Lord Smith of Finsbury
Main Page: Lord Smith of Finsbury (Non-affiliated - Life peer)Advertising Standards Authority
Lord Smith of Finsbury Excerpts
Lord Smith of Finsbury (Non-Afl)
Is it not a strength of a system where, if a regulatory body recognises that it has got something wrong, it can actually put it right?
Lord Palmer of Childs Hill
I thank the noble Lord for that. Indeed it is a strength, but it is also an inconsistency. It shows that there is a set of people in the ASA who are making decisions and then presumably another set of people come along and say, “That decision was not correct”. It does not generate respect for the decisions. When the Minister replies, will he say whether it matters that there is a lack of consistency in judgments or changes are made, which the noble Lord, Lord Smith, thinks is a virtue? Also, are there adequate guidelines about the use of experts in scientific and political beliefs? The noble Lord, Lord Lipsey, mentioned a particular Middle Eastern question which I do not have to hand, but are there experts from all sides of what is a ticklish problem for everyone in the international sector? I do not know, and perhaps the Minister can comment on that.
The noble Baroness, Lady Deech, mentioned in passing the Leveson inquiry into press self-regulation, and its drawbacks are a useful parallel to the ASA. I want to speak in a little more detail about that in the time I have than the noble Baroness, Lady Deech. Like the much-criticised Press Complaints Commission, the ASA has a chair appointed by the funding body, and an independent reviewer with a very limited remit. Leveson—vol. 1, page 219—criticised this model and lack of interest in and input from the public. He criticised press regulation because the standards were set by the editors.
The same is true of the ASA. The code is drafted entirely by advertisers. On page 1,624 of Leveson, he said that the ultimate code should be approved by an independent body. That is what the ASA should do as well. Leveson in vol. 4, page 1,759, says that good self-regulation requires,
“that the Chair and members of the Board are appointed in a genuinely open, transparent and independent way, without any influence from industry”.
The chair should be independent of any political party and an appointment panel should be used, including people such as the Commissioner for Public Appointments, for chair and board members, as mentioned by the noble Baroness, Lady Deech.
The Advertising Standards Authority, despite its eminent chair who I accept is doing a thoroughly good job—I have no criticism of the noble Lord, Lord Smith—offends against all these regulation criteria. Maybe it manages it but it does not make it right. The question for noble Lords and for the Minister, which is a point made by the noble Baroness, Lady Deech, is whether the practice of self-regulation is no longer the accepted norm.
We have talked about Leveson and the press. Now we are talking about the ASA. We mentioned the Shipman inquiry, which altered medical regulation. We mentioned the Clementi review, which altered the legal profession’s self-regulation. There is also the Etherington report, which heralds the demise of self-regulation in fundraising.
The ASA is funded by the industry; it is good that the Government do not have to fund it. Its chair is appointed by the Advertising Standards Board of Finance. In this case, it is a very good chair, but it is nice and comfy. Just because there is a good chair now does not necessarily mean that the chairs will always be as acceptable to many of us. The ASA is not subject to requests under freedom of information, which it would be in another guise. What is required is: governance by a board mainly from outside the industry; an appeal system; and—dare I mention it?—transparency. This could be achieved at the same cost by a statutory or consumer-led body funded by a levy on members. In this case, it is funded by a levy on members on a board that is self-regulated and which is not what we should be aiming for in this century.
Lord Smith of Finsbury
My Lords, I must begin by declaring a very firm interest in this matter as chairman of the Advertising Standards Authority.
At the outset, let us remind ourselves of the overall picture. The ASA has been regulating ads in the UK for the last 53 years, and doing so very successfully. Last year we dealt with more than 37,000 complaints relating to 17,300 adverts. In addition to responding to complaints, we also initiated—of our own initiative—1,600 cases to make sure that the advertising codes were being complied with. Out of this, last year 3,384 ads were banned, removed or amended. If anyone thinks that the ASA is toothless, just look at this past week when we banned ads by some of the major companies in this country, including Boots, Bet365 and Coral. We act without fear or favour. In addition, last year we gave more than 194,000 pieces of advice or training to advertisers in order to make sure that they got it right in the first place.
