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Calls for ‘outright ban on absurd’ mid-contract telecoms price rises

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Calls for ‘outright ban on absurd’ mid-contract telecoms price rises



Ofcom is facing calls for an “outright ban” on “absurd” mid-contract price hikes after the Government separately asked the regulator to revisit its rules on the practice.

The calls follow O2 unexpectedly announcing it was raising prices by £2.50 a month for existing customers.

On Monday, Technology Secretary Liz Kendall wrote an open letter to Ofcom bosses asking them to review mid-contract price rises again.

She wrote: “As we discussed when we met earlier this month, driving down inflationary costs and protecting consumers are vitally important for this government.

“As such, I welcome both the action you took in January to increase transparency on how in-contract prices are presented in new contracts, and your statement yesterday expressing disappointment with O2’s price rises.

“I strongly agree they are against the spirit of your previous changes on pricing, and all the more disappointing given the current pressures on consumers.”

She added: “Nevertheless, I believe we need to go further, faster. I am keen that we look at in-contract price rises again.”

Ofcom has been given until November 7 to respond to Ms Kendall’s letter.

Ofcom said: “We share the Government’s concern that customers who face price rises must be treated fairly by mobile providers and they are empowered to exercise their right to switch penalty-free if they didn’t agree to them upfront.

“We will respond to the Secretary of State’s specific queries shortly.”

O2 said in a statement: “We appreciate that price changes are never welcome, but 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.”

Ofcom introduced new rules in January to crack down on phone and broadband providers increasing prices in the middle of a contract without warning.

But last week, O2 announced it would be raising its monthly prices by more than originally promised.

It was able to do this because the increase was not linked to inflation, and it has given customers 30 days to leave without penalty providing they continue to pay off the cost of their device.

O2 said it has not gone against the regulation and Ofcom’s rules do not stop providers from raising prices.

The firm said: “A price increase equivalent to 8p per day is greatly outweighed by the £700 million we invest each year into our mobile network, with UK consumers benefitting from an extremely competitive market and some of the lowest prices compared to international peers.”

Alex Tofts, broadband spokesman from comparison site Broadband Genie, said: “What we’re seeing from O2 and price rises from other major providers is a direct result of crude regulation that has been poorly thought out, with its implications not given enough consideration.

“The only real way to protect customers is to outright ban these absurd mid-contract price hikes. Some providers already offer fixed prices, so why can’t those with the biggest profit margins do the same?

“We fully back the call for Ofcom to revisit these regulations. Until then, we urge all consumers to check whether they’re still in contract.

“To be fair to Ofcom, the broadband switching process has become much easier thanks to the One Touch Switch system. One-in-three households are currently free to switch, and with many providers offering competitive new-customer discounts, now could be the best opportunity to protect your budget before further price rises take effect.”



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Alan Bates to get multi-million-pound payout over Post Office saga

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Alan Bates to get multi-million-pound payout over Post Office saga


Post Office campaigner Alan Bates has agreed a multi-million pound compensation figure from the Post Office, sources close to the deal have confirmed to the BBC.

The payout for Sir Alan comes more than 20 years after he started campaigning for justice for victims of the Horizon scandal which led a group of 555 sub-postmasters launching landmark legal action against the Post Office.

The exact sum paid to Sir Alan has not been made public and he has not responded to requests for comment.

Between 1999 and 2015, more than 900 sub-postmasters were wrongly prosecuted after the faulty Horizon IT system indicated shortfalls in Post Office branch accounts.

Hundreds more poured their own savings into their branch to make up apparent shortfalls in order to avoid prosecution.

Marriages broke down, and some families believe the stress led to serious health conditions, addiction and even premature death.

A spokesperson for the Department for Business and Trade said: “We pay tribute to Sir Alan Bates for his long record of campaigning on behalf of victims.

“We can confirm that Sir Alan’s claim has reached the end of the scheme process and been settled.”

As of September 2025, a total of £1.23bn had been awarded to more than 9,100 sub-postmasters.

Sir Alan first received an offer of redress in January 2024, which he rejected, describing it as “cruel and derisory”.

