I have a contended 2MBit/sec link to the exchange with Demon as my ISP.
 My download bandwidth is about 250-300KBits/sec.  Is this what I
should expect for £20/month?  Are there better ISPs?

At one time I was getting over 1MBit/sec, and even with my old
512kbit/sec link I would get about 450kbits/sec.