§ 8.5 p.m.
§ The Minister of State, Department of Prices and Consumer Protection (Mr. John Fraser)
I beg to move,That this House takes note of Commission Document No. R/511/78 on Misleading and Unfair Advertising.
§ Mr. Deputy Speaker (Sir Myer Galpern)
I have to announce that Mr. Speaker has selected the amendment standing in the names of Opposition Members.
§ Mr. Fraser
As will be clear from my speech, I have no difficulty in accepting the Opposition amendment. It is the form of the present draft directive which concerns me, not its objective of seeking protection for the consumer against misleading advertising. I am less sure about certain so-called unfair advertising but I shall come to that later.
The principal theme underlying the directive—that the advertising process can give full value to the public only if it is honest and truthful—is unexceptionable. In April 1975, the Council of Ministers adopted a Community programme which contains a very sensible basic principle for consumer protection and information, and set up various priorities for the general well-being of the consumer.
Advertising was accepted as one of these priority areas and the Commission was called upon by Ministers to submit appropriate proposals to protect the consumer against false and misleading advertising. In putting forward these proposals the Commission is not acting completely on its own initiative.
However, the draft directive in its present form seems to have two main flaws. There are matters of detail which will be discussed in working parties and by Ministers, but at this stage—before it goes to discussion and before there is any report from the European Parliament—it is right to concentrate on the main flaws.
Firstly, the directive is too limited in its consumer protection objectives and too ambitious about the way in which they should be enforced. It wants all advertising to be honest and truthful. We all agree with that. In the United Kingdom, this 706 includes not only the Government, but consumers, the media and the advertising industry itself. All these interests agree that it is important to consumers that advertisements should be decent and tasteful, as well as truthful and honest. The advertising industry pays particular attention to trying to ensure that its advertisements satisfy all four criteria. Since 1962, when the Advertising Standards Authority was first created, and probably long before then, this has been done by various self-denying ordinances.
The Commission has ignored—and rightly so—the important questions of taste and decency. Matters of taste and decency are matters for individual nations. That which is acceptable in Amsterdam may be quite unacceptable in Angmering-on-Sea. These are matters which differ from country to country. It is quite right that there should be national domestic judgments on taste and decency.
One cannot ignore the fact that if we have control by a voluntary system on matters of taste and decency that control can come about only as part of the voluntary system—the ASA code. Once one tries to intervene in those areas, one puts the code and the system in jeopardy.
Therefore, I make no complaint that the Commission has not tried to deal with these matters. It has concentrated on truthfulness and honesty, so much so that adoption of the directive in its present form would mean that persons affected by advertising would be given a clearly defined right to seek court action. This is where we start to differ from the Commission. People would be given the right to seek court action against an advertiser if his advertisement was misleading or unfair. If the courts found against the advertiser, they would be empowered to require publication of a corrective statement, as well as to impose other sanctions. The directive not only requires the adoption of laws against misleading and unfair advertising to enable court action to be taken; it also outlines in some detail the procedures whereby the laws are to be put into effect.
I turn to the Thirty-third Report of the Select Committee on European Legislation which recommended this draft directive for debate and rightly asked the House to pay attention to three aspects of the procedure: first, the requirement 707 that associations as well as individuals should be allowed to institute proceedings; secondly, the provision for the granting of injunctions should be without proof of fault; thirdly, the responsibility being laid upon the court to settle the terms of the corrective statement for publication. These are all important.
I question whether a rigid legal procedure enforced by the courts is the most effective method of controlling advertising. It is certainly not the most effective way of dealing with the delicate issues of taste and morals, to which I referred, and which are embraced in the voluntary code.
I agree with the critics of the present form of the directive who say that the process of law by itself is too blunt an instrument for dealing effectively with false and misleading advertising. The CBI and the Advertising Association, in particular, say that advertising control should be based on an efficient mixture of statutory and voluntary control. I agree with that. I think that those who framed the draft directive may have failed to appreciate the strengths of the system of advertising control that we already have.
The House will know that the present system is that advertising has long been regulated predominantly by a process of self-regulation, either by the Advertising Standards Authority through its code of practice or through codes approved by the statutory Independent Broadcasting Authority. This predominantly self-regulatory process is backed up by about 60 statutes each covering aspects of advertising, though the statute law is not foremost. The law is used to provide the necessary back-up if the administrative control should fail to be completely effective.
I am not saying that self-regulation alone is the most effective way of controlling advertising but the strength of self-regulation lies not in its comparative independence from the courts but in the codes of practice which underlie it. Codes of practice, especially in this area, are better than statute law as the primary regulators of misleading or unfair advertising for a number of reasons.
Perhaps first and foremost they can be applied in spirit as well as in letter. I suspect that the moment that one tried 708 to translate a code of practice formulated by the industry into the letter of a primary statute or statutory instrument—the moment the industry was asked to concentrate on, or rather had no choice but to be bound only by, the letter of the law—I am sure that there would be a heyday for copy writers. They would look at the wording of the statutory control and nudge one another and say "We can soon find a way around that."
Self-regulation, a code which is agreed by the industry, an obligation to follow the spirit as well as the letter of the matter, seems to me much more satisfactory. Apart from the advantage at the moment that one is bound by the spirit as well as by the letter, objective interpretation of the law requires it to be obeyed according to the letter and therefore gives considerable scope for avoidance. But codes can embrace subjective questions of taste and morals—even questions of social responsibility in advertising—which are not easily definable in statutes but which are as important for consumer protection as being misleading or unfair. More importantly, codes of practice can be more frequently updated than the law to take account of continuous change in marketing practices and social acceptability of advertisements.
For all these reasons, I think that the better control of advertising than the strict legal remedy pursued through the courts would be to continue to develop codes of practice and where necessary to strengthen this form of administrative control within an appropriate statutorily-based regulatory framework. I agree with the Commission that self-regulation, of itself, is an insufficient control and needs to be supported by statutory control, but I do not think that statutory control ought to oust the very valuable system we have developed over a number of years.
I argue that any development of the appropriate form of statutory control to meet the Commission's objects would best be left to member States to develop in accordance with their existing legal traditions and institutional arrangements. I do not think that this is an unreasonable principle to press for in this context. If it is successfully pressed, the three specific points mentioned in the Thirty-third Report to which I have referred would of course be subsumed.
709 Such an approach would deal with the other issues raised both in the Thirty-third Report and in the report on the directive from the other place, which dealt with the merits of the matter as well as recommending it for debate, namely, that certain aspects of the court procedures proposed in the draft directive would represent significant innovations in United Kingdom law and practice. I have already mentioned one, the class action, which is at present virtually unknown in this branch of English law, and also the provision for making court orders without proof of fault.
In its present form, the directive would also require the burden of proof in relation to the correctness of a factual claim to be placed on the advertiser, instead of an objector, and might require the creation of a new criminal offence. Whatever their wider merits, these elements in the present directive have important implications for United Kingdom law and practice which should not be imported upon the back of a directive which is narrowly concerned with advertising.
It therefore seems right to remove from the directive all these features, and in particular to alter the present text of the directive to permit advertising to be regulated by appropriate authorities, such as the ASA or the Director-General of Fair Trading, in addition to the courts. I want the useful work of these authorities in advertising to continue. I share the view of the Select Committee and the Scrutiny Committee in another place that two systems of regulation—one the voluntary system and the other recourse to the courts—could not in practice co-exist and that in their present form the Commission's proposals would seriously undermine the administrative control systems and would certainly not work as well.
The other main claim which the Commission has made for this directive is that misleading advertising and unfair advertising are improper ways of influencing the market process and that consumers and competitors and the public in general must be protected from them. The Commission has claimed that the differing degree of legal protection against misleading and unfair advertising in member States hinders its objective of promoting harmonious development of economic activities throughout the EEC.
710 I do not know that there is need, in the context of an advertising directive, to harmonise laws in order to secure the free flow of goods and services across frontiers. I understand that about 90 per cent. of advertising is directed to particular countries or even to particular regions within countries. It is very unusual for advertising campaigns to be developed with the prime object of transcending frontiers, because ethnic differences, differences in taste and indeed language and differences in the way in which advertising messages might be received would differ among the various countries and within the various regions of Europe. There might be a little cross-frontier advertising, such as takes place in Ireland, but I think that I am correct in saying that this is very limited and to an extent which is peripheral to the main objects of the directive.
For this reason, I can understand the wish of both Scrutiny Committees to challenge the legal basis of the directive. It is hard to understand why legal differences in member States about advertising should directly affect the working of the Common Market. I also think that the concept of "unfair" advertising, which is introduced in the directive, may have more to do with protecting advertisers from one another than with protecting consumers from the advertisers. These features in particular have attracted much criticism of the directive in its present form.
There are thus several grounds on which the directive, in its present form, can be criticised. However—perhaps I should come back to the point that I made at the beginning—the Commission initially acted upon a proposal of Ministers and did not do this entirely on its own initiative. But I believe that, in the discussions which have taken place, and there are many more to take place, the Commission recognised many of the difficulties.
I was very encouraged to read in the European Parliament's "Rainbow Hansard" for 1st October that the Commission's President, Roy Jenkins, had reiterated that the Commission does not believe in harmonisation for harmonisation's sake; that harmonisation proposals must be justified by promoting trade within the Community and strengthening foundations for economic and monetary 711 union—not everybody would agree with that; and that the Commission proposes to concentrate on areas of real need.
He added something which is very important in the context of the advertising directive—that the Commissionshould not seek to include unnecessary detailbut shouldrather … lay down the primary objectives to be obtained and leave the detailed implementation to member States.He also said:The Commission would be very willing to consider taking action to amend or withdraw proposals, taking into account these guidelines.The House will understand from what I have said that the proper application of these welcome principles will meet all my objections to the present draft directive. I shall continue to press for their application in all future considerations of this directive, in the confident belief that the Commission will take careful note of the wise words of its President in future negotiations and take, I hope, even more note of the wise words which will be uttered in this debate.
§ 8.20 p.m.
§ Mr. Giles Shaw (Pudsey)
I beg to move, to leave out from 'House' to the end of the Question and to add instead thereof:'in taking note of Commission Document No. R/511/78 on Misleading and Unfair Advertising, considers that in its present form it is not acceptable to the United Kingdom, as it seriously undermines the existing system of self-regulation.'.This is the second time this week that we have discussed the harmonisation of consumer protection policies in the Community. The Minister of State's words will give great encouragement to those of us who believe that with consumer protection, possibly above all else, there is clearly room for agreement upon aims and general objectives while we reserve to ourselves detailed control of the way in which those objectives are met.
