I've never heard of a phone contract in the UK that limits incoming minutes...
He is right that they tend to be extremely suspicious of people claiming not to need a license though. When I was a student I had a TV for playing games and watching DVDs on, and got harassed on the regular by the TV licensing heavies. And by heavies, I mean they literally sent a huge enforcement officer to our door once, demanding to be let in to inspect our property. I politely told him to fuck off because he had no right of entry and I had informed them time and again that we were within our rights not to have a license.
We still got the threatening letters after that, but no more unfriendly faces at the door.