My Lords, I rise to speak to a number of amendments in this important group focused on the Government’s proposals in Schedule 17. I will speak first to Amendments 247A, 249ZA, 249ZB, and so on, tabled by my noble friend Lady Walmsley
and me. I am grateful for the support of the noble Lord, Lord Vaizey, too. These arise from the 15th report of the Delegated Powers and Regulatory Reform Committee of 16 December—already referred to by the noble Lord, Lord Moylan—supported by the 9th report of the Constitution Committee of 7 January and its clear recommendation about Schedule 17. Alongside the Secondary Legislation Scrutiny Committee, both committees have expressed strong views as to the increasingly skeletal nature of current government legislation and the increasing tendency not just to avoid detail in primary legislation but to avoid secondary legislation through issuing guidance which does not come before Parliament. The House debated this aspect on the first day of Committee, when noble Lords made clear their views about the skeletal nature of the Bill.
The DPRRC says in paragraph 20:
“The merits of restrictions on food and drink advertising are not within our remit; but the method of implementing the policy is.”
The committee goes on to say, in paragraph 23:
“Legislation, which of its nature affects the legal rights and liabilities of people, should not be capable of being altered by guidance.”
It concludes, in paragraph 26:
“We consider that the power to define a food or drink product that is ‘less healthy’ should be exercised solely through the making of regulations and not also through the making of guidance.”
Explicitly, under paragraph 1 of Schedule 17 amending the Communications Act 2003, new Section 321A(3)(c) provides that
“a food or drink product is ‘less healthy’ if … it falls within a description specified in regulations made by the Secretary of State, and … it is ‘less healthy’ in accordance with the relevant guidance”.
This crucial guidance is the nutrient profiling model, over which Parliament has exercised no scrutiny. It has been in place since 2011 and it can be changed by the Government without any parliamentary debate or input from affected businesses. The NPM is a tool used by Ofcom and the Committee of Advertising Practice to give food and drink products a score, which determines whether products can be advertised during children’s television currently and in non-broadcast media, including print, cinema, online and social media. At the very least, the definition of “less healthy”—giving rise as it does to such severe economic consequences for broadcasters, manufacturers and online media—should be contained in secondary legislation, which, as the DPRRC noted, should normally be introduced by the affirmative procedure. The Constitution Committee entirely endorsed the conclusions of the DPRRC.
Much has changed in the last 10 years. It would be a travesty if such important new provisions having such a major impact on broadcasters and manufacturers were based on out-of-date guidance and not subjected in any way to parliamentary scrutiny. I hope that the Government will accept that secondary legislation is the only legitimate way forward. I also hope that the Minister will not try to satisfy us with the consultation on the NPM that took place in 2018. That has still not seen the light of day and still would not be subject to parliamentary scrutiny, however onerous its new provisions were—for example, they could in future include free sugars in fruit juices and smoothies.
I have also tabled Amendments 248B and 253C. Many in the food industry are concerned that the new definition of food or drink SME introduced by paragraph 1 of Schedule 17 is based purely on employee numbers and could create a competitive disadvantage for UK businesses. As currently drafted, large multinational businesses could be exempt from the restrictions by reason of having less than 250 UK-based employees. This may inadvertently encourage companies to divert manufacturing abroad in order to qualify as an SME. To ensure a level playing field and to protect UK manufacturing, the amendment substitutes an SME definition that also includes a turnover threshold, currently of not more than £36 million, in line with the definition of medium-sized company in Section 465 the Companies Act 2006.
I have also signed and support amendments spoken to variously by the noble Lords, Lord Vaizey and Lord Moylan, which propose: provisions to allow further time for implementation of the provisions of Schedule 17; the sunset clause, which provides the necessary post-legislative scrutiny; explicit exemptions for brand advertising; and ensuring a level playing field for liability for the online platforms. I also support my noble friend Lady Walmsley’s consultation amendment, Amendment 259A.
Above all, I support the amendments spoken to by the noble Lord, Lord Vaizey, in spirit, designed to change the watershed. I sponsored the Private Member’s Bill that banned tobacco advertising 20 years ago, so I am not averse to strong action on advertising where necessary, where the evidence of harm is there. I absolutely support a national obesity strategy and believe we have a serious problem. Campaigns such as the Daily Mile and Eat Them to Defeat Them are the way forward, alongside the sugar tax, targeted interventions and nutrition education. However, I believe that Schedule 17, as it currently stands, is disproportionate in what it seeks to do.
As we have heard, the Government’s own impact assessment of March 2019 confirms the minimal impact on obesity of these measures, but they represent a demonstrable threat to broadcasters and to jobs and investment across the country. The impact assessment estimated that a pre-9 pm TV watershed ban would reduce children’s calorie intake by 1.7 calories a day—it is there in black and white. At the same time, it sets out that children’s exposure to such advertisements has declined by 70% since the rules were tightened in 2008. The latest BARB data suggests that the decline is accelerating far beyond that predicted previously.
So while exposure levels have declined significantly, childhood obesity levels have risen. It seems extraordinary to proceed with that policy as regards television, when the evidence is that it will do little to address obesity. Given that the most likely response of the industry will be to move to alternative in-store price promotions, this is not surprising. These are not subject to any government restrictions and this was what much of the food and drink sector told the strategy consultants OC&C it would do in the event of a pre-9 pm ban.
The Obesity Health Alliance states that
“evidence shows children who already have a weight classed as overweight or obese eat more in response to advertising.”
To put this in context, overweight and obese boys consume between 146 and 505 excess calories per day, while the figures are 157 to 291 for girls. Using the Government’s own numbers and methodology, overweight children would still lose just 2.63 calories per day. Such a small reduction will make no meaningful difference to health outcomes.
The impact assessment predicts a £171 million loss to broadcasters in advertising revenue, and it is here that I have my most fundamental concerns: the proposals will have a major detrimental impact on the funding of public service broadcasters and news media. That is the key problem. The Government, in their consultations, relied heavily on the idea that broadcasters would be able to mitigate most of the impact of the ban. I have explored that proposition carefully and it is not the case. Broadcasters cannot easily shift existing HFSS advertising from pre to post-9 pm slots. Non-HFSS advertisers will resist being moved out of post-9 pm airtime since this would reduce the impact of campaigns and make them relatively more expensive.
Broadcasters make the strong point that they do not have a queue of advertisers who currently have no TV space waiting patiently in the wings for slots to become available, nor brands with other products unable to get enough space. ITV has experienced four years of successive decline in TV advertising revenue, so the pre-9 pm ban will cause great damage to commercial public service broadcasting, which is already under pressure. In the circumstances, the compromise watershed suggestion put forward by the noble Lord, Lord Vaizey, and supported by the commercial public service broadcasters, to cover the viewing times for children seems eminently reasonable. Again, I hope the Government will reconsider.
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