With misleading advertising there can be no doubt that the system to which the Minister has referred has been designed to protect the United Kingdom consumer at little cost and with some great effectiveness. We should not lightly see it overthrown in the name of a general objective to harmonise protection against misleading or unfair advertising.
712 That in no way prevents us from speaking in the debate as profound proponents of the Common Market and what it seeks to do. But in advertising there is little evidence that this is a facet of trading or marketing which is a serious embarrassment to the individual frontiers which occasionally it might cross. As the Minister of State reminded us, Ulster Television beams into the territory usually served by Telefis Eireann. I am not entirely persuaded that that has been an embarrassment to either Government. No doubt with the French or Walloon-speaking peoples of Belgium the internal divisions are far greater than could be provided by any national frontier in terms of advertising control.
So we must draw one conclusion from the debate. It is that for the second time within five days the House of Commons is arguing that in consumer protection policy it is vital to try to agree general aims and objectives which none of us would probably dispute but to allow the means by which those objectives are achieved to be primarily matters for individual national Parliaments, bearing in mind the separate national systems which exist.
I make one caveat on that, because I appreciate that it is a bold statement. It is that there exists upon all members of the Community who are interested in increasing the standards of consumer protection the duty to see that there is a threshold of acceptability for consumer protection throughout the Community. There may be markets where the use of misleading or unfair advertising practices is so blatant and widespread a disservice to the community that international measures must be taken. I think the Minister of State recognises, as we on the Opposition side recognise, that in this country that is not the case and that systems have been developed over time which have stood the consumer in good stead.
It is right for me to remind the House of my interest in these matters and to declare that I am a consultant to an advertising agency and have had substantial experience in a manufacturing company which is a substantial advertiser. I do not regard that necessarily as being a disqualification but perhaps rather as some additional qualification for what I am about to say.
713 In welcoming our amendment, the Minister of State has once again demonstrated that there can be a substantial degree of unanimity on this matter. We are concerned not with the general objective of the Community in seeking to arrive at a level of protection which is consistent throughout the marketing area but with the way in which it is proposed to do that.
We agree that the consumer should be protected from misleading and unfair advertising. But we do not agree, and the Government have clearly stated that they, too, do not agree, with the means proposed in the directive. It clearly involves the introduction under article 5 of a complex legal structure even where member States have, as is permitted under article 7, a self-regulatory system.
Why do we so strongly prefer a self-regulatory system? That is the type to which the Minister has given his blessing and to which we on the Opposition side subscribe. It is not that we are opposed to the use of any law or any legal sanction governing the activities of advertisers or their agents, or the effects of advertising upon our community—far from it. There is in this country a substantial body of statutes which govern and protect the consumer at the point of sale. Advertising is covered by many of those statutes whether in the Trade Descriptions Act, the Fair Trading Act, the Consumer Credit Act, or the Sale of Goods Act and many others. Advertising is seen to be a part of the selling process which should not impinge unfairly or in an agressive or misleading manner upon the consumer.
Moreover, we have a statutory system to control advertising on the most powerful medium, namely, television. If to that we add independent local radio, we can say without peradventure that the Independent Broadcasting Authority is obliged by statute to control, and is answerable to this House for the way in which it does it, advertising on both those important media.
That system has been in operation recently. The Select Committee on Nationalised Industries has only just completed a survey of the Independent Broadcasting Authority, in which it took great pains to examine how the authority meets its legal obligations to control and vet advertising on television and radio. I com- 714 mend the Committee's Tenth Report to hon. Members. It will provide ample evidence and ample opportunity for discussion about the way in which statutory control of advertising is undertaken by the IBA.
The Committee's findings suggested that the system works well. It involves the pre-vetting of advertisements in the early stage of typescript or at the filming stage before the advertisements are transmitted over the television network. It is interesting, too, that the IBA's code of practice, which is the fundamental instrument governing the control of advertising, is largely based upon a code of practice which the Advertising Standards Authority, the voluntary agency, has issued in relation to other media.
The IBA is strengthened in its statutory provision by being able to deal with sensitive matters such as the advertising of alcoholic drinks, of medical products or of products that children buy, by calling in additional medical experts and differing processes for handling advertisements for those markets.
In recent years the Advertising Standards Authority has provided the main body of the code of advertising practice. The IBA has largely based its activities upon what the authority recommends for the media for which it it responsible. While television is a significant absorber of advertising revenue, it is not the largest advertising medium in terms of the number of advertisements published. That still remains the printed medium. Hon. Members must remember that in printed advertising the largest sector in terms of the number of advertisements is still the classified advertising sector where so many of our constituents, and possibly hon. Members, advertise articles for sale and also, possibly, recognise that they may be infringing the code of advertising practice.
It is in classified advertising that consumer complaints frequently arise. This is where the individual citizen has the right to decide how he shall word his advertisements, subject to what the newspaper proprietor—if he happens to be in membership and observes the code of advertising practice—agrees to accept.
§ Mr. Clement Freud (Isle of Ely)
Will the hon. Gentleman accept that the code of practice tends always to deal with 715 quality and even good taste, but never with the immorality of advertising? I have in mind advertisements selling products which make deprived children feel that unless they have a certain product which their parents cannot afford they are somehow left out in the cold.
§ Mr. Shaw
I concede to the hon. Gentleman that such a matter cannot easily be decided by the acceptance of an advertisement. What the Advertising Standards Authority, or its member and associated operators, cannot do is to determine how the advertisement will be received in a variation of homes. If an advertisement is accepted for television use, it is accepted for all television use. It cannot be restricted to those homes which are, for example, above the average income level. It is a nonsense to suggest that the Advertising Standards Authority should seek to deal with those advertisements which are likely to have a disproportionately harrowing effect upon those homes which have 15 children and not the means to support them.
What the authority and what the media have to do is to ensure—within the terms of the code—that the advertising is decent, honest and truthful, and that the spirit of the code is observed, too. The hon. Member will, I am sure equally recognise that where the advertisement appears and when it appears, and in the context of what programming it appears, are matters not for the authority but for the media owner and the way in which he handles the advertising.
§ Mr. Tim Rathbone (Lewes)
I am sure my hon. Friend would agree with the findings of a report from the Office of Fair Trading published this morning. I shall quote two sentences from it which touch on the point raised by the hon. Member for Isle of Ely (Mr. Freud). The report says:The notable resultthis was the result of some of the research which had been mounted—was that reactions to advertisements were remarkably consistent as between different types of respondent and between different types of advertisement. Responses did not show that any particular group—eg the poor, the young, the old or the less well-educated—were any more vulnerable to advertising than others.716 That is, perhaps, pertinent.
§ Mr. Shaw
I am grateful to my hon. Friend for raising that point. The report issued today, to which I shall shortly refer, gives many answers to some of the questions raised by hon. Members when discussing advertising matters.
I return to the code because it is the basis of the self-regulatory system which we have in this country and it is the code which we regard as being so important. In the 14th report of the Advertising Standards Authority, the chairman of that authority, Lord Thomson of Monifieth, said in discussing this European directive:What is at issue is the balance to be struck in the general public interest between self-regulation and state regulation. There are bureaucrats in Brussels as well as ideologists at home who would like to tilt the balance decisively in the direction of statutory enforcement … For self-regulation to sustain its case it must not only be capable of striking a fair balance between the advertiser and the public. It must also be seen to do so.I suggest that it is very much that degree of conviction which is, in a sense, on trial here tonight. The Minister has thrown his weight—I welcome this—in favour of the self-regulatory system and the voluntary code system, embodied in the Advertising Standards Authority. We as representatives of our constituents, and those of us who understand the anxieties of those affected by misleading advertising or unfair sales practices, must take a view whether the system of voluntary codes and practices should be endorsed.
If the House does nothing else tonight, it must take its stand and decide whether it is in favour of this voluntary system being proceeded with. Both the Government and Opposition take the view that this is the right system. That system is crucial to the way in which we examine this directive and the House must say whether it believes that this is the correct system to pursue.
In the draft report that was put before the European Parliament by the Consumer Protection Committee, the rapporteur, Lord Kennet, spoke in favour of the system. He said:The British self-regulatory system, although it has certain shortcomings, has so far produced satisfactory results. This is in fact recognised by the British consumer associations.717 Broadly, I believe that the consumer associations would agree that the self-regulatory system, subject to certain shortcomings, is a better system than one based purely on complex statute law.
The Select Committee in another place was even sharper in its conclusions. In its 38th Report it drew the following conclusion:The Committee, though they recognise that there are loopholes in the United Kingdom's self-regulatory system, are of the opinion that, in general, it is efficient and economical and that it would be unwise to set up alongside it the legal system called for by the Directive which might supplant the self-regulatory system, and not work so well.That is the fundamental issue before us. It relates to whether the proposals in the European directive, which require a system of law being set up under article 5, alongside a self-regulatory system allowed under article 7, are a sensible way in which to proceed. It is the overwhelming view of the bodies which have examined this matter that this would not be in the best interests of consumers in the United Kingdom.
It is only fair to add that the National Consumer Council is critical of a voluntary control system. It has issued a pamphlet entitled "Advertising—legislate or persuade?". Having considered the voluntary system of codes which operates here, the council concludes:On the basis of factual surveys we have concluded that the main control system—thevoluntary Advertising Standards Authority administered British Code of Advertising Practice —has not provided adequate control against misleading or unfair advertising.That conclusion is endorsed by findings undertaken by the European Union of Consumer Groups. That body examined a substantial number of advertisements in the British press—a total of more than 3,000 advertisements—and concluded that about 14 per cent. of those advertisements did not fully comply with the British code of advertising practice. It felt that a total of 7 per cent. were seriously at variance with the code. We must accept that the evidence produced by that body constitutes a critical comment on the way in which the code operates.
