The Unpatriotic Shopping Debate Rumbles On

Comedian Des Bishop argued on the Late Late show a few weeks ago that he had never seen a country who was happier to be in recession. He claimed that we were happier to be poor and right ('I told you it would end but you wouldn't listen would you!) than happy and rich. We laughed at that suggestion. But he's dead right really. We love to play ourselves down. The Celtic Tiger made us get above ourselves really.


Now there's this argument about patriotism and how apparently according to Brian Cowen shopping in the North is unpatriotic. He said 'when you shop in Northern Ireland, you’re paying Her Majesty’s taxes, you’re not paying taxes to the state that you live in'. Hmmm. I posted on this topic a few days ago and concluded 'that shopping over the Border hurts the Irish economy. €300 spent in Sainsburys in Newry is stimulating the UK economy and generates VAT for the British Exchequer. Meanwhile Revenue has lost the VAT from your €300 shop that it would have gotten if you had shopped in Superquinn. Loss in VAT returns significantly hurts the Irish economy. The effect on society is less money to fund schools and hospitals'. And my thoughts on this so far haven't changed.


But now politicians in the North are getting involved in this debate too, arguing that Northern motorists went across the Border to the South for years to buy cheaper petrol giving taxes to Revenue. Stormont junior minister Jeffrey Donaldson has been urging Southern shoppers to bring their Euro across the Border in order to get a good deal. But more importantly it has to be said that he is looking after NI's self interest and hoping to bolster the NI economy.


Added to this unpatriotic nonsense that's been floating about, is Donaldson's comment that Irish government ministers support a united Ireland (do they?) but don't support the Irish shopping in the North. Whilst I like the brashness of this argument, I fail to see the connection. Surely regardless of politics, loss of VAT to the Irish Revenue Commissioners is a major problem to our government, and thus to us.


But it's interesting to listen to this debate rumble on nonetheless.

(photo from Guardian.co.uk)

UK VAT cut could push more shoppers North

The UK government's decision to cut the VAT rate from 17.5% to 15% could send even more Irish shoppers across the border into Newry. The move came today as Chancellor of the Exchequer Alistair Darling announced a £20 billion package to help stimulate the British economy. The new rate will come into effect next Monday.

Meanwhile, VAT in the Republic is set to rise by 0.5% to 21.5%. That's a 6.5% difference in VAT rates between the two regions. Then take into account the healthy Sterling exchange rate plus price differentials and you have a major incentive to go North. Recent months have seen major traffic jams in Newry as it's shopping centres fill with Southern registered cars. Those cars return across the border with cheaper alcohol, clothing and various other items.

It's true that bargains are to be had in Newry- for some reason goods appear to be significantly cheaper in the North despite the distance being so small. I recently clocked a price differential of €51 to £30 for a handbag (£30 is €36- so where is the rest gone?). Sure there's chatter about increased labour and VAT rates but that's still a huge difference.

Some of the media have been asking whether going North for shopping is unpatriotic.... that argument is truly madness in my opinion. How can we honestly be asking people to overpay in the South in the justification of keeping Irish jobs safe? Surely the government should be concentrating on addressing the situation rather than pointing the finger at frustrated consumers who are shopping with their pockets. We're in a downturn in case the government hasn't noticed.... so of course people are going to go where value is best. If that means over the border then so be it.

But the fact remains that shopping over the Border hurts the Irish economy. €300 spent in Sainsburys in Newry is stimulating the UK economy and generates VAT for the British Exchequer. Meanwhile Revenue has lost the VAT from your €300 shop that it would have gotten if you had shopped in Superquinn. Loss in VAT returns significantly hurts the Irish economy. The effect on society is less money to fund schools and hospitals. So where does that leave us? It leaves us with quite the dilemma- the choice between value in the North and personal monetary savings, or being ripped off in the South by greedy retailers but supporting the Irish economy. Oh dear.

Ultimately the government needs to take some responsibility for this issue, whether it is through cutting our VAT rate so that there's no reason to go North or finally tackling profiteering in Rip-Off Ireland.

Someone has to take responsibility for this, but consumers shouldn't be forced to choose between patriotism and value for money.

(photo from Irishnews.com)

Rip Off Ireland

It's definitely alive and well. Despite the media and the public kicking up a fuss about price differentials between Euro and Sterling prices, most notably seen between Dublin and Newry stores, ripoff Ireland roars on. A few weeks ago I purchased a bag in a high street chain which cost me €51. That night I discovered the Sterling price online was just £30. Seems a bit off doesn't it? It's well off! At the time of writing £30 is equal to just €35. So where is the other €16 going? A little bit for the increased labour costs we hear so much about. But that's still a huge price difference. So anyway in defiance of rip off Ireland, I purchased the same bag for £30 in England last week and returned the old one in town tonight. When asked was there anything wrong with the bag or did it just not suit, I simply replied; 'well when I saw it was £30 online I wasn't very impressed' so I'm returning this. To which the assistant replied 'sure that always happens doesn't it' ...... not in my wallet!

So lesson is shop around and convert those prices!