls to my digs and then back down to the train the next day. Each trip I was stopped and searched, package repeatedly opened to the general mirth of ‘Her Majesty’s finest’ while I wrestled with the torn cardboard and ripped packaging.
In the 1970s, with sterling and Irish pound parity, it was fairly easy to see where the bargains lay, North and South, but the creation of the European Monetary System and the floating of the punt as an international currency in 1979 launched an urgent need for numeracy and many Northern retailers began to offer complimentary calculators and currency converters to 26-County shoppers.
In the intervening years, the pendulum of comparative advantage has swung back and forth, the cross-border trains and buses could be packed some weeks or empty others, the car parks jammed or bleak and vacant, and the same for the petrol forecourts, but in recent weeks this has all been forgotten and rather than find a solution to decades of beggar-thy-neighbour economic strategies, Southern politicians and vocal elements of that Establishment did what they do best in such crises – denounce your opponents while wrapping yourself in the Tricolour, preening your new-found but utterly twisted patriotism.
Dublin Lord Mayor Eibhlin Byrne called for “civic patriotism”. “These are critical times,” said Byrne, who warned that there would be repercussions for people taking their spending out of the city. Funny: when Blanchardstown, Dundrum, or even Liffey Valley shopping centres were opened there were no vocal comments on the TV headlines or in the newspapers from the political elite in Dublin. So, it seems, you can build an out-of-town shopping mall anywhere in Ireland except Newry, Enniskillen or Derry!
Outspoken 26-County economist Jim Power said the shoppers trekking north are committing “the ultimate act of patriotic sabotage”.
Fianna Fáil Finance Minister Brian Lenihan added to the debate by declaring that it makes things “very, very difficult” but exacerbated the problem by increasing the VAT differential between the states by raising Irish inflation to 21.5 per cent and then, when New Labour Chancellor of the Exchequer Alastair Darling cut 2.5 per cent from the British VAT rate, lowering it to 17 per cent, Lenihan again did nothing.
Nor did Lenihan, Byrne and Power say anything when Ikea opened a store north of the border last year, even though the effect on local furniture manufacturers will, in the long-term, be immense and could endanger thousands of jobs along the border as this is where the Irish furniture sector is concentrated. In the South, they have changed planning laws to allow Ikea to open here.
Similarly, there were no patriotic calls to the thousands of Irish shoppers flying to out-of-town discount fashion malls in New Jersey and upstate New York in recent years. So, once again, selective patriotism while faced with challenging consumer behaviour.
Dundalk Town Council has sought a cut in the 26-County VAT rate to 15 per cent while other councils and chambers of commerce along the border have made similar calls but still no action has been taken by the coalition government.
This week, Gerard O’Hare, Newry businessman and owner of the town’s Quays shopping centre, asked for an apology from Fianna Fáil Finance Minister Brian Lenihan, while last weekend the M1 was again clogged with shoppers travelling north to take advantage of favourable exchange rates, lower excise and VAT levies – so few heeding Lenihan’s call.
O’Hare, who was interviewed by The Irish Times, made one critical point when he said:
“This is not about politics. It is about economics and those who are in charge of economics. This is all about bringing the benefits of two economies on the one island together and making the most of it.”
In the long-term, this is the only solution. We need an island economy with a single currency and harmonised tax system. Tesco, Dunnes Stores, Marks & Spencers and all the major banks operate on both sides of the border, and customers will go where bargains are cheaper.
Fianna Fáil, by raising VAT and ignoring the need to steadily build an island economy, have been the major contributing factor to this problem. Selective, so-called patriotism is only worsening the economic imbalances on the island.
It is a pretty depressing scenario when it falls to Jeffrey Donaldson to tell Brian Lenihan:
“It is interesting that the Irish Government supports a united Ireland but when it comes to patriotism that only extends to the 26 counties of the Republic.”
For now, the soundbites need to end and be replaced with a focus on a level playing field for shoppers throughout the island and the jobs that depend on those spending decisions.