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RIPPED BY
RETAIL!
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 the
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
"guerrilla" work.
Rip-Off Britain Today
Other products which still cost significantly more in
Britain include:
CDs and DVDs
Computer Software - the most notable example being
Microsoft Windows Vista
Books
Electrical Goods
Houses
Petroleum and diesel fuel
For example: The PlayStation 3 costs approximately £120
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.
While the UK rate of VAT is 17.5%(currently reduced for
1 year to 15%), 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 not
taken into consideration is that US prices are quoted
before tax, while UK prices generally already include
VAT. This would put the £300 UK Playstation 2 at about
£255 before VAT or $370.
However, the VAT argument is something of a red herring.
Firstly, the UK rate of VAT, while high, is by no means
the highest in the EU - indeed all but three EU
countries have higher standard rates of VAT than the UK.
Secondly, Jersey and Guernsey (UK Crown Dependencies) -
are the EU's most significant VAT-exempt zones.
Retailers such as Play.com operate from Jersey
specifically as a means of VAT avoidance, but this has
little impact on the prices UK customers continue to pay
for goods.
However, the price differences compared to the US and
Asia are also existent in other European countries.
Another example is Microsoft Windows Vista, whereupon
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. [1].
The Apple iPhone provides another dramatic example. At
its introduction on 11 Nov 2007 the British were asked
to pay 40% more for the phone than their American
counterparts. The phone was sold in the UK for $562
(£269) while the same device could be bought in the USA
for $399 directly from AT&T. Apple clearly views Britain
as "Treasure Island", the Apple TV was sold in Feb 2008
for $229 to US customers (http://apple.com/appletv) but
for a much higher $391 (£199) to UK customers visiting
the same site (http://www.apple.com/uk/appletv/). Other
Apple products have a similar price ratio, UK customers
expected to pay a heavy premium.
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 in the UK. 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. However, the
same book could be purchased at UK supermarkets such as
Tesco Extra and Asda for less than £3.99.
Also, the IKEA 2008 catalogue carries products priced at
more than double that of European versions of the
catalogue. Examples include a kitchen pictured in the
German catalogue costing €1275 ( = £954.37 -
www.exchangerate.com). In the UK catalogue, page 103,
it's massive £2115 ( = €2825.5 - www.exchangerate.com)
which is obviously more than double. Another example,
page 6 "BESTA Bench Combination". In the UK costs £258
(= €344.68), costs in Germany €152 (= £113.78) which is
again less than half. IKEA cite "shipping costs &
taxation of goods" as reasons for the price difference.
Effect on Internet Retail
Perceived or actual higher prices in the UK often have
the effect of making British consumers order goods from
the Internet, whether from UK businesses claiming to
break a pricing cartel (e.g. CD WOW! for CDs, TheHut.com
and Play.com for CDs, DVDs, videogames and books, and
Glassesdirect in the prescription spectacles business)
or directly from abroad, including via eBay and other
online auction sites. See UK Internet business.
Most USA Internet retailers are happy to ship directly
to consumers in the UK which provides a welcome relief
from the heavily inflated UK prices. Many believe that
true competition from the Internet and from abroad will
eventually normalize retail prices and put an end to the
suffering of an angry population tired of being referred
to as "Treasure Island".
However, there are significant exceptions to the rule.
The biggest player in music downloads, Apple's iTunes,
operates a model where purchases can only be made in a
domain where the users' means of payment is registered.
UK customers are therefore tied to the offerings in the
UK iTunes store - a disadvantage both in price terms
(79p/download in the UK is significantly more than
99c/download in the US) and in terms of available
choice. On 9th January 2008, however, Apple conceded
that this was unfair practice and promised to harmonise
prices with Europe within 6 months, citing the record
labels wholesale music price as the reason.
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DID YOU KNOW :-
The early 1970's
saw a massive invasion of foreign companies to
our shores.
Attracted by generous incentives and by a
Government that was trying desperately to stem
the rising tide of unemployment, together with a
poor balance of payments, large foreign
corporations took up residence that had
previously been denied to them.
The government
was probably unaware that many of these foreign
companies had already secured a foothold in the
UK many years before, as early as 1950 - and
that they had been working under a secret agenda
buying up millions of shares in UK companies,
waiting for the day to penetrate one of the most
lucrative markets outside of North America and
continental Europe.
In the boardrooms
(often controlled by British-expatiates and
Commonwealth conglomerates!) these overseas
companies saw Great Britain as a goldmine.
