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.

Former BBC journalist and manager in Belfast, Manchester and London, Editor Spolight; Political Editor BBC NI; Current Affairs Commissioning editor BBC Radio 4; Editor Political and Parliamentary Programmes, BBC Westminster; former London Editor Belfast Telegraph. Hon Senior Research Fellow, The Constitution Unit, Univ Coll. London