Northern Ireland winner with Vat cut as shopping war ecalates

Opinion in GB may turn up its collective nose at the Vat cut but the one part of these islands where it really matters is – guess where?

In an open letter to Minister for Finance Brian Lenihan and Tánaiste Mary Coughlan yesterday, the (Drogheda) chamber called on them to “act urgently” to assist the commercial and retail sectors in the State to “stem the flow of income and sales North to the jurisdiction of the UK government”.

Peter Robinson had to hold himself back from rubbing his hands in glee.

“Let’s be clear, this is swings and roundabouts. There have been many occasions where this has worked in the other direction, it worked in terms of fuel and aggregates when that very clearly damaged the prospects of businesses on our side of the border,” Mr Robinson added.

Anticipated by Pete last Monday, the day of the pre-budget report, the shopping war is hotting up..

David McKittrick reports

“Until the other day, it was regarded as harmless to nip across the Irish border to pick up a bargain. Now suddenly it is being denounced as “the ultimate act of patriotic sabotage”

However the latest poll showing support for Gordon Brown plummeting illustrates how volatile is public opinion in the twists and turns of recession. This was brought home to me vividly as I watched the BBC’s Question Time from the swing constituency of Basildon in Essex last night…It sounded as if the government are facing a People’s Revolt over foot-dragging over bank lending and the feebleness of the Vat cut. Iv’e never heard an audience speaking more strongly from the heart. Douglas Alexander, the unfortunate minister on parade kept repeating that the government were “working day and night “ to get the banks to lend. Thunderous applause greeted the audience member who shouted “You say you’re working and working – get the thing done.. If you think you’re going to win an election with this going on you can think again. ” Another businessman complained that although he had good security for a loan the bank wasn’t even returning his calls. It was a solemn moment when panelist member Justin King the CEO of Sainsbury’s confirmed :“ Yes this is happening all over the country.”

The public are growing impatient. You could be forgiven if you thought the main UK banks had been “nationalised” weeks ago. It turns out the first one is coming through only today. Resistance continues to the Lloyds TSB/HBos merger. To be fair, these seismic changes in economic management by the state are bound to take more than a few weeks to bite. Credit guarantees for mortgage lending is another option the government are “working on” and in retail, more shots are left in the locker.

Question Time from Newry next Thursday should be good. It’s bound to feature a lively debate on the pros and cons of the new (temporary?) economic border.

  • Grassy Noel

    I see the hubris of the greedy, grasping rip-off Republic has now attracted the forces of nemesis, and boy, am I enjoying their childlike whinges and moans.

    Time and again insufferably smug and contented southerners would tell us we were an economic basket-case and a sectarian backwater – but oh, how times have changed!

    Furthermore, I read with interest that lots of pubs have started to go under, what a pity indeed!

    I only hope one of those was the pub in Dublin that tried to charge me and my family for ice in the recent past, only for me to leave the drinks unsipped on the bar, before turning, rallying everyone, and walking out.

    I have to say, not a fan of the DUP per se, but I like Robinson’s style:

    “Some in the South have said it is unpatriotic to shop in Northern Ireland, but in the spirit of North-South co-operation, I am happy to offer a warm welcome to all of our visitors from the South.

    “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.

    “It worked in terms of fuel aggregates when very clearly it damaged the prospects of businesses on our side of the border. I encourage people to come to Northern Ireland and am delighted that they built all those good roads so that people could come up quickly to Northern Ireland.”

    Roughly translated: ner ner ner-ner nerrrr!

    Or

    AHAHAHAHAHAHAHAHAHAHAHA!

    The only drawback is trying to get a parking space in Castle Court on a weekend. Nightmare!

  • The Reincarnation of Paul Revere’s Horse

    Im just wondering how much would one have to spend to make a worthwhile saving driving from Dublin. A 110km journey.

    I can only imagine the catchment area for people to go North to shop would really only be Ulster counties in the Republic, Louth, North Meath.

    Is this really making a big deal out of nothing?

  • pacman

    “Time and again insufferably smug and contented southerners would tell us we were an economic basket-case and a sectarian backwater”

    We still are unless I’ve been in a coma for a very long time.

    Money talks – simple as. It’s hardly going to solve the social and economic problems of this place no matter how much the executive think it will but then none of them will ever be inclined to try and creat an economy here until the annual bung from Westminster is removed.