However, that is not the only piece of research that has been conducted. Today we have seen the publication of the report of the Office of Fair Trading into the 718 workings of the Advertising Standards Authority code of practice. The House will want to have an opportunity to examine that important report at its leisure. It endorses the acceptability of the code and the way in which the consumer is protected by it. Let me quote from one of its findings. As part of its review, the Office of Fair Tradingcommissioned research to gauge the extent to which advertisements conform to the code. The results indicate that the vast majority (93 per cent.) of advertisements in newspapers and magazines conform to the code.That is an astonishing statistic, bearing in mind the vast numbers of different advertisements to different sectors of the market which are printed each day and each week throughout the length and breadth of the United Kingdom. The study conducted by the Office of Fair Trading does more than merely provide the facts on which it bases its conclusions. Now, through its Director General, Mr. Gordon Borrie, it firmly believes that the self-regulatory system is valuable and should be built upon. In his summing up to the report, the Director General of Fair Trading has said:I hope this survey will help to put matters into perspective. Our research has produced no evidence to suggest that the public are being misled or confused by advertising on a wide scale. Indeed, it suggests strongly that, with a general tightening up and the limited statutory backing proposed, the self-regulatory system should provide adequate protection for consumers.That is the view of the Director General of Fair Trading. I think that it endorses the view of this amendment, which I am so glad the Government have accepted, which is that the self-regulatory system, if it is tightened up where it is shown to be weak, and if it is given, perhaps, a statutory background in which it can work, will provide a complete answer to those who believe that we should improve our standards of consumer protection against unfair or misleading advertising.
Where should the statutory element come in? We are clearly aware that the voluntary code—this applies to all voluntary systems—depends for its success upon its acceptance by all those who are involved in the trade or service industries. In the case of the Advertising Standards Authority, its writ will run only to those who willingly subscribe to both the spirit and letter of its code. It is obvious that 719 there are some instances where the writ does not reach. It does not reach, for example, the handbill that is issued in the street. It does not reach the fly-by-night trader. It does not, perhaps, effectively reach the direct mailer who can put through the letter box advertisements which do not pass through the normal vetting which a media authority can apply to it, and it may not reach the unscrupulous who refuses to abide by something which does not have statutory backing.
Therefore, I think it is probably right that the Director General should conclude, as I suspect the advertising industry itself should conclude, that if the self-regulatory body is to be given another lease of life it must recognise that there are certain areas where it requires strengthening. I suspect that it will readily agree that it is infinitely preferable for some additional power to be given to, let us say, the Office of Fair Trading, to provide a legal back-up to the voluntary system, than to endorse the legal system proposed under this EEC directive.
This again is one of the burdens of the Opposition amendment. We see, very strongly, the self-regulatory body as being the main base upon which advertising control should rest. But we recognise that there may be circumstances in which it is shown to be weak. This, clearly, is the view of the National Consumer Council. It is now the view of the Director General of Fair Trading. I have reason to believe that the advertising interests themselves recognise that some additional power might help their code of practice and their self-regulatory system to improve and to be more effective to the consumer.
What should that be? That is a matter for discussion. As I understand it, the Department of Prices and Consumer Protection, from which we have here tonight the Minister of State, is prepared to enter into discussions about the kind of progress that might be made to see whether some addition to the power of the Director General of Fair Trading would be acceptable.
Let me make it clear that the Opposition have always held the view that the Office of Fair Trading is the right authority to conduct investigations or to use 720 statute law in the area of consumer protection. We much prefer that that should be the authority to use statute law rather than, for example, consider making the Advertising Standards Authority a statutory body, or to include statute law of a quite different and unique kind, as is proposed by this directive.
We think that there is room for discussion. We think that there is room, perhaps, for back-up legal powers under the restraint and desist orders which the Office of Fair Trading can issue under, I believe, both part II and part III of the Act, which will provide that abuses of the code should be regarded as an offence and for which restraint orders can be issued in matters of trading.
The House must recognise that what is proposed in the directive is not acceptable. That is not because we do not understand what the EEC is after—that we understand—but because in the United Kingdom we have a system that has been shown to work well. It has been shown by a report as recently as today to work extremely well in covering virtually 93 per cent. of the advertisements available in the printed medium. We have statutory control of the advertising content of both radio and television.
The House should be in no doubt that what we seek by the amendment is an understanding that the self-regulatory system, possibly with some improvement and possibly with some further backup powers carried out by the Office of Fair Trading, must remain the central method of dealing with the problem of misleading and unfair advertising.
I quote from the Law Society, which examined the proposals of the EEC directive purely from the legal point of view. It stated:It may be that in practice the immediate objective is to require those member States whose laws are substantially more lax than those in the rest of the Community to bring them up to a certain minimum Community standard on the basis that this existing laxity is more of a threat to the functioning of the market than any hypothetical future excess of regulatory zeal by individual member States.It has caught the mood of the directive nicely.
It may be necessary in certain markets of the Community to introduce a legislative framework for advertising control to prevent consumers from being exploited 721 by misleading or unfair advertising practices. It cannot be said that that is the position in the United Kingdom market. We have a proven system that is financed by the industry. It is adopted by the majority of those who are involved in the expression of advertisements through the media. We recognise that there may not be 100 per cent. coverage but the principle and spirit that it embodies allow the consumer a far greater degree of protection than anything proposed under articles 5 or 7 of the directive.
Article 5 asks that we produce such laws as willprovide persons affected by misleading or unfair advertising, as well as associations with legitimate interest … with quick effective and inexpensive facilities for initiating appropriate legal proceedings against misleading and unfair advertising.The Minister of State is a solicitor. I doubt whether he can say that any legal process in his knowledge has been quick —it may have been effective or inexpensive—in dealing with those matters. We know that the body of law suggested in these proposals cannot be quick. It cannot be cheap and it is likely that it will not be effective. Therefore, the amendment has been moved in the spirit that the self-regulatory system, improved and, if necessary, after discussion with the interested parties, backed by the Office of Fair Trading, is the best possible security that the British consumer can have that he will not be deterred by misleading or unfair advertising.
§ 8.49 p.m.
§ Mr. Nigel Spearing (Newham, South)
As is clear from the Order Paper, my hon. Friends and I tabled an amendment. We understand why it has not been selected. It statesbut cannot accept proposals which might involve the creation of new criminal offences and would undermine the authority of existing self-regulator bodies administering voluntary codes of pracice.We support the Opposition amendment. I am glad that the Government have accepted it although I must stress immediately that I do not think that my hon. Friends would join in the laudatory plaudits of the advertising industry that we have heard from the hon. Member for Pudsey (Mr. Shaw).
It has been quite a week for the EEC both in the House and outside. Events started with the Prime Minister having 722 a go at the common agricultural policy. This is the second time that the official Opposition have tabled amendments to EEC "take note" motions. I am pleased to see that intelligent and progressive step being taken. We have also had this week Lord Thomson of Monifieth, admittedly wearing his other hat, being called in aid to help an amendment against the Community. It has been quite a week.
I congratulate the Minister on his comprehensive critique of this complex document and for the annex to his memorandum which shows the large number of bodies consulted on this matter by the Government.
The whole House will recognise that this sort of stupid harmonisation shows the municipal role of the House in no uncertain way. This is a sensitive national affair about which there are wide views. As the memorandum says, there are 60 existing statutes which have a bearing on this sensitive matter. The whole position is summed up by the evidence of the Mail Order Publishers' Authority, which said in its memorandum to a Sub-Committee of another place:The draft directive on misleading advertising, if implemented, would play havoc with established British law, seriously undermine the self-regulatory system, give the aggrieved consumer no benefit that he does not already enjoy, and create intolerable uncertainties for business (and consumer) as to the scope and application of the law.Most of us agree that we want to do it our way.
The hon. Member for Pudsey was too kind to the industry, though he declared his past interest in it. Many of us do not recognise the happy picture which he painted. It seems to many of us that display advertising, as opposed to classified advertising which has an important part to play in providing information, all too often stokes up the less happy feelings of mankind and appeals to envy. acquisitive instincts and snobbishness—Wear this, buy that, and you will be like the people in the advertisements.I am reminded of Dr. Johnson, who said:Depend upon it, Sir, promise is the soul of an advertisement.Often the promise is made of commodities that are not susceptible to scientific test. People experience only disappointment. Such advertising builds 723 up expectations which are all too rarely fulfilled. If we could use this debate as a moral, we are seeing this week the expectations built up by the advertising techniques for the whole EEC outfit beginning to reach the stage of disappointment. Perhaps it is therefore appropriate that we are discussing advertising. The whole EEC adventure was built up with a package of expectations which was not justified by the contents. Only some hon. Members had the political sagacity to see what was inside the package and to read the small print which was not read by other hon. Members and was obscured from the general population.
§ Mr. Tim Smith (Ashfield)
What evidence has the hon. Gentleman that if we had not been given that package things would not be a lot worse than they are?
§ Mr. Spearing
I am referring not to any social or economic position in the country as a whole but to the way in which we are entangled in legislation made from another place across the sea. But for the amendment and the Government view of it, we would find ourselves enmeshed in the tangle of legislation which the hon. Member for Pudsey described so graphically.
The possible reason for this essay in harmonisation stems perhaps from a completely different attitude to law. I am no lawyer. I have no doubt that others will confirm that the attitude and assumptions of law and law-making in the countries across the English Channel have a different basis, history and expectation from ours. We all agree that on this side of the channel the combination of voluntary practice, possibly with some statutory framework rather than statutory detail, is best calculated to strike the balance between the interests of the consumer and those of the legitimate advertiser and business man.
I am not qualified to say how that should occur. I am glad that the hon. Member for Pudsey believes that there should be a development in that area. I believe that there should be such developments for the reasons that I have outlined.
I recall the worst type of advertisement which traded upon people's fear. It involved a well-known beverage which was taken at night and which was heavily 724 advertised. There was a strip cartoon associated with these advertisements. It was a wicked and evil cartoon which showed an elderly lady—a grandma—who lived with her family. The cartoon showed the harassed daughter-in-law saying "You know, grandma, I shall have to think about asking you to go." This implied that the daughter-in-law was going to find an old people's home for grandma.
The cartoon then showed grandma drinking the marvellous beverage. Then the daughter-in-law said "Grandma, I do not know what we would do without you." I hope that we can get rid of that type of appeal to fear by either voluntary methods or some type of gentle but effective statutory backing.
§ Mr. Edward Lyons (Bradford, West)
Is not the appeal to fear outlawed by this draft directive? Is not that one of thefew good things about it?
§ Mr. Spearing
I was about to deal with that matter. I was about to quote from the Government's memorandum in which, under the heading "Policy Implications" paragraph 5(ii) states:the definition of unfair advertising includes any advertisement which appeals to sentiments of fear".If one uses the analogy of the night beverage advertisement, hon. Members might say "Hear, hear" to that. But perhaps they have not seen the next line of the memorandum which states:This could reduce the impact of Government advertising which has been successful through making justifiable appeals to fear in the fields of fire protection, road safety and vandalism.I believe that in certain instances there might be a right appeal to fear in advertising. The seat belt campaign, which we arc to discuss later in the Session, is a correct use of that appeal.
