December 23, 2008

Cross-border shopping can be the new patriotism

There has been a lot said and written about cross-border shopping and patriotism in the weeks running up to Christmas. As a person with a passing interest in both subjects (the latter mainly on the terraces at Lansdowne Road), I wonder if I might add my two ha’apence.

Irish Finance Minister Brian Lenihan started it all with his unwise ‘call to patriotic action’ in urging Irish people to accept the harsh cuts of his October budget. He then compounded the error when he told RTE listeners last month: ‘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.’ 1

Inevitably the people ignored him. The main consequence of that budget for the average Irish citizen north of a line from Dublin to Galway (and even further south) seems to have been to drive them in even larger numbers across the border to do their Christmas shopping. The price differences between North and South – helped by a dramatically weakened Sterling and a 2.5% cut in VAT in the UK compared to an 0.5% rise in the Republic – are now the stuff of legend: Irish-made Kerrygold butter twice the price in Dublin as in Lisburn; a bottle of Irish whiskey £14 cheaper in Northern Ireland; and a wide range of goods from breakfast cereals and Pampers to women’s shoes and cups of coffee over 30% more expensive.

Not surprisingly, it didn’t take Northern politicians long to weigh in on the other side of the argument. Peter Robinson, stressing that he was not trying to score any ‘cheap political points’, nevertheless couldn’t stop himself commenting: ‘In truth it is good for us all. Northern Ireland gets a significant economic boost, and people in the Republic might save enough on their shopping to help pay their higher taxes and their health bills.’ 2 Jeffrey Donaldson found it ‘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.’ 3 Martin McGuinness said he was ‘gobsmacked that we are being excluded from the all-island economy.’ 4

A man with no political axe to grind, Bill Tosh, the head of Dundalk Chamber of Commerce, put the central issue of cross-border prices most succinctly when he pointed out that Larry Goodman produces a large proportion of the meat sold on the island from his base near the border in County Louth: ‘It’s all the same meat but somehow it ends up costing twice as much down south. That’s obscene.’ 5

Paul Cullen, Irish Times consumer affairs correspondent, noting the Dublin’s Fianna Fail Lord Mayor’s call for its citizens to show ‘civic patriotism’ by choosing to shop in the capital rather than go North this Christmas, commented: ‘It might seem strange for a member of the Republican Party to suggest that patriotism cannot be exercised north of the border. After all, isn’t the most patriotic thing to buy Irish-made goods wherever they are sold (and preferably at the cheapest prices), especially when the retailer down South may be foreign-owned?’ 6

Or as one Limerick reader wrote to the Irish Times: ‘When Aer Lingus moved its Heathrow service from Shannon to Belfast, objectors were told it was done because costs were lower in the North. We were informed by various politicians and commentators that this was a free market, that we were all one island. However when ordinary people head north to shop for the same economic reasons, they are branded as “unpatriotic”.

The prominent Southern economist Jim O’Leary pointed out that the more Southerners went North, the more pressure there would be on Southern retailers to cut their profit margins, costs and prices, and ‘this is as it should be.’ The problem of floods of people heading North to buy cheaper priced goods was part of the wider problem of the South’s lost competitiveness. The Republic’s main weapon in the fight against the current severe economic recession would be to cut its excessive production costs (and even more excessive retail prices) and thus start to compete internationally again. ‘One could argue that it is our patriotic duty to do what we can to bring that about, including travelling North for our shopping until that has happened,’ was his provocative conclusion. 7

I’m no economist or business leader, but here’s my two ha’apence worth. Maybe we need to be moving towards a new kind of all-island patriotism which transcends the narrow domains of traditional Irish nationalism or British unionism. This should be based on the conviction that what we are striving for ‘in the common name of Irishmen’ (and Irishwomen) is what brings the greatest benefits to the people of the whole island. We don’t want to get into a situation like that in the 1920s, when the Irish Free State broke away from Britain only to see its ‘independent’ standard of living fall significantly. In the new post Belfast and St Andrews Agreement Ireland, the best political and business leaders are those who can ensure the maximum benefits for all the people of the island, nationalist and unionist and other, North and South, whatever the colour of the governments in Dublin and Belfast. I suggest that should be the new pragmatic, patriotic maxim for the early 21st century.

Andy Pollak

1 Belfast Telegraph, 27 November 2008
2 Business World, 28 November 2008
3 Belfast Telegraph, 27 November 2008
4 Today with Pat Kenny, RTE, Radio 1, 22 December 2008
5 Irish Times, 25 November 2008
6 Ibid.
7 Irish Times, 12 December 2008