The government has said it does not intend to scrap the mid-contract price rises applied to UK broadband and mobile phone contracts, despite recent changes by Ofcom and the government’s previous stated intention to further address the increases laid on consumers.

As spotted by ISPreview, mobile and broadband contracts were debated in Parliament on December 9, where the Minister for Digital Economy, Baroness Lloyd of Effra, said the government has “no plans to ban in-contract price rises” when asked by House of Lords member Lord Sikka what steps the government was taking to ensure the annual price increases are “fair”.

“My noble friend is right to highlight the importance of the ability to have the right contract and of giving consumers the information they need,” Baroness Lloyd said.

“We have no plans to ban in-contract price rises, but consumers have the right to leave, penalty-free, for 30 days from when unexpected price rises are announced by a provider. The Chancellor and Secretary of State asked Ofcom to review the suitability of the current 30-day notice period, to ensure that it can be enacted by consumers who experience unexpected and unannounced mid-contract price rises.”

Mid-contract price rises are applied to most long-term broadband and mobile phone contracts in the UK, meaning in a two-year contract, the price for the customer can rise twice from the originally advertised monthly price. Rises occur in April, and used to be linked to inflation.

UK regular Ofcom banned inflation-based mid-contract price rises in July 2024, a rule which has now come into effect. But broadband and mobile providers can still enforce price hikes, they just have to declare upfront how much the rises will be in clear pounds and pence.

While this increases transparency, firms are, within reason, free to choose the increased rates rather than be bound by inflation.

Mobile network O2 in October announced it was upping its annual mid-contract price rise to £2.50, up from the old rate of £1.80.

“We are disappointed by O2’s decision,” Ofcom said in an October 30 statement. “This goes against the spirit of our rules which are designed to ensure greater certainty and transparency for customers when they sign up.

“Today, we’ve written to the major mobile companies reminding them of their obligations to treat customers fairly. We encourage any customer who wants to avoid these price rises to exercise their right to exit without penalty and sign up to a new deal”.

As noted by ISPreview, in a subsequent letter to Ofcom CEO Dame Melanie Dawes, Secretary of State for Science, Innovation and Technology Liz Kendall said she was “keen that we look at in-contract price rises again”, a sentiment at odds with Baroness Lloyd’s declaration in Parliament this week.

“I would welcome your undertaking a rapid review on how easy it is for customers to switch providers – if companies are determined to increase pricing, it is beholden on us to make sure that customers are able to go elsewhere as easily as possible,” Kendall added.

Though it can be annoying or daunting to change service providers, it could be worth shopping around for a better deal if you feel your broadband or mobile contract is getting too expensive.

Leaving a contract early can result in an exit fee, but if you are out of contract you can easily switch thanks to Ofcom’s One Touch Switch policy that puts the responsibility of actioning your switch on your current provider.