John Carty (Fianna Fail)

I move amendment No. 1:

To delete all words after "Seanad Éireann" and substitute the following:

"recognises:

the economic impact of the significant decline in value of sterling against the euro in terms of exports and the effect on the price of consumer goods;

that around half the value of goods and services purchased in the State, including the majority of foodstuffs, oral medicines, books and children's clothes and shoes, are not subject to the standard rate of VAT and therefore are unaffected by the change in the standard rate;

that Ireland continues to be a low taxation economy in comparison with other competing economies;

that overall inflation in Ireland continues to decrease and is less than the Euro area average and is lower than the comparable index in the UK;

that retailers and telecommunications providers have a duty and a responsibility to justify to their customers and the economy the reasons for charging significantly higher prices to their customers in Ireland as compared to the prices charged to customers in other jurisdictions;

supports:

the actions of the Tánaiste and Minister for Enterprise, Trade and Employment in pursuing the retail trade to explain the reasons for these price differentials;

the Tánaiste's determination to ensure that consumers receive a fair deal and that retailers do not engage in unacceptable profiteering; and

the ongoing work of the National Consumer Agency to inform consumers through its Price Comparison Surveys of the choices available in the marketplace."

I welcome the Minister of State to the House and thank the Labour Party for tabling this motion this evening. It is a worthy motion at this time, given the current media attention on the number of Irish people travelling to Northern Ireland and spending money that should well be spent in our own economy. Such people believe they are getting good bargains, which must be the case, given the numbers involved, but I appeal to them to think twice about the amount of money they are spending in Northern Ireland, especially given the current state of our economy. In the coming months we will see the result of this cross-Border shopping, with many jobs being lost here. I appeal to people to consider the situation carefully, even though they may be getting bargains.

It appears that most of the bargains to be found in Northern Ireland are in food and alcohol. However, last week a supermarket in the Republic advertised enormous reductions in the price of various drinks and foodstuffs. One could purchase a bottle of Jameson whiskey for €18.99 and 24 bottles of beer for €17.99, and striploin steaks were reduced to half price. I do not know how people could make any savings by travelling to Northern Ireland for such goods. I appeal to people to consider carefully what they are doing.

The fact that the standard rate of VAT does not apply to many items in the Republic of Ireland, including most foodstuffs, oral medicines, books and children's clothing and shoes means that retailers must be creaming off a considerable amount of money in profit on such goods. That is an area on which any task force should focus.

Much has been said by Labour Party representatives about telecommunications providers. Senator Hannigan referred to the fact that a new model of BlackBerry costs €121 in the Republic but is free in Newry. I find that difficult to believe but I am sure that the Minister of State has taken a note of that point and will investigate it further to determine why that might be the case. It is not right and it should not happen, given that a single company supplies such goods north and south of the Border.

I have alluded to the fact that there has been a reduction in food prices in the Republic, especially since certain multiples have entered the market. Two in particular, when they set up in an area, appear to force the other multiples to drop their prices. Housewives are also a lot more discerning than in the past and do not mind shopping in two or three different supermarkets and picking up what they want in each because, by doing so, they can make enormous savings. It is to be welcomed that housewives have come around to that way of thinking because 12 or 18 months ago they did all their shopping in one supermarket. Now that they have seen the full-page advertisements in the newspapers from certain multiples, they are opting to buy item A in supermarket X, item B in supermarket Y and so forth.

I am a member of the British-Irish interparliamentary group and have heard my counterparts from England describing how entire areas of that country have been denuded of shops, requiring that people travel 15 to 25 miles to buy petrol and so forth. Irish people should be concerned about the possibility of the same happening here and should support their local shops and petrol stations as much as possible. If such local businesses close, people will be at a loss. I can see this happening in my own village. There is no petrol station there anymore but once, at a time when there were far fewer cars, there were four. Villagers now have to travel up to seven miles to get petrol. However, in the town to which we travel, I am delighted to say there is enormous competition. In recent weeks a supermarket there has made an arrangement with a local filling station whereby customers who spend €60 in the supermarket will be given a voucher for petrol entitling them to 10 cent off per litre, up to a maximum of 60 litres. That is welcome and indicates that some retailers still understand the concept of competition.

I drive from the west to Dublin every week via Athlone. There is a shop near the Hudson Bay Hotel called the Hudson Bay Stores, which is the last shop one passes until one reaches Dublin, unless one takes a detour into one of the smaller towns along the route. That demonstrates progress in the sense that there is a dual carriageway all the way from Athlone to Dublin. However, at the same time it is regrettable that one cannot pull in along the route to buy a coffee or some petrol.

The United Kingdom, of which Northern Ireland is a part, has a population of over 60 million, which allows for far greater economies of scale than are possible in the Republic of Ireland, which has a population of only 4 million. We have heard quite a bit in the recent past from business people that the minimum wage in the Republic is €8.65 but the minimum wage in Northern Ireland is £5.73, which is the equivalent of about €6.70. Thus, staff costs are higher in the Republic, and that is the way it should be. The young people — or any kind of people — working in those shops should be paid a decent basic wage. I thoroughly agree with that. I also agree with Senator McCarthy regarding the conversion rate between sterling and euro. If one goes into a store in Dublin or anywhere products will have a price up in sterling and one in euro, but there will be a huge difference between the two. If one brings it to the attention of the staff they will look at one and ask what they can do about it. They have no answer. We should be more vigilant in this regard and challenge those figures.