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12th May 2008
Dear Gordon Brown
Our Special Relationship with the USA: One USD Equals One GBP
I am glad that you still believe that we have a special relationship
with the USA. As Prime Minister of the United Kingdom and Northern
Ireland I would have thought that you are well placed to investigate
the truth of the following proposition and perhaps may be able to
rectify what many UK citizens feel is a rip off. Or is it because the
USA can manage their economy better than the UK can manage theirs?
Our Special Relationship with the USA means, in 2008, that we buy many
goods that are produced by American companies and that we pay in GBP
almost the same amount that an American citizen would pay in USD. For
example Microsoft sells an upgrade from Frontpage (a well known and
popular web design and publishing software package) for their new
product Expression Web 2 for 94.99 USD in the USA and for 99.99 GBP in
the UK. These are prices that Amazon.com and Amazon.co.uk sell these
identical products for. The US price is subject to sales tax. To
compare the two prices the UK price which includes VAT at 17.5 per
cent needs to be reduced to 82.49 GBP. Removing the tax from the
prices alters the calculation to a pricing policy that sets 1 USD =
0.9 GBP. Whereas at today's exchange rate, 1 USD =1.95 GBP.
www.xe.com
If we use the exchange rate, which addmitedly fluctuates, to calculate
the UK price the UK price should be 42.33 GBP (ex VAT)
However my view of the Special Relationship is that at the beginning
of the Second World War (during which I was born) it became
increasingly important that not withstanding the separation of the USA
and Great Britain we share not only the same language but culture and
philosophy and we were being threatened by Nazi Germany. Apart from
financial support we had the military support of the USA and there is
no doubt that we would not have survived the Second World War without
that support. But at present, in a time of (relatively) global peace,
there is an important, possibly terminal situation to this
relationship; that is that we are being charged much more for products
than US citizens and the US Government is not doing anything about
this.
I could have used any other retailer and would find that the upgrade
is being sold for the same or very similar prices. Of course Microsoft
are not the only company who market their products in the UK using the
exchange rate 1USD =1GBP or as close to that equation as to make
hardly any difference.
British Citizens are paying almost twice what a US citizen pays for
the same product.
Perhaps, Prime Minister you could ask President George Bush how the
USA manages its economy in such a way as to enable the same products
to be sold in the USA at a fraction of what they cost in the UK. Or
are we simply being ripped off by these companies?
Yours sincerely
A. Citizen
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