All of this happens at no cost at all to the public purse; it is funded by a 0.1% voluntary levy across the advertising spend. We provide a one-stop shop for complaints about advertising in all media, including print, press, leaflets, cinema, television and radio, as well as online and social media. The self-regulatory system is able to respond to developments in the advertising world and in society much more quickly than a statutory system could. As the noble Lord, Lord Lipsey, pointed out, when we asked those who brought complaints to us whether they were satisfied with the way they were dealt with, even of those who were disappointed that we did not uphold their complaint 75% were very or quite satisfied with the process we went through.
I realise that of course the noble Baroness is not one of the 75%. It is worth noting that in her own case, which triggered her recent campaign against the ASA, she brought 22 separate items of complaint about an ad by Medical Aid for Palestinians. This was a highly complex case in an even more highly controversial area of public concern. Some of it related to matters of fact; some of it to matters of competing judgment. It needed very careful consideration. As well as to the ASA council, it also went to the independent reviewer, Sir Hayden Phillips. Only four of the 22 points were upheld, but no one can say that careful consideration was not given.
On one matter, I accept that the noble Baroness has a point, or at least part of a point. She believes that we should have brought in outside experts to advise on her case. We do bring in expert advice on some cases, normally to assist on detailed technical or scientific evidence. We did so in 16 cases out of 900 investigations last year. However, in a matter of political controversy, what would count as an expert? Who would qualify as an expert on all the passionately argued debates about Israel and Palestine? It is difficult, but none the less I have already made a commitment to the noble Baroness that, in future similar cases, we will give careful consideration to bringing in an outside expert if we genuinely believe that they may be able to assist the process.
However, on many other things that she said in her arguments this evening, the noble Baroness is simply not right. She said that the ASA was not able to be a full member of the Ombudsman Association. That is incorrect. The Ombudsman Association has three categories of membership: ombudsman members, which are categorised as meeting the criteria for technical ombudsmen; complaint handler members, which are categorised as having appropriate governance in place to function as best-practice complaint handlers; and associate members, who have an interest and relevant expertise in the work of the Ombudsman Association. Because it is not technically an ombudsman, the ASA is a complaint handler member. We are a full member of the Ombudsman Association and we share complaint handler status with the Information Commissioner’s Office, the Office of the Immigration Services Commissioner and the First Civil Service Commissioner and Commissioner for Public Appointments in England.
Baroness Deech
When I say “full member”, the ASA does not qualify in that top category, which has to be, as I said, independent of the industry or profession being regulated. The rules of the Ombudsman Association are quite clear on that.
Lord Smith of Finsbury
The Ombudsman Association is perfectly satisfied with the governance and procedures of the Advertising Standards Authority. Indeed, as the noble Baroness will have noticed, the other entities with which we share complaint handler status would fit with any person’s consideration of independence and probity.
Secondly, the noble Baroness says that the codes of practice are written by the industry and that there is no external input at all. Yes, the codes are written by industry representatives, but only after very full and thorough consultation. The Institute for Government recently said, in commenting on the inadequacies of government response to consultation:
“However, an example of best practice is the way in which the Committee of Advertising Practice (CAP) and the Broadcast Committee of Advertising Practice (BCAP) reacted to the results of a consultation on applying advertising standards to e-cigarettes”.
It is best practice in the view of the Institute for Government, which is a thoroughly independent body.
Thirdly, the noble Baroness said that the ASA is not accountable to anyone outside the industry—that it is not overseen. First, on broadcasting ads we co-regulate with Ofcom. Secondly, we work very closely with trading standards; on occasion we refer recalcitrant advertisers to trading standards. Thirdly, we have a robust and independent review process in place. Fourthly, we are, of course, subject to judicial review. As the noble Lord noted, in 53 years we have failed in judicial review on only one and a half occasions. Finally, we have issued a commitment to good regulation, which is published and available to be viewed by anyone. We have committed ourselves to an external assessment and review of that statement of commitment next year.
