Special low-cost internet broadband deals for those on benefits should be free of VAT to get more people online, peers have urged. Those without internet are at a disadvantage when looking for jobs, for example, a report by a Lords committee said.
“The government does not have a credible strategy to tackle digital exclusion,” the report said.
But the government said it is committed to ensuring no one is left behind in the digital age. It says it has 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”.
Social tariffs are discounted deals offered by firms to people on benefits. But 1.7 million households have no mobile or broadband internet at home, and up to a million people have cut back or cancelled internet packages in the past year, the House of Lords communications and digital committee said.
Services from benefits to banking are increasingly moving online and 90% of jobs are only advertised online.
Katherine Sacks-Jones, chief executive of children-in-care charity Become, said many care-leavers face “a real struggle”. Many can’t afford wi-fi “or 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,” she said.
People who can’t afford data have told the BBC of difficulties managing benefits claims, or having to juggle work hours with library opening hours to fill in forms or print things out.
The chair of the committee, Baroness Stowell, told the BBC that people without internet often missed out on online deals “so in a cost-of-living type situation, they are also not getting the full advantage of any savings”, she said.
The report accused the government of taking its “eye off the ball”.
It said the government’s ambition to make the UK a “technology superpower” and boost economic growth was being undermined by high levels of digital exclusion. That includes people who can’t afford internet, who can’t access it, or lack key digital skills. It said the scale of the problem was a “direct consequence of political lethargy”.
The increasing use of AI in the delivery of public services may also mean that digitally excluded people may face bias.
People who do not post online often may be poorly represented in the datasets – often drawn from material on the internet – used to train such systems, the report said.
Peers want to see more use of social tariffs. At the moment just 5% of the 4.3 million households who are eligible use them.
The committee also called for the chancellor to remove VAT from social tariffs “straight away”, Baroness Stowell said, adding that she wanted Ofcom to do better in forcing companies to advertise these tariffs.
The report comes as Chancellor Jeremy Hunt met with regulators including Ofcom about the cost-of-living crisis. Following that meeting Dame Melanie Dawes, Ofcom’s chief executive, said it would be “urging telecoms firms to take immediate steps to raise awareness of social tariffs”.
Till Sommer from the Internet Service Providers Association agreed with the committee that a new digital inclusion strategy was “long overdue”.
He said there was a “real commitment” across the broadband sector to help more people get online through social tariffs and low-cost broadband, and support for people struggling. But he said there were areas where “only the government can move the dial – including reviewing VAT on broadband”.