Martin Lewis wrote to Chancellor Rachel Reeves as part of his campaign to clamp down on mid-contract price hikes on mobile phone bills after recent announcements by telecoms giants
Martin Lewis has revealed a letter he was sent by Rachel Reeves after asking her to intervene over shock mobile phone bill price hikes.
The personal finance TV expert accused O2 of “increasing prices by more than it told people when they signed up” after it confirmed it would be changing the amount bills go up each year from next April. The annual price increase on Pay Monthly plans will now rise by £2.50 every April, compared to the previous £1.80.
Mr Lewis, who urged customers to switch providers to “give O2 a corporate bloody nose” in protest, wrote to Ms Reeves to request tougher action from Ofcom on mid-contract price hikes – and in today’s Budget, she announced that she would be asking the regulator to investigate potential rule changes.
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It follows similar moves this year by major players in the mobile and broadband industry, including EE/BT, who announced a £2.50 increase this summer, and, Vodafone, who changed their annual price increases £1.80 to £2.50. TalkTalk meanwhile announced an increase to £4 for broadband customers.
Now, Martin Lewis says he has been sent a copy of the Chancellor’s letter to Ofcom’s CEO Melanie Davies, in which she writes of how price hikes are adding to “ongoing cost of living challenges” facing British families.
One part of the letter reads: “As you are aware, inflation remains a key challenge for the government, and we are determined to bear down on it wherever possible. The impact of rising costs on consumers, including in essential services such as telecoms, must be minimised.”
“The DSIT [Department for Science, Innovation and Technology] Secretary of State wrote to you recently requesting an assessment of the impact of the January rule change, as well as consideration of further measures to strengthen consumer protections and transparency in pricing.
“HM Treasury supports this approach, and we understand that Ofcom is due to publish a report in February outlining trends in switching across telecoms services, as well as data on consumer engagement and confidence in the market.
“Building on this work, we would ask that Ofcom produces an interim review of the impact of the January 2025 changes by spring 2026 with a full review due in 2027.”
Ofcom operates independently of the government, reporting directly to Members of Parliament and not ministers.
An O2 spokesperson told the Mirror: “We have been fully transparent with our customers about this change, writing directly to them and providing the right to exit without penalty if they wish, which is in line with existing rules.
“While we recognise price changes are never welcome, an increase equivalent to 8p per day is greatly outweighed by the £700m we invest each year into our mobile network.
“We’ll continue to engage constructively with ministers as we invest billions of pounds in digital infrastructure to help deliver the connectivity ambitions set out by Government at a time when telecoms prices have fallen in real terms, usage is increasing and competition in the market has never been greater.”
An Ofcom spokesperson said: “We want a telecoms market where investment, innovation and competition can continue to thrive, and where consumers have access to reliable services, are treated fairly, and prices are clear and certain.
“We will respond to the letter from the Chancellor and Secretary of State in due course.”
