As we step up our support in the cost-of-living crisis, it’s time to cut VAT on social tariffs

Author: Lutz Schüler, CEO Virgin Media O2

With inflation continuing to rise and people up and down the country feeling the impact of the cost-of-living crisis, we’re not sitting on our hands at Virgin Media O2. Through a mixture of investment, support measures for struggling households, community initiatives and providing even more value to customers, we’re stepping up. But we know there’s more to do.

As one of the first providers to have introduced a low-cost social broadband tariff back in 2020, the difference these services can make to people’s lives is clear. Connectivity is too important to go without, so we made it affordable to those on the lowest incomes.

Until now, it’s not always been easy for us to check if a customer is in receipt of Universal Credit, with the process being mostly manual and heavy on administration. That changed last week when Government announced a new system which allows broadband providers to confirm customers’ eligibility quickly and easily. This was very welcome news and something we’ve long called for.

We’re committed to using this API as soon as possible, with work already underway to implement it, and we will also expand our eligibility criteria to include a wider range of benefits so even more people can access our social tariff. On top of this, to ensure customers know about the support on offer, we’ll soon start including information about Essential Broadband in the communications we send to customers every year related to their contract.

While these steps will help to improve the availability, awareness and affordability of essential connectivity, we can still go further. By cutting VAT on social tariffs to 5%, as Which? has been calling for, Government could put more money back into the pockets of those struggling most in a targeted way. We would pass on any social tariff VAT cut in full and urge the next PM to review this as a priority.

However, support can’t just be focused on social tariffs, and we’re committed to playing our part in helping all of our customers and the communities we serve. Right now, this matters more than ever.

For example, last month, we boosted the list of services customers can access without using any data, adding fuel poverty, debt advice and financial support organisations to help customers struggling most. This makes Virgin Media O2 the biggest ‘zero-rater’ of support services in the UK.

We’ve recently boosted our donation to the National Databank – a foodbank but for free mobile data, texts, and calls – which we founded with digital inclusion charity, Good Things Foundation. As part of our strategic partnership with Good Things Foundation, backed by a £2m donation to help fix the digital divide, those at risk of digital exclusion can receive 20GB of free O2 mobile data per month via the National Databank with more than 10,000 vouchers for free mobile data already issued.

These initiatives are on top of help for customers who are finding it difficult to pay their bill, including dedicated training and additional tools for our advisors.

While we’re all experiencing rising prices, we have continued to provide customers with excellent value services which they are using more than ever. Whether it’s being the only mobile operator to provide free EU roaming; access to exclusive freebies and deals via O2 Priority; double mobile data and speed via our Volt bundles, or a 10% credit every month on top streaming services through our new Stream TV service, we work hard to give our customers even more and keep them connected to the services they need and love.

While we continue to support our customers, with further measures on the way, we know our responsibility doesn’t stop there. We are giving back to the communities we serve – through numerous local initiatives and community grants  – while also doubling down on our investment to upgrade the UK, equating to more than £2bn a year to match ever increasing demand and bring fibre and 5G to more of the country.

During the Covid-19 crisis, the telecoms sector stepped up to keep the country connected. Just as we did then, today we are putting our customers first and providing extra help to those most in need. While there are no easy fixes to the current crisis, we’re committed to doing what we can and will keep working closely and collaboratively with Government to go even further.

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