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Labour Reveals Plan to Slash “rip-off” UK Phone Bills and Cut Line Rental

Saturday, November 30th, 2013 (8:11 am) - Score 1,621
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The Labour Party has proposed a new multipoint point plan that it believes could help to cut the cost of consumer phone and calling bills across the United Kingdom, which includes a pledge to force BT and other operators into cutting the cost of line rental. But some of the measures are already expected.

Rising consumer utility bills, especially for gas and electricity, are currently a big focus of the political circus and this is largely due to the growing trend of price hikes that now frequently eclipse the level of annual inflation. As a result the Government are next week set to announce a raft of new measures to tackle the problem (delayed from last week).

So it will of course come as little surprise to find that the main opposition Labour Party are hoping to wrong foot that forthcoming announcement by revealing their own 8 point plan to, in the words of Helen Goodman (Shadow Communications Minister), “protect consumers against the great phone ripoff“.

The plan was reportedly published on Friday but so far we haven’t been able to find a public copy on either Helen Goodman or Labour’s own website, which means that we’re forced to summarise from the closest approximation (The Guardian).

Labour’s Plan to Cut Phone Bills

* Force BT to cut its standard line rental charge.

* Offer the option to receive paper bills without a financial penalty (this often attracts an extra cost of between £1 to £3 per month or per bill).

* Free caller identification to prevent nuisance calls (e.g. BT charges £1.75 a month to display the caller’s number).

* Outlawing of mid-contract price rises, which have been imposed by mobile operators on customers who thought they had signed up to fixed charges. Ofcom are banning these rises for all contracts signed from January 2014 but Labour says the rules should apply to all existing contracts retrospectively (good luck with that).

* Free mobile calls to 0800 numbers (0800 calls from landlines are free but mobile can be more expensive).

* A cap on the amount a customer has to pay for bills run up before reporting a phone lost or stolen (e.g. £50 to prevent bill shocks).

* Easier switching between mobile networks, and between combined phone, TV and broadband suppliers.

It’s easy to claim the high ground when you propose something that’s already set to be introduced, which is the case for several of the above proposals. For example, Ofcom already intends to introduce easier migration (albeit not for FTTP/H or Virgin Media’s cable lines) and the regulator has also moved to tackle mid-contract price rises (we think 0800 calls are also still being looked at) but it’s not a complete “ban” as The Guardian claims (note: the idea of applying this retrospectively seems unlikely to be workable).

Some of the other ideas are all fair game but in the grander scheme of things they probably wouldn’t make a huge difference to your bill and even if you could force BT to cut their line rental then the operator has a habit of simply raising its prices in other areas to compensate (e.g. broadband, calls etc.). Lest we not forget that telecoms prices, thanks to the lower cost of broadband, haven’t actually risen anything like as aggressively as the other utility services and in fact many bundles have become cheaper (here).

The Government must also share some of the blame for pummelling broadband ISPs and phone providers with masses of new laws and regulation, from the Digital Economy Act (DEAct) to the new network-level filtering (Parental Control) requirements, which have cost a significant amount of money to develop and implement. Naturally those costs have to be recouped from somewhere.

In a recent ISPreview.co.uk survey of 998 readers some 74% agreed that the high price of a fixed phone line represented its main drawback and 64% said they would get rid of their fixed line if it wasn’t needed for broadband. Perhaps in the long run the best solution will thus be competition from mobile operators but in the meantime it’s good to see the issue at least being taken seriously. Now if only politicians would take some responsibility for their part in the hikes too.

Leave a Comment
43 Responses
  1. Avatar Hull_lad says:

    So their plan is to hammer a segment of the Comms market that is already in decline? Another well thought through policy.

  2. Avatar FibreFred says:

    Force? Can you force a private company to do that?

    Maybe it costs that much to keep the line in place + some profit

    This is why we have Ofcom why are silly politicians meddling?

  3. Avatar sam says:

    it doesn’t cost BT that much for line rental, bt must be making a massive profit hence why they post huge profits each year. Reducing that price will results in BT’s own broadband price increasing but it would likely result in the broadband from Talktalk and others to decrease their prices so that is a good thing. There are also a lot of pensioners that use the phone but not broadband so this would help them too.

