However, if you change from economy to business, you will normally be charged the change fee of £35 in addition to the extra Avios.

IME, for many redemption tickets using Avios for QF domestic flights, the cash component (taxes, fees and charges) is much less than that - typically £10 or so. If you cancel the original economy class ticket, you are refunded all of your Avios and you only forfeit the £10 or so (provided you don't cancel too late).

Therefore it's very often cheaper to make the change from economy to business by cancelling the economy class award ticket and booking a new business class ticket. In practice, of course, you should do it the other way round: book the new ticket first, then cancel the existing one - just in case something goes wrong with the new booking.