Well, yes, because VAT is really only charged on "non-essential" or "luxury" items. Although books are classified as essential in order to encourage people to read (a skill which I can easily see the justification as being essential), a Kindle reader or a PC aren't and it's hard to class an ebook as essential if you require something "non-essential" in order to read the damn thing.

I see no reason to take VAT off it, either, whether we had existing agreements or not. If you classed an ebook as essential, then ebook readers of one kind or another would have to be VAT-free as well and that's just a silly loss of income. And although IT is pretty important in the modern world, it's far from "essential" at the moment because there's still whole groups of people who don't have computers at home. If IT is ever classed as "essential", then we generate a whole lot more problems like having to give everyone Internet access (and not being able to cut them off), having to subsidise PC's for the low-earners (parts of which we do already), more reliance on power networks, etc.

Seems like it wasn't really that tough a decision to make, or to see which way they'd go.