They secretly called the UK "The
Goldcoast" and "Treasure
Island" - and rightly so. With a
population of over 50 million filled with naive
British consumers who had money to spend after a
rather successful decade in the 60's, and with
rising house prices, the cash registers started
plundering the population. And plunder they
surely did.
Not content to make a reasonable profit, these
companies had (and still do) a field day. By
paying low wages, in a regime that did not have
a minimum wage or strict labour laws, to a
rather generally unskilled naive workforce, and
charging excessive prices for their goods, often
in a cartel created by their greed, to a
populace who rarely complained, their profits
began to balloon.
Thanks to Government policies, such as the
Resale Prices Act of 1956 and 1964 which
strangely allowed companies, both foreign and
domestic, to lawfully withhold supplies to
retailers who wanted to sell their products at
below the 'recommended' retail price in order to
attract customers, the mother of all Rip-Off's
was born.
Fueled by inflation, decimalisation, government
tax incentives and finally by EC grants in the
mid-1970's the rape of Britain was in full
swing. Their shareholders saw their stock rise
as literally billions of Pounds flowed out of
the UK into foreign coffers.....and
still does !!
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The
Government
is
spending
£12,000
of
taxpayers'
money
every
second
(slightly
more
than
what
BT
earns
a
minute) |
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Average Family car in UK-
£12,000 |
Average Family car in
Holland - £9,000 |
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To fill an Average family
car with petrol in the
UK costs £50
or $80 |
To fill the same car with
petrol in the USA costs £15.07 or
$24.11 |
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Pack of 20 cigarettes in the
UK - £5.00 |
Pack of 20 cigarettes in
Spain - £1.60 |
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Pint of beer in pub in UK-
£2.30 |
Pint of beer in pub in spain
- £0.80p |
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Six pack of beer in UK -
£4.20 |
Six pack of beer in Germany
- £2.40 |
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TV licence in UK - £121 |
TV licence in USA - $0 |
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30 minute local phone call
in UK - £0.40p |
30 minute local phone call
in USA - $0 |
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Anger as British
Gas profits soar 500%
Homeowners reacted
with fury today after British Gas revealed a
five-fold increase in profits. The £571m
windfall - up from £95m last year - comes
weeks after it stung 13m customers with a 15%
increase in bills.
The
average household now pays £1,000 a
year. Group-wide earnings for
Centrica, which owns British
Gas, rose to a record £1.95bn,
guaranteeing huge bonuses for
bosses.
The
profits came after a year which saw
the wholesale price of gas fall
between January and March - but no
cut in household bills as a result.
Consumer groups today accused the
utility firm of ripping off the
public.
Fuel
campaigner Lesley Davies said: 'It's
quite sickening when companies make
these huge profits while, at the
same time, we are expecting 25,000
excess winter deaths as a result of
people not being able to keep warm.'
The soaring Centrica
profits, up 40%, also
sparked calls for an
investigation into the
retail energy market.
Joe Malinowski, who runs
energyshop.com, said:
'The first half-year
profit was absolutely
extraordinary. The money
was just flowing through
the door.'
The fall in the
wholesale price of gas,
due to a mild winter and
new supplies from
Norway, stopped last
summer and since then it
has nearly doubled,
ending the bonanza.
British Gas said it had
been a 'year of two
halves' as a result. It
added: 'Sharp falls in
the price of gas in
winter 2006 led to
unexpected profits in
British Gas early in
2007, but rising costs
later in the year also
mean that analysts
expect margins in the
second half to be very
thin.'
Adam Scorer, consumer
lobby group
energywatch's director
of campaigns, said: 'No
one is going to argue
that energy companies
don't need to make a
profit. However, British
Gas customers will want
to tear their hair out
when they hear the scale
of these profits and
compare them with their
own rising bills.'
Centrica said it needed
big profits to pay for
investment in new gas
generating plants and
wind farms to meet
government clean energy
targets.
Allan Asher of
energywatch said: 'The
time has now come for
the Government to find
out what is going on in
the retail energy
market, to ask why
competition is not
working for customers.
The companies are making
a fortune out of their
customers and the
Government is doing
nothing about it.'

Ann Robinson, director
of consumer policy at
uSwitch.com, said:
'Today's announcement
boils down to profits
and price hikes and
reveals the depth of the
divide in how British
Gas treats customers and
shareholders. This
company has given up all
pretence of keeping a
healthy balance between
the two. Consumers have
a right to feel like
Britain's biggest energy
company is taking them
for a ride.'
