£70 - £80 per month is certainly expensive and you've done well to get it down to £35 per month, though for a low useage phone you may find that it is possible to get it down a little further.
I think one of the most important things when it comes to contract mobile phone useage is to ensure you have enough texts and minutes in your allowance to cover you for the month. The cost of calls and texts outside your allowance could increase your bill significantly.
For my daughter's phone I am with T.Mobile. For £30 per month inc. VAT she got a top of the range handset and has an allowance of £180 per month for UK texts and calls, which I find is more than enough for her and she never goes over her allowance.
I'm currently on a pay-as-you-go mobile (though I'm looking at changing this soon), so like yourself I am always aware of cost. I recently came across a website called fishtext.co.uk that offers text messaging from your mobile phone or computer for 2p per message. I'm not sure whether there are additional charges involved, but I intend to look in to the service further.
onecompare.com is also a useful website, where you choose whether you are looking for pay-as-you go or a monthly contract, choose a handset and they will show the best offers currently available from various suppliers.