    All those measures are good but the better option would be to nationalise bt openreach which won’t happen obviously.

    Free caller id would be great btw.

    1. Avatar FibreFred says:

      “it doesn’t cost BT that much for line rental, bt must be making a massive profit hence”

      Based on what? Your own thoughts, do you have any experience on managing telco plant the size of the UK?

      And I assume labours forcing of line rental reduction (unlikely) would also hit TalkTalk and Sky, there’s not much difference between all three.

    2. It really does not cost that much to provide line rental. The underlying product is the copper line which only costs around £7 per month ex vat as far as I remember. That has not really gone up in price (down if anything) for years. BT, TalkTalk, Sky etc are just playing a game with everyone – we want to pay peanuts for “broadband” so we do, they just make up the rest with “line rental”.

    3. Avatar FibreFred says:

      £7 including maintenance ? Where did those figures come from ?

    4. Openreach price list – it is currently £84.26 per year exc vat, or £7 per month

  4. Avatar Kits says:

    Had none of you realised BT use the phone line rental to pay for freebies for the broadband users like free sky sports.

    Without good profits from line rental BT couldn’t offer free 100£ marks and spencers vouchers free sports to those who sign up to the superfast broadband.

    1. I thought that was what they were using all that BDUK dosh for! 🙂

  5. Avatar dragoneast says:

    It’s the pantomime season. Shut your eyes, dream, and you can believe anything. Hold on to yer purses and wallets when there’s thieves (sorry, politicians) about, though.

  6. “Force BT to cut its standard line rental charge.”
    With LLU so cheap, this is just never going to happen in my view as other operators are free to lower their retail prices if they wish.

    “Offer the option to receive paper bills without a financial penalty”
    Given the cost of postage these days, this is just silly. However, if it was me then what I would do is force BT et al to email the invoices and not make you log in all the time to get to them.

    “Free caller identification to prevent nuisance calls”
    Again this is very cheap for operators to provide and thus offer it for free to compete with BT if they wish.

    “Outlawing of mid-contract price rises”
    Happening anyway
    “Labour says the rules should apply to all existing contracts retrospectively”
    Typical opposition rubbish this one as by the time of the next election, there will be very few contracts prior to Jan 2014.

    “Free mobile calls to 0800 numbers”
    Again happening anyway if I remember right

    “A cap on the amount a customer has to pay for bills run up before reporting a phone lost or stolen (e.g. £50 to prevent bill shocks).”
    Have to admit, I thought this was the case anyway – though dare say the mobile operators would try to pretend otherwise.

    “Easier switching between mobile networks, and between combined phone, TV and broadband suppliers.”
    Ban the use of bundles! 🙂 Yeah, I know it will never happen but we are all allowed to daydream a bit!

    1. Avatar FibreFred says:

      Emailing your bill instead of logging in , how secure is that ? No that should certainly not happen agreed on cli tho it can’t cost bt anything really or what little it does should be absorbed ,can you imagine taking a mobile phone contract with no cli ? It should be in as standard these days it’s no longer a perk

    2. Avatar Kyle says:

      I wonder how many people remember to remove this from their BT account before they decide to reintroduce the charge for something that was the only positive move made on their landline offerings for years? Mine was off the day I found out.

    3. @Fibrefred.

      What is wrong with being emailed invoices? I get emailed lots of invoices – it is standard practice for many many businesses to do it this way. I accept that, say, the itemised billing info is best kept in the login area, but am lost to think of a reason why the invoice itself could not be emailed.

    4. Avatar FibreFred says:

      Crossed wires then, invoice sure but anything itemised with personal customer info should remain in a login area. No different to your energy statements etc

  7. Avatar brains says:

    scrap line rental altogether if you dont use the bloody home phone and still have broadband . typical !!!!

    1. Avatar bob says:

      Broadband still uses a line so you still need a line. There is a big question mark though as to whether BT is loading other costs onto the line rental other than the direct cost of the line

  8. Avatar Sledgehammer says:

    It’s all about conning people into voting for them come the next election.

    The whole 650+ of them are useless they do not deserve voting back into office, sack the lot.

    1. Avatar four_eyes says:

      well say no more they all the same Useless tories even labour all for themselves as usual . just talk shite all the so called government.