Hon. Members of a particular age will remember the argument that arose out of the advertising of what was known as the "weedy widow". That created a great deal of controversy. Perhaps it was a justified advertisement and it was paid for by the Government. Perhaps that was a proper use of fear.
Rather than having these detailed, Continental-type definitions, we in Britain should move towards something which 725 the right hon. Member for Down, South (Mr. Powell) might be able to help us with—the use of Greek words. I suspect that the Greeks would have different words for those different emotions. He may be able to tell us. There is bad pride and good pride, as he pointed out in the debate the other day, and I suspect that there is also good fear and bad fear. I am not against the right use of fear in the right sort of advertisement for proper ends, but I am sure that we would deplore its use in other ways.
§ Mr. Edward Lyons
I know that the explanatory memorandum provided by the Minister suggests that advertising by the Government based on fear—for example, to prevent accidents—might be caught by the draft directive, but is my hon. Friend sure that he is right to accept what the Minister has said in the explanatory memorandum? As I understand the draft directive, it is designed to improve trading practices and relations within the EEC and therefore—I am open to correction—it will not catch Government noncommercial advertising. The Government can continue to advertise on the basis of fear, in the interests of all of us.
§ Mr. Spearing
I think that this is for the Minister to say. I certainly would not presume to answer for him. He can deal with it, if he wishes, when he replies. But if my hon. and learned Friend is advocating the merits of this document —which I rather fear he may be, from his comments—I would repudiate any such thing. I may be doing him an injustice—
§ Mr. Spearing
I am glad to hear that I am, because I have suggested that the way to tackle the problem is quite different.
Paragraph 4(iv) of the explanatory memorandum points out thatthe proposals might necessitate the creation of new criminal offences in the United Kingdom".It is not definitive but at least there is a suggestion that it might. We were told that going into the EEC would not involve anything of that sort. Now we are told that something of this sort is envisaged.
726 I suggest that the House should pursue the line of better and perhaps more effective voluntary arrangements in the fields that I have mentioned, particularly in those which are liable to great social dissatisfactions which can never properly be filled by material purchases. People cannot get everything with money, although advertisers suggest that they can. I have suggested the line that we should pursue together with the statutory framework that the hon. Member for Pudsey mentioned.
My only quarrel with what my hon. Friend the Minister said is that he was talking about modifications. I would say to him—and I hope many other hon. Members will as well--that we do not want modifications. We want him and the EEC to drop it.
§ 9.3 p.m.
§ Mr. Hugh Dykes (Harrow, East)
I hope, Mr. Deputy Speaker, that you will agree that I am not exaggerating if I use the adjective "amazing" for this debate. It is truly an amazing debate. Although the Government and the Opposition are apparently at one in their attitudes to the draft directive, and although a very skilfully drafted amendment has already been accepted by the Minister, it is extraordinary that the speeches have been getting longer in adding to the arguments which have already been put so well by hon. Members on each side for objecting to most of the main parameters of the directive.
The debate is not only amazing from that point of view. It is also perhaps amazing and encouraging in the sense of the development of scrutiny in this House. There has long been a sinister myth—perpetrated by hon. Members such as the hon. Member for Newham, South (Mr. Spearing), and put around in this House—that those who are very enthusiastic about our membership of the EEC are implacably opposed to any effective scrutiny of EEC matters in this House.
§ Mr. Dykes
I prefer not to give way at the moment because I am anxious not to be too long, Mr. Deputy Speaker. I think that what I am about to say to the hon. Gentleman will assuage his anxiety that I am being unfair. I am sure that he will agree that there are some people, at any rate, who say that it is only on one side, on the part of those with a particular view about the Community, that a demand exists in this House for vigorous scrutiny—
§ Mr. Spearing
I am very grateful to the hon. Gentleman for giving way. I need only to refer to the recommendations of the Procedure Committee which are now before the House. If he will look at the names of the members of that Committee, he will find that the majority of them do not share my views on the EEC.
§ Mr. Dykes
I was about to say the same thing as a result of the hon. Gentleman looking anxious about my earlier remarks.
At all events, there is a recognition in the House of a difference of attitude towards these matters. Yet it is extremely agreeable for those who feel that there is a legitimate role for EEC legislation, which is the umbrella for the national legislation of all the member States, in the context of what national Parliaments and Governments do to defend legitimate national interests in the Community's councils that effective scrutiny should take place in all Parliaments, not just in this one.
In this context the United Kingdom and Denmark lead the field. I am glad that, through the sensible pragmatic approach of this House, in the face of hon. Members, such as the hon. Member for Newham, South, saying that it could not be done, we have built up the practice of having amendments. Such amendments are expressions of opinion, of course, without substantive force, as we all acknowledge, but they lead directly to a prise de position by Governments in the Brussels councils and, I hope, a solemn and firm adherence by those Governments, of whatever complexion 728 and colour—I see the right hon. Member for Down, South (Mr. Powell) agrees—remaining in that position. It is up to any Government in that context not to be so rash as to agree to anything here which they know they cannot negotiate when they get back to the Brussels negotiating table.
I know that the Minister, being a sagacious person and having presented his argument skilfully, would not dream of making such a rash promise. 1 hat has been shown by his acceptance of the amendment and the indication that the Commission is extremely flexible on the objections beginning to emanate not only from this country but from some of the other member States. It is not true that we have a monopoly on relative indignation on this draft directive. Other points are being made in other member States. They will come together in a new attitude and a revised document. That is a healthy process.
In the sense that that is common view and basic to what a national Parliament can do in its relationship with the Community, even if the period of the great debate is unfortunately rather extended, that makes sense and appeals to the innate common sense of the British people. All the ridiculous additional conclusions that anti-Marketeers keep drawing from that—"We object to some of the problems in the Community; therefore, we should abolish it or, it should abolish us "—or that we should leave the EEC are absurd.
We all know that there are many problems facing the Government. Their whole policy is based on fear, not just in the context of advertising but in the context of all the problems facing them or facing this House as an institution. We do not say that the Government should be abolished—perhaps I might reconsider that statement. We might in fact say that. But we certainly would not say that the House of Commons should be abolished.
Those distortions of the background continually surrounding all these directives as they come before the House should be dealt with forecfully by those of good will in all parts of the House who hold the interests of the British public dear in the sense of our continuing membership of the Community. We should work constructively in all the 729 EEC councils to make the best of what is presented.
After all, I imagine that British officials were involved in drawing up the later stages of the draft directive, because it all began in 1975. Therefore, I think that there is a meeting of minds on the contents of the directive. Both the Minister and my hon. Friend the Member for Pudsey (Mr. Shaw) have ably developed our objection to the imposition of excessive legislative force and our preference for the voluntary code.
I shall not repeat the many valid points which have been made. This is another very good example where the Community should limit its intervention in the internal activities of the member States. That, after all, as someone said, is 90 per cent. -plus of what we are considering tonight in all the advertisements on television, in the newspapers and elsewhere within the framework of the proposal. The Community should limit its interference at the maximum to creating some kind of framework directive which would sound and look like a code of conduct, would be broadly couched and delimited and would leave the rest to the efforts of individual member States.
I think that if the Minister had time to consult opinion in France—a country which we often regard as dirigiste and where there are strong laws on advertising, which I do not accept; they go too far —he would find that some senior personnel in the Régie Francaise de Públicité, which organises all television advertising on the three channels in France, would say that the law can be taken too far in these controls.
As the Minister rightly said, only a residual element of intra-Community trade could come within the context of any advertising relevant to these proposals. It is extremely remote. It may develop in the future. That is certainly possible, and then there may need to be a stronger directive, but that may be in 50 years' time. In the meantime, the scope is limited. There is no evidence that these are matters involving the distortion or limitation of free trade between the Community States
I think, therefore, that the Minister has adopted a correct, justifiable and defensible attitude. We thank him for that, and we thank my hon. Friend the Mem- 730 ber for Pudsey for having agreed with that position and for having moved his amendment.
§ 9.10 p.m.
§ Mr. Edward Lyons (Bradford, West)
I belong to the Scrutiny Committee, to which my hon. Friend the Member for Newham, South (Mr. Spearing) referred. He says that it contains a majority of pro-Marketeers, but I disagree. It contains a majority of anti-Marketeers, and with the presence of the hon. Member for Banbury (Mr. Marten) and the hon. and learned Member for Beaconsfield (Mr. Bell) the majority of anti-Marketeers seems to be very great. In terms of attacks on the Common Market and the amount of speech in that Committee, the anti-Marketeers have it, and no one objects to that.
§ Mr. Neil Marten (Banbury)
It is true that the anti-Marketeers attend that Committee much more than the pro-Marketeers do, and when we attend it we play our full part in protecting British interests.
§ Mr. Spearing
I must apologise to my hon. and learned Friend. I could not have been speaking sufficiently distinctly, or perhaps I spoke too quickly. I was referring not to the Scrutiny Committee but to the Procedure Committee, which has issued a report in which it says that it wishes to see a change in the procedures whereby we examine documents of the kind that we have before us. I think that my hon. and learned Friend will agree that I was correct in respect of that Committee.
§ Mr. Lyons
I would not know, but I accept what my hon. Friend says about it.
I know that my hon. Friend is exceedingly enthusiastic in his opposition to the Common Market—opposition which has continued over the years. He told me in hushed tones in October 1971 that to join the Common Market would mean a change in the size and shape of milk bottles, and he asked whether that would 731 not change my mind. I promised to consider the matter, but it did not change my mind. We must keep a sense of proportion about the entire issue.
The basis of the proposed draft directive is to promote equality of protection of consumers within the EEC and enable advertisers to advertise in all the countries of the EEC without worrying too much about differences in law between those countries. There is nothing wrong with those ambitions, but they must be weighed against other considerations.
I do not believe that the fact that life may be a little more difficult for international cross-border advertisers should matter so much that we introduce legislation that is of dubious advantage and may be rather complex in Britain. For that reason, I am not too happy about this draft directive.
There are one or two matters about which I should like to be clearer in my mind. It has been suggested that ministerial advertising in terms of road safety based on fear would be unlawful under the directive. As I have indicated already, I am not certain that that is right, and I look forward to hearing what the Minister has to say about it.