    I had to laugh at Arlene Fosters’ enthusiasm on yesterday’s news for the latest white elephants for Belfast (Rapid Transit and Titanic Quarter). It won’t benefit the majority of the people in the country who rarely go near Belfast but it will cause millions of foreigners to suddenly decide to forego a holiday in the sun to come to Belfast.

    At what point will these idiots realsise that tourism is not a sustainable economy?

  • frustrated democrat

    Brian

    You have 14 links in that piece, I know you want to source your quotes but it would take all day for a reader to reference them all and see why you had the link.

    Can we have fewer links, especially inside Slugger where regulars will probably have read the piece already?

  • BonarLaw

    pacman

    the tourist business is currently worth £5bn pa to Scotland. The target is to grow this to £7.5bn pa by 2015.

    Perhaps if Tourism Ireland wasn’t marketing two competing destinations NI could be doing better in this sector.

  • George

    Grassy Noel,
    Time and again insufferably smug and contented southerners would tell us we were an economic basket-case and a sectarian backwater – but oh, how times have changed!

    Really, and how is that then? Have some fantastic and enlightened economic measures been put in place since I went to bed last night? Northern Ireland is still an economic basket case and building an economy around consumer spending (southern or otherwise) is hardly sustainable.

    Or have you already forgotten one the main reasons we are all in this mess in the first place?

    The reason for the whining is quite simple: the politicians know that they can do nothing about the cross-border shopping and thousands of southern jobs are going to go after Christmas (partly as a result but mostly because of the downturn) so the Pilate-like washing of hands is starting early.

    PS: We all all have particular premises in the Republic that we live in hope won’t make it through the recession. My own was the “luxurious” Capella in East Cork where part of the experience was walking wolfhounds in the grounds. What were these people thinking?

  • An Ceilleachaireach Rua

    Eh, Noel, far be it from me to interupt your bout of maniac schadenfreude (sic?) but this situation is in a large part a function of the current economic weakness of sterling vis the eurodollar and lower pirces are usually a sign of a less economically vibrant economy (not always but it’s worth bearing in mind). As Peter said; it’s swings and roundabouts. Will be in Belfast myself tomorrow to pick up come furniture. Do I feel like an unpatriotic economic saboteur? My Kevin Myers I do.

  • Grassy Moel,

    Time and again insufferably smug and contented southerners would tell us we were an economic basket-case and a sectarian backwater

    Um, still the case, I’m afraid. That’s one of the reasons why things are cheaper in the north – less demand, lower rents, lower wages, etc. Think of it like this: when you go to Bulgaria for your hols (!), you’ll find that things are a lot cheaper. Bulgaria is a basket case compared with the north, as the north is compared with the south (but to a lesser degree).

    As for not being sectarian any more … ! Do you think a southern economic refugee parking his beemer in a loyalist area while shopping in Belfast could be certain of its safety?

    [PS: verification word below is ‘South’. Uncanny!]

  • An Ceilleachaireach Rua

    PS – when did FF become such a blatantly partitionist party? I blame the PDs…

  • Brian Walker

    frustrated, I’m sorry you’re frustrated. In some cases, not all, the links are to obvious sources and so can surely be ignored if you wish. I certainly don’t read every link myself but I like to have the choice. But I’ll bear your protest in mind.

  • pacman

    What’s to market Bonar? The Giant’s Causeway (currently without a visitor centre but may soon have two – one for real people and one for bible-thumpers)…………..erm………murals………..er……..the peace process (honestly Guv, you won’t get blown up anymore).

    What happens the next time Al-Quaeda decide to blow up a few aeroplanes or shoot up a load of tourists and everyone decides to stay at home. Will that be Tourism Ireland’s fault?

  • Grassy Noel

    To all those who had a pop – I was not suggesting our economy is not a ‘basket case’ still – far from it – but rather my schadenfraude was more to do with the fact that those who were so disparaging and snooty about our corner of the island are currently falling over themselves to come up and spend in it.

    And spend. And spend…

  • An Ceilleachaireach Rua

    Grassy,

    becuase it’s cheaper. It’s not indicative of much else really considering even the staunchest of Orangemen were know to fill up in Louth or Donegal…

  • Grassy Noel

    Eh, Noel, far be it from me to interupt your bout of maniac schadenfreude (sic?) but this situation is in a large part a function of the current economic weakness of sterling vis the eurodollar and lower pirces are usually a sign of a less economically vibrant economy (not always but it’s worth bearing in mind). As Peter said; it’s swings and roundabouts. Will be in Belfast myself tomorrow to pick up come furniture. Do I feel like an unpatriotic economic saboteur? My Kevin Myers I do.

