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April 30, 2007

Rip Off Britain

Sigh. Again.

British shoppers are paying more than their European and American counterparts for a host of goods and services, according to experts who are worried that many consumers are being left out of pocket.

While the UK is cheap for clothing and food, it is one of the most expensive places in the world to buy computer games consoles, branded electronic goods, alcohol, rail tickets and furniture.

Booze is easy to explain: it's the taxes. For the rest it's the price of land:

Maurice Fitzpatrick, an economist at Grant Thornton, said the United States enjoyed significantly lower taxes and land prices - two key reasons why goods there are so much cheaper. "Land is one of the key factors in the cost of production," he said.

That's caused by the planning system. All those lovely green belts, the way in which we insist that here is no ribbon development, or suburban sprawl. This is the cost of it coming back to bite us. Might be worth it, might not be, but worth identifying the source of the problem.

However, experts now believe many consumers are missing out. Even when prices appear reasonable, there is growing evidence of a two-tier economy in which bargains are available only to the smartest consumers and those with access to the internet.

Quite, net retailers don't need to pay for that expensive land.

April 30, 2007 in Economics | Permalink


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Ok smartypants, explain this - In Australia, nearly as large as the US, it is both cheaper and faster for me to buy a book from Amazon in the US than it is to order it from an Australian supplier.

Well, population size may have something to do with it, but the cost could be double and the delay could also be double, two weeks as opposed to one. Something not quite right here I think.

Posted by: Chris Harper | Apr 30, 2007 9:58:34 AM

Chris, it might have something to do with the restrictions on parallel imports (publisher monopoly):


"Books, periodicals and sheet music were originally targeted by the Government for inclusion in the current legislation, but the publishing industry was granted a reprieve in a deal done between the Government and the Australian Democrats (one of the minor parties in the upper house). However, the lifting of the restrictions does apply to “copies of electronic literary or music items”, presumably including digital text and sheet music."

But Tim is also right, incompetent State Labor governments have milked the public mercilessly by restricting land releases while simultaneously raking in huge 'Stamp Duty' taxes on land sales.

The previous New South Wales premier who, during the announcement of a new 2.5% tax on investment property transfers, was in tax-free Auckland New Zealand, buying an investment property!

Posted by: Forester | Apr 30, 2007 11:10:03 AM