Let us consider an advertisement which is not ministerial but simply political. I have in mind, for example, the Saatchi & Saatchi advertisement, "Labour does not work". I know that most people read only the first word, "Labour", and assumed that it was a Labour political advertisement, which some hon. Members may find surprising. But there was a queue of people depicted in the advertisement who were supposed to be genuinely unemployed. Of course, they were not unemployed at all. It now appears that all of them were employed. That is a deception. It is misleading. Will it be caught by this draft directive? I think not, on the basis that politicians, being clever, have excluded political advertisements from the directive. It nowhere says so expressly, but I believe that to be the case because such advertisements are not connected directly with commerce.
If that is right about that type of advertisement, surely it must also be right about safety advertisements based on fear. The first type of advertisement could 732 be held to be illegal on the ground that it was misleading if it was caught by the directive.
I hope that those two matters will be cleared up by the Minister.
§ Mr. Tony Newton (Braintree)
What would the hon. and learned Member assume to be the position in respect of an advertisement by a commercial organisation which had invented a device which was important to safety and had marketed it on the basis of an appeal to fear? Would he say that that would be ruled out? If so, does he think it sensible that it should be?
§ Mr. Lyons
It might be ruled out, and it would not be sensible to have a directive ruling it out. That is one of the reasons why I am unhappy about the directive.
I come now to a legal point about the directive. It switches the burden of proof from a person alleging a misrepresentation of fact to the person who produces the advertisement. In other words, under the draft directive one need only allege that an advertisement is misleading as to the fact and that it misrepresents the fact for the burden, which can be extremely heavy, to fall upon the person advertising to prove in court that the fact is correct. That seems to me to make it easy to make the complaint but not always easy without great expense to produce a defence.
It has been a general principle of English law that the burden of proof is on the person making the allegation. The prosecutor, for example, must prove his case. We have one or two exceptions to the general rule, but we admit those exceptions very reluctantly and sparingly. I have yet to be convinced that the case is made out in this directive for reversing a hallowed and traditional rule of the English legal system—a rule, incidentally, which has helped to make the British legal system regarded as one of the fairest in the world. Before this type of directive is accepted, I hope that there will be a careful examination of the proposition contained in it about the burden of proof.
In the directive, there is no defence of public interest. It has been suggested that where an advertiser relies on fear to show 733 that something can happen unless use is made of, for example, a new device perfected by a commercial company, there is an offence. But there should be a defence based upon the public interest. I do not find a defence of public interest in the draft directive, and to that extent I regard it as potentially a directive for injustice.
The definition of unfair advertising, which is an offence under the directive, is very wide and to some extent vague. For example, any advertisement which exploits thetrust, credulity or lack of experience of a consumer, or influences or is likely to influence a consumer or the public in general in any other improper manneris an offence. When one talks about exploiting "the credulity" of the consumer one thinks, for example, of advertisements which suggest that if one wears a particular type of eau de cologne one will be very much more attractive to women.
§ Mr. Lyons
Or to men. I am trying to promote the equality of the sexes. It would perhaps be a harsh interpretation of the law to have someone in court on that basis, because it seems pretty easy for almost anyone to get any advertiser into court under this directive.
I think that there is a general case for saying that all advertising of consumer goods may be bad because it promotes possession as something absolutely necessary in our modern society. Some people say that violence on television begets violence in the streets. It is equally possible to say that the stress on possessing worldly goods in television consumer advertising produces theft in the streets.
§ Mr. Lyons
The case seems to me to be equally strong. If one is to go into the fundamental basis of the morality of advertising, one should consider whether we should be much more strict about it, whether in some cases we should ban it and to some extent try to limit the material basis of our society. Of course, as was said earlier, the effect of this advertising is to make persons who cannot afford what is advertised often permanently 734 unhappy and feel at a gross disadvantage compared to the rest of the community.
§ Mr. Giles Shaw
Before the hon. and learned Gentleman leaves the point of describing the effect which advertising may have in an ethical and moral sense, may I ask what he feels would be the result if we asked for editorial matter on television to be subjected to the kind of code and scrutiny to which advertising itself is subjected?
§ Mr. Lyons
Editorial matter is carefully excluded from this draft directive, and that is right. However, having made observations about the morality of commercial advertising, with its stress on consumer goods, I none the less have to accept that this directive and the present self-regulatory practice proceed on the basis of the existing system. Therefore, one has to accept that one is dealing with an existing system and that nothing said tonight will materially affect the right of advertisers to advertise consumer goods in the way in which they have always done so, namely, with the basic essential desire to get people to buy more of their goods. So we are looking at advertising in a much narrower and limited way.
The directive involves new laws and new offences, and makes access to the courts easier. It could be an engine for the embarrassment of commercial companies by persons who wish to embarrass them, including competitors. They could be got into court very easily, and on the principle that there is no smoke without fire great damage could be done to companies even when they were eventually exonerated by the courts.
§ Mr. Lyons
My hon. Friend the Member for Grimsby (Mr. Mitchell) says "particularly Saatchi & Saatchi" but I know that he does not mean it. For all those reasons, I think that we should be very cautious with this type of directive. We have the ability to put our own house in order and no great harm will be done to the Community if advertising law is not the same in all the member States.
§ 9.25 p.m.
§ Mr. Tim Smith (Ashfield)
As there seems to be a wide measure of agreement on this draft directive, I shall be brief. I listened with interest to the 735 hon. Member for Newham, South (Mr. Spearing), who said that those of us who supported British entry into the EEC were guilty of unfair and misleading advertising. It then transpired that he had been guilty of the same in that he suggested to one of his hon. Friends that milk bottles might change size when we joined the EEC. He was worse because he tried to make his appeal based on fear.
This is not the first occasion that we have discussed draft Community documents this week. Indeed, this is the second occasion that there has been an official Opposition amendment expressing serious reservations about a directive. On Tuesday we had the directive on the display and pricing of foodstuffs when the Opposition amendment said that the directive would… run counter to consumer protection measures in the United Kingdom and would impose extra costs upon the relevant trades as well as upon the consumer.Today we have an official Opposition amendment on this directive which saysthat in its present form it is not acceptable to the United Kingdom, as it seriously undermines the existing system of self-regulation.I make one general point about the question of directives. I am sorry that the right hon. Member for Down, South (Mr. Powell) is not here. I listened with interest to what he said on Tuesday when he was commenting on what my hon. Friend the Member for Pudsey (Mr. Shaw) had said. Both these measures are designed to protect the consumer, although this one seems to go further in that it also deals with unfair advertising, which, as the Minister said, seems to deal more with unfair advertising between competitors. But, generally speaking, these directives are designed to protect the consumer, and that by itself is not sufficient to justify a Community directive. 1t must go further than that—it must be within the spirit of the Treaty of Rome. First, it must be shown to affect intra-Community trade in some way or another.
Both these directives illustrate another point that was made by my hon. Friend the Member for Harrow, East (Mr. Dykes)—that they should be concerned with the end and not the means, with the principles and not the methods. When one gets into the area of the methods, one 736 runs into difficulty, as is particularly well illustrated by this directive tonight.
The right hon. Member for Down, South said on Tuesday night:The Opposition give as their objection to the documents as they stand—the directives as they are at present proposed or used to be proposed—that they would run counter to consumer protection measures in the United Kingdom.Is it the view of Her Majesty's Opposition that we should not accept legislation of the Community which runs counter to … measures in the United Kingdom?" —[Official Report,14th November 1978; Vol. 958, c. 315.]I do not think that that was a proper inference from the official Opposition amendment. The criterion for determining whether a directive is intra vires the Treaty of Rome is straightforward enough—that is, to determine whether it is in accordance with article 100. In other words, does the matter directly affect the economic functioning of the Common Market? Does it affect intra-Community trade in any way? Is it designed to deal with imperfect competition between member States? Therefore, I believe that the right hon. Member's interpretation was a case of wishful thinking.
On the other hand, if we find a directive which runs counter to United Kingdom measures but also affects the functioning of the Common Market, I think that the Opposition will certainly support it, and I believe that the Government will too. We shall have an example of that on Monday, when we debate the Companies Bill, the first two clauses of which are concerned with implementing in detail the second EEC directive on company law. However, as I say, if we apply that test to this directive, it is found wanting.
I want to refer to the evidence given to the House of Lords Select Committee on this matter on 5th April. Incidentally, if there is no other justification for the existence of the House of Lords, this kind of report certainly is. It is very impressive. The Select Committee went into this directive in great detail, covering every aspect. I think that we would generally agree with most of its conclusions.
The Committee was told by the Department's representatives:we have no evidence whatsoever that there is any impediment at all to intra-Community trade as a result of the differing practices as now conducted.737 It is therefore clear that the directive fails the article 100 test.
It also fails the article 189 test, in the sense that it goes beyond ends, talks about how the ends will be achieved, and spells out the means in detail. Article 189 says that a directive shall concern itself only with the result to be achieved, not with the form and not with the methods, which should remain discretionary.
Inevitably, in a Community of nine—soon, one hopes, to be enlarged to 12—if one becomes involved in methods, one will run into difficulties. It is precisely on this point that this directive does so. It introduces a class action, which is totally unheard of in English law in this context. It introduces an injunction without proof of any damage having occurred or proof of fault. It introduces the new concept of the mandatory corrective action and it introduces a fine or a penalty which is apparently unrelated to the damage caused. As the hon. and learned Member for Bradford, West (Mr. Lyons) said, it also introduces, which is not totally unheard of but would be unusual in this context, the shifting of the burden of proof from one side to the other.
Therefore, in general, the whole matter is far too theoretical. It fails to take into account the practical situation in the United Kingdom, which is one of cheap and effective self-regulation. While it may not be perfect, that system seems to work very well as far as it goes, and, so far as the present arrangements are ineffective, they should be used as a base for strengthening the self-regulation and possibly, if necessary, introducing some statutory support as a last resort. We do not want an effective system of self-regulation to be undermined by this directive.
As has already been said, a number of things ensure that most advertising remains domestic—by definition. Language, ethnic characteristics, even a sense of humour, all vary from one country to another. It is therefore not possible to have an international advertising campaign in the sense that one simply produces one advertisement which appeals to people across international boundaries. It does not work like that and, in many cases, a manufacturer even has to change the name of his product.
738 I am not sure what will happen to the directive now—the Minister was not clear about that—but I assume that he is saying that it should either be withdrawn or else amended so substantially as to be unrecognisable in its present form. There might be some case for dealing with the principles we seem to be agreed on, and I should be interested in the Minister's views.
§ 9.34 p.m.
