PRICES 2

The story gets worse. The Japanese drive on the left, as we do. So it should be easy for dealers there to export their cheap cars here. But even such 'grey' imports have been kept out. It has been made virtually impossible for a Japanese dealer to sell to, say, Asda or Tesco. A limit of 100 cars every five years has been imposed on importers. To its credit, the Government has realised that this is a restriction on trade and announced this weekend that it intends to end it. So we might at last see Japanese or Korean cars at British supermarkets.

The Government was not so helpful with regard to prices in the Budget. The extra excise duties on petrol and diesel mean that delivery of every object we buy in the shops will cost us more. This comes after several years of tax increases on fuel that have made British petrol, the cheapest in Western Europe in 1993, now the most expensive. This in a country that is a net exporter of oil. Our oil importing neighbours, on the other hand, have seen fuel prices fluctuate with the market. Meanwhile, the VAT duty that we pay on most goods is much higher than the sales tax payable in most American states. In that direct way, too, it is government that makes our prices higher.

But the most important impact of government on prices has been through creating or sanctioning barriers to competition. In virtually every business where British prices are high, government has allowed an obstacle. Perhaps the most celebrated barrier is the Common Agricultural Policy which has cost British families as much as £1,000 a year in higher prices and taxes. Such barriers have been created by - or are supported by - governments (or the EU). Of course there are specific businesses that may gain from such barriers and lobby for them. All businesses love a monopoly. But governments cannot duck responsibility. If one is "angry" about high prices in Britain, one should be angry at governments - past and present.

British shoppers pay up to 40% more for branded items such as clothes and perfumes than consumers in other countries, according to a government report. The study, carried out jointly with the Swedish Government, has prompted Trade and Industry Secretary Stephen Byres to call for reforms to stop UK shoppers being ripped off. Under European Union (EU) trademark laws, manufacturers can dictate which retailers in the EU can sell their products and where they can import them from.

Mr Byers said companies were obviously abusing the legislation to keep prices artificially high in some countries. The legislation also prevents British retailers from sourcing goods from outside the EU on the "grey market" where they are often cheaper. He is now calling for an overhaul of the trademark laws. "Action is needed to reform the EU law on the protection of branded goods," he said. "I want the Tesco's and Asda's of this world to be able to source the best deals from anywhere in the world and pass those savings on to consumers." He said the findings had been circulated to other European Union member states. The report surveyed the price of 133 items in France, Germany, Sweden, the UK and the US. It found that High Street prices in Britain were often the most expensive.

In particular, music lovers are often paying significantly more for chart CDs, DVDs and computer game consoles. The findings will be discussed at a meeting of European consumer affairs ministers in Sweden on Thursday and Friday. Consumer Minister Kim Howells will be representing the UK. Court cases Mr Howells said: "We are working with the Swedes to push for removal of trademark restrictions on the import of such goods. "We hope other member states will support our joint approach. More cut-price designer goods could be sold on supermarket shelves "We want the European Commission to change the Trade Mark Directive so traders can import cheaper branded goods from any country. "Allowing brands to dictate which retailers can sell their products and where they can import them from is unacceptable. "Effectively the directive forces retailers to import goods from the most expensive suppliers."

Supermarkets, most notably Tesco, have gone head-to-head with companies and sourced goods from outside the EU on the "grey market". Clothes manufacturer Levi Strauss has argued this is illegal. But earlier, the European Court of Justice indicated that traders such as Tesco should have their interests considered.

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