    I like the cut of your jib, sir.

    As stated above, (and now I’m feeling all guilty about it!) I was only highlighting the fact that down through the years us Northerners (and non-unionists like me) had to put up with all sorts of slurs and nasty comments about our wee bit of the island, and our economy, and our politicians etc. – but now, we have a flood of southerners coming in to buy, buy, buy and in so doing, giving our zombie economy a real injection of fresh blood.

    I hope I didn’t offend you. It wasn’t my intention.

  • eranu

    “Im just wondering how much would one have to spend to make a worthwhile saving driving from Dublin. A 110km journey.”

    The Reincarnation of Paul Revere’s Horse, a dublin-belfast-dublin trip in my 2 litre car uses half a tank. about €25, maybe €20 these days. depends how fast you drive on the motorway.
    the catchment area in the east is dublin all the way up the motorway. newry is an hour from dublin, about a morning commute to work for most dublin employees 🙂 belfast about 1h50mins. i know quite a few dublin people that have already been shopping in belfast. seems quite popular for newstalk listeners.

    it will be interesting to see if any northern business people and the assembly actually have the ability to build on the southern invasion. i think theres only a small window to make the most of increased shopping. id say after the january sales finish people everywhere will just hang on to their money. i think belfast and the shopping border towns should accept euros at the til. they should also be running ads on RTE and southern radio stating the prices in NI and the prices in dublin and showing how much cash can be saved. they need to be aggressive and not just sit on their arses and see what happens.
    to make the most of things would require quick thinking and fast action, not something associated with MLAs. perhaps the NI business people will step up a few gears. the tv ad for newry shopping needs to be scrapped and replaced with something much louder and straight to the point. at the min all it says is “come to newry, its nice, we’ve got shops” alan sugar would throw that out the window in a second. they need to yell figures to people. they need to state shop names and how much can be saved compared to other shop names in dublin.

    superquinn (southern supermarket) is already running a radio ad telling people to forget about going to newry and listing items giving the newry price and their cheaper price.

    what exactly are NI business and the assembly going to do to compete? its click click click your fingers time and make hurry up gestures. make an effort to come up with helpful ideas and do something right now, or accept the ‘absolutely useless’ title yet again.

    as far as the patriotic stuff goes, its no surprise to here that ‘ireland’ means the republic. perhaps northern nationalists will get the message that they are not part of the republic but are part of somewhere called Northern Ireland 🙂

    i think the SDLP and SF have got it right.

    “North South makes sense”
    “Ireland of Equals” (equal shopping rights anyway!)

    just like a squirrel, NI business should be gathering as many nuts as possible for winter. it might be a long one…

  • An Ceilleachaireach Rua

    None taken, Grassy. Believe me; people down here are reacting with a very jaundiced eye to the plaintative appeals to patriotic sense by the very people who had us over a barrel of inflated prices for so long (IBEC, CIF, various Chambers of Commerce). The Government were powerless/unwilling to prevent some of the absolutely blatant gouging going on here for the Tiger years and now it’s chickens coming home to roost. The current process will mean that prices in the North will rise and they’ll probably fall in the south over time. No feckin’ harm.

  • An Ceilleachaireach Rua

    eranu,

    it’s a 430Km trip from ACR towers. Leaving at the crack tomorrow (~5.30am) I’d hope to be to Ikea for about 10.30-11am. 4-5 hours inside the timeless hellhole then back out onto the bóthar maybe stopping in Banbridge to do the shopping. Hoping to be tucked up safe again in Deepest Rebel Mexico for 9-10pm. It’s like planning a bloody military expedition!

  • simple simon

    “You have 14 links in that piece, I know you want to source your quotes but it would take all day for a reader to reference them all and see why you had the link.”

    Probably compensating for his faux pas the other evening when he “reviewed” a book he hadn’t read.

  • eranu

    ACR, where are your towers located? much further south from dublin and i think the journey time would be too much. only practical for some i suppose.

    all you need for a cheap shop is a car, half a tank or so, €3.60 in coins and a credit card. and possibley some worthers originals for the journey!