§ Mr. J. W. Rooker (Birmingham, Perry Barr)
First, I apologise for not being present for the Minister's speech; I was out of the House for a short time. Secondly, I intend to be brief, because, after nearly five years in this House, I have just discovered that if one speaks for less than eight minutes, it is not held against one. Since I wish to speak on the Social Security Bill next week, I do not want to fall foul of the Chair.
§ Mr. Michael Morris (Northampton, South)
The hon. Gentleman has had more than eight minutes this week.
§ Mr. Rooker
I came in only to raise a couple of points, but while I have been sitting here many more have occurred to me.
Both amendments on the Order Paper imply that the present system of self-regulation is satisfactory. I do not agree. I do not think that the ASA does a good enough job. There are plenty of examples of ways in which my constituents and others are misled by unfair and untruthful advertising. They are ripped off to a great extent in the secondary finance markets of banking, second mortgages, and loans. They are not told the truth about the repayments. The advertising is misleading by any strtech of the imagination.
We have had to introduce legislation to cover some aspects of this, and not all advertising is "honest, decent and legal" which, I think, is the current slogan. Much of it arouses entirely hopeless aspirations among people about what they can gain if they accept the product being advertised.
Earlier in the debate there was reference to eau de cologne-type perfumes. I think that in technical terms the consumer has an association of ideas. The advertisement plants the seed of an idea which causes people to buy the product, but they 739 then discover that the product does not make them like James Bond.
This highlights the great problem of the latter part of the twentieth century with its materialistic society.. We have often seen films made abroad, perhaps in Third world countries, showing colour television screens in hovels advertising the goods of the twentieth century. We see high-speed automobiles being advertised in countries where roads do not exist, and books and literature being advertised in countries which are without proper education. That sort of advertising builds up false aspirations and causes people to become bitter, and that in turn causes them to become violent. I know that I have stepped over the bounds of the debate by referring to other countries, but a similar situation exists here.
I come now to advertising on the basis of fear. I have a specific question concerning safety equipment. I refer not to seat belts but to safety equipment in factories. This includes helmets, toe protector boots, and so on. The only way in which workers in some factories can be induced to wear safety equipment is if they are shown the results of what happens if they do not wear the equipment. The results of not wearing the equipment can be catastrophic. It is often not just a matter of a finger or the tip of thumb being lost, but of losing half a hand or an arm.
I would not wish to detail some of the results of factory accidents that I have seen, because they can be most unpleasant. The Royal Society for the Prevention of Accidents and the British Safety Council have had to use horrific posters about factory safety equipment. They are far more horrific than anything hon. Members have seen in advertisements about wearing safety belts. The advertisements on the backs of buses are like a vicar's tea party compared to what has to be used in industry. It is only fair to say that the manufacturers of safety equipment are selling their goods to make a profit. That means that they arc covered by all parts of the directive. I hope that my hon. Friend will deal with this aspect.
I wish now to deal with the question of animals. Offering membership of a hunt or blood sports association is a 740 service just like any other. People are offered membership of a club or society which will provide titillation for human beings when they see animals being torn to pieces. Some of the advertising to counteract that has to be based on fear. It is done in such a way that it strikes fear into the heart of any thinking human being and carries the message that he or she should have respect for other members of this planet—the animals. Is any of the advertising used by the anti-blood sport societies to be covered by the directive? If it is, that is not good enough. That point must be met.
One other aspect is mentioned in the last paragraph of article 8 on page 15. It says:More exacting provisions may be justified as regards the advertising of certain products, e.g. narcotics, weapons, medicines, tobacco products and food or as regards advertising through certain media, e.g. on television or by telephone.It is the last part of that paragraph to which I want to refer. I have never been on the receiving end of a telephone advertisement. I should not want this practice to become widespread in this country, as it is in America. I understand that certain hon. Members, one of whom is sitting not far away from me, have used this technique as a way of reaching constituents. I do not think that this ought to be allowed to become widespread. I would like to see statutory controls on the use of telephone advertising.
The directive is fairly widespread in its definitions and embraces the operation of advertising in its widest sense, including public relations. There are people who walk this place, the public relations lobbyists, who buy up hon. Members to press forward a certain case. Are they covered? Are those who put forward false prospectuses covered? Would they be caught by the definition of unfair and misleading advertising? Would those lobbying hon. Members be within the definition? Are those who seek to sell shares or float a company covered by the definition? They are selling a stake in a company. It is a service. They are selling a commodity, a share.
Earlier this week I raised in the House the issue of the National Enterprise Board spending £6½ million of public money to buy Allied Investments, having been 741 sold it by Sir Richard Marsh on the basis of what appears to be a false prospectus. Would that sort of advertising be covered by this directive?
Before you came into the Chair, Mr. Speaker, one or two hon. Members had raised the question of governmental advertising in its widest and narrowest senses. Article 5 presumably relates to party political advertising. I have here the front page of the Daily Mirror for 7th September. During the recess we lose our platform in this place. I kept this by me. At that time we were contemplating going into a busy period of electioneering and I put this on one side, believing it to be material of which I could make use.
The headline says:How Tories Faked Granny Annie".We all remember the party political broadcast put together by Saatchi & Saatchi. The comment of the Daily Mirror was:The current Conservative political broadcasts and advertisements are slick, shabby, deceptive and dangerous.That advertisement was surely misleading and unfair. That is how I would define it. The Daily Mirror went on:And 'poor Annie' a pensioner, is really called Sarah, not all that poor, and a member of the Chelsea Conservative Club.Such nakedly untruthful political advertising ought to be covered by such a directive. I would prefer that statutory control was based in this country.
I notice that none of the political parties is mentioned. It may be claimed that that is because the political parties are not covered. But the CBI is there. What is it advertising if it is not pro-Tory, anti-Labour policies? What is the difference between that and political advertising?
I could make a speech on every item in this directive. However, Mr. Speaker, as I wish to catch your eye during the Second Reading debate next week on the Social Security Bill I shall draw my remarks to a close.
§ Mr. Speaker
I thank the hon. Member for Birmingham, Perry Barr (Mr. Rooker) for reminding the House that, if a speech lasts for eight minutes or less, when I am recording speeches the following morning I do not enter it. I regret to tell the hon. Gentleman that he was two minutes over that period.
§ 9.45 p.m.
§ Mr. Tony Newton (Braintree)
I think that I am the only contributor to the debate so far who must begin by declaring an interest, because I am the only Member of the House who is also a member of the Advertising Standards Authority. As I have been a member for a little less than a year, I shall not attempt to parade in this debate as an expert on the workings of the authority, still less as its spokesman—which I am not.
Let me make one point clear to the hon. Member for Birmingham, Perry Barr (Mr. Rooker). Although I, and indeed many other members of the authority, have certain anxieties about aspects of the way in which the authority works—and we can all think of ways in which it can be improved—the hon. Gentleman's criticisms of the authority rested on his asking the authority to do what amounts to a political job. He was asking that body to change the nature of our society. If he wants to change attitudes towards the possession of goods, he must press that case here in the House of Commons rather than complain that the ASA is unwilling to take on that task on his behalf.
I wish that my hon. Friend the Member for Harrow, East (Mr. Dykes) were still present. Although I largely agree with his remarks about the Community and the absurdity of attempting to pretend that this kind of objective destroys the validity of the Community as a concept, I must point out that, even to those of us who are pro-EEC and who have been consistently of that view, the fact that this kind of nonsense is continually being talked makes us tear our hair out. Whoever thought that these proposals could have been justified within the terms of article 100 should have had on his desk a little notice to be read every day to the effect "What good will these proposals do?" If the draftsman had borne that advice in mind, we might well not have had these proposals at all.
I do not see how it can be argued that these proposals could significantly affect the nature or quality of competition within the Community. I can assure the House, drawing on my experience in the authority, that we take exactly the same line on advertisements for German, Italian or French cars as we do with 743 British cars. If we do not think the advertisements stand up, we rule them out. What matters is that there should be fair treatment within the market. I do not think that any other view on that aspect can be seriously sustained.
In view of the amount of unanimity on this topic on both sides of the House, it hardly seems necessary to develop arguments at great length, and I do not intend to do so. I am taking part in this debate only because I occupy my present position on the authority and therefore I speak with a little experience. Furthermore, I believe it is important that when the Minister is in Brussels he should have the clearest possible demonstration of widespread concern in this House because of the opposition to the terms of this directive as it stands.
I wish to make two points. First, I see no reason to doubt that if this directive were to go through in its present form, and if we were forced to conform to it, although it says that the statutory system would run in parallel to the voluntary system, it would result in the destruction of the voluntary system. I do not believe that the industry would be willing to spend £500,000 or more a year financing the existing self-regulatory system.
When the hon. Member for Perry Barr suggests that the industry finances this system, I must tell him that it operates on an independent basis. The members of the authority are appointed by the chairman, and the chairman is normally a person of considerable independent standing, as indeed is Lord Thomson of Monifieth. Therefore, there is no question of our being financially dependent in a day-to-day sense on those who ultimately provide the money. I do not see why the industry should be expected to finance a self-regulatory system, or indeed that it would be willing to go on doing so, if this in itself were no bar to a parallel system of statutory enforcement and if there could be no protection against legal action, regardless of what was found by the ASA or any other part of the self-regulatory system to be an acceptable advertisement.
Similarly, as many hon. Members have said, it cannot be denied that there would be involved in this draft directive substantial change in our legal procedures, which is open to objections of the kind mentioned earlier.
744 I do not regard either of those points as conclusive in themselves. I happen to believe that it is true that it would destroy the self-regulatory system, but that is not an ultimate objection under all circumstances. It is true that it would involve us in making changes in our legal system, but that is not a fundamental and conclusive objection. All of these things could and should be done if there is a good case to be shown for them.
I have no doubt whatever that the net result of carrying through this directive would be less advantage and greater disadvantage to consumers. They would be faced with a system which would almost certainly be more expensive for them personally to get on the move. At the moment, all that it requires is the price of a postage stamp to the Advertising Standards Authority. It would certainly be slower, inevitably, as soon as the law and the courts and statutory definitions were involved. It would certainly be more expensive to the industry because of the legal costs that would necessarily arise. That in itself would lead to extra costs to the consumer. Most important of all, I am quite convinced that it would give the consumer less protection. I was glad to hear the Minister laying a good deal of emphasis upon that point.
I have in my hand a copy of "The British Code of Advertising Practice". This is the old version. It is currently being revised. It runs to over 60 pages of quite close print. Anybody who attempted to turn it into the form of statutory instruments would have a volume of a size which most of us could not even carry physically into the House. Nobody would, in practice, try to do it. It would become an impossible nightmare task. What one would set out to do would be to have much more limited objectives than are contained in what is inevitably the relatively loose—it is as tight as can be, but still relatively loose —non-legalistic wording of the code.
