It sounds outrageous to me, but I have no idea how accessible the thermostat is or isn't. Have they given you a breakdown of that?

Main dealer rates could now be as much as £200 an hour inc VAT depending on location. So £700 may be expected if its booked as a 3 hour job at a main dealer. An MB specialist will probably be half that.

Gone are the days of the thermostat staring you in the face near the top of the radiator where you could remove it, test it and change it in half an hour!