'Rip-off Britain' - On-line

[Mr T.]

Ripped-off Britain goes online to ensure the price is right
By David Derbyshire, Consumer Affairs Editor
(Filed: 04/12/2004)

The phenomenal growth of internet shopping may finally be eroding Britain's reputation as the "rip-off" capital of Europe, according to the consumer group, Which?

Fierce price competition between high street stores and online retailers over the past few years has "empowered" shoppers and pushed down prices, the group said.


Julie Edwards bought her entire kitchen in Italy for £7,000, £20,000 less that it would have cost in the UK

However, prices for some goods are still disproportionately high in the UK. Shoppers hunting for designer furniture, for instance, can save up to 40 per cent if they buy from France or Italy.

Shopping sites offering price comparisons between retailers have been one of the biggest internet success stories of the past few years. The third most visited website in the UK is Kelkoo, which offers comparisons between more than 2000 shops.

Retailers and consumer groups believe that the internet has revolutionised the way millions of people shop. Even if they don't buy online, more than one in 10 adults check prices on the internet before going to the high street.

Phil Evans, of Which?, said the internet had helped to erode the inflated prices of the 1990s. Earlier this year, a survey by Which? found that it was easy to save up to 20 per cent buying electrical goods such as televisions, personal music players, DVD players and digital cameras online.

However, Mr Evans believes that British prices remain unnecessarily high, even taking account of the weak dollar. "For years we put up with the idea that we paid higher prices and we sort of assumed that it was for a good reason," he told TV programme Tonight With Trevor McDonald.



"We're in a much better position now than we were five years ago. But there's still a long way to go, so consumers should still shop around."

Concerns that shoppers were paying more than in continental Europe and America for the same goods reached a peak in the late 1990s.

In 1997 the new Labour Government ordered an inquiry into pricing across Europe. But although it confirmed that car manufacturers were charging more for cars sold in Britain, and ordered prices to come down, it failed to find widespread evidence of inflated prices for other goods. Recent studies have shown that electrical goods are actually cheaper than most of Europe.

Dorothea Arndt, of Kelkoo, said the four-year-old website had helped to push down prices and change attitudes to shopping. Four million people use the service each month.

"There has definitely been an impact from online retail - and in a word it's transparency," she said. "Marketing used to be about pushing brands at consumers. Now we have moved on and consumers are empowered."

The use of shopping directories such as Kelkoo rose by 80 per cent last year. Earlier this year the Google search engine jumped on the bandwagon with its shopping service Froogle.

The owner of Europe by Net, which claims it can save shoppers up to 40 per cent by buying direct from the continent, believes that UK shops are still ripping off customers.

Julie Edwards launched the website in 1999 after travelling to Italy to buy a pram and found the savings more than covered the cost of the trip.

"A couple of years later we were having another baby and were moving house. We got a quote from two London kitchen suppliers for around £27,000, including a marble counter top that alone cost £7000. We ended up buying it in Italy where the whole kitchen cost just £7,000."

Her company now sells European furniture, lightings, bathrooms and fittings. "The higher prices are not across the board, but they are in the high end of furniture. That's why I am sceptical about the arguments that shop and labour costs are so much higher here. If it's not true in electronics, why is it true for furniture?"

David Southwell, of the British Retail Consortium, said two Government studies had shown that "rip off" Britain was a myth. "The UK is a relatively high-cost place to do business. There will always be regional variation based on local taxation and costs."

• Tonight With Trevor McDonald, ITV1, Monday, 8pm


http://www.kelkoo.co.uk/

[Dinger]

I remember reading an article in the Sunday Times about year or so ago and they had looked into British Airways and they found the BA loaded some of the prices in the UK 200% and more compared to BA sales in other european countries. Unbelievable. And if you were to buy a flight Trans-Atlantic you have to pay for a separate flight to London whereas in all other european countries the flight to London is included in the price. I used to live in the US and the cost of living there is so cheap compared to here. And on average we get paid less for jobs than the Yanks so go figure.

Dinger

[NeilB]

Don't talk to me about BA! They dropped Muscat from their destinations because of trouble 1000 miles away....apparently it was too dangerous in Oman for their crews to stop over....FFS!

We all moved our flights to Emirates and have not been back since.

BA...the worlds favourite airline.....my arse!

</rant>

We get ripped off by all the airlines out here. They all know when the schools finish and put their prices up accordingly. You can either pay the prices or steam in 50 degC heat.

Neil

[Mr T.]

Britain has some of the highest fees for mobiles
By David Derbyshire, Consumer Affairs Editor
(Filed: 10/12/2004)

Mobile phone users in Britain pay some of the highest charges in Europe, according to an industry report seen by The Telegraph.

Only Germany and Spain have more expensive tariffs in western Europe, the study shows.

Table of mobile costs


The value-for-money league table, prepared for the Organisation of Economic Co-operation and Development, ranks Britain 22 out of 29.

However, the industry regulator Ofcom says that despite the apparently high tariffs, prices are falling in Britain and customers are benefiting from healthy competition.

The figures, compiled for the OECD in April, compare the annual costs faced by a typical "medium user".

The basket of services used in the study includes the monthly charge, the costs of local and national calls, calls to other mobiles and text messages. The results are then adjusted to take into account national variations in the cost of living.

Denmark is the cheapest place to own a mobile phone with an annual cost of around £130. The most expensive is Poland, at more than £520. Britain has an annual cost of around £310, according to the OECD report.

The statistics reveal a strong link between competition and prices. Countries with the cheapest phone services tend to have more operators. Those at the expensive end of the table have just two or three.

At the time of the study, Britain had five networks, plus another six "virtual" operators such as Tesco that share networks with established phone companies.