  9. Avatar X66yh says:

    @wirelesspaceman

    Emailed invoices which appear to be PDF files but are not are precisely the way the cryptolocker virus is spreading – mostly among companies rather than individuals though it has to be said

    1. I take your point, but following that to the extreme would basically mean banning all attachments. I guess the best compromise would be to allow the option and then let each customer decide for themselves.

  10. Avatar X66yh says:

    @brains
    you clearly don’t have any as this has been explained by many people on many occasions on many forums.

    In the the UK, physical line maintenance/rent and payment for receiving a voice service on the line are lumped together and called ‘line rental’ with the cost of the actual calls being extra. Broadband is paid for totally separately.
    So the voice component seems very expensive compared to the broadband element as it has the line maintenance part with it.

    Now we could quite easily put the line maintenance costs/rental onto the broadband charges instead – and then the payment for having the voice service added would seem quite cheap while your broadband charges would rocket upwards.
    Would you like that instead?

    What you seem to want is not to pay at all for the line maintenance component and just pay broadband only charges – dream on it ain’t going to happen!
    Understand now?

    1. In my view really it is about time that the “line rental” was moved to broadband and not telepony in how it was marketed as that is what the vast majority of people use if for most these days.

      However, as the option is already there for new companies to enter the market and do just that, I don’t suppose we will see any movement from the existing oligopoly unless/until some new company does it and gains a significant customer base.

    2. Avatar bob says:

      A part of he problem is BT is clearly loading some of the call charges onto the line rental because of the conflict of interest, Having a high line rental helps keep competition at bay particularly many people just want a bare line & Broadband as they will use their mobile for calls.

      Probably if line rental was not picking up some of the call charges and some of the rest of the BT groups charges line rental would probably be under £10

      It is very difficult to be sure because of the complexity of the BT accounts

      Perhaps a way to understand it is to consider Amazon and Starbucks who use their complex company accounts to move costs to other parts of the group so that the UK business units show almost no profits

  11. Avatar Phil says:

    It won’t work. BT are a private company and very powerful one. Labour Party cannot force BT to cut line rental to customers. It’s all about Labour want the power in government again. Do not trust Labour. It just a word of broken promise. THe same go for energy fixed for 20 months under Labour, yeah right? who would believe it?

  12. Avatar dragoneast says:

    Politics is all about impressions. Labour want to create the impression they are for the common people, and paint the Tories as out of touch toffs. Comic stuff. Desperate, inadequate, people often lash out. Like crying babies, it gets them noticed; and the noise just might get mistaken for an argument. “No smoke without fire” some say; true, but often that’s because you want the benefit of the fire.

    1. Avatar FibreFred says:

      All of the parties are terrible, no doubt about that. I’m not sure why they are trying to score points like this, surely all they have to do it get rid of milliband and they’ll walk into power, I can’t believe for a second we’ll let the toffs run or should I say ruin for another term

  13. Avatar dragoneast says:

    The twin problem that Labour need to address is that the consumer (or the taxpayer) will have to pay for their initiatives. There isn’t a pixie with a pot of gold at the end of the rainbow. And secondly, it’s all very well trying to protect people against their own stupidity, but everyone else will pay the cost of doing so. (And moving money around costs more money, as they’ve found with energy subsidies). The result: your attack on the cost of living ends up putting up the cost of living. Thanks a bunch.

  14. Avatar ethel prunehat says:

    Economically illiterate nonsense. Why should I subsidise those who want paper bills, when I’d be perfectly happy with having them electronically? And which BT are the referring to? Wholesale/Retail/OpenReach?

  15. Avatar finaldest says:

    Simple solution would be to nationalize BT Openreach and thus charge all ISP’s a fixed charge to use the network thus increasing competition. This in my view would help with infrastructure upgrades also.

    Line rental should be made optional.

    labour only make these proposals to try and bribe voters. Most people say all politicians are the same why expect them to change and take people seriously when no one bothers to vote in the first place.

    If we all voted then politicians would try a lot harder

    1. Avatar TheFacts says:

      Simple to nationalise, please explain. How can line rental be optional, other than included in broadband cost?

    2. Avatar FibreFred says:

      lol, line rental optional so I guess supplying a line is also optional?

      You have to pay for the line if you want to use the line, simple as.

