The UK government has stated it has “no plans to ban in-contract price rises” for broadband and mobile phone contracts, despite recent regulatory changes and previous indications of further action. The declaration was made by Minister for Digital Economy Baroness Lloyd of Effra during a House of Lords debate on December 9, in response to a question from Lord Sikka about ensuring fairness in annual price increases.
Baroness Lloyd acknowledged the importance of consumer information and the right to leave contracts penalty-free within 30 days of unexpected price rises. She noted that the Chancellor and Secretary of State have asked Ofcom to review the suitability of the current 30-day notice period. However, she emphasised that the government does not intend to prohibit mid-contract price increases outright.
Mid-contract price rises are common in long-term broadband and mobile contracts, typically occurring in April. While Ofcom banned inflation-linked rises in July 2024, providers can still impose price hikes if they clearly state the amount in pounds and pence upfront. This rule aims to increase transparency but allows firms to set their own rates.
O2 recently announced it would increase its annual mid-contract price rise to £2.50 per month, up from £1.80. Ofcom expressed disappointment, stating the move “goes against the spirit of our rules” and reminding companies of their obligation to treat customers fairly. Ofcom encouraged customers to exercise their right to exit without penalty and seek better deals.
In a letter to Ofcom CEO Dame Melanie Dawes, Secretary of State Liz Kendall called for a “rapid review” of how easily customers can switch providers, noting that if companies raise prices, it is important to ensure customers can move elsewhere. Despite this, Baroness Lloyd’s parliamentary statement suggests no immediate legislative action to ban mid-contract rises.
Consumers unhappy with price increases can shop around for better deals. Ofcom’s One Touch Switch policy simplifies the process for those out of contract, while early exit fees may apply for those still under contract.
