Earl of Courtown
Main Page: Earl of Courtown (Conservative - Excepted Hereditary)Advertising Standards Authority
Earl of Courtown Excerpts
The Earl of Courtown (Con)
My Lords, I, too, thank the noble Baroness, Lady Deech, for securing this debate and for the contributions of all noble Lords. The impact of advertising and its regulation are clearly issues that attract strong interest and feeling from many in the House.
I will look at some background to the industry, as the noble Lord, Lord Clement-Jones, did. The UK’s advertising industry plays a key role in our economy and is a world leader. The sector was worth £10.2 billion in 2013—the second-highest contributor to our economy of any creative industry sector—and has grown by 67% since 2010. The core advertising and marketing sector employed 167,000 people in 2014, and nearly half a million if you include those employed in advertising and marketing jobs in the wider economy.
As well as being important in its own right, advertising plays a crucial role in helping secure the UK’s economic recovery. Without advertising, brands cannot make their mark on the marketplace and consumers cannot make informed purchasing decisions. Advertising helps to stimulate competition, innovation and expansion. Internationally, the UK’s advertising industry has a tremendously strong reputation—a disproportionately large number of global iconic advertising and marketing campaigns has involved UK creative talent, either in ad agencies themselves or in supporting sectors, for example film, music and graphic design. We have the most awarded ad agencies in the world as a proportion of GDP, exporting £2 billion a year in agency services, and London is an undisputed international advertising hub.
Nobody is arguing that this industry should not be regulated. The question is what form of regulation would be most appropriate and effective.
As a matter of principle, this Government prefer effective self-regulation over statutory regulation. We support the system of co-regulation and self-regulation for broadcast and non-broadcast advertising enforced by the Advertising Standards Authority. We believe that this regulatory system has worked well for both customers and advertisers, and we support the previous Government’s assessment, mentioned by the noble Lord, Lord Clement-Jones, in the 2013 policy paper Connectivity, Content and Consumers: Britain’s Digital Platform for Growth, that it is an exemplar of successful self-regulation.
The ASA provides an easy one-stop shop for both public and advertisers, and allows for flexibility to take on additional responsibilities, such as online advertising, relatively speedily in the light of technological changes compared with a statutory regulatory regime. The system is free to the taxpayer and is a cost-effective way to resolve grievances. It allows for harmonious decision-making for cross-media adjudication decisions and promotes corporate social responsibility by ensuring that industry has a strong stake in maintaining an effective, robust system to ensure a high level of consumer trust in its products.
A very good example of what self-regulation can do that the Government cannot is Clearcast. This is a commercial service which checks whether broadcasting ads are in breach of the BCAP Code before they are aired. It is used by Channel 4, Channel 5 and Sky, to name but a few. Some commercial broadcasters have made it mandatory for ads to undergo a Clearcast check—something that would be regarded as censorship if it came from the Government.
The noble Baroness, Lady Deech, and the noble Lord, Lord Palmer, mentioned the independence from industry of the ASA. As the noble Lord, Lord Smith, mentioned, the ASA council is the independent jury that decides whether ads have breached the advertising codes. The ASA chair is appointed by the chair of ASBOF for a renewable four-year term, but the post holder must be independent of the advertising and media industries. Two-thirds of council members on each panel are independent of the advertising and media industries, and members are appointed through an open recruitment process, with all positions advertised. Following a review of the appointments process, the chairman will in future appoint an independent person to participate in the recruitment of all council members.
The noble Baroness drew a comparison with the press regulator, which was also mentioned by the noble Lord, Lord Stevenson. The Government want the press to comply with the reforms recommended by Leveson and enshrined in the royal charter, and want to see a self-regulatory regime that is tough, independent, fully subscribed and commands confidence. The noble Baroness also mentioned ads likely to cause extreme offence. The ASA has a number of options enabling it to act quickly where there is risk of great harm or offence. In extreme cases, it has the power to order advertisers to remove ads from publication immediately on receipt of complaint and before investigation. Where it may not be necessary to use that extreme sanction, but where there is a need to rule quickly, the ASA’s procedures allow for timescales to be shortened according to need. The noble Baroness also mentioned various examples, including those of pornographic pictures. She questioned the decisions of the independent self-regulator. It is not for the Government to comment on decisions taken.
The noble Lord, Lord Palmer, raised the subject of funding. The ASA is funded by levies on advertising spend, but this is collected at arm’s length by both the Advertising Standards Board of Finance and the Broadcast Advertising Standards Board of Finance. This maintains the system of independence, ensuring that decisions are not influenced by those who may or may not be funding the system, while ensuring proper funding.
The noble Lord, Lord Stevenson, and the noble Baroness, Lady Deech, also mentioned the EU directive. The EU directive concerns misleading and comparative advertising. In the United Kingdom, this EU law is implemented through business and consumer protection regulations, enforced by trading standards. The CAP and BCAP codes administered by the ASA reflect the regulations as far as they apply to advertising covered by the codes, and the ASA has an agreement with trading standards that it will in most circumstances act in the first instance in alleged cases of misleading advertising. Judicial reviews of ASA rulings have repeatedly endorsed the ASA’s authority and processes in the area of misleading advertising.
The noble Lord, Lord Clement-Jones, mentioned consistency, which was also of concern to the noble Lord, Lord Palmer of Childs Hill. The noble Lord, Lord Clement-Jones, appeared to say that he felt that there was consistency in the decisions of the ASA.
The noble Lord, Lord Stevenson, also talked about consumer satisfaction. The ASA carries out a customer satisfaction survey. Latest data show customer satisfaction with complaint-handling at over 70%, despite the ASA upholding only a minority of complaints received. That figure compares very favourably with other government and industry regulators’ handling of complaints.
Lord Stevenson of Balmacara
I was not exactly commenting on that, although others did and it is useful to have that figure repeated. I said that the matters that cause the most difficulty for the ASA are taste and decency, and to some extent those that are political. That requires there to be good and enduring relationships with consumer engagement, which I do not see but may be there. It was that point I was probing.
The Earl of Courtown
I am glad that the noble Lord was able to clarify that. As with any regulatory regime, there is always room for improvement, and the ASA would welcome suggestions on how its procedures might be improved. I will also ensure that I bring the department’s attention to this debate and all that was said by noble Lords. Nevertheless, the Government believe that overall the ASA is an effective regulator.