Séamus Kirk (Louth, Fianna Fail)

As a representative of a Border constituency, I rise to tell the Tánaiste that the implications of this proposal are very serious. Huge volumes of traffic from the towns in my constituency and along the Border will go northwards. We are quite familiar with the very adequate road infrastructure and travelling long distances to shop in Newry, Banbridge and further north is relatively easy for shoppers nowadays.

Commentators regularly say the domestic economy needs a lift. We need to generate more activity in the domestic economy. There is no doubt that the increase in the VAT rate will further depress the domestic economy south of the Border. People with diminished spending power after some of the measures introduced yesterday and today will chase value for money. Naturally, they will travel to Newry, Banbridge and perhaps Belfast and other areas. The difficulty we have is that the trading equilibrium in the Border counties blows hot or cold, depending on where the advantage for shopper lies.

It is not long since we saw the spectacle of miles of tailbacks of vehicles on the way to Newry. That was a loss to the trading sector south of the Border, including in County Louth. Inevitably, that has serious implications for the overall tax yield for the Exchequer and has clear implications for the number of people employed in the retail sector.

Given the profound implications of this proposal, I appeal to the Tánaiste to reconsider it. The figure of 2% is too great an increase and must be reconsidered immediately.

See this speech in context