Paul Schofield, head of
utilities at price
comparison site
moneysupermarket.com,
said: 'Five out of the
six energy giants have
announced a combination
of price increases and
new products over the
past six weeks so now is
an excellent time for
users to make sure that
they have the best
provider and product for
their area and
consumption.
'Online monthly direct
debit accounts, are the
cheapest products
available, merely
requiring customers to
have an email address
and apply online. There
is no need for customers
to manage the account
online as payments are
by direct debit.'
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How Rip-Off Britain started
In 1986 I
campaigned British Telecom to itemise their
telephone bills. It was absurd that a phone bill
only showed the 'final amount to pay', leaving
the consumer no idea whether phone calls were
accurately recorded or not and, more
importantly, leaving no recourse for challenge
or complaint! It was akin to going to the petrol
station and filling up the car with no visible
pump meter present - and then handing over £X
amount! After arriving back from Canada (where
phone bills had been itemised for years), this
was my first rude awakening to 'Rip-Off
Britain'.
The 'Rip-Off
Britain' campaign got into full swing in 1998
when I launched my website in an effort to get
justice for the British public. I have since
appeared on BBC2 Newsnight, Sky News, numerous
national and local radio stations and talk
shows, have written various articles, and have
even 'duped' the scammers at their own game! I
continue to vigorously campaign for the British
consumer in one the most expensive, 'cutthroat'
and consumer exploited countries in the World.
The Rip-Off continues
The phrase
"Rip-Off Britain" was originally coined during
1997 due to the vast difference in
car prices in the UK - as compared with the
rest of Europe. 'Rip-Off' is now part of our
everyday language - especially when we realise
or discover to our horror, anger and dismay
we've been duped, scammed, 'taken for a ride',
or have been plain diddled out of our hard
earned money by shoddy goods, poor service,
unscrupulous or sharp business practices,
exorbitant charges, etc.
My aim is to
ensure that 'Rip-Off Britain' remains ingrained
in our mind-set, by reminding people to be more
vigilant in their purchases and everyday
dealings. However, if you do unfortunately get
'ripped-off', you're going to discover that by
using my proven methods & tactics of complaint,
you'll achieve a satisfactory outcome and a
result in your favour in the majority of cases.
Public
awareness behind the British 'rip-off'
culture has vastly improved over the past
decade or so. But despite our efforts and
the many media campaigns on TV & Radio, the
'so-called' voluntary business codes of
conduct that is supposed to be the 'magic
bullet' to protect us all, and successive
Government intervention by often weak and
ineffective legislation; there are STILL
significant areas within our economy and
throughout society where British consumers
are continually being Ripped-Off!
Quote of the Year
"Never keep up with the Joneses. Drag'em
down to your level. It's cheaper".
Britain's Top Rip-Off's
As polled in a
survey of over 8,000 e-mail and website
responses from 1999 to 2005
(presented in random order)
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Fraudulent schemes & scams
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Shoddy
goods & poor service |
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Unqualified & rogue trades people |
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Unscrupulous business practices |
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Bank
charges & bad practices |
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Fraudulent e-mails |
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Water
& energy companies |
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Council Tax * |
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Railway fares |
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High
interest store & credit cards |
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Mobile
phone charges |
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Capital Gains Tax * |
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Fuel
duty * |
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House
selling/buying practices |
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Inheritance tax * |
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Stamp
duty * |
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Speed
cameras * |
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Premium Rate phone numbers |
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Postal
charges |
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Wages
below the minimum |
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Low
Old Age Pensions |
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High
taxation of the poorest * |
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Motorway restaurants |
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Endowment policies & mis-selling |
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The
demise of Final Salary pensions |
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Government wasting our money |
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Membership of the Euro |
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Stealth taxation * |
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CD's,
DVD's |
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Car
prices |
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Electrical goods |
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Hotel
accommodation |
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TV
Licence fee * |
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Food
prices (supermarkets) |
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Extended warranties |
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Loan
protection insurance |
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Import
duty * |
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Value
added tax (VAT) * |
*Government
taxation
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So, who's the culprit? Who's ripping us
off?
After years of
analysing this question and looking at the
evidence (apart from the rogue plumber who just
charged you £150 for a call-out to fix a
washer), I've concluded that multi-national
business conglomerates and our Government are
the main culprits who have helped shape, and
continue to maintain a 'Rip-Off Britain'.