He was made another offer in May 2024 which he said was around a third of what he had requested. In May of this year, he said that he’d received a third offer for less than 50% of his original claim.

Sir Alan was part of the Group Litigation Order compensation scheme, under which claimants can either receive £75,000 or seek their own settlement.

As part of plan to claim his own settlement, Mr Bates told the BBC his lawyers had included compensation owed for his 20 years of campaigning for justice for those sub-postmasters caught up in the scandal.

The Post Office/Horizon scandal reached new heights in the public consciousness last year after Sir Alan’s campaign for justice was portrayed in the ITV drama series Mr Bates vs the Post Office.

The government adopted all but one of the recommendations of a report published following an inquiry into the scandal.

The inquiry detailed the full human impact of the scandal for the first time: the report said that more than 13 people may have taken their own lives as a result of what happened to them.

Earlier this year, Sir Alan accused the government of putting forward a “take it or leave it” offer of compensation amounting to less than half of his claim.

Many victims have previously complained about being forced to accept low offers of compensation, without the benefit of legal help.

Last month, the government announced that all victims who are claiming compensation will now be entitled to free legal advice to help them with their offers.

There are four different compensation schemes, which are aimed at different groups of victims.

Individual eligibility for compensation depends on the particular circumstances of each case.

However, the schemes have been criticised for being too slow and complicated, with many of the worst-affected victims receiving far less than their original claims.



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Primark owner profit dips as UK sales fall amid inflation squeeze

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Primark owner profit dips as UK sales fall amid inflation squeeze


Primark saw sales drop in the UK as people spent less at the budget retailer, its owner Associated British Foods (ABF) said.

In the year to September it saw a 3.1% fall in like-for-like sales compared with the year prior, which it said reflected weak consumer confidence.

The company said it expected the “subdued” retail market to impact Primark sales into 2026.

ABF said that it was exploring splitting off the fast-fashion retailer from its food business, where it owns brands like Twinings, Ovaltine and Ryvita.

The entire business saw profits fall by 13% to £1.4bn for the year.

Chief executive George Weston said though he was “confident” for 2026, it depended on the “consumer environment” which was was “particularly unpredictable at the moment”.

British shoppers have been tightening their belts amid rising prices on the UK high street, and turning to even cheaper competitors such as Shein and Temu.

Inflation, the rate at which prices rise, has held stubbornly at 3.8% for the year to September. Although inflation is down from highs seen in 2022-2023, it remains above the Bank of England’s target of 2%.

The Associated British Foods boss said in a call after the financial results that there was a “working assumption” in ABF that a separation of Primark “is where we would like to get to”, although no decision had been made.

Dan Coatsworth from AJ Bell said it was not clear what triggered a rethink by the board, which had previously pushed back against the idea of a break-up, but did say Primark could command a much higher share price as a standalone company separate from its food business, which AB Foods said was “less well-understood” by the market.

Mr Coatsworth said over the years many people have expressed a desire to only invest in Primark, rather than have its rapid growth “diluted” by non-retail interests.

He added that “the wheels are being greased for a corporate break-up”, especially as such demergers are “all the rage” at present, with Unilever, Kraft Heinz and Warner Bros Discovery among those currently in the process.

“The idea of ‘slimming to greatness’ is based on the principle that big companies might benefit from having a tighter focus rather than spinning three or four plates at the same time,” he added.

Laura Lambie from Rathbones added that ABF was a “disparate mixture of businesses with no real strategic rationale behind it”.

Primark, which has 475 stores in 18 countries, had reached the size where it requires extra focus to capitalise on its growth prospects, particularly overseas said analysts, with one saying Primark was the “jewel” in ABF’s crown.

But Primark’s challenges in the UK could worsen as Chancellor Rachel Reeves is widely expected to raise taxes in the Budget later this month.

That would come on top of cost rises seen since the last Budget, including more expensive staffing costs as a result of the rise in minimum wage.

People are feeling insecure about their jobs as businesses cut back on hiring, said Laura Lambie from Federated Hermes, and that was part of what was fuelling a “difficult environment” for retailers as profit margins shrunk.

