A couple of corrections
The Nexus One does not have the same screen as the Motorola Milestone -- the Milestone has an 854x480 pixel trans-reflective LCD screen, whereas the Nexus One has an 800x480 pixel active-matrix organic LED screen. It's not really surprising that this newer technology is more expensive.
Secondly, in response to Michael's comment, the Nexus One (if you remove the unnecessary mains charger) is $558.65 shipped to the UK, which is (at the current exchange rate) £341.85 before VAT, (possible) import duty and handling fee.
Unless you are lucky enough to be overlooked by customs, the expected total price for a Nexus One today is £341.85 + £59.82 VAT + DHL handling fee, bringing the total price to approximately £400. It is also unclear currently as to whether the Nexus One attracts duty or not (mobile phones do not, but devices with GPS do, at 6%). This could increase the final price to approximately £425.