Calls to Cut Low-Cost Broadband VAT

There have been calls to cut low-cost broadband VAT to help get more people online.

Social Tariffs are broadband and phone packages at lowered pricing for those claiming Universal Credit, Pension Credit and other benefits.

Many providers call these their ‘Essential’ packages, or ‘Basic’ packages.

Ofcom, the UK regulator, has been encouraging companies to offer social tariffs so those on lower incomes have packages better suited to them. (Social tariffs: Cheaper broadband and phone packages – Ofcom)

A report by a Lords committee has said that people without internet access, are at a disadvantage when job hunting. (The Government has “no credible strategy” to tackle digital exclusion – Committees – UK Parliament)

The report says, “The government does not have a credible strategy to tackle digital exclusion,”

However, the government claims it is committed to making sure no one falls behind in the digital age.

The government said it worked “to bring a range of social broadband and mobile tariffs, available across 99% of the UK and starting from as low as £10 per month”.

Why does it matter?

Despite this, there are still 1.7 million households that don’t have access to mobile or broadband internet.

As well as this, up to 1 million people have cancelled their internet packages or cut back on their packages in only the last year, according to the House of Lords communications and digital committee.

A lot of services have been moving online things like benefits and a big one being job advertisements.

90% of jobs are advertised exclusively online.

Many students who were struggling through Covid and the ongoing cost of living crisis, were forced to spend their time in libraries using the computers as many couldn’t get their own devices.

Alongside this, they would be vigilant with their data usage on their mobile devices.

Cutting their packages so they were more affordable meant that they had to be more conservative with their usage.

The chief executive at Become the Children’s charity, Katharine Sacks-Jones, said that many of their care-leavers are faced with “a real struggle”.

Katharine continued, “They can’t buy the data on their phone, because they’re having to pay for other things like feeding themselves, like keeping the electricity on,”

The report said the government’s goal for the UK to be a “technology superpower” and to boost economic growth was being overshadowed by digital exclusion.

The effects

Digital exclusion includes those who can’t access the internet, can’t afford it, or who don’t have key digital skills.

In the report, it said the problem’s scale was a “direct consequence of political lethargy”.

Due to the increased use of AI in public services, digitally excluded people may face bias from the AI.

If they aren’t posting online regularly, they could be represented badly in the datasets.

This is because the datasets are normally taken from material online and are used to train the systems, the report said.

Currently, only 5% of the 4.3 million homes that are eligible for Social Tariffs, use them.

The committee wants to see the use of Social Tariffs rise have called for the chancellor to get rid of the VAT from Social Tariffs.

Baroness Stowell of the House of Lords said it should be done “straight away”.

Jeremy Hunt has met with Ofcom and other regulators regarding the cost-of-living crisis.

Ofcom’s Chief Executive, Dame Melanie Dawes, said that Ofcom will be “urging telecoms firms to take immediate steps to raise awareness of social tariffs”.

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