  • An Ceilleachaireach Rua

    ACR towers are located about 10 miles south of the Cork-Limerick border at Charleville. from what I can see it’s good road most of the way and leaving at the crack it’s about five hours up. That’s nothing to me. I’ve done far, far worse. Going down we can do at our leisure and if we need to pull in for an hour’s kip after Naas then so be it. We’ll be saving ourselves the bones of €300 all in.

    We’ve acquired a van, some loose change and Mr. Visa will look after the rest. I’m somewhat looking forward to it as my last trip Ooop North was characterised by drunkeness alternating with hangover.

  • eranu

    thats a journey and a half ACR. hope you all enjoy yourselves. you could try the international Christmas market at belfast city hall for some nice food instead of pints this time.

  • Grassy Noel

    ACR,

    don’t eat a thing out of the Xmas market – it is overpriced and not very nice at all.

    Enjoy your trip to our fine city!

    GN

  • An Ceilleachaireach Rua

    Thanks for the tips, gents. I’ll report back on the true extent of my dastardly acts of economic sabotage on Monday.

    Broadsword calling Danny Boy. Broadsword calling Danny Boy.

  • Oilifear

    The “unpatriotic to shop in the North” statement is utterly contemptible! I will shop anywhere on Ireland I choose and have bear no preference for giving my pay to one Irishman or another. What is genuinely unpatriotic is for either administration, north or south, to manage the economy of Irish people in such a way as to endanger the prosperity of Irish people, be they north or south.

    This is the all-Ireland economy. The current princes of the southern administration have already shown themselves incompetent at handling the down-turn. I am unsurprised that they cannot grasp that their continued decisions to raise taxes and costs in the 26-counties would drive the Irish economy north.

    I think James Craig once made a speech on seeing the which would succeed more – Northern Ireland or the Free State, a Protestant Ireland or a Catholic Ireland. While I don’t agree with his sentiments (or Dev’s that inspired his response), competition is good. This is the real benefit of the all-Ireland economy, it is not just mutual cooperation but mutual (and hopefully friendly) competition.

  • Wilde Rover

    Is it not the case that any savings made will be lost due to an inevitable increase in taxation to cover dole payments to redundant retail workers?

    Or maybe the jobs will all go in the new year anyway.

    And then both parts of the island can come together in the spirit of poverty.

  • Ri Na Deise

    I know Im living up here like but really is worth the trip up. Ye’ll save a fortune. Stock up on booze and fags too while yer up.

    Was home in Waterford last week and the price disparity in some areas is incredible.

    Came back up with a shopping list for family members.lol

    The comment from the government re ‘unpatriotic shoppers’ is frankly disgusting. Them bollixes are only looking for someone else to get em out of a hole they created.

  • Comrade Stalin

    Horseman:

    That’s one of the reasons why things are cheaper in the north – less demand, lower rents, lower wages, etc. Think of it like this: when you go to Bulgaria for your hols (!), you’ll find that things are a lot cheaper. Bulgaria is a basket case compared with the north, as the north is compared with the south (but to a lesser degree).

    This analysis is staggeringly simplistic.

    I was in the USA a few months ago. They have lower rents, lower wages, cheaper goods etc. Is the USA a basket case compared with Northern Ireland ? I don’t think so. If you go to Zimbabwe, on the other hand, you’ll find that many basic necessities are very expensive. That doesn’t mean that the economy there is successful.

    Northern Ireland and the RoI are a bit like the tortoise and the hare. NI has steadily, slowly been improving over the past 10-15 years. The RoI grew too quickly and it didn’t stop to properly account for it’s exposure to over inflated property values. NI’s economy is dominated by public sector wastage, and we’re taking advantage of being a small part of a much larger economy; but it’s slowly been moving along.

    I did enjoy Robinson’s very diplomatic way of making his point. The Irish government, quite correctly, did not see that it had a role in stopping massive levels cross border illegal fuel activity through it’s tax system. That approach is one which very much cuts both ways.

  • The Impartial Observer

    Absolute chaos here in Newry today on account of thousands of shoppers coming North. Apparently the tailback on the A1 stretched back past Ravensdale Forest at 8am!

  • Mack

    CS – “Northern Ireland and the RoI are a bit like the tortoise and the hare. NI has steadily, slowly been improving over the past 10-15 years. The RoI grew too quickly and it didn’t stop to properly account for it’s exposure to over inflated property values.”

