Bring Back the Border?

Hardly a day goes by south of the border without another exhortation to ‘Buy Irish’. And it isn’t just the indigenous retailers (Dunnes with ‘the difference is we’re Irish’, or Superquinn with ‘love the taste of Ireland’). Even the UK retailers are at it (e.g.: Tesco with its ‘buy me I’m Irish’, and similarly M&S). And Irish food manufacturers aren’t leaving it to the retailers: they have got together to launch ‘Love Irish Food’ – with a full monty advertising campaign to promote it.

So where will it end? There’s the rub. Part of the problem is what do we mean by ‘Irish’ and ‘Ireland’. A small matter to the readers of Slugger O’Toole no doubt (!) – but a vexing one for many others. And as a Northerner who has now lived longer in the South than in the North I am, perhaps, more sensitive to the nuances of the matter than some of my esteemed Southern colleagues in the retailing and branding business. But there is no doubt that we are witnessing the emergence of a ‘Little Irelander’ mentality that does not befit an economy built on globalisation, nor bode especially well for the future of economic relations on this island.

How bad can it get? The forthcoming Budget in December will tell a tale. Already Finance Minister Lenihan is struggling to close an exploding gap between rising public spending and falling tax revenues. And the ‘problem’ of cross-border shopping has ebbed and flowed as issue through 2009; especially because of its impact on Irish VAT revenues. The return to higher VAT rates in the UK in January might help mitigate some of that. But we can’t rule out Minister Lenihan going further.

How far can he go? How far would he be allowed to go by the Irish electorate? Let me share one indicator with you. My own company – Amárach Research – ran a question on our omnibus survey of 1,000 adults in the Republic of Ireland, just last week. We asked respondents the following: Do you agree/disagree that “The government should discourage people shopping across the border in Northern Ireland by introducing special taxes on products bought there?” An alarmingly large minority – 37% – agreed that they should (23% agreed strongly). Though a reassuring 50% disagreed (35% disagreed strongly). Not surprisingly, agreement was highest in Munster, and lowest in Connaught/Rest of Ulster. And more importantly still: those most in control of the grocery purse strings (women) were significantly more likely to disagree than men.

My fear is that a prolonged recession – coupled with weakening sterling and approaching parity with the euro – will exacerbate the trends we are seeing right now. It’s a pity that the ‘yes to Lisbon’ campaigners didn’t do a better job of reminding everyone we are in a Single European Market (and how much we have benefited from same).

  • Itwas SammyMcNally whatdoneit

    if things become much worse for the Plain people of Ireland – the question “Would you sell your Grannie” will be met with the answer “Yes – she’s already on ebay”.

    A hearty Sterling crisis should bring an end to the pound and the price differntial issue will be significantly eased.

  • Drumlins Rock

    sammy its a bit sickening that your dreaming of a sterling crash just so you can get rid of the Queens head of your money, whilst it can’t be ruled out it wouldnt do anyone any favours north or south.
    As for cross border trade there is still one area where it is still goning the other way, diesel (i’m talking about just the legal fuel trade btw!) what are the chances the Irish Government will raise the fuel duty significantly in the budget?

  • Itwas SammyMcNally whatdoneit

    Drumlins Rock,

    re. the Queen’s head.

    Britian should either get into the EU club proper i.e. join the Euro or feck off out of it – I believe they should be good Europeans and join the rest of us – I would far rather they just started acting senssibly rather than having to wait for a crisis to do so.

  • Dave

    ” It’s a pity that the ‘yes to Lisbon’ campaigners didn’t do a better job of reminding everyone we are in a Single European Market (and how much we have benefited from same). ”

    But they did do a good job of brainwashing you.

    Suppression of the national interest is not a product of globalisation: it is a product of EU law that makes it illegal for a Member State to promote its national interest by promoting its indigenous goods and services over goods and services from other Member States.

    Just because the EU makes it illegal for the government to ‘buy national’ doesn’t mean that consumers should be stupid enough to think that buying national is somehow bad for the economy rather than beneficial to it.

