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The Conservative MP for Hinckley and Bosworth, Dr Luke Evans (Shadow Health Minister), has tabled a new Private Members Bill (PMB) that seeks to “prohibit” mobile, landline (phone) and broadband providers from increasing their prices mid-way through your contract. But it’s chances of becoming law are fairly slim.
The issue centres around Ofcom’s January 2025 changes (here), which required telecoms providers to improve pricing transparency by adopting a new approach to mid-contract price hikes. The change did away with the old and sometimes confusing percentage and inflation-based model – replacing it with one that required providers to set out such price rises “clearly and up-front, in pounds and pence, when a customer signs up”.
On the surface this seemed like a good idea, but it also made it more difficult for communication providers to balance price rises across lots of different packages, which resulted in many of them adopting a flat price rise instead (usually increasing by c.£2 to £5 per month each year) – set at the same level for every package.
The catch is that this approach ends up hitting those on the cheapest broadband and mobile packages the hardest (i.e. if you pay £20/month then a £4 rise equates to a 20% price hike each year), while only giving a reprieve to the smaller portion of consumers who take more expensive packages (e.g. if you pay £60 then a £4 rise equates to a 6.67% increase) – not very fair to those on cheaper packages. A recent study confirmed that, when compared with the old policy, this had indeed inflated prices for most consumers (here).
The New Private Members Bill
The ‘Telecommunications (Fixed-term Contracts) Bill‘, as tabled by Dr Luke Evans MP, seeks to address this problem by banning mid-contract hikes in law and describes itself as follows: “A Bill to prohibit the increasing of charges payable under certain fixed-term telecommunications contracts within the duration of those contracts; and for connected purposes.”
At the time of writing this bill is still in its early stages and so hasn’t yet been fully drafted (i.e. it’s not yet fully published for the public), which makes it tricky to analyse. However, the reality is that only a minority of Private Members Bills ever become law (they can be tabled by any MP, not only those from the Government), but they do often serve a purpose by creating publicity around an issue and encouraging wider debate.
The key things to watch thus centre around how much support the new Bill picks up from other MPs as it progresses and whether its provisions are focused on consumers or also extend to businesses, as well as other areas of service provision (e.g. optional paid add-ons or calling charges). We suspect it would not be workable to include optional extras or call charges, as well as business connections, but that doesn’t mean to say the bill won’t try.
In addition, it’s worth remembering that broadband, phone and mobile providers are NOT immune to cost increases. Providers, much like consumers, are also suffering under the burden of rising supplier (e.g. wholesale) and lease costs, high inflation, high energy prices, the cost of adding all sorts of new services (e.g. FTTP) and catering for new regulations etc.
So, if providers can’t raise their prices mid-contract (spreading their risk to consumers), then they’ll probably front-load them instead, which may raise the general pricing of packages across the market to balance against the risk they take over longer terms. But we imagine that competition would still ensure plenty of diversity and choice, while pricing would also be a lot clearer for consumers.
The reality is that providers, at least among most of the largest market players (not all providers adopt mid-contract hikes), currently seem to be abusing Ofcom’s policy to increase consumer prices in a way that is now unfair – particularly for those least able to afford the most expensive plans. One way or another, this needs to be addressed. Credits to Ben for spotting the bill.