    I disagree with that analysis. House prices extended to greater salary multiples in the north than in the south (greater even, in Northern Ireland, than Japan at it’s 1989 peak). Certainly the credit bubble drove construction forward in RoI at the expense (opportunity cost) of almost everything else. Structurally the RoI economy is in much better shape (e.g. tax structures, education, attractiveness of Dublin as a location to live in Europe – one of the big reasons Google cites for locating their EMEA headquarters there).

    The population of RoI has increased dramatically – from something like 2.5 million 30-40 years ago to 4.5 million today. The last 15 years have generated a huge number of skilled executives, engineers, lawyers, accountants etc with experience of delivering world class products and services in the private sector. By and large, that skill base is going nowhere.

    The next few years will be painful, and hard decisions will have to be taken – but after that Ireland’s economy will continue to grow – faster than the north’s.

    Newry is mental today – they should pull the ads on RTE!

  • Comrade Stalin

    I disagree with that analysis. House prices extended to greater salary multiples in the north than in the south (greater even, in Northern Ireland, than Japan at it’s 1989 peak).

    I am not sure what house price inflation itself has to do with my point about economic expansion and inflation. The Irish economy was heavily focussed on property, isn’t that way the banks are looking rather precarious ? The Irish government booked a lot of it’s revenue from stamp duty and other property related concerns.

    The Northern economy has little or nothing to do with house price inflation. We don’t directly extract a significant proportion of our public revenue from property taxes. We do have lots of American banks and insurance companies here propping up our knowledge-based economy, but they’ve all claimed they have no plans to close up.

    In terms of inflation, I lived in Dublin about nine years ago and things were more expensive there then, and this was still the case the last time I checked.

    Certainly the credit bubble drove construction forward in RoI at the expense (opportunity cost) of almost everything else. Structurally the RoI economy is in much better shape (e.g. tax structures,

    Other than the corporation tax goose, what’s better about the shape of the tax structure ?

    education,

    Granted, but not that the government sees it that way, since they’re extracting a levy from students in exchange for their role in improving the competitiveness of the knowledge-based economy.

    attractiveness of Dublin as a location to live in Europe – one of the big reasons Google cites for locating their EMEA headquarters there).

    Do you think Dublin would still look that way if Northern Ireland was part of the eurozone ?

    I like Dublin a lot, and I miss living there sometimes, but I am not sure exactly what is attractive about living there. Commuting to work is a major pain, and it’s highly unlikely you’ll be able to drive. Going out for a meal or a few pints is more expensive than up here, and more often than not the staff in restaurants and bars can be rude and surly. Doing any kind of shopping is more expensive. The government has dragged it’s heels over major infrastructure development such as the Luas and the Metro. I remember the Metro being announced when I lived there, and they still haven’t broken ground on it yet.

    I don’t want it to look like I’m slagging the RoI off, I have nothing against it; reunification, to me, wouldn’t necessarily be a bad thing at all. I just hope that people are realistic about the state the place is in and that they haven’t believed their own PR.

  • C Hound

    “We don’t directly extract a significant proportion of our public revenue from property taxes.”

    We sponge off GB.

  • An Ceilleachaireach Rua

    The Impartial Observer.

    As one of the vast throng stuck in said jam, I can confirm both it’s length and it’s sheer awfulness. We were stuck in it for the guts of three hours! The source of the problem was both the sheer volume of people looking to get into Newry and the lane closure on the A1. Eventually arrived at Ikea Belfast (which was refreshingly easy to find!) at about 13.30. Only three hours later than we’d hoped…

    Once there though we were a model of efficiency and were it not for an incorrect pack number we would’ve been Cork-bound again about an hour earlier than the 5pm departure time realised. The one sour note was that the TV unit we wanted was incorrectly stocked and could only be reached by forklift; forklifts that were not in use on a Saturday… Traffic back was heavy but moving. Once we crossed the border it was plain sailing altogether. We touched down in ACR Towers shortly after 10pm. I’m fecking wrecked but we are very pleased with our purchases.

    Pretty much everyone we had to interact with was pleasant and helpful and seemed happy that people were coming north to spend their eurodollars. We weren’t alone. You could’ve been forgiven for thinking that half of Dublin had decided to go for the trip! I reckon one in three(conservateively!) of Ikea’s customers were Staters. I even made out the dulcet tones of a few of my county-folk. Like.

