Over the last twenty years or so, Her Majesty’s Government has seen fit to put more and more taxes on pretty much everything. The perfect example is petrol: fuel duty in the UK is right up there with the highest in the world.
This is a pain, because it’s taxing something that’s essential and then frittering the money away on shit all (please refer to the handout from ‘Government Waste 101′). But that’s not my complaint here.
While the UK fuel duty has been skyrocketing, the Irish has been rising by considerably less. The result of this is that fuel on the south side of the border has been a shitload less than that up here. The price differential has often been enough that it’s financially sensible to drive up to forty miles, fill up, and drive back again – you’d still end up saving money on a tank of petrol. On diesel it was even more pronounced.
This cross border traffic was excellent. The road users benefited, because they got petrol cheaper. The Irish government was rewarded for having low taxes by having an increased tax base for it. Irish retailers benefited from that same increased customer base. Petrol retailers up north suffered as their government gave them the full length of the shaft, and the UK government suffered as crossborder sales (and fuel smuggling) reduced the amount they could lift from Norn Iron drivers.
The UK government squealed like a stuck pig at the beginning of this, and the Irish government was quite happy with things. And I side with the Irish – both because I like low taxes and because it kept a little bit of money out of the hands of HMG (and therefore kept a little bit of money from being pissed away by HMG).
Now, it would appear that the shoe is on the other foot.
While the decline in the value of sterling is posing problems for UK tourists bound for Europe, it is providing an unexpected boon for Northern Ireland’s retailers.
As the pound keeps falling, the traffic-jams keep growing with euro-shoppers coming to Northern Ireland for a Christmas bargain.
What with the recent stupid rise of Irish VAT, and the strange drop in UKish VAT, this was to be expected. Yes, it’s added about an hour to the drive from Dublin to Belfast as the shoppers queue, but I think it’s a great thing: it shows governments that taxation isn’t something that will flow to them no matter how high they raise them.
We live in a world where people, money and business are wonderfully mobile – if any particular government thinks that they will get away with squeezing their population too tightly, then they might find that a lump of that population takes their business elsewhere. And I say fair play to ‘em.