Fourthly, the noble Baroness said that ASA members are somehow not independent. Two-thirds have no connection or involvement with advertising or marketing before they are appointed. That is a criterion for appointment. The chair has to have had no connection or involvement with advertising or marketing. Members are appointed not by the chair alone, but by open advertisement and interview by a panel of council members, now including an external person as part of the interview process. I invite her, as I have done before, to come and see the council in action. I dare her to suggest that it is somehow not independent.
We had a very interesting tour of the horizon of a number of complaints about the sexualisation of figures in advertising from both the noble Baroness and the noble Lord, Lord Palmer. This is precisely the point: an awful lot will always depend on the precise nature of the image, the context in which it is seen and the way it will be reacted to by the public in whose presence it will be seen. These are issues that can only be judged, case by case, by a committee of sensible, rational, independent-minded people. That is precisely what the Advertising Standards Authority council is.
This is a system of regulation that works. It is admired around the world. If noble Lords ask anyone in advertising or advertising regulation in any other country in the world, they will tell you that the ASA system in the United Kingdom is the gold standard for regulation. We do not get all the things that we do right. We do, however, get most things right. We tamper with it at our peril.
Lord Stevenson of Balmacara (Lab)
My Lords, it has been a very good debate and we all owe a debt of gratitude to the noble Baroness, Lady Deech, for allowing us to expand on the issues that she has raised here. There is tremendous expertise around the Chamber. Who would have thought that we had a gold medallist in complaining sitting in our very midst? How wonderful to hear that. It is good to see the noble Lord, Lord Smith, in fine form, as combative as ever. He is too often absent from our discussions. I wish he would spend more time here. He must tell us some time what was going on in 1962 that led to the ASA being established. It must have been an interesting time, from all that we have heard tonight.
I did feel a little uncomfortable at times because we seem to be re-hearing a private discussion, one perhaps more restricted to the halls of the ASA, and it will be difficult for us to draw very much from some of the points made here because not all of us were involved in the process. I am sure the Minister will agree with me on that. However, in the interstices of that debate there are a number of points worthy of further reflection.
First, it is interesting, as was picked up by the noble Lord, Lord Smith, that most of the points that were raised for debate about what was happening in the field—apart from the political point raised by the noble Baroness—concerned the question of taste and decency. Of course, this is an area that politicians should keep well away from and we are wrong to even think about discussing it. But it makes the point, which I think was picked up by the noble Lord, Lord Clement-Jones, that whoever does this job has to have good connections to the wider world to understand the way that people are thinking about the issues being used by advertisers. They should be able to design a structure of receiving and dealing with complaints that engenders trust in their judgments. That point is so important that we should hold on to it as this goes forward.
I have no doubt that all the people involved in the current systems run by the ASA are doing their very best to make a good job of it and doing it as well as they can. I do not think that any imputation was being made about that. However, as the noble Lord, Lord Palmer of Childs Hill, asked, “Just because it is going well, does that make it right? Do we have to stick with the model we have or can we think of better ones?”. That is what the debate ought to be about. Can we do this better or fairer? There were, for example, questions about costs: “We are getting this for free, so should we not stay with these arrangements?”. However, other regulators, not least the FCA, raise their own funding. We should not be stuck on a particular model just because it happens to be cheaper than anything else.
Another matter that came out strongly in the debate is that the points raised in the Leveson inquiry seem extremely relevant to this debate. They should not be discarded simply because they do not point in the direction of advertising. The structures that were considered and the arrangements under which decisions would be taken—along with the appeals system, the role of Parliament and the role of other regulatory bodies—were all carefully mapped out by Sir Brian Leveson. There are issues here that would read across into the discussions we are having. For example, surely it is relevant that Leveson does not call for a statutory solution, at least not initially. He calls for the industry to self-regulate, but in a way which is perceived to be independent from and not attached to any interest groups, particularly those which fund the bodies that are currently operating.
