North The Place For Credit Crunch Christmas

Forget the North Pole, as it looks like the best place to 'spend' Christmas this year is not going to be Santa's home - rather its likely to be 'North of the border' instead.

Environment Minister John Gormley has said the Government needs to look at ways of stemming the anticipated flow of shoppers from the Republic to the North this Christmas.

Mr Gormley's comments come as speculation mounts that the British government is set to cut VAT rates by 2% to stimulate the UK economy. The move is expected to draw more shoppers to the North as the strength of the Euro and relatively high prices in the South makes for attractive savings during the 'Credit Crunch Christmas'.

Speaking in Dublin today, the Minister said it was important for Ireland and the UK to ensure their actions are "in sync" to ensure neither gains a competitive advantage.

However, his belief Ireland and the UK should stay 'in sync' may be a little bitter for the UK government to swallow, after Fianna Fail's surprise guaranteeing of Ireland's banks earlier this year, which was said to have left the UK leadership furious.

The British government is due to reveal its pre-Budget report on Monday afternoon, and is expected to include a cut in VAT from 17.5% to 15% - paid for in part by a new 45% tax rate on earnings over £150,000 – similar to the 3% levy on top earners introduced last week by the Irish government.

The move could indeed exacerbate the existing price differences that are prompting many consumers from the Republic to travel north of the border when shopping.

See: VAT Slashed In Pre-Budget Report

(DW)(BMcC)