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Dáil
‹ Ceisteanna—Questions. Oral Answers. - Revenue Loss to Northern Ireland.

Cross-border shopping and revenue losses

Summary

The Minister said there were no reliable figures for revenue lost to cross-Border purchases, while citing duty and VAT reductions intended to make shopping here more attractive. Deputies challenged the petrol-price increase and raised business closures, conflicting estimates and conditions in Border towns; the Minister acknowledged the problem but disputed the figures and said he would inform himself about the region.

asked the Minister for Finance the amount lost in revenue as a result of the more attractive prices in Northern Ireland.

Comment on this

There is no estimate available of the revenue losses attributable to cross-Border purchases. However, a number of measures have been taken by the Government to reduce the attractiveness of cross-Border purchases. The reduction last year in spirits duty largely eliminated the incentive for cross-Border purchases of spirits, which accounted for a substantial amount of these purchases. The excise duty reductions announced in the budget for televisions and motor vehicle parts and the reduction in VAT on a wide range of household items from 35 per cent to 23 per cent will also have a significant impact.

Comment on this

What steps does the Minister propose to take to safeguard further the small business people who are losing out as a result of cross-Border shopping?

Comment on this

I have indicated the measures which I have taken which will have an effect on cross-Border purchases. I have nothing further to add to that.

Comment on this

Among the measures taken by the Minister would he not acknowledge that the most significant measure which he has adopted has been the increase in the petrol price which now leaves a differential of about 75p? The other significant measure which he has adopted has been the borrowing in US dollars which has added to our petrol prices.

Comment on this
Thomas J. Fitzpatrick An Ceann Comhairle Fine Gael

That is a speech.

Comment on this

That is absolute nonsense.

Comment on this

Would the Minister not acknowledge that, far from minimising the impact of cross-Border trading, his policies, particularly the increase of 10p in the price of petrol, are going to aggravate the problem?

Comment on this
Thomas J. Fitzpatrick An Ceann Comhairle Fine Gael

How the Deputy can regard that as a question is beyond the Chair.

Comment on this

Does the Minister think that that measure will help to solve the problem, or rather tend to aggravate it?

Comment on this

I have indicated to the House the measures that I have taken which will have an effect on this matter. There is no doubt but that the Deputy should be careful in criticising individual tax changes in the budget since without the modest contribution we have had from the excise duty increase this year the VAT changes would not have been possible. Quite frankly, I am appalled that Deputy O'Kennedy should pretend, if I heard him right and I think I did, that borrowing dollars increases petrol prices. That is the most glorious non sequitur that I have heard for a long time.

Comment on this
Thomas J. Fitzpatrick An Ceann Comhairle Fine Gael

I call Deputy Leonard.

Comment on this

The Minister maintains that he has no record of losses. Would he agree that over the last two years, from the 1983 budget, trading organisations and a chamber of commerce submitted statements to him, documented and audited, of the losses under every heading in that region? Still, his Department say that they have not proper records of that loss.

Comment on this

Over the last two years there have been a great many unofficial estimates of total spending in the North. In order of magnitude they go from one to seven. The fact of the matter is that in the nature of things it is impossible to know what these amounts are.

Comment on this

Would the Minister add in beer?

Comment on this

If we knew what the amounts were, we could have been able to stop them.

Comment on this

Would the Minister not agree——

Comment on this
Thomas J. Fitzpatrick An Ceann Comhairle Fine Gael

I am calling Deputy O'Hanlon. I gave Deputy Leonard one question. The Deputy should not ignore the Chair.

Comment on this

When we are getting information like that, we are no better off.

Comment on this

Is the Minister really aware of the effect of the increase in the price of petrol in the recent budget and not alone the effect which it is having in the Border counties? In my own town two petrol stations have closed down and in the town nearest to mine three petrol stations have closed down. Is the Minister aware that no later than this morning on the news on BBC Northern Ireland the people of Northern Ireland were told how unattractive it was to come here because of the price of petrol? They were told that the increase which is now about to take place because of the increase in the price of the dollar will leave a variation of almost a full punt between the two prices.

Comment on this

That is not a non sequitur. That is a reality.

Comment on this

Is the Minister aware of the amount of petrol which is being bought in the Six Counties?

Comment on this

He is not. He does not want to know.

Comment on this

This is occurring right along the Border area. Has the Minister any idea of the loss of revenue?

Comment on this

I am perfectly aware, as anybody would have to be, that there is a problem of the kind indicated by Deputies on the other side of the House. What I have said is that we do not have any reliable figures for the size of that problem. I would caution the Deputy against giving any credence to propaganda that suggests that because the dollar up to yesterday — it has reversed itself somewhat today — was increasing in value as against European currencies, prices here would be the only ones that would move and prices in the UK, for example, would not move.

Comment on this

Not to the same extent.

Comment on this

Is the Minister aware that the Northern authorities have stated that £500 million came into the Ulster region——

Comment on this

Hear, hear.

Comment on this

——from the South last year. Is he aware of the depth of economic devastation in the region? Is he further aware of the number of small businesses and companies which are in trouble in the Dundalk region?

Comment on this

Hear, hear.

Comment on this

I am aware of the matters referred to by Deputy McGahon. In any estimate that they might make of the flow of funds or purchases, the Northern Ireland authorities have no better information to go on than we have.

Comment on this

To confirm the position as conveyed to the Minister from all sides of the House, would he at the invitation of backbenchers and Members from all sides from the Border region undertake a visit to the region and confirm from the customs officials on the spot the measure of cross-Border shopping going into Newry? Would he confirm from figures that they will make available to him, and from the sight of his own eyes in Dundalk and Newry, that this leakage is actually much more serious now than it was 12 months ago?

Comment on this

I do not have to wait for Deputy O'Kennedy to suggest to me that I either visit the area or speak to customs officials——

Comment on this

I think that the Minister should.

Comment on this

——or inform myself as to what the situation is.

Comment on this

He should hurry to Newry town.

Comment on this
Thomas J. Fitzpatrick An Ceann Comhairle Fine Gael

Ceist a seacht. We should move on. We are now at this question too long.

Comment on this