    The only reason EU law promotes this nonsense is because it is part f its agenda of replacing the national interest with an EU interest, making folks into ‘Little Europers.’ The EU is a customs union, kid: it is a protectionist market that imposes tariffs on goods and services that are not indigenous to the EU, thereby ensuring that ‘globalisation’ occurs on its terms, just like every other state outside of the EU seeks to do.

    Also, you have been brainwashed to confuse the benefits of free between European states with the EU. If the EU did not exist, these states could still trade freely with each other. However, they could do it without the additional cost burden of 600 billion euro in red-tape that the EU imposes on European business. The Single Market adds 160 a year to European GDP, but it also adds 600 billion euro in extra costs.

    It’s a pity that the No side didn’t do a better job about educating Irish people about the considerable disavantages of the EU. 😉

  • dunreavynomore

    Thomas Sharkey, a Sinn Féin councillor ‘accused’ Mark Durkan of crossing the border to interfere in the referendum in Dundalk yesterday. Isn’t that a fine bit of ‘our borderism’? He could have tackled the hapless Durkan on a hundred different things but suggesting he had no right to be in the 26 cos talking about Lisbon… (Irish News, Irish Times)

  • Barnshee

    A hearty Sterling crisis should bring an end to the pound and the price differntial issue will be significantly eased.

    How? prices in NI will still be lower whether items are priced in euros or pounds

    shakes his head again

  • George

    A bit of a silly question to ask as it would not be possible under EU law and the ECJ would immediately strike down any such measure.

  • Itwas SammyMcNally whatdoneit

    Barnshee/Head Shaker

    I would guess that most of the big supermakets (where the shoppers are going) would simply have the same price North and South.

  • kensei

    Dave

    Suppression of the national interest is not a product of globalisation: it is a product of EU law that makes it illegal for a Member State to promote its national interest by promoting its indigenous goods and services over goods and services from other Member States.

    Comparative advantage.

    Barnshee

    How? prices in NI will still be lower whether items are priced in euros or pounds

    Possibly due to lower wage costs and maybe VAT and other bits, but prices are likely to stabilise in the long term, Euro or no. Businesses around the border will drop prices or go bust, basically. The North will exert downward pressure on prices and wages. To an extent that has already happened, I believe. The UK has done a beggar thy neighbour devaluation, basically, but gains from those are temporary. And you don’t build prosperity on what amounts to a carry trade.

    Joining the Euro simply removes one barrier to trade and unnecessary currency risk. Comapnies can hedge but individuals can’t, really. In the long term it probably helps everyone.

  • Barnshee

    “The UK has done a beggar thy neighbour devaluation, basically, but gains from those are temporary. And you don’t build prosperity on what amounts to a carry trade”

    The UK has done beggar thy neighbour for as long as I can remember (and longer)and will do it again and again if considered necessary.

    Joining the euro means they can`t do it thus can`t/won`t join

  • John East Belfast

    Sammy

    There is no way a “sterling crisis” as you quote will cause the pound to join the Euro – especially once Labour and Mandelson are no longer in government.

    The policy makers in London cannot believe their luck with where sterling is at the minute and see it as a major opportunity for Britain to get itself out of recession and grow the company’s GDP.

    In future years this current matter will not be forgotten and hence any future UK Govt will be even less likely ditch it.

    The pound is here to stay and it is the ROI that suffers most because it is the only EU country that has a land border with the UK meaning that from a retail point of view the big players like Germany and France dont give a damn.

    It is simply another manifestation of being a small player in the big EU club.

  • Only Asking

    I would guess that most of the big supermakets (where the shoppers are going) would simply have the same price North and South.

    Wouldn’t prices vary if the vat rates are variable, as Gerard notes above.

    And the ‘problem’ of cross-border shopping has ebbed and flowed as issue through 2009; especially because of its impact on Irish VAT revenues

  • Itwas SammyMcNally whatdoneit

    Only Asking,

    all food is vat free (I think) – not sure what comparative rates on drink are.

  • Thereyouarenow

    It would take a major crisis for Britain to join he euro but who can say for certain that it won’t happen.