    One final observation. As we were wheeling our purchases van-ward there was a CIE International Tours (No Unionist feelings were hurt in the naming of this bus…) thronged to the gunnals with flatpack and shoppers. I allowed myself a wry smile when considering the role of a semi-state body in aiding and abetting the economic sabotage of the RoI’s economy. I also mused to ACRette as to whether the PPP toll operators on the M1 shared Mr. Linehan’s chagrin at all the extra business…

  • An Ceilleachaireach Rua

    CS, I thought Robinson came over as a bit of a douche in his utterances on this. For my money, Everyone’s Favourite Art Garfunkel Double summed things up in a much more measured but nonetheless emphatic way (i.e. people aren’t stupid and you can’t blame them for following the prices). Pistol Pete seemed more interested in thumbing his nose. Quel surpris there.

  • Mack

    CS – I see what you meant, I misintrepreted you – my bad. (I thought you were arguing NI was better placed long term, rather than just being less affected now). You raised some other interesting points though –

    “Do you think Dublin would still look that way if Northern Ireland was part of the eurozone ? ”

    I’ll explain a little – John Herlihy director of Google Europe has stated that when looking for a location they wanted somewhere were the could collate talent from across Europe. It’s easier to get Spanish, German, Russian, Norwegian, Dutch, Greek, Italians etc. together in Dublin than in any other city (with the exception of London, which was a close runner) in Europe. Northern Ireland doesn’t have that draw. In that sense Dublin isn’t competing on cost, in genuinely does have something special.

    Tax structures – it’s not corporation tax alone. Taxes overall are low, particularly important taxes employers have to pay as part of meeting a particular salary. To pay a Dublin employee a given salary costs an employer much less than to pay a Berliner the same salary – before you even account for the fact the Dub get’s to keep a lot more of his.

    Property bubble – Ok, I totally see where your coming from. It’s true construction did grow to become a huge part of the Irish economy, and the government made a mistake in ramping up expenditure, salaries and public expenditure on the basis of such. This is correcting now, and will continue to correct over the next few years.

  • Comrade Stalin

    We sponge off GB.

    Yes we do. Not necessarily something to be proud of, but that’s neither here nor there.

    Mack:

    I’ll explain a little – John Herlihy director of Google Europe has stated that when looking for a location they wanted somewhere were the could collate talent from across Europe. It’s easier to get Spanish, German, Russian, Norwegian, Dutch, Greek, Italians etc. together in Dublin than in any other city (with the exception of London, which was a close runner) in Europe. Northern Ireland doesn’t have that draw. In that sense Dublin isn’t competing on cost, in genuinely does have something special.

    I hadn’t considered that point of view. Yes, Dublin is arguably an international city; Belfast has a long way to go before it gets there.

    We largely agree on the rest, I think. I do think that the situation with tax is pretty dire, and I’d say right now that the average Irish worker is giving away a greater proportion of his paypacket in tax than his contemporary up in NI – and remember that he/she needs to pay health insurance as well. But, I agree, tax is a lot heavier elsewhere in Europe.

  • Republic of Connaught

    Dublin might be known as an international city but God knows why. This Celtic Tiger money hasn’t exactly been spent to make Dublin an aesthetically pleasing city to look at. It’s lamentable Dublin, Belfast and Cork; the big three on this island are so God damn ugly compared to European cities like Prague or Vienna or Barcelona or Milan etc.. not to mention Paris, London and Rome.

    Even Edinburgh puts Irish cities to shame. For a country that has produced world renowned poets, writers and musicians, we don’t display much artistic style in the architecture of our cities.

  • kensei

    CS

    To an extent it would have taken a lot to rein in the construction industry – it got fat not just from private housing, but the huge amount of expansion that was required (and to an extent still is required) to Ireland’s infrastructure. The waters are receding on this boom, but they’ve left behind a lot of useful stuff. The criminal bit is the wasting of funds during the boom that could have into giving Ireland an even better infrastructure. Adding it the future will not simply make it arrive later than it could have, but it’ll cost more.

    And on another point, I can’t see Belfast ever “catching up” Dublin. The latter is a proper capital, and not just a regional one.

    RoC

    I actually quite like the centre of Dublin, though you are right in that it doesn’t compare with Edinburgh. Belfast however, was greatly hit with the fugly stick, aside from a few major landmarks.

