The true number of households without internet access is significantly higher than Ofcom believes, according to a major new report revealing that the cost of living crisis is hitting hardest on the poor and the elderly.
According to new analysis from the Centre for Social Justice, 11 per cent of some 28 million UK households cannot access the internet at home. This is significantly higher than Ofcom figures would suggest at around 7 per cent or 2 million households.
The new paper, Left Out, developed in partnership with Virgin Money, sets out a three-pronged framework for easing the pain of digital exclusion: device access, digital connection, and digital capability.
It explodes the myth that limited digital access is solely a problem for the elderly. While over 65s do represent the majority of those who lack access to the internet at home, 29 per cent are of working age. Worryingly, 42 per cent of those on low incomes without access to the internet at home are of working age.
These findings follow on from previous CSJ research that showed digital exclusion can lead to poverty premiums, where those on the lowest incomes pay more for basic goods and services.
This previous paper, Over the Odds, found that nearly seven million people in Great Britain were paying multiple poverty premiums and that this cost them nearly £500 extra a year for essential goods and services, including food, insurance, and credit.
Digital exclusion is likely to increase the costs consumers pay as goods can be more expensive offline. Without internet access, consumers can pay as much as 25 per cent more on essential goods and services.
Working age digitally-excluded consumers are considerably more likely to face economic challenges because they are significantly more likely to be unemployed (22.1 per cent as against the national average of 3.8 per cent). Even among those who are employed, consumers with limited digital skills are far more likely to be in low-income jobs. Reducing digital exclusion and improving digital skills could therefore improve consumers’ job prospects.
In her foreword for the report, Emma Hardy MP, the Labour MP for Hull West and Hessle, warns that: “Without action to tackle the three pillars of digital exclusion identified in this report – a lack of access to digital devices, no or limited connection to the internet, and digital capability- these vulnerable people will be left behind and their disadvantage entrenched.”
The CSJ calls on the Government to work with business to tackle the poverty premium. It proposes a new digital inclusion strategy and makes ten recommendations to tackle the three pillars of digital exclusion, including:
- Reducing VAT on social tariffs to 5 per cent
- Giving consumers greater confidence that social tariffs offer comparable broadband speeds
- A new digital skills programme, targeted at those who are unemployed and those with limited digital skills
Matthew Greenwood, Head of Debt at the Centre for Social Justice, said:
“In our new analysis of digital exclusion, it becomes clear that millions of households still lack access to the internet at home.
“This inconsistent access dampens their economic outcomes and can lead them to paying a poverty premium for basic goods and services, such as food and insurance.
“The Government needs to revamp its 2014 Digital Inclusion Strategy to promote device ownership, social tariff uptake, and digital capability. The poverty premium is bad enough, the digital premium cannot be allowed to continue.”
David Duffy, CEO at Virgin Money, said: “We are proud to have worked with the Centre for Social Justice to develop this report and highlight the significant detriment those experiencing digital exclusion are facing. Digital exclusion and the poverty premium are issues that cannot be tackled by a few organisations alone.
“We strongly support the policy recommendations that the Centre for Social Justice suggest and hope it will stir policymakers and businesses in more sectors into action so together we can help those in the greatest financial difficulty.”
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