According to experts, benefit recipients should be encouraged to take advantage of special discounts on broadband service.
They stated during the Lords Digital Committee's hearings on digital exclusion that lowering the VAT on broadband could aid those who experience "digital exclusion.".
Consumer advocacy group Which?'s Rocio Concha urged action to increase benefit enrollment by utilizing less expensive social tariffs.
The government has urged businesses to spread word about the deals.
In her opening remarks, chairwoman Baroness Stowell noted that the high cost of living continued to strain household budgets, resulting in more people being "pushed" into digital exclusion.
According to experts who testified before the committee, the term "digital exclusion" refers to a connected group of issues with the internet, including:.
- no entry to it.
- lacking a means of connection.
- lack of ability or self-assurance to use it.
According to testimony from Rowlando Morgan of the economic consulting firm The Centre for Economics and Business Research, eliminating digital exclusion for important groups could produce £13 point 7 billion in economic benefits over ten years for only £1 point 4 billion in cost.
In testimony, Helen Milner, executive director of the nonprofit The Good Things Foundation, stated that more than one in 20 homes have no internet access at all, whether it be fixed line or mobile.
Not all of that may be due to problems with affordability, but the foundation's databank service, which offers internet access vouchers, has seen extremely high demand, she said, just as food banks have seen significant increases in demand.
"I've met a young woman who wept because we gave her a £10 top-up through the databank because she can now contact her mother in Ireland. She had two young children and had no way of contacting her, so we gave her the money," Ms. Milner said.
"So, we're talking about people with a pitiful amount of money,".
More than 9.1 million UK households (32 percent), which is more than double the level of April 2021, were having trouble paying their phone, broadband, pay-TV, and streaming bills in October 2022, according to telecoms regulator Ofcom.
Furthermore, 17 percent of households, more than four times the percentage who did so in June 2021, were cutting back on other expenses like food and clothing in order to pay for communications services.
According to a survey conducted by the Digital Poverty Alliance, more than one in three adults had trouble paying their mobile phone or broadband bills.
There are less expensive social tariffs available for benefit claimants, but according to Ms. Concha, only 32% of those who are eligible use them, and the majority are simply unaware that they are available.
Internet access, like access to water, gas, and electricity, is a necessity in today's society, according to Ms. Concha.
She made the case that data should be exempt from the VAT, just like other utilities for domestic users, like energy and water, are.
VAT is still charged on social tariffs and removing it would be relatively inexpensive compared to the potential benefits, the committee was told. .
Industry associations have backed comparable actions.
The committee was also informed that non-social tariff consumers were experiencing above-inflation price increases, with some going as high as 17%.
It was also told that financially vulnerable people needed to be able to switch contract without financial penalty, and should not be compelled to pay these increases.
Science Secretary Michelle Donelan recently urged telecoms bosses to reconsider the price rises.
When former TalkTalk CEO Baroness Harding, a committee member, questioned whether social tariffs were adequate, Ms. Milner suggested there should be a standard one.
