Rip-Off Britain

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Rip-Off Britain is an expression coined by the tabloid press in the late 1990s to describe dissatisfaction with certain products costing more in the United Kingdom than in the some other countries, especially certain members of the EU and the United States. Such complaints are particularly prevalent in the media when the Pound is strong, as this makes overseas prices lower in sterling terms.

1 Origins
2 Rip-Off Britain Today
3 See also
4 References
5 External links

[edit] Origins

The phrase Rip-Off Britain came out of a campaign run by the Consumers' Association in 1998 aimed at lowering car prices in Britain, which were at the time, and despite legislation outlawing it, significantly higher than the EU average.

The Consumers' Association hired a stand at the British International Motor Show, only revealing on press day its true purpose. The organizers (SMMT, Society of Motor Manufacturers and Traders) decided not to fan the media flames by ejecting the Consumers' Association.

The phrase, "Rip-Off Britain" had already taken a hold on the media and it became a term in frequent media usage, used to describe anything that was wrong with Britain. Along the way, it proved to be one of elements that led to a tipping point for car prices, with prices harmonizing with the EU very quickly.

The campaign was devised by UK advertising agency Claydon Heeley, who are known for this type of "guerilla" work.

[edit] Rip-Off Britain Today

Other products which still cost significantly more in Britain include:

CDs and DVDs
iTunes Store songs, iPod, and iPod games
Computer Software - the most notable example being Microsoft Windows Vista
Books
Electrical Goods

For example: The PlayStation 3 will cost an estimated £88 more in the UK than the US.

The defence generally used by companies subjected to "rip-off" complaints is that some of their fixed costs are higher in the United Kingdom than elsewhere. The amount of substance to this defence varies from case to case. Also, the level of indirect taxation applied to some products, such as alcoholic drinks and tobacco, varies widely from country to country.

Although VAT is high in the UK at 17.5%, price differences are often far larger than this. For example when Playstation 2 was launched it cost $300 in America and £300^[1] (this equated to around $435 dollars in November 2001) in the UK, about 38% more than the US price once an average 5% ($15) US sales tax is added. Something else that is often forgotten to take into consideration is that US prices are quotes before tax, while UK prices already include VAT. This would put the £300 UK Playstation 2 at about £255 before VAT or $370.

However, the price differences compared to the US and Asia are also existent in other European countries.

Another example is Microsoft Windows Vista, where upon release it had an RRP (Recommended Retail Price) of $249 (£127) in the United States and £249 ($487) in the United Kingdom. This makes it almost twice as expensive to buy in the UK than in America, which tax differences alone cannot account for.

Yet another example is books. Amazon.com provides a good opportunity to research the "rip-off Britain" effect because books are an international commodity item whose price is unaffected by tax. As an example, John Grisham's book "The Broker" is listed at £6.99 ($13.74 on Feb 2, 2007) at the UK Amazon site and $7.99 for the same item at the US site. A strong pound cannot explain away this 71% price difference.