Question to the Department for Business, Energy and Industrial Strategy:

To ask the Secretary of State for Business, Energy and Industrial Strategy, what steps his Department is taking to tackle the loyalty penalty in the (a) mobile, (b) broadband and (c) mortgage market.

In 2019, new rules for mobile phones were created by Ofcom which required companies to provide better upfront contract information on pricing for bundled handset and airtime services, and several companies voluntarily agreed to reduce bills for out-of-contract customers. In broadband, a number of major providers took steps to reduce the loyalty penalty, including capping prices. An updated review was published by Ofcom in July 2020.

Other telecoms interventions have been developed, including Ofcom’s new rules which require communication providers to send a notification to their customers when they are nearing the end of their contract. The Government and Ofcom continue to work on ‘Open Communications’ as part of the Smart Data project to help consumers access information and switch providers accordingly, for which Ofcom published a consultation in July 2020.

The Financial Conduct Authority conducted a mortgage market study in 2019 which noted that they are working with lenders to make it easier for borrowers to switch, where that is possible and would be of benefit, in light of the ‘loyalty penalty’. That work continues.