  • Greenflag

    Back in Dean Swift’s time it was burn everything English except coal.

    Today it’s burn everything Northern Irish except plasma tv’s , computers , toys, drink , electrical goods , food , furnishings , etc or any kind of grot that’ll suffice for a Christmas present .

    Is’nt it remarkable how human nature never changes ? Still it could be much worse . Pity the poor Wal Mart employee on New York’s Long Island who was stampeded to death as a mob of early morning bargain hunters who had queued overnight for prezzies took no prisoners . When the management announced they were closing the store as a mark of respect for the dead employee the mob of consumers howled out their disapproval and presumably would have lynched the manager had he had the temerity to show himself .

    Strange animals human beings . Rats come closest I believe in terms of gross callousness towards members of the same species 🙁

    Someone on Slugger (Dave probably )mentioned there were 300,000 vacant houses in the Republic right now ? Wonder where he got that figure from ? Does anyone know ?

  • Mack

    Greenflag – that was me.

    The figure comes via the lads at thepropertypin.com and finfacts.ie from the 2006 census & estimates of built but unoccupied units since then. I’ll dig out some links..

  • Mack

    Greenflag – Estimate closer to 350k!

    On finfacts –

    http://www.finfacts.ie/irishfinancenews/article_1015142.shtml

    Discussion on thepropertypin.com (in fairness the lads there had this long before anyone else)

    http://www.thepropertypin.com/viewtopic.php?f=4&t=15204&p=152399&hilit;=+finfacts#p152399

    Track the numbers for sale & rent –

    http://daftwatch.atspace.com/

    http://treesdontgrowtothesky.com/
    http://irishpropertywatch.com/

    Gotta love the interwebs for making this info available..

    CS – On personal tax north and south.

    Whether you pay less tax in the UK or in RoI depends on how much you earn. The Republic uses a tax credit system – everything you earn is ‘taxed’ – they use this to calculate your tax bill and then subtract your tax credits from it. This means a large number of low earners are removed entirely from the net, and others pay only minimal tax.

    The upper band rate does kick in slightly earlier in the south, but PRSI is a fraction of National Insurance and is subject to an upper ceiling.

    Things may have changed but the last time I checked for higher rate payers the interest on deposit was taxed much more lightly, and capital gains was lower in the south and there were a host of other reliefs available in the south but not the north (mortgage interest relief etc).

  • Greenflag

    mack ,

    Thanks . The figure sounds ‘nutty ‘? 300,000 housing units is almost 4 years construction in the residential area and I cannot see developers continuing to build with so many unoccupied units ,

    30,00O seems plausible. If you can dig out some links that would be appreciated . I’ve tried to google without success .

  • Mack

    Greenflag – At first blush it does seem nutty. But these are not unsold homes, merely empties. Bought by the deluded during the boom, to flip at a profit later. The CIF reckon their members have 30k unsold homes (this after adding substantially to the rental supply by letting out unsellables).

    In 2006 there were something like 90k homes completed (about half the number for the whole of the UK). Was there demand for 90 new households (with an average of 2.9 persons)? Our population would have to be expanding at 261,000 per year to accommodate that (ignoring replacement of existing stock). The completion figures for most of this decade are staggering.

    The mentality here was that a house was your passport to riches. They were increasing in value faster than most people could earn money. So we had workers purchasing a house to retire too down the country while continuing to live in their current house (‘sure, we’ll rent it out in our retirement’). Trader uppers kept both houses, intending to sell their old one a year or two down the line for profit (‘sure, it’s too much hassle to rent it out’).

    For others, tax breaks and low interest rates made it tax efficient to purchase property, write the mortgage interest off against other earnings and because prices were rising significantly the whole enterprise could remain profitable without dirtying ones hands with the landlord business.

  • Greenflag

    Mack ,

    Sorry I posted the above remark before seeing your links .

    ‘I cannot see developers continuing to build with so many unoccupied units’

    It’s obvious my eyesight has deteriorated much more so than I thought.:( I just don’t see what my ears hear and vice versa . Now I know what it must have felt like to have been a Hungarian living under communism 😉

    We mustlook on the bright side . With so many vacant units there will be no problem sorting out any homeless people ? In addition there will be plenty of vacant units to house the next influx of immigrants when the economy rebounds ;)?

    Holiday homes I can understand -in Spain perhaps or in Florida or furthest Bulgaria on the Black Sea but Leitrim ?