    Britain will not be allowed by its european “partners” long term to have the “benefits” of sterling without the downsides as well.

    Undoubtedly from the 26 counties situation it is a major disadavantage having sterling at such close proximity (Land and Sea).

    Its not that I would like to go down on bended knee to Europe but I believe that the Republic should be compensated for having this renegade state (Britain for those not paying attention)playing both sides against the middle at such close quarters.

    At the very least a European army should be raised to drive sterling from the Island of Ireland (That bit is only half serious)
    That could be a reward for voting yes to Lisbon 2.
    Is it too late to make this request.

  • Thereyouarenow

    If one is so inclined all these arguments could be made for getting rid of that troublesome border.

  • doodle

    “Britian should either get into the EU club proper i.e. join the Euro or feck off out of it -”

    Can I a mere, pro European Brit, remind you Sammy, that the UK along with Germany is much the largest contributor to EU funds- £4 BILLION this year alone, whilst Ireland has always been a net beneficary of EU funds (eg all those lovely roads you now have). Lets not have any nonsense about Ireland being a “good european2 – Ireland loves Europe bcuae it loves Euro subsidies and if they day ever comes when Ireland has to pay a cent, net, into the EU funds that wil be they day Ireland thinks about leaving the EU. If the UK ever left the EU it would leave a mighty big hole in EU funding and the Irish gravey train would be well and truly over.

  • igor

    Great… a good Sterling crisis…marvellous for exports and attracting investment to NI as opposed to the Republic

  • Itwas SammyMcNally whatdoneit

    igor,

    “Great… a good Sterling crisis”

    its amazing – it is just suggested on Slugger that Sterling might be in for some bother and before you can say Mickey-Mouse-Currency theres a run on the pound.

  • John East Belfast

    Thereyouarenow

    “Undoubtedly from the 26 counties situation it is a major disadavantage having sterling at such close proximity (Land and Sea).

    Its not that I would like to go down on bended knee to Europe but I believe that the Republic should be compensated for having this renegade state (Britain for those not paying attention)playing both sides against the middle at such close quarters.”

    Are you saying there are no benefits to the ROI for adopting the Euro ?

    Also ROI is not the only Euro country with a land border with a non Euro state
    Germany – Poland
    Finland – Sweden & Russia
    France et al – Switzerland
    Autria – Slovenia etc

    Therefore the ROI will just have to dry its eyes and suck it up.

    There were no complaints when northerners were shopping on mass in Dublin when our city centre was being blwon to pieces. Not to mention the demise of the legitimate border petrol stations in the north.

    The bottom line is the ROI never should have thrown its lot in with sterling with whose economy it had its main similarities.

    Interest Rates would have been higher for longer and may have just helped cool the property boom and the ROI would now be exporting its way out of trouble.

    You make your choices and pay the price….

    Are you sa

  • an@other.com

    JEB,

    A thinly-veiled digs at the ROI.

    Google the PSBR for the UK, which Goondog Millionaire [“I’ve forever brought an end to boom and bust!!”] has saddled your grandkids’ offspring with.

    Then come back to me and tell me you’re “alright Jack”…

    Not that the ROI is any kind of economic utopia [far from it]…but to have such a blinkered view of UK Finances, whilst having a pop at another soveriegn state [from the safety of the public sector black-hole that is your “wee statelet”] smacks of myopic stupidity, tbh…

  • Gram

    >>But there is no doubt that we are witnessing the emergence of a ‘Little Irelander’ mentality that does not befit an economy built on globalisation, nor bode especially well for the future of economic relations on this island.<

  • Erasmus

    Ireland loves Europe bcuae it loves Euro subsidies and if they day ever comes when Ireland has to pay a cent, net, into the EU funds that wil be they day Ireland thinks about leaving the EU.
    Ireland actually has been a net contributor for quite some time. Incidentally one of the myths that has grown about the period of expansion to which the ‘Celtic Tiger’ sobriquet has been attached is that it was fuelled by EU subsidies – these only had a marginal influence.