According to a survey commissioned by Virgin Atlantic, Britons are now paying less for phones, PCs, TVs and bikes than they were 21 years ago, even though the cost of living has more than doubled in that time. According to the Government’s own inflation figures, a typical basket of goods has gone up by 109 per cent since 1984 but the statistics hide massive reductions in some of most must-have consumer items. Virgin Atlantic commissioned the research into prices to celebrate its own 21st birthday after it realised that fares it charges on flights to New York are nearly the same price as they were in 1984 when Richard Branson started the airline.
Sir Richard Branson, Chairman of Virgin Atlantic, commented;
“It is eye-opening to see how the prices of goods have changed in the past 21 years since we first started flying.
“We noticed that our own fares to New York have changed little in price from when we launched on June 22, 1984 and wanted to see how some other prices had altered.
“When you consider that inflation has gone up by 109 per cent in that time it is surprising that some goods have actually gone down in price and others have only gone up by a fraction of the cost of living rate
“Our entry into the transatlantic market in 1984 brought prices down in the way that Freddie Laker had done so a few years earlier. We are proud to have maintained the same effect on the London-New York market and dozens more destinations and will continue to do so for many, many years to come.
“There are still some long haul routes on which British Airways doesn’t face competition from Virgin Atlantic and where fares, as a result, remain high. These are very much in our sites for future expansion.
“Prices in Britain are often classed as rip-off, but our research shows than many things are cheaper now then they were in the mid-80s.”
If the cost of living has more than doubled since 1984 then shoppers would expect many items to have gone up in price by at least twice as much. While some items have risen considerably over 21 years, most have not risen by as much as inflation and some goods have actually gone down. Even big-cost items like cars have gone up by less than inflation since 1984 with a VW Polo now 81 per cent more and a
Ford Fiesta up 99 per cent - both less than the inflation rate of 109 per cent. Milk has gone up just 33 per cent since 1984, while a typical medium-sliced loaf of brown bread has risen from 31p to 44p - an increase of 42 per cent. Among everyday groceries, instant coffee has actually gone down in price from £1.14p in 1984 to 89p now - a reduction of 22 per cent. An Apple Mac computer has also plummeted in price from £1,388 in 1984 to £680 now, a drop of 51 per cent, while it may be no surprise that mobile phones have dropped a staggering 96 per cent from £1,750 in the mid-1980s to about £85 for a handset with a yearly contract now.
According to electronics giant Phillips, a typical 22-inch TV set cost £248 in 1984, but today an equivalent 21-inch model is 49 per cent less at £126. A children’s BMX bicycle has also gone down in price dramatically - from £244 to £99.99, a reduction of 59 percent. Even petrol, whose price is heavily affected by fuel duty increases in the Government’s Budget each year has gone up by slightly more than inflation - 112 per cent taking it from 39p to a nationwide average of 83p. A second-class stamp has risen by 61 per cent, considerably less than inflation, from 13p to 21p.
Even a flight to New York 21 years ago was being advertised for as low as £119 (excluding taxes and charges), compared to Virgin Atlantic’s cheapest fare this year of £118 (excluding taxes and charges), a decrease of 0.8 per cent. The biggest increase has been in house prices with the average UK property going up from £32,751 in 1984 to £162,840 now - an increase of 397 per cent. The price of a McDonald’s Big Mac hamburger has also seen a big rise in price from 63p in 1984 to £1.88 now. Industry commentators say the price reductions in some items like groceries is the result of massive competition among the big supermarkets which has seen price drops on hundreds of goods. Meanwhile, electronic items like computers and mobile phones have plummeted in price as the technology used to make them becomes cheaper.