Ilkka Lakaniemi, an economist with the mobile phone manufacturer Nokia, said Britain's high prices could be slowing down the move from fixed line calls to mobile.

He believes that half of all voice calls globally will be made on mobile phones by 2007. Yet in Britain, the switch from landline to mobile is unlikely happen before 2009.

Ofcom insisted that British consumers were not being ripped off. "Our research shows that prices are coming down as a result of competition," a spokesman said. "Competition, and the lack of a dominant position for one operator, is good for consumer choice."

However, mobile phone operators have been found guilty of uncompetitive practices. In June, Ofcom ordered networks to reduce the cost of calls to rival operators.

The phone companies have also come under fire from consumer groups for offering confusing service packages. Some offer a dozen or so different deals, making meaningful comparisons between firms almost impossible.

The operator O2 said international comparisons of charges were unreliable. "The way mobiles are used varies enormously from country to country. Bundles of services are very popular in Britain, but less so in the rest of Europe," a spokesman said.

"Over the last few years prices have come down considerably and there is increasing choice for customers."

Orange said: "The UK is one of the most competitive mobile phone markets in Europe. It is one of the countries that needs the least regulation."


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Reining in Rip-off Britain
(Filed: 10/12/2004)

The mobile phone market is developing so rapidly that the research we report today, showing British bills are among the highest in Europe, is probably already out of date. Regulators are clamping down on obscure charges, which sting users for ringing another network. And 3, the newcomer to the market, is practically giving away airtime and phones.

It goes to show that the concept of "Rip-off" Britain is slowly being eroded by the market. The extent to which it remains true depends on how much competition there is, and the extra costs imposed by the Government. For instance, our historically high mobile phone-call prices owe much to the

£22 billion fee levied by Gordon Brown for new 3G licences. By contrast, the special offer from 3 does not arise out of any government intervention, but from fierce competition.

Here the influence of the internet is revolutionary, as it spreads information instantaneously. After five years of individuals importing cars online, the difference between prices in Britain and the rest of Europe is steadily contracting. The latest EU study found that an Audi A3 was only three per cent more expensive in Britain than the average, whereas, four years ago, the difference was 39 per cent. You can now compare prices for everything from electrical goods to toys on sites such as Kelkoo.

Indeed, many consumers are doing just that and this Christmas retailers are predicting £4 billion of sales via websites (let's hope the Post Office can cope). Everywhere, consumer goods prices are coming down thanks to free markets and competition. Another example is clothing and footwear, which have been transformed by trade with China.

According to the Office for National Statistics, apparel prices have fallen 20 per cent in the past seven years and are now cheaper than in 1987.

It is a pity we cannot shop for governments online, because it is hard to see how British voters would tolerate taxes rising at the fastest rate in Europe if they could get better value at the click of a mouse. Interestingly, one consumer website (called, originally, rip-off.co.uk) also campaigns for lower council tax.

Just because there has been progress on reducing the exorbitant prices does not mean there is no further to go. Endless regulatory interference, on matters such as health and safety, has sent service inflation - e.g. plumbers and nannies - soaring.

Furthermore, many companies still get away with charging Britons through the nose because our national character makes us reluctant to cause a fuss, whether it be about the price or the service. But it should be possible to seek a better deal without being rude. Our advice is: complain more, pay less.

[Far_X]

Originally Posted by Dinger

I remember reading an article in the Sunday Times about year or so ago and they had looked into British Airways and they found the BA loaded some of the prices in the UK 200% and more compared to BA sales in other european countries. Unbelievable. And if you were to buy a flight Trans-Atlantic you have to pay for a separate flight to London whereas in all other european countries the flight to London is included in the price. I used to live in the US and the cost of living there is so cheap compared to here. And on average we get paid less for jobs than the Yanks so go figure.

Dinger

Yeah but we get stung when we come over for visits!! Get the petrol prices sorted!! I hate driving economy sized cars!!

[Finless]

If I am buying something specifically identifiable (for example, white goods as opposed to "furniture") I always check on the internet to get an idea of price.

However, last year, when buying a book (prob the last H. Potter. book) I was quoted a cheaper price by W.H. Smiths. on the phone than was available on their website!

Don't always assume the best prices are available "on line".

[Far_X]

Originally Posted by Finless

However, last year, when buying a book (prob the last H. Potter. book) I was quoted a cheaper price by W.H. Smiths. on the phone than was available on their website!

Don't always assume the best prices are available "on line".

People still use the old phone ???

[Bantam]

The problem is now not with consumer costs, but tax.

Example - Petrol / Diesel is disproportionately taxed, although Europe are starting to get close. France is no longer hugely cheaper than the UK for Diesel (68.5 vs 81.9 pence per litre) and they're pretty hacked off with it too.

Council Tax, Income Tax, Tax on Interest, Insurance Premium Tax, Airport Tax, National Insurance, VAT, Road Tax, Stamp Duty, Inheritance Tax, Duty on alcohol and tobacco etc.. etc.. etc..

Essentially, not only do the government charge you to earn your money, but then they charge you to spend it. And when you die they tax you for dying.

In real terms the inflation in this country doesn't include the cost of tax rises. If it did, we'd have an inflation problem because it's this which is eating our cash.

In real terms the cost of consumer items have gone down. I'm spending less at the supermarket than I did 2 years ago and getting more for my money.

Electrical items cost nowt compared to two or four years ago.

42" Plasma TV in 2000 = £16,000 (Philips, as seen in Selfridges, London, before I went down to the Millennium Dome)
42" Plasma TV in 2004 = £999 (Tiny)

[Woz]

It's also knowing where to get things. Dyson DC 08 sat at my house at the moment- £159.00 much cheaper than that lot quoted up there.

[Bantam]

*nudge nudge wink wink* down the pub, eh, woz?