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).