The House of Lords Select Committee on Communications has made a series of recommendations on UK Advertising in a Digital Age. The Government has issued its response to the recommendations “for which the Government is directly responsible.”
The Committee recommended (Recommendation 2) that where businesses fail to self-regulate adequately, the Government should propose legislation to regulate digital advertising.
The Government responded that it is pleased to see efforts to self-regulate, but at the same time recognises the “highly complex nature of the online advertising industry” and will publish a White Paper later this year outlining plans for legislation specifically focusing on online harms, although in principle the Government prefers systems of self-regulation such as the CAP Code (Code of Non-broadcast Advertising and direct & Promotional Marketing).
The Committee recommended (Recommendation 4) that the CMA conduct a market study of digital advertising to investigate whether the market works fairly for businesses and consumers.
The Government responded that as part of the Digital Charter’s work programme they are keen to gather more evidence on business models in the digital media advertising market, which is also important to the Cairncross review into the sustainability of the press. They said that the CMA is an independent authority and the Government cannot require them to undertake particular investigations except in exceptional circumstances.
The Committee recommended (Recommendation 5) that the Government ensure the CMA is properly resourced to take on the burden of cases that will fall to it after Brexit.
The Government responded that it is confident in the CMA’s readiness for Brexit, and the CMA is working closely with government departments in planning for the event. Over £250 million of additional spending in 2017=2018 has been committed by the Chancellor to allow all bodies, including the CMA, to prepare for Brexit, and as part of the Spring Statement, a further £23.6 million was announced for the CMA in 2018-2019.
The Committee recommended (Recommendation 6) that the Government use the Digital Charter to gather evidence on whether competition law is adequate to regulate data-driven markets.
The Government responded that the UK’s competition tools are designed to be sufficiently flexible to tackle competition issues across the economy. However they recognise that digital services, particularly those funded by advertising, pose challenges, and as outlined in Modernising consumer markets, the Government will review the UK’s competition tools in the context of digital markets as part of their overall competition law review, to be completed by April 2019. Referring to data, they highlighted the introduction of the right to data portability in the Data Protection Act 2018, and that the Smart Data review is looking at ensuring it is implemented in a way which supports consumers getting better deals in regulated markets.
The Committee recommended (Recommendation 9) that the Government ensures regulatory alignment with the EU is maintained on data protection, and that the ICO has a position on the European Data Protection Board.
The Government responded that the GDPR has been implemented, and the Law Enforcement Directive transposed into UK law, by the Data Protection Act 2018, which gives people more control over their data. As a result, data protection legislation will be fully aligned at the point of exit from the EU, and the government agrees that continued free flow of data is crucial for a future UK/EU relationship. They therefore want to secure an agreement with the EU that provides stability and confidence with regards to data, but this is a matter for negotiations.
The Committee recommended (Recommendation 12) that the Government undertake a review of the skills needed by the future economy, and whether the education system provides for these, particularly for growing sectors such as advertising and the creative industries. In particular, the Government should review whether it is still appropriate for young people to specialise in either arts or science subjects at an early stage.
The Government responded that much work is already underway to ensure “a full picture of the skills needs of different sectors of the economy and different parts of the country.” In particular, the Department for Education is focusing on establishing the architecture that allows the post-16 education and training system to respond rapidly and accurately to skills shortages and changes in the labour market. Fundamental reform is taking place in the post-16 education system which aims to put employers in the driving seat of the skills system. The Government is launching the Skills Advisory Panels, which will provide a conduit for national-level analysis of labour markets and skills needs, to help with local decisions. The Government has also conduct the latest Employer Skills Survey, the results of which will be published later in 2018. Moreover, through the Review of Post-18 Education and Training, the Government will assess the best ways to support educational outcomes that deliver the Government’s Industrial Strategy ambitions. In addition to this, the Government’s reforms to GCSEs have been designed with employers in mind, and are underpinned by more rigorous content, preparing pupils for future careers in the industries Britain needs. The Government is also aware of the importance of both STEM subjects and the Arts, and has funded programmes focussing on both. The Government is investing £84 million over the next four years to improve computer science teaching and increase participation in computer science, particularly among girls.
The Committee recommended (Recommendation 13) that the English Baccalaureate must include the measurement of one arts subject, as this will ensure that the arts are properly recognised both by schools and the school league tables.
