According to experts, benefit recipients should be encouraged to use special discounted deals for broadband in order to increase their accessibility.
They claimed that lowering the VAT on broadband could aid those who struggle with "digital exclusion" during the Lords Digital Committee's hearings on the subject.
Consumer advocacy group Which?'s Rocio Concha urged action to increase the number of people receiving benefits by using less expensive social tariffs.
The government has urged businesses to increase public awareness of the deals.
According to chairwoman Baroness Stowell in her opening remarks, the high cost of living has continued to strain household budgets, pushing more people "into" digital exclusion.
The term "digital exclusion" refers to a collection of connected issues with the internet, according to experts who spoke to the committee.
- unable to access it.
- not being able to connect a device to it.
- an absence of abilities or assurance to use it.
Rowlando Morgan of the economic consulting firm The Centre for Economics and Business Research testified before the committee that 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.
According to Helen Milner, CEO of the nonprofit The Good Things Foundation, "more than one in 20 households have no internet access at all, either fixed line or mobile.".
The foundation's databank service, which offers internet access vouchers, has experienced extremely high demand, she said, though not all of that may be due to problems with affordability. Demand for food banks has increased significantly, she said.
According to Ms. Milner, "I've met a young woman who wept after we gave her a £10 top-up through the databank so she can now contact her mum in Ireland, because she had two young children and she had no way whatsoever to contact her.
Therefore, we're discussing people with extremely, incredibly, limited resources.
More than 9.1 million UK households, or 32%, had trouble paying their phone, broadband, pay-TV, and streaming bills in October 2022, more than double the rate in April 2021, according to telecoms regulator Ofcom.
Additionally, 17 percent of households were reducing their other spending, such as on clothing and food, in order to pay for communications services, which is more than four times the percentage from June 2021.
A survey by the Digital Poverty Alliance found that more than one in three adults had trouble paying their mobile phone or broadband bills.
Benefit claimants can choose from cheaper social tariffs, but only 32% of those who qualify do so, according to Ms. Concha, and the majority are just unaware that they are an option.
In the modern world, having access to the internet is just as important as having access to water, gas, and electricity, according to Ms. Concha.
Data should be exempt from VAT, she argued, 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 organizations have backed similar actions.
The committee was also informed that non-social tariff consumers were experiencing price increases above inflation, some of which reached 17 percent.
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.
The former chief executive of TalkTalk and committee member Baroness Harding questioned whether social tariffs were adequate and Ms. Milner suggested there should be a standard one.