The news comes as a series of casualties on the UK high street continue as the costs of maintaining bricks-and-mortar stores becomes too high amidst rising online competition and pressure on consumer spending.

Recent retail names that have had to close stores or enter administration include Bodycare, Claire’s, and Pizza Hut which said it will be slashing the number of restaurants it operates.



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Reeves lays ground for painful Budget, but will it be worth it?

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Reeves lays ground for painful Budget, but will it be worth it?


Dharshini DavidDeputy economics editor

Getty Images Chancellor Rachel Reeves wears a plum coloured suit and points to a journalist while stood at a podium in the media briefing room of 9 Downing StreetGetty Images

The chancellor’s pitch: the Budget will be painful, due to the actions of others, but it will be worth it, to tackle debt, help public services and promote growth.

How does that add up?

Rachel Reeves pinned the need for expected tax rises on the actions of previous governments – post-Brexit trading arrangements, austerity – as the underlying reasons for a disappointing assessment by the official forecasters of the economy’s productivity.

That productivity has been held back by years of poor investment, and improvements have been slow. Lower productivity means weaker growth in the economy, hitting tax income and affecting assumptions about how much money the chancellor has to find to meet her financial rules.

Reeves also pointed to other external forces – tariffs and supply chain disruption – for the underwhelming performance of growth and inflation.

But some of these were foreseeable. Even if the official assessment is worse than thought, productivity – a measure of the output of the economy per hour worked – has long been problematic.

And when it comes to external factors, President Trump’s trade hostilities, for example, are expected to have a very limited impact on growth.

Economists say the chancellor may need tax rises totalling some £30bn to meet her financial rules by a comfortable margin.

Reeves accused past Conservative governments of prioritising political convenience, but her fiscal position also reflects similar actions by her own government.

The public purse is having to find several billions of pounds to fund U-turns over welfare and Winter Fuel Payments.

Analysts, including those at the Bank of England, also point to the chancellor’s own tax rises in last year’s Budget as hindering growth and employment, and adding to inflation pressures this year.

It was always risky for Reeves to suggest she wouldn’t be back for another hefty tax raid. She met her financial rules by only a slim margin last year. The gamble didn’t pay off, but it can’t just be blamed on ill winds from elsewhere.

It now appears that taxes are going to rise – and significantly. The chancellor argues money is needed to support the extra funding that has been put into public services, but the performance of these services depends on more than just cash.

Official figures indicate that in the year after Labour came to power, the public sector, and in particular healthcare, became less efficient as productivity dropped. There’s more work to be done if we’re to get bang for our buck.

For the actual detail on which taxes will rise, we’ll have to wait until the Budget.

But by skirting around the issue of whether manifesto pledges will be adhered to, while claiming to have inherited a dire environment, the chancellor has stoked speculation that income tax rates may rise.

The pledges of not increasing the main rates of VAT, employee National Insurance Contributions and income tax always seemed risky to economists – the “big three” account for the majority of tax take. But they are also the most visible taxes for the public, and their inclusion in the manifesto made them appear taboo, glass only to be broken in cases of emergency.

A rise in, say, income tax rates may come to pass (perhaps accompanied with a cut in National Insurance to offset the impact on workers). But it may not.

The Budget is still being put together. The door to breaking manifesto pledges may have been deliberately nudged open so that if it doesn’t come to pass, then an alternate package of tax rises, however large, would be greeted with relief.

There are a multitude of other options to consider– a levy on banks or the gambling industry, a further freezing of the thresholds at which different rates of taxes on incomes become applicable (so-called fiscal drag), a change in the liability of partnerships for National Insurance and even the tax treatment of pension levies have all been mooted.

And those tax rises will still be substantial, and felt primarily in the pockets of the better off.

Finding tax rises of the tune of £20-£30bn – sucking that amount out of the economy – is impossible without affecting incomes or profits, which risks damaging the outlook for growth.

However big the tax bill, this Budget may not deliver everything the chancellor wishes for.



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