MINISTER FOR Enterprise, Trade and Employment Mary Coughlan challenged retailers to explain price differentials between the Republic and the North and Britain.

Ms Coughlan said that although the reduction in the UK standard VAT rate would have an impact on the price differential on some goods between the North and South, it should be pointed out that the UK had increased excise on alcohol, cigarettes, petrol and diesel to offset the 2.5 per cent reduction in VAT on those items.

About half the value of goods and services purchased in the State were not subject to the standard rate of VAT and were, therefore, unaffected by the change in the standard rate.

“It . . . remains my view that where retailers are imposing significant differentials in the price of goods in the South vis-a-vis the price of such goods in their retail outlets in the North, the UK or elsewhere, those retailers have a duty to their customers and to the Irish economy to explain why they are charging such price differentials,” she said.

The Minister said she would be continuing her engagement with retailers over the coming weeks, and her primary objective remained having a strong and vibrant retail sector that secured jobs in Ireland.

She said that she would be establishing a manufacturing forum to bring together representatives from the manufacturing industry and the relevant Government and employee representatives.

Ms Coughlan was replying to Fine Gael enterprise spokesman Leo Varadkar, who accused the Government of being responsible for rising inflation.

“Inflation for Government-provided and Government-regulated services has run at double the average rate of inflation,” he said.

Mr Varadkar, who was introducing an FG private members’ motion calling on the Government to introduce measures to curb inflation, claimed that the rise in Government-imposed prices had continued unabated.

“In recent months, we have been subjected to massive increases in electricity and gas and, despite the fall in commodity prices, there has been no reversal of these increases,” he added.

“Other regulators have got in on the act including the taxi regulator who imposed an increase in fares of greater than 8 per cent, against the wishes of most taxi drivers.”

He said that Minister for Health Mary Harney had joined the inflation club with a 10 per cent rise in accident and emergency charges, which would be compounded by a 52 per cent increase in January.

Overnight fees for private patients in public hospitals would go up by 20 per cent, while public patients faced a 14 per cent hike, he said.