Joe McHugh (Donegal North East, Fine Gael)

I am glad to be able to contribute to this debate. I propose to highlight two problems in the constituency Deputy Blaney and I represent. I refer to the continued mass exodus of shoppers across the Border and the difficulties encountered by small businesses in County Donegal as they try to survive. There is a false economy in the region. As businesses try to hold things together without having to lay people off, they find in most instances that they are unable to get credit from the banks. They are trying to hang in there. I share Deputy Blaney's optimism that we will get out of this crisis eventually. We need to do something in the meantime, however. In the United States, ambitious proposals are being made and political leadership is being shown. Similar action is being taken, rightly or wrongly, across the water. The unprecedented times we are experiencing are economically dangerous. Nobody has the authority to say he or she knows what is going to happen. The UK Chancellor of the Exchequer, Mr. Alistair Darling, has decided to reduce the rate of VAT in the other jurisdiction on this island to 15%. The two jurisdictions that are side by side have separate economies, which can lead to anomalies. The major anomaly relates to the two different tax bands that exist.

I would like to mention something I raised last night. I will not spend too much time on it. We have an obligation under the Good Friday Agreement. I am aware that Deputy Blaney is the chairperson of the British-Irish Interparliamentary Body. We need to examine the anomalies that are being created. Two things are happening. People from Donegal, Dublin and other parts of the South are travelling to Northern Ireland for a so-called "shopping experience", but they are not getting it. While I accept they are getting reduced prices, and many people are happy to go for price, they are getting something else as well. It is predicted that many stores in the Border areas of Northern Ireland will have to close this Saturday morning because they will be unable to cope with the level of demand. There are similar issues on this side of the Border, where businesses may have to close their doors because there is not enough demand. We need leadership. The Government should do something. We need the Minister to come up with some kind of solution to try to stimulate the economy. This country's economy needs some form of stimulation or injection. We will not trade our way out of this problem if we continue to increase indirect and stealth taxes. We need to trade our way out of our economic difficulties. That is something the Government should focus on.

I heard indirectly this morning about a discussion that took place in a public house in Letterkenny last night. I was not present for the discussion, naturally, because I was in this House. The proprietor of the public house told me that a man summed up the present difficulties by comparing the Irish economy to a boat off the coast of Tory Island — it is rudderless and it lacks a captain. We need somebody to take charge and control. Both of the economies on this island — the regional economy in Northern Ireland and our own economy here — are faltering. Both of them need some form of stimulus. Petrol and diesel prices on either side of the Border will always increase and decrease over time, which will lead people to cross the Border. The economy in Northern Ireland is in as much trouble as the economy in this jurisdiction. The difference is that the authorities there are doing something about it. They are getting customers, etc. I wish to mention something of which this country should be cognisant. There is an Asda store in Newry and another on my doorstep in Strabane. Asda is a subsidiary of Wal-Mart. It is not called Wal-Mart, but it is part of the same corporation grouping. Its outlet in Strabane has the highest turnover of any Asda outlet in the United Kingdom. The revenue being accrued at that store is being lost to our Exchequer because of the 30% differential in this country's pricing structure. We have failed to attack our high cost base. We are not protecting our small and medium sized enterprises. We have hammered them by introducing more red tape and bureaucracy. We have not assisted them.

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