The Minister touched on the question of taste and decency. Of course, that is a classic case of the difficulty of translating into statutory language, whether one has endless space or limited space. However many words one wants to use, it can be very difficult to do. The Minister also emphasised the point, quite 745 rightly, which is very much bound up with this, that a code of this kind can be based on the application of the spirit as well as the leter in a way in which a statutory instrument cannot.
An interesting point emerged in what the hon. Member for Isle of Ely (Mr. Freud) said about the code in its relationship to children. I wish that he was still in the Chamber. If I recall his words roughly correctly, he said that there was nothing in the code about problems which might be created for children by showing them things which they and their parents could not afford. Since then, I have had a chance to look quickly through the code. I notice that in appendix B, headed "Children and young people," at section 1.3, it says:No advertisement is allowed which leads children to believe that if they do not own the product advertised they will be inferior in some way to other children or that they are liable to be held in contempt ar ridiculed for not owning it.There it is. The code does attempt to deal with that.
I accept that it is not always easy, even for a self-regulatory system, trying to work within the spirit as well as the letter, to decide precisely which advertisements fall one side or the other of a line such as that. However, whereas the code can at least attempt to lay down a standard such as that, and a body such as the ASA can attempt to form a broad judgment as individual men and women as to whether an advertisement is acceptable within that context, the attempt to do anything of that kind at all by statutory instrument and arguing in court whether the advertisement for "X" product made a child feel inferior would be a hopeless task even to begin. It could not be done on a statutory basis.
I was glad to hear my hon. Friend the Member for Pudsey (Mr. Shaw) refer to the report of the Office of Fair Trading. It is a surprisingly clearcut endorsement of the general effectiveness of the self-regulatory system. My hon. Friend said—I do not dissent from this as an individual or as an individual member of Advertising Standards Authority Ltd.—that in due course a need may be demonstrated for additional forms of legal backup.
746 We should be cautious before rushing to look for new forms of legal back-up. We would not have to go very far down that path before running into the objection that everyone with one exception, namely, the hon. Member for Perry Barr, had seen to the draft directive. There are those who are often said to reflect the need for statutory back-up—for example, the fly-by-nighters distributing handbills and those whom we can never quite track down who place a one-off advertisement in the classified columns of the local paper. The problem is that we would not catch up with them if we had legal back-up.
There are many in our society, including those who flout planning procedures, against whom we have plenty of powers and statutory back-up. Again, the problem is catching up with them and enforcing the statutory back-up. I have in mind the unscrupulous trader who descends on an area for one day and indulges in an unscrupulous practice before flitting off to another town some miles distant. The self-regulatory system may not be able to cope with that sort of activity; but neither would statutory back-up powers.
There are some practices that the self-regulatory system seems unable to deal with, but it is unrealistic to think that there is some magic statutory cure. Often these are the problems that statutory cures have not been able to deal with satisfactorily.
§ Mr. Edward Lyons
Will the hon. Gentleman add to the list those in Ireland who send through the post bogus trade directory invoices in the hope of getting British business people to pay for nonexistent entries in non-existent trade directories? Is he aware that nothing much can be done because these people are operating from Ireland? There is nothing in the directive to help us in that direction.
§ Mr. Newton
I am grateful to the hon. and learned Gentleman, because that is a good illustration of the practice that I had in mind. There are many activities that go on in any society that we would all like to clobber. If we could find the right law to do that, we would be prepared to enact it. However, enforcement is not the same as enacting. We do not have jurisdiction over everything even in this country, let alone Ireland.
747 Although the self-regulatory system has not solved all our problems, we must not think that a move to any significant extent down a statutory path would necessarily solve all the problems in a different way.
On one rare occasion we can congratulate both the Government and the Opposion and wish the Government well in their efforts in Brussels to ensure that this silly directive does not go any further in its present form.
§ 9.58 p.m.
§ Mr. Tim Rathbone (Lewes)
It is with pleasure that I take up the arguments of my hon. Friend the Member for Braintree (Mr. Newton). I congratulate my hon. Friend and, through him, the Advertising Standards Authority on behalf of the advertising industry, in which I declare an interest as a person who works in advertising, on behalf of all British consumers on protecting them from being misguided by advertising. The protection that it offers has become the envy of the world.
I agree with the objectives of the European Community and I agree with the objectives that I think the Commissioners had in drawing up the documents now before us. However, that is a different position to hold from agreeing with the methods that they suggest for carrying them through.
Advertising throughout the Community should be seen to be, and appreciated as being, honest and truthful. Advertising should be created and used throughout the Community to further rather than to interrupt free and fair competition. That must be seen in the context of the control system that we have in this country, of which I think we may all be genuinely proud. Our system is a combination of self-regulation and statutory regulation, backed up, in the broadest terms, by business law. It stands comparison with anything anywhere else in the world, and the directive would cut through to the core of that method.
It has been particularly pleasing to have published today by the Office of Fair Trading an endorsement of our system. As the hon. Member for Birmingham, Perry Barr (Mr. Rooker) pointed out dramatically, the system is not perfect. Though it is speedy it could probably be speedier. Though it is cost effective, virtually eliminating all seriously mis- 748 leading advertisements, it could probably be more cost effective. Though it is flexible, it could probably be applied with greater diligence and flexibility. However, it is certainly continuously evolving in a way that would not be possible if it were legal writ. All this is being put at risk by the Commission's suggestion of harmonisation for harmonisation's sake.
The Commission refers to corrective advertising, but that has not been mentioned in the debate so far, although it has been referred to by the Secretary of State and, perhaps, by his Minister of State. It seems to be part of the thinking about the control of advertising and there are some misconceptions about it which should be put right.
On the face of it, the thought of powers being given to force the seven in every 100 advertisers who are identified in the OFT report as having used misleading advertising to put their case straight by publishing countermanding statements is attractive. It should be appreciated that those seven in every 100 are not all dramatically misleading advertisers. It would be unkind to them to say that. Only about half of those are misleading. The rest are in breach of details of the code, such as not putting all the elements of an address on a coupon.
We are not talking about 7 per cent., but about 3 per cent., and even that figure would be reduced in any objective assessment of what might be considered as misleading a reader into doing something that proved to be against his interests.
Even corrective advertising by this very small group would not be certain of success. It has not worked well in other countries which have adopted it, particularly France and the United States, and, crucially, it has not worked well for the consumer. Indeed, in the United States it is not even considered as something which is done to benefit the consumer, but as a measure against unfair competition and against an advertiser who has gained an increase in market share or sales volume through the placing of deceptive advertising.
We must also accept the near impossibility of reaching through corrective advertising the same people who saw and were influenced by the original advertisement. Whether they are reached or 749 not, there is an inevitable time lag between the original message and the corrective advertising.
If the corrective advertising is not seen by consumers who were misled and does not correct the misapprehensions of those influenced by the original message, its general effect is to discredit the advertiser in general terms and to undermine the credibility of advertising as a whole, which will do no one any good and will put further into jeopardy the efforts of industry to achieve the regeneration which both sides of the House urge upon it.
There is another argument against the introduction of corrective advertising. It concerns the freedom of the press. To put corrective advertising into practice, there must be a power in the court, or a Government authority, to order the correction so that the media are obliged to accept it. This would be seen to infringe the freedom of the press, particularly as there could be resistance to the acceptance of certain corrective advertising which threw doubt upon the honesty and acceptability of the majority of advertisements carried in the medium.
The Secretary of State has recommended consideration of corrective advertising. The EEC directive firmly suggests such a course. I have tried to indicate how it has been investigated, so the Secretary of State suggested, and how it has been found wanting in other countries. It would be unwise for the European Community to go down that path.
The directive on misleading advertising really needs what the Minister has suggested and what the Commission has already accepted—a rethink. It smacks of harmonisation for harmonisation's sake. It is not best suited to methods that would lead to the best standards of advertising throughout the Community. It does nothing to underpin the methods practised here.
Few people could argue against a measure which was designed to bring everybody in the Community up to the same standards in advertising as consumers have in this country. If the Commission has the good of consumers and manufacturers in mind, it should revise the directive to give it the character which is inherent in our standards of advertising. In spite of some of the comments 750 made by Labour Members, our advertising can, more than any other in the world, be described as legal, decent, honest and truthful.
§ 10.7 p.m.
§ Mr. Michael Morris (Northampton, South)
I declare an interest as a director of two advertising agencies. It is a pleasure to follow my hon. Friend the Member for Lewes (Mr. Rathbone) and I agree with what he said about corrective advertising. The suggestions that have been made tonight are worthy of careful study and they have the support of the majority of those who take a responsible view in the industry.
I was disappointed to have to listen to the second speech this week which exceeded eight minutes by the hon. Member for Birmingham, Perry Barr (Mr. Rooker). I accept that that is a cross that I must bear.
I was reminded of what was probably the most deceitful and untruthful campaign in political history which was conducted under the heading of "Yesterday's Men". Perhaps the hon. Member for Perry Barr should remind himself of that because it left a rotten taste in everybody's mouth. He has no reason to be proud of it.
The directive is of interest to all who work in the industry. Anybody who has worked across the member States knows that throughout the Community we should have advertising which is of an equally high standard, regardless of which country is involved. Free and effective competition in advertising should help us to acheve that end.
The directive must be viewed against the background of two matters: first, what exists in the member countries at present, and, secondly. how it stacks up against harmonisation for harmonisation's sake.
The first point that several hon. Members have made is that we have a strong self-regulatory body which is putting in £500,000 of its own money, not somebody else's money. It is the industry that is putting in that money. If more money is needed, I think that the industry will respond, but if there is a sword of Damocles, if the code is considered to be irrelevant and the courts are to act, the industry must question whether that money is wisely spent.
751 In terms of television, the control that is exercised by the Independent Television Companies Association is, I think, one of the most stringent in the world and meets already a fair number of the points in the directive. No hon. Member should be under any illusions. This is the most intrusive and persuasive medium and the one most likely to do the damage. I have had the privilege for many years of advertising not only in this country but also in France, Germany, Italy, Holland and Belgium. From my experience, I cannot see in what way the consumer or competition has been adversely affected. I have never come across factors in the market which prevent the necessary degree of fair competition.