Where does that leave us? Simply trying to defend the existing arrangements against any other model that might come up is not really where we want to get to. As the noble Baroness, Lady Deech, said, there are wider issues here about self-regulation, which might be helpful in trying to get to the right decision at a time of reconsideration within the wider community about how regulation operates.
I have a list of points which I suggest the Minister should respond to when he gets to the Dispatch Box. First, can we be absolutely certain that the current arrangements satisfy the EU directive in its full sense? Enough has been said to raise a question for me about whether their particularity is sufficient to do it. I am particularly struck by the points made about access to the courts should there be a problem in resolving disputes. Of course there is an independent adjudicator and judicial review, but I do not think that that is what the EU directive meant. I would be grateful if the Minister could respond on that point.
Secondly, it is not at all clear to me that the consumer interest is as well represented as has been argued in some of the discussions that should be taking place around the ASA. We in this Chamber have tried in a number of debates to find ways of improving the engagement of consumers on, for example, the FCA and the CMA. There is no perfect model, but the existing model, as far as it has been explained to us, is not the right one.
Thirdly, there are all sorts of things happening out there in the real world, as was touched on by a number of speakers, where there is currently no apparent regulatory function—good or bad. I think particularly of things such as the dark web but also of some social media. Are we confident that the existing agencies have the capacity and technical expertise to begin to think about those issues? There is no easy option.
In the modern world, given that most organisations which engage in advertising will be large companies based outside the UK—much the same as those which produce television and film materials; and even if they are in the UK, they will have a small presence here but will largely be run from elsewhere—do we have sufficient sanctions and ability to deal with penalties, should there be a need to do so, in time? The current sanctions are largely persuasive and largely reliant on the ability to shame those affected by the judgments into changing their behaviour. I am not saying we necessarily would wish to do this, but should there be need for financial penalties or custodial sentences, is it right for a body set up by industry to have that responsibility? If that is where we are going, do we not need to think more carefully about the statutory elements that might be involved in that? Ofcom obviously is a possibility, and it may be that that is an area we might want to look at.
Lord Smith of Finsbury
Perhaps I may just very briefly point out to the noble Lord that at the ASA we do, if there is a persistent, recalcitrant non-complier, refer them, in the case of a broadcast ad, to Ofcom, and in the case of any other ad, to trading standards. Statutory criminal action can then follow.
Lord Stevenson of Balmacara
I am grateful to the noble Lord for pointing that out. I had not picked that up in the voluminous material which has been circulating. I am grateful to him for reminding me about it, but he makes the point that I was always going to make: the ASA’s ability to operate in that way at the moment is largely based on coregulatory activity not a self-regulatory arrangement. That, again, is a complexity. I am not saying it is wrong; I am just saying that we need to tease out what we want from this and make sure that it aligns properly.
I end by referring to ATVOD, which the noble Lord, Lord Clement-Jones, mentioned, because there has been a change here which I think is significant. The coregulatory structure with Ofcom is to change from December 2015. As many noble Lords will be aware, ATVOD used to do coregulation with Ofcom for TV on demand. According to Ofcom, the change which has been put forward is based on the feeling that Ofcom should do this on its own in future,
“in light of the increasing convergence of linear services and on-demand programme services, the Single Digital Market Review in the EU, and the need for a comprehensive solution to the future of content regulation”.
That seemed to be a way into having a further discussion about whether or not it should go further than simply to ATVOD.
This has been a good debate and there are lots of things here to take forward. I do not think we should get stuck on the particularities of the specific issue raised by the noble Baroness, Lady Deech, but I do think that her experience has given her sufficient vigour and interest to take this to another stage. We should respect that and try to give her a good answer.