      As for nationalising Openreach god help us… because we all know the government has a great track record for running infrastructure don’t we….

    3. Avatar bob says:

      Simplest approach is to separate Openreach from the rest of the BT group. This could be as simply as floating it off as a wholly owned BT company

      With the current BT set up there is a clear conflict of interests and BT manipulates the accounts to suit Openreach & BT retail

      As a separate company that conflict pretty much goes and Openreachs remit is to maximise the return for Openreaches shareholders . Currently the aim is to reduce competition as far as is legally possible

  16. Avatar bob says:

    A lot of the increase in line rental is to try to reduce competition from other providers as BT use the line rental to hold down call charges but many people just want a line & Broadband. Probably about £5 of the line rental is being used to hold down call charges

    1. Avatar TheFacts says:

      What, £5 of £7? Justify please.

  17. Avatar dragoneast says:

    I can only assume that those people who want to see OpenReach nationalised (or sold off) are BT shareholders. Because they’d be the only ones to benefit from the compensation or sale proceeds. (And yes there’d be market-rate compensation: the courts would make sure of it). The rest of us would just pay the cost. And that’s before we get any telecommunications services for our money, let alone what.

  18. Avatar dragoneast says:

    There’s something too I don’t get about this latest incarnation of Labour: benefiting most the rich who live in and waste energy in large houses, the rich elderly who like their traditional paper bills, and the idle rich who are careless in the use of their phones (rather than the frugal and careful poor). When did socialism become robbing the poor to pay the rich?

    1. Avatar Ignitionnet says:

      Besides all of this crap where is much of our money going? Housing costs.

      The cost of living crisis is a housing costs crisis.

      Of course that won’t win the votes of said rich and elderly who already own paid off houses.

      Most politicians of all colours are a bunch of short-termist turds with no interest in looking past the next election. Whatever wins the most votes is what goes, stuff what’s actually best.

      Our telecomms in the UK are not expensive relative to peers. Nor actually are our energy bills compared with much of Europe.

      We’re struggling because our wages are stagnant or dropping while costs of housing and food are rising. If a government wants to tackle anything they should tackle the billions in corporate welfare, known as working tax credits, that we pay people to ensure they can live because their employer won’t pay enough for them to live on.

    2. Avatar FibreFred says:

      “We’re struggling because our wages are stagnant or dropping while costs of housing and food are rising. If a government wants to tackle anything they should tackle the billions in corporate welfare, known as working tax credits, that we pay people to ensure they can live because their employer won’t pay enough for them to live on.”

      Exactly this, its not the costs of the services that’s the issues its our wages also made worse by the fact we don’t make and export much the rest of the world want these days, we import it all

  19. Avatar dragoneast says:

    I think it’s actually worse . . . politicians want to reduce wages even further, supposedly to make us “competitive” with the “tiger” economies of the Far East (for which, read “China”).

    1. Avatar FibreFred says:

      Well if that happens we are indeed doomed. A lot of people in the UK over the last few years have had a zero percent wage rise or less than inflation (myself included) but all of the time the goods/services we import (or from within) continue to rise. Its not “rip off charges” its our earnings that are out of step with what we are buying.

      Is this the answer of the politicians then? Earn next to nothing, pay next to nothing for your goods/services and export next to nothing

  20. Avatar Nilsatis says:

    I work in mental health, persons who have a long recovery and who will need to budget, the land line is first to go and in place a mobile payg!

  21. Avatar cyclope says:

    This i found amusing “The Government must also share some of the blame for pummelling broadband ISPs and phone providers with masses of new laws and regulation, from the Digital Economy Act (DEAct) to the new network-level filtering (Parental Control) requirements, which have cost a significant amount of money to develop and implement. Naturally those costs have to be recouped from somewhere” It was the last labour government that brought this DEB in remember Mandelscum !!! If it wasn’t for this bill none of this filtering(censorship) would be happening now, What they should be saying is that DEB needs to be scrapped end of,
    On the bit about line rental, yes this should be curbed as it is too high currently ,and the mobile phones ,that sector is a joke, a ripp off !! just think if the manufacturers stopped bringing out new phones with new gimicks each year,the mobile operators profits would be in decline, a phone is for making and recieving calls at the end of the day, too much use my fry your brain though

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