Small and
medium-sized business is often blamed for
ripping us off either by their high prices, poor
service, or both. Although this may have been
the case many years ago, the vast majority of
our 'home-grown' businesses are generally
serving customers quite well - it's only a small
percentage that rip us off which gains media
attention and fuels our wrath. Poor service can
be blamed purely on mismanagement and inadequate
resources. High prices in the UK as compared
with many other countries is another matter!
The major handicap
to small and medium-sized businesses in
maintaining low prices can squarely be blamed on
a number of factors including, poor banking
practices and banks grossly overcharging for
their services (UK
bank profits at £32bn!), high interest rates
(as compared with the EU average), virtually
uncontrollable commercial rents and high
property prices, exceedingly high business tax
rates, labour costs, high import duties and, of
course, the high cost of transportation (fuel
duty).
The high operating
costs of running a business, combined with
endless
Government regulation, UK banking practices
and multi-national profiteering, remains a major
contributory factor that's induced a negative
affect by forcing UK businesses to mark-up their
goods and services far higher than is
compared with many European and other
countries in World - especially the USA! The end
effect leaves UK businesses little option but to
charge higher retail prices upon consumers.
However, contrary to what many people may
believe, 'home-grown' UK business profit margins
are not excessive as compared with other 'home'
businesses in the
G8.
The multi-national
corporations, with their massive buying power
and profits, have been on a quest to capture the
massive UK market since the early 1960's.
Because we live on an island, they know only too
well that cross-border shopping (such as
commonly occurs in continental Europe without
much Customs interference) is not really
feasible for us 'islanders', especially with
punitive Government import tariffs and
restrictions on the value of some goods coming
into the UK.
Since the
introduction of the Internet, and where people
can (according to EU law) buy goods from within
the EU without import duty or UK VAT (which is
generally paid in the EU country of origin -
vehicles still being the exception), the
multi-nationals (and the Government for tax
revenue raising reasons) don't really want us to
join the Euro in a hurry, where prices could be
immediately compared and the abolition of
current Custom controls would surely happen. Not
being satisfied with their current market
capture, with the Euro on the horizon, the
multi-nationals are now seizing on this
'opportunity' by either squeezing out
'home-grown' UK businesses or
buying-out their operations. Because of this
'imbalance' within the UK market place, the
demise of the 'corner shop' and many other
businesses, is now happening at an alarming
rate.
Trading on the
Internet, in order to keep overheads to a
minimum, is fast becoming the only viable option
for many UK businesses, and has indeed been
driven by the consumer in their quest for lower
and more competitive prices. Unfortunately,
buying goods over the Internet is not always as
competitive as consumers would believe - but
of course, it's certainly the best place to
compare prices.
The constant drive
by multi-national companies to increase sales
and create massive profits for their
shareholders has fueled their expansion
throughout the World in order to secure more
markets and even greater
profits. Many have created massive
business cartels - many of whom trade away
circumventing
regulation because of their international
corporate structure, whilst paying minuscule
amounts in corporate tax. Combined with the
zealous necessity (or by mismanagement) of
Government to raise revenue by stealth, has
created a monetary vacuum in a world that's bent
on GROWTH - with the ordinary consumer (along
with the poor in third world countries),
'sandwiched' in the middle of these two massive
'empires'.
As an Island
(known as
'Treasure Island' in corporate circles), the
UK has been literally plundered by both
multi-national corporations and successive
Governments over the past 50 years. But it's now
time for the ordinary consumer to fight back -
and many are doing just that!
Unfortunately, the
ballot box just isn't working. Whatever
Governments' in power they continue to raise
massive tax revenues year after year (any
increase is inflationary!), whilst invoking ever
greater regulation by wasting billions in taxes
to placate an ever increasing 'politically
correct' agenda, and by creating 'social
engineering' using stealth legislation. When
Government declares a Budget and increases tax
revenue by stealth, it becomes directly
responsible for actually increasing the price of
goods and services. But many big businesses have
realised that consumer backlash is in full
flight - and are at least trying to address our
complaints. Others have yet to learn, and will
ultimately fall foul by consumer pressure.
Depending upon
your personal grievance or complaint, the phrase
'Rip-Off' is now being used to describe not only
an array of different consumer issues, but other
seemingly non-related issues. In the future, I'm
sure this infamous phrase will be used to
describe almost anything we disagree with or are
concerned about, from our dwindling oil & gas
reserves and faltering energy policy, to Global
Warming.
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If you
wish to read further information regarding rips
offs in the UK click
here! |
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If you want a good
example of how we are being ripped off by
religion, governments and multinational companys
look for ZeitGeist on
YouTube
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