Michael McCarthy (Labour)

I second the motion. I welcome the Minister of State at the Department of Enterprise, Trade and Employment, Deputy Billy Kelleher, to the House. I hope the debate will generate views from all sides of the House. We all represent people and we come from constituencies, however far apart they may be geographically, in which consumer trends are the same. People will feel the pinch equally in Cork, Mayo and Donegal. In this case the matter of shopping in the North forms part of the motion. As public representatives, we bring a wide variety of views to the House and these should be fully debated.

The motion reflects what has been a very serious situation for some time. It has been flagged in various elements of the media. It is no surprise that this is firmly on the agenda of everyone as Christmas approaches. Various articles have appeared in newspapers in the past six months highlighting an exodus of shoppers from the South to the North. We do not begrudge the North our customers. Politics in this part of Ireland for the past 20 or 30 years has focused on strengthening ties between North and South. It aggravates some people to refer to the Twenty-six Counties. This is a country of Thirty-two Counties and on that basis we must encourage links.

I stress we do not begrudge the North our custom. However, there are ways to facilitate cross-Border ties without retailers here losing out heavily. We benefit from those in the North who travel south for holidays. This is especially the case in west Cork, as the Minister of State, Deputy Kelleher, is aware. We depend largely on such tourism and it is very important. The evidence suggests that the number of tourists from the United Kingdom and the United States of America will fall. There is a strong base of those in the North who travel south on holidays. We must ensure we do more to encourage shoppers from the North. This is a serious challenge, but it also represents an opportunity. Let us seriously consider a scheme based on the shoppers task force, the membership of which should be all-encompassing. Let us turn this economic challenge into an opportunity. Let us start to encourage shoppers from the North to travel south.

The different VAT rates form a significant part of the debate. It was madness to increase our VAT rate from 21% to 21.5% when the exchequer in the United Kingdom reduced its VAT rate from 17.5% to 15% with the obvious knock-on effects in Northern Ireland. This is a very significant issue. The Minister for Finance and the Government must seriously examine that part of the problem, much of which is of our own doing. We must ensure fewer people travel to the North, and addressing the VAT discrepancy is one way to do so. The slashing of the VAT rate in the UK shows imagination on the part of the Government there in attempting to solve the economic crisis and to reboot its economy. It requires imagination to do so.

We must tackle the high prices charged by UK retail chains here. Senator Hannigan referred to the significant price disparity in take-out foods. Consider the high street chains. Using the currency converter it is possible to see they are making a fortune here. They are not passing on the sterling prices which would obviously be of benefit to customers in Ireland. That must be tackled seriously from the highest level of Government. Why is it a company can make a profit on a product in the UK, apply the currency conversion rate and still charge more than it should in this country? Whatever about being immoral, the matter should be discussed between the Governments to ensure the system is fair.

I refer to the general credit crunch. Hard-working families find it more and more difficult to pay for medicines and general price increases in groceries. The 1% levy is hurting people, which we should not forget. It is another form of taxation which is unfair. I welcome the fact that the Government decided to exclude those on the minimum wage from the 1% levy. However, it is unfair that someone earning slightly more than the minimum wage pays proportionally the same as someone earning slightly less than €100,000 per year. We must remain conscious of this. All these difficulties have dented consumer confidence. Since the introduction of the budget on 14 October and the publication of recent figures on tax receipts, the situation has become more challenging and daunting. Consumer confidence is at an all-time low. A strategy is needed from the Government, as is an impetus which reflects imagination and returns money to consumers and inspires confidence in the market.

The European Central Bank, ECB, interest rate is expected to be reduced again tomorrow. Following the initial rate reduction at the beginning of November, I wrote to the Minister for Finance, Deputy Brian Lenihan. It angered me and many in the House and throughout the country that the ECB rate reduction would automatically be passed on to those with tracker mortgages, but would not necessarily be passed on to those with other types of mortgages. The options of passing on the reduction was left largely to the discretion of the banks. I raised this issue in the House and I wrote to the Minister for Finance on the matter. In fairness to the Minister, he replied. He referred in his correspondence to comments he made in the Dáil on 11 November in which he welcomed the Central Bank's announcement on 6 November to pass on the reduction in key interest rates. There is a difference between welcoming and encouraging on the one hand and obliging financial institutions to pass on the reductions on the other hand.

The State, the Government and the country bailed out the banks and provided them with a guarantee. The least we expect in return is that the Government would ensure that commercial banks would pass on the reductions. If it is left to the discretion of the banks it will not happen. The banks are concerned about making money and profit, not about the people who must go to court and face foreclosures and repossessions.

Those circumstances are all the more daunting when one considers that many people face this Christmas without a guaranteed job in the beginning of 2009. Anyone who knows anything about the 1980s will remember the job insecurity of that time. If one had a job one was lucky and if one had a secure job one was part of a rare breed. We are returning to the mindset whereby people are no longer guaranteed safe jobs in the future, which is a matter of great concern. Everyone fears losing a job, but those on the margins also fear losing their houses, which is an awful and appalling vista.

I refer to mobile phone roaming charges. Senator Hannigan referred to an example of a phone available free of charge in the North and the corresponding cost of the same product here. Mobile phone companies have been making a fortune on the backs of Irish consumers for a long time. I remember ten years ago in London, if one was a Vodafone bill-paying customer the phone would be registered to one's address. At the time Vodafone allowed customers free calls after 6 p.m. and before 8 a.m. the following morning to landlines in that area. That service is still not readily available here, ten years later. That is the same company which bought out Eircell. Unfortunately, it did not bring some of the discount schemes from the UK, which is another example of why the motion must be passed in the House.

The cost of sending a text message is so small that it is almost scientifically impossible to calculate. Millions of text messages are sent and this practice is encouraged by mobile phone companies. If one sends SMS messages saying "How are you?", "I am fine.", "Any news?", the cost is 9 cent each time. Before one reaches the third sentence of a small conversation the cost can be as high as 60 cent.