Retailers have demanded no hikes in excise duty as a survey showed a sixth of motorists plan to Christmas shop across the Border.

Retail Ireland said the forthcoming budget must take steps to boost consumer confidence when VAT jumps by 2 per cent.

Chairman Frank Gleeson maintained decisive action must also be taken by Government to tackle diesel laundering and tobacco smuggling. “Retail sales have fallen by over 20 per cent since 2008 due to the recession and price reductions,” he said.

“At the same time the savings ratio has increased from approximately 2 per cent to 12 per cent due to weak consumer confidence.

“The budget will have an enormous impact on the crucial pre-Christmas shopping period and should contain measures that boost consumer confidence and get people spending again.”

Meanwhile a poll by AA Travel Insurance revealed the VAT increase would sway shoppers to go to Northern Ireland.

Of 11,500 people surveyed, almost 18 per cent said they were planning to cross the border in the run up to Christmas, up from 16 per cent last year. The main reasons were to buy alcohol, groceries and gifts.

AA’s Conor Faughan said: “It’s important to remember that if introduced, the higher rate of VAT will also apply to our fuel which is already hovering in and around the €1.50 mark per litre of petrol.”

Elsewhere research from payments technology company Visa Europe showed Irish consumers are set to spend a total of €257 million online on gifts in the run up to Christmas - with an average spend of €155 per shopper.

It predicted today is the busiest shopping day online due to the combination of monthly pay days and delivery times.

Conor Langford, vice-president of Visa Ireland, said: “Online shopping continues to soar in popularity in Ireland, with consumers set to pick up a range of goods on the internet for Christmas.

“We would remind shoppers to make sure that they place their orders early to ensure that they receive their goods on time.”

PA