The Government responded that the subjects included in the English Baccalaureate are those which, according to Russell Group Universities, at A level open more doors to more degrees. The Sutton Trust has found that schools which increased their English Baccalaureate entry from a low rate are more likely to record good English and maths GCSEs, more likely to take an A level or equivalent, and more likely to stay in education. Moreover, Arts GCSEs already attract credit in performance tables.
The Committee recommended (Recommendation 18) that the industry should continue to show leadership and improve representation at senior levels, and that barriers to entering the industry such as informal recruitment procedures need to be removed. If necessary the Government should clarify that all internships and work experience programmes of more than four weeks should be remunerated and HMRC should take enforcement action against non-compliant businesses. The industry should develop and implement best practice such as ‘CV-blind’ recruitment processes, and encourage outreach and mentoring programmes.
The Government responded that it agrees with the assertion that the industry should work to improve representation at senior levels, and that this is why they commission and support independent reviews such as the Hampton-Alexander Review, which set challenging targets for FTSE 350 companies. The Government says that currently legislation is clear that when someone qualifies as a worker they must be paid minimum wage. The Government has committed to updating public guidance on internships and engaging directly with employers to raise awareness of existing rules. Moreover, the Government is investing in minimum wage enforcement.
The Committee recommended (Recommendations 19-21) that the Government provide more resources to deliver sufficient careers advice and employer interactions for all communities throughout the UK, including ensuring greater employment interactions with primary school pupils and young people before they choose their GCSEs. The Committee also recommends that the Government encourage schools to make time for employers to interact with children by taking into account such interaction activities when measuring school performance.
The Government’s careers strategy, published in December 2017, sets out a long term plan to help young people and adults choose the right career for them. The Government is also funding training for 500 careers leaders who are responsible for the careers programme in their school or college, and investing £2 million to support primary school career focused initiatives. The careers strategy outlines that all secondary schools should provide pupils with at least seven employer encounters from year 7 to 13. By 2020 the Careers & Enterprise Company will provide secondary schools and colleges with access to an Enterprise Adviser. Careers is already considered under three of the four areas evaluated by Ofsted as part of school inspections.
The Committee recommended (Recommendations 23-24) that the Government undertake a comprehensive review of the apprenticeship scheme to ensure it is suitable for the creative industries, and investigate how the period of approval of training standards could be reduced and whether small advertising businesses could pool resources into a shared apprenticeship levy account.
The Government responded that new, high quality apprenticeship standards are being designed and driven by employers to meet their needs across all sectors of the economy. The Institute for Apprenticeships published its Faster and Better programme in February 2018 to simplify aspects of the standards development process, to make approval faster. It is already possible for levy-paying employers to work together to use their levy funds locally, and connected companies can ‘pool’ their levy funds for the benefit of the whole organisation, but employers cannot jointly fund an apprenticeship with another levy payer. It is possible, however, for levy payers to transfer up to 10 per cent of funds to another employer, including smaller employers in the supply chain, which may give smaller employers the opportunity to employ an apprenticeship.
The Committee recommended (Recommendation 26) that Tier 4 visas be extended to allow all students to work in the UK for at least two years after graduation.
The Government responded that there are four visa categories available to non-EEA graduates. The Tier 4 pilot helps support students switching from Masters studies to taking up a graduate role. Once the pilot has been evaluated, the Government will consider whether to introduce it into the Immigration Rules, but there are no plans to extend Tier 4 visas for two years after graduation.
The Committee recommended (Recommendations 27-30) that, as the UK leaves the EU, the Government develops an immigration policy that works for businesses by changing the visa system to make it easier and cheaper to navigate for both individuals and companies. They recommend that the Government allow foreign nationals to work in the UK following an offer of permanent employment by a UK advertising employer, and seek reciprocal arrangements for UK citizens wishing to work in trade partner countries. The Committee recommends the Government introduce a creative industries’ freelancer visa on the basis of reciprocal agreements with nations around the world, to allow foreign freelancers to work in the UK and grant UK freelancers the right to work abroad.
The Government responded that it continues to welcome highly skilled and talented migrants to the UK, and is developing options for the future immigration system designed to continue to serve the national interest. In the meantime the system already offers a number of routes for those working in the creative and innovative industries.
Please contact Tim Cowen if you have any questions regarding the above.