Several hon. Members made the point that international advertising is not a feature of today's world. With respect, that is not entirely true. There is an increasing incidence of campaigns being created in one country. Admittedly, they are put into another language, but the basic copy point is kept common, and the basic message is quite often kept common. I think that we shall see this developing over the next few years. It is not something that is declining. We should not delude ourselves that there are not pan-European campaigns, because there are.
We think that article 5 in the directive is totally unacceptable and misconceived. The Minister made the point in his opening speech about collective bodies taking action. We all know from our own political lives that there are particular little caucuses of one persuasion or another. We may agree with some of them and disagree with others. But we think that article 5 is dangerous in opening up certain opportunities.
I take a slightly different view perhaps from the Minister on article 6. Indeed, I take a different view from that expressed in the various briefing documents which have been sent to me. I give the example of the ITCA. If an advertiser is advertising a product on television and wishes to 752 make a claim, the onus is on him to substantiate that claim. I recognise that in law the onus is the other way round. In the agro-chemical industry there is a very strict code of practice for advertisements which appear in the press, principally directed at the farming community. There again the onus is on the advertiser to prove that his claims are valid. Woe betide him if they are not.
I utter a word of caution to those who would totally reject article 6. I think that it is something that we ought to move towards, and something that many parts of the industry—
§ Mr. John Fraser
Under article 5 the courts are enabled to make orders without proof of fault. This probably raises more objections than the practice which already obtains under the advertising code and the Independent Broadcasting Authority code.
§ Mr. Morris
I am grateful to the Minister. He is right to point that out.
This is an important directive because it has to do with competition and free competition throughout the Community. The advertising industry is a dynamic one. We are part of the dynamic end of the marketing mix, and I believe that the vast majority of the people who operate in it throughout the Community are decent and truthful. They use their skills and abilities to communicate to prospective purchasers the benefits of the products they wish to sell in a way that they judge will motivate people to purchase them.
We run a very grave risk with the system we have in the West if we put too many restrictions on that dynamic element. We have a strong code. There may be areas in which there is room for strengthening it, as several hon. Members have said, but I think that the code is a great step forward. It has been built up over many years. I hope that the Minister will feel fortified, when he sends his retort to the Commission, in pointing out that we have already gone three-quarters of the way along the road that the Commission wishes us to take.
§ 10.15 p.m.
§ Mr. Giles Shaw
I think the House will agree that we have had a full and informative debate on this directive. The House will also agree that there is unanimity on how we view it. There is no need for me to rehearse the reasons why we do not find it acceptable.
In my brief summing up of the debate, I should like to draw attention to three matters. First, we must accept that advertising is a vital part of the selling process. The hon. Member for Birmingham, Perry Barr (Mr. Rooker) could rightly articulate his views against the aggressive tendencies of some advertisements or what he considers to be the unfair aggression of some advertising. But I think that equally he would be the first to complain if, as a result of failing to sell goods, there was a shortage of manufacture and, in consequence, a shortage of jobs. It is not possible to disentangle advertising from selling and selling from jobs.
§ Mr. Shaw
The question of practice concerns the hon. Gentleman as much as it concerns us.
However, it is no excuse to say that, because one finds advertising aggressive, it should be contained within statute law. We seek to ensure that certain advertising is controlled within a regulatory system which allows its competitive edge to be cutting and its sales to be successful. That was what my hon. Friend the Member for Northampton, South (Mr. Morris) was setting out. The question of maintaining the importance of advertising as the selling weapon of the United Kingdom's marketing effort must be common ground between us.
The second point concerns public confidence. I think the Minister understands that the Director General of Fair Trading in his report has given a substantial clearance of the advertising system regarding public confidence. That is an important development to which we should pay substantial respect. A number of bodies—consumer bodies among them—feel that the scale of potentially misleading advertising is great. The 754 proof in today's report suggests that the scale is very small.
Public confidence is the name of the game, and with it goes responsibility. It is the responsibility and the mechanism by which we carry it out which brings us into conflict with the directive. Many hon. Members, particularly my hon. Friend the Member for Braintree (Mr. Newton), who as a member of the Advertising Standards Authority Ltd. has a particular interest, have shown that the responsibility with which the Advertising Standards Authority Ltd. executes its work is of the highest and should command public respect.
That brings me to my final point. The House may know—the Minister certainly will—that Commissioner Burke is here tonight and tomorrow will no doubt attend the Advertising Association's luncheon. That may be one reason why the Government selected this evening to debate the directive. But it would not be fair to ascribe authorship of the directive to Commissioner Burke, because it was in train long before he took over his responsibilities.
It is right that the House should express its unequivocal view that, as regards this directive and the unit pricing directive which we discussed recently, both the Government and the Opposition are of the firm conclusion that the way in which the EEC is seeking to regulate activities involving unit pricing and advertising is wrong.
I ask the Minister, if he has the opportunity of meeting Commissioner Burke—I suspect that he may have that opportunity—to impress upon him two simple points of view. One is that the United Kingdom has a long history of effective consumer protection measures, many of which depend upon voluntary systems and codes of practice. We have grown up with codes of practice and we support them. On the whole, to the largest possible degree, industries accept them. That is the natural way in which we seek to control our commercial practices. It is the kind of approach that the Commission would do well to examine before it comes forward with legislative counterproposals.
The second thing the hon. Gentleman could well say to the Commissioner is 755 that when it comes to discussing matters of consumer protection, which, after all, do not flow directly from article 100—they were brought together by the Council as a separate body of intention and are not necessarily derived from the Treaty of Rome—it would be far wiser to go into a discussion document phase, such as the chairman of the National Consumer Council, Mr. Michael Shanks, outlined the other day. We should have a Green Paper phase, as I described it on Tuesday night, before we get involved with the niceties of legislation and the details of law embodied in these articles. I think that the debate will have achieved a great deal if the Minister gives the House an indication that he views consumer protection measures from the Community in that light and that he will seek to persuade the Community to look at them in that light.
The debate set out to deal with the advertising directive. We have dealt with it. It set out to enhance the self-regulatory system and, backed by the report from the Director General of Fair Trading, we have dealt with that.
We know that there are abuses and that within the United Kingdom there are ways in which we can legally sort them out, if the industry and the Department agree. But what we must have for the future is a slightly more intelligent way of dealing with proposals for consumer protection emanating from Brussels. If we can achieve that tonight, we shall have achieved a great deal.
§ 10.22 p.m.
§ Mr. John Fraser
With the leave of the House, Mr. Deputy Speaker, I should like to reply to the debate.
I begin with the last point raised by the hon. Member for Pudsey (Mr. Shaw). I had discussions with Commissioner Burke some months ago, when one of the points we discussed was the Green Paper approach—that is, having a document that would briefly state the mischiefs, the objectives and the sort of procedures that might deal with the mischiefs. We could start with that approach rather than the detailed legal language of a directive, which I think frightens and concerns many of those who read it, although I think that they sometimes become too neurotic and 756 concern temselves too much at this stage of the game.
I should emphasise again that the proposal before us was not initiated by the Commission on its own. The Commission was invited by the Council of Ministers in 1975 to produce something on advertising in the nature of a directive. It responded with a form of directive that we find unacceptable, but I do not criticise the Commission strongly for that. It has produced a first draft. The draft is then submitted for an opinion of the European Parliament, an opinion of the Economic and Social Committee. We have here a draft that has not yet come to any discussion by Ministers or their officials. Therefore, it is particularly valuable to have this debate at this time—much more valuable than having a debate when the discussions have got half-way through the Council.
I think that the content and quality of the speeches will be of great assistance to the United Kingdom. I shall not repeat the agreements that we seem to have reached this evening, but the timing is particularly fortunate.
I think that the hon. Member for Northampton, South (Mr. Morris) used the phrase "retort to the Commission". I do not think that that is an appropriate phrase at this stage. It is not a retort; it is a comment. The speeches on this subject, particularly at this stage of the proceedings, are read very carefully by the Commission, and I am sure that it will take full note of the points that have been raised.
I am particularly grateful for the thoughtful, constructive and helpful speech of the hon. Member for Pudsey, who strayed beyond the directive to comment on the existing voluntary system and whether it was perfect, a reflection that was shared by other hon. Members. I have spoken in praise of the voluntary system and the Advertising Standards Authority code. Nothing in those remarks implies that there is perfection.
I do not propose to go any further than that. There will be other occasions on which we can look at the nature of advertising control in this country. I firmly believe that the voluntary system and the codes of practice are central to it. I do not impute perfection to it. We 757 can discuss those matters on another occasion.
I do not think either that this is the right time to try to achieve, let us say, a definitive definition of the word "fear". The House is obviously agreed that some advertising which appeals to fear or to real and apprehended danger, such as advertisements designed to stop people smoking or to wear seat belts, is desirable and that advertisements which appeal to people's sentiments or fear by trying, for example, to sell them hearing aid devices in disreputable circumstances are wrong. They are wrong if they appeal to fear where other types might be right.
The only lesson that I want to draw is that within a code it is possible to draw that distinction and to draw it according to the real circumstances which people face from day to day. If we try to translate that sort of task into a statutory instrument or into primary legislation and if we then entrust that task to lawyers and judges to interpret after legal argument, that is when the system starts to break down. Therefore, the discussion about fear is perhaps not helpful in arriving at the right definitions, but it is helpful in illustrating that a code is a better way to deal with these matters.
The same is true of the arguments about the burden of truth. When one comes to article 6, within the context of a code it is helpful and right for consumers to say that if a manufacturer or advertiser makes a specific factual claim that product X will cure Y, there is no reason why he should not be put to the proof of that. But, again, it is much more easily done in the context of a code.
I end on the subject of harmonisation. There is no possible harmonisation at present of matters which militate against competition within the Community. That would be an absurd claim for the directive. The Commission was invited by Ministers to achieve some degree of harmonisation in the objectives of member States in the broad protections which they give to consumers and in raising the general standards of ethics—the general standards of the advertising industry. That sort of harmonisation has nothing to do with trade in the strict sense of the word or with competition, but it raises the general standards for consumers and it does it by comparable ways in different 758 countries without exact uniformity. That is a form of harmonisation to which I do not see any objection. I am sure that, in the light of this debate, the sort of harmonisation of broad objectives which does not create the difficulties which hon. Members have mentioned can be achieved, and, I am sure, all the better achieved as a result of the comments made here this evening.
§ Amendment agreed to.
§ Main Question, as amended, put and agreed to.
That this House, in taking note of Commission Document No. R/511/78 on Misleading and Unfair Advertising, considers that in its present form it is not acceptable to the United Kingdom, as it seriously undermines the existing system of self-regulation.