- The Washington Times - Sunday, December 10, 2006

LONDON — The rapid approach of the “$2 pound” is producing in Britain a curious mixture of Christmas joy and everyday despair — not to mention a tax-sniffing Scrooge lurking for the unsuspecting.

The U.S. dollar has plunged to a 14-year low against the British pound, and the widely predicted point at which a pound is worth $2 will very likely come sometime between now and Santa Claus’ arrival.

But the dollar’s fall has already caught the attention of bargain-hunting Britons, who are deserting London’s expensive Oxford Street and other pricey shopping emporiums in favor of shopping sprees in the United States.

They are attracted by visions of men’s Levis for $35 in New York, against $125 back home; a video IPod for $249, versus the $370 in London; a platinum wedding band in Tiffany’s shop in the Big Apple for $700, against $945 in a shop off Oxford Street.

The Times of London calculated that if British shoppers are planning to spend as little as $2,400 on items, they can pay for the airfare plus a weekend in a budget hotel in Manhattan and still come out ahead.

The entrepreneurial spirit is in full flow. Travel companies report they are getting a “significant increase” in bookings for three-day weekend shopping sprees to New York. But the rush is going on all week, and both British Airways and Virgin Atlantic have added an extra flight a day.

“Brits will always look for a bargain,” said Virgin Atlantic spokesman Paul Charles, “and if the bargain is in New York on the back of better exchange rates, then they will take it.”

The shoe is on the other foot for American visitors in Britain, who are finding that at a moderately priced London hotel room can now cost as much as $500 a night. Gasoline now runs about $6.50 a gallon, and a pub lunch for two will set them back about $80.

American expats in Britain and British workers who are paid in U.S. dollars by American companies, meanwhile, have seen their dollar-based incomes reduced by nearly 13 percent since January.

Even those flush with high-priced pounds had best be reminded that every Christmas has its Scrooge — and this one is no different.

Ebenezer in this case is the tax man — customs officials who lurk at international airports to remind the unwary that even bargains can, and in many cases will, come at a price. In Britain, it could come as a shock to many to learn that there is a $285 limit on many goods brought into the country.

Above that figure, shoppers landing from abroad could find themselves having to pay import duties and something called a value-added tax, or VAT. The 20 percent surcharge could well wipe out any savings from a trip to New York.

Witness the case of Coleen McLoughlin, the girlfriend of soccer star Wayne Rooney, who marched through the “green” (nothing to declare) channel at London’s Heathrow Airport with four suitcases stuffed full of goodies she had bought in the United States.

At the other end of the exit channel, she was presented by the customs and duty folks with a bill for about $5,800.

“We are fed up with people thinking they can walk through the ‘nothing-to-declare’ areas loaded up with goods and evading paying duties,” a senior customs source told the London Evening Standard newspaper.

“We have been urged to step up our stop-and-searches of people,” he said, “and where they have been too greedy, take appropriate action. Shoppers have been warned, and they can try their luck if they want.”

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