    With house ownership in Ireland the highest in the world who did people think would rent out their ‘investments ‘ ?

    Simple rule for all those who invest in ‘property’ . If you can’t get at least between 1.5% and 2% of the cost of a property in monthly rent then don’t bother . The above presupposes also a deposit of between 10 and 20% of the price of the property . The above is a rough figure and local conditions may vary it a little .

  • Greenflag

    On reflection of post 13 above a correction is in order .

    The first two paragraphs should of course have read .

    ‘Burn everything Chinese made sold in Northern Ireland but buy everything Chinese sold in the Republic . This will help you to impoverish yourself and enrich the public service sector and their political minders in the Republic 🙁

    Finance Minister Lenihan has been seen in Church more often these days . A report has emanated from one who overheard the Minister reciting his version of the Lord’s Prayer

    Our Father (Lord’s Prayer)
    Our Father, who lives in Wall St
    Bless Obama’s new economic team with wisdom
    Thy foreclosures rates reduce
    Thy economic policies be made to work somehow for the love of jaysuz -I mean your son .
    Give us this day our daily Vat tax
    And forgive us our enjoyment of extra tax revenues provided by northern drivers
    And we won’t forgive those who listened to our sound advice
    Lead us not into another bubble of any kind
    but deliver us from those Northern money grabbing b*****ds and their cheap currency , prices and lower vat rates 😉 Amen

  • Mack

    Greenflag – “Burn everything Chinese made sold in Northern Ireland but buy everything Chinese sold in the Republic . This will help you to impoverish yourself and enrich the public service sector and their political minders in the Republic”

    Theoretically, the north’s big retail gain from Sterling’s devaluation will be temporary. The next batch of goods will have to purchased with Sterling that is now worth less (than 6 months ago), which should push up prices for imported goods in the north (relative to the south).

    If Gordon’s printing press can run faster than the destructive deleveraging of debt deflation – eventually CPI and wage inflation will erode many of the north’s structural advantages in retail too – if our government can take the appropriate measures to reduce the cost of doing (retail) business in the south.

    In the long term, we will benefit more from having a sound currency, rather than from bannana republic style one with frequent devaluations.

    In another thread a Eurosceptic (the aforementioned Dave, I think) argued that Ireland would benefit from managing it’s own monetary policy because it could devalue it if neccessary – and at the same time said Ireland would be closer to Switzerland rather than Iceland.

    The Swiss have devalued their currency exactly once. From wikipedia..

    http://en.wikipedia.org/wiki/Swiss_franc

    “Even after the monetary union faded away in the 1920s and officially ended in 1927, the Swiss franc remained on that standard until 1936, when it suffered its sole devaluation, on 27 September during the Great Depression”

  • Greenflag

    ‘The mentality here was that a house was your passport to riches.

    Not just in Ireland . The outbreak of rentier disease has afflicted every country in the Anglosphere and in particular the USA States of California , Florida , and Nevada. Historically the same disease added to hyper inflation helped to weaken , undermine and finally destroy Spanish ‘world’ hegemony in the 16th century . Holland had it’s ‘tulip ‘ bubble burst in the early 18th century followed by the flight of capital to the UK for better returns on investment . And London has seen houses the size of broom cupboards sell for 200,000 plus a decade ago iirc and decline to half that price only to rise again .

    The old fallacy of composition rears it’s ugly head once again . Just because one person can become a property mogul does not mean everybody can.

    But you can’t tell this to people. Not until the ponzi scheme implodes .

    However not to be too negative -if people have been lucky enough to buy the extra house and can afford to keep it up without falling further into debt then property is probably as good an asset as shares in General Motors or the Bank of Ireland .

    Bankers are notoriously negative when approached by the man in the street who wants to borrow 100,000 euros /pounds /dollars to purchase shares in a fast growing company . However they will lend 200,000 euros to someone earning 30,000 euros who wants to retire to Leitrim ??

  • Greenflag

    mack ,

    ‘In the long term, we will benefit more from having a sound currency, rather than from bannana republic style one with frequent devaluations.’

    That would seem to have been the lesson of recent European history at least since the Weimar Republic . With an economy tightly pegged to the strength of it’s financial services sector it won’t to say the least be an attractive option for foreign investors to invest in a ‘devaluing ‘ currency or in assets denominated in that currency .