London Olympic Games and Paralympic Games Bill

My Lords, my noble friend is not only suggesting that I compete with the noble Lord, Lord Coe, over a mile, but it now seems to be a mile over hurdles. That would guarantee that I had not taken the first bend when the noble Lord, Lord Coe, had finished the race. I will seek to give my noble friend an answer, because I hear what he says about this being a compromise amendment. I am not quite able to regard it as such, for reasons I will identify in a moment. He has raised important issues, however, and I will respond particularly to his challenge to explain how we intend to go on if, as is our intention, we proceed with these restrictions after Royal Assent. We debated this issue at some length in Committee, where three main areas of concern were expressed. They have been reiterated this evening with the emphasis, inevitably with this amendment, being placed on the third. First was the effect that the London Olympic association right might have on small business. Genuine concerns have been expressed throughout the passage of the Bill that many small businesses could unwittingly infringe the London Olympic association right, and would then feel the full force of a civil action from LOCOG as a result. The noble Lord, Lord Glentoran, was particularly concerned about this in Committee. Secondly, concern was expressed at the possibility that companies will have invested in advertising campaigns that may end up infringing the London Olympic association right before they were aware of the provisions contained within Schedule 4. As was emphasised in Committee, this is particularly true of broadcast campaigns that often have a long production time. Thirdly, noble Lords, in Committee and on this amendment today, have questioned why this new provision needs to be commenced so far out from 2012. I have listened carefully to the debate this evening, as I did in Committee. The House will recognise that, through my officials, we have been in regular contact with the advertising industry, which also raised its concerns about the commencement of Schedule 4. To do justice to this debate, I will—not apologise—warn that this will be a lengthy reply to an amendment of cardinal importance. I take it for granted that we are all agreed that the unauthorised commercial exploitation of the games is wrong. The London Olympic association right is designed to prevent a company from associating itself with the games unless it has paid to do so. This principle must hold this year, just as it will in the weeks leading up to the opening ceremony. We cannot enforce it until the legislation is in place, but the principle obtains, enjoined on us by the International Olympic Committee in some crucial respects. We intend to observe that principle. LOCOG has already said that it will take a reasonable and proportionate approach in exercising the rights given to it by virtue of Schedule 4, particularly in the few months after Royal Assent. I take on board the points made by several noble Lords in this debate—in very strong terms by my noble friend Lord Pendry, with his vast experience of these issues—but we do not want people to fall foul of these situations in circumstances into which they have inadvertently blundered, either through ignorance or because they already had campaigns running well before the guidance was available, or the Act had received Royal Assent. LOCOG has already taken a number of important steps to ensure that the industry is fully informed about the London Olympic association right and knows how to interpret it. LOCOG has produced a set of guidelines, to which the noble Lord, Lord Clement-Jones, referred, on how to interpret the provisions of Schedule 4. The guidance has been shared with the Advertising Association, the radio and broadcast clearing houses and others that represent advertising interests. The guidance has been drafted in close co-operation with the advertising industry to ensure it is as comprehensive and clear as possible. LOCOG will be passing a further draft of these guidance notes to the advertising industry by the end of the week and will certainly have a final version posted on its website by Royal Assent. So advertisers will know the definitive guidance by Royal Assent. Over the coming months LOCOG will also be undertaking a significant programme of education. It is producing no fewer than 11 sector-specific guides, outlining what the London Olympic association right means for the people it is likely to affect most. These sector guides will be tailored to specific interests, ranging from the advice that LOCOG will give its own sponsors and suppliers, right through to the advice that it will give to non-commercial organisations and national sporting governing bodies. It will of course include specific guides for the advertising industry and the media. LOCOG will also be working through the 2012 Nations and Regions Group—a group that LOCOG established to ensure that the whole of the country is engaged with and informed about the games. My noble friend Lord Pendry expressed regret that the noble Lord, Lord Coe, was not in his place at the later stage in the evening, although I am sure that we are all grateful for the keen interest he took earlier in the evening on other areas of controversy in the Bill. But I have no doubt that, had he been here, he would have been able to attest to the virtues that I have sought to express in relation to how LOCOG is going about its very responsible job of ensuring that the advertising industry knows just where it stands. The regional development agencies are key partners in the Nations and Regions Group and we will be looking to them to help to communicate with their regions’ businesses about the implications of the Bill. I am also pleased to put it on the record today that LOCOG has committed to hosting a seminar with representatives from small businesses, including the Small Business Service and other trade associations, to ensure that they are fully informed about what the London Olympic association right means for their members. I understand the concerns expressed this evening. LOCOG has committed to taking a lenient approach in the first few months of this right being in place, and there is a clear and comprehensive process for engaging with small and medium-sized enterprises—a matter emphasised by the noble Lord, Lord Glentoran, in introducing the amendment. I hope that that will give noble Lords some considerable comfort on this particular issue. I want to reiterate the value of ambush marketing, and why the IOC has asked us to take steps to prevent this sort of activity in relation to the 2012 games. Ambush marketing in relation to major international sporting events is becoming more and more prevalent. Sporting events do not come any bigger than the Olympics. The value of ambushing the games and the threat of commercial exploitation do not get any greater than for these games in 2012. That is why, with our experience, we need to prevent from the outset deliberate campaigns by big multinational companies that seek commercially to exploit the games. I do not think it would be wise to create a situation where companies are free to exploit the games from now until the beginning of next year, which would be the burden of this amendment if it were passed. It is not the inadvertent breach by a local corner shop or a bed and breakfast where the proprietor would not be expected to be well informed on these issues that the immediate commencement of Schedule 4 is aiming at. We are aiming at a deliberate and persistent ambush marketing campaign that could damage LOCOG’s ability to sign up their sponsors and raise the money that it needs to finance the games. LOCOG will be signing up its first sponsors in the autumn of this year. It needs to do that with the legislation in place to provide certainty to its potential sponsors that their rights will be entirely protected. LOCOG also needs to go to its sponsors in a marketplace that has not already been affected by people who have sought to exploit the games; it must be able to offer its sponsors the opportunity to activate their sponsorship rights immediately. It is worth remembering just how much LOCOG must raise. On an operating budget of £2 billion, LOCOG must raise a third from local sponsorship revenues. That is a far larger sum than any previous Olympic organising committee has had to raise and, effectively, means doubling the sports sponsorship market in the United Kingdom. That is a major task for and a major challenge to LOCOG. We are all rightly optimistic about it; indeed, the noble Lord, Lord Coe, and his colleagues exude confidence about it. We all know what an enormous success the London games will be. But they need every support that they can get. They certainly need the legislative support that guarantees their position when they approach their sponsors. Although LOCOG can offer sponsors one of the most recognised and valued brands in the world, sponsors of the Olympics get only a limited time at the games. What is more, there is no advertising in the arenas in which the games are played. When you are watching the competition on television, there will be no sponsors’ advertisements inside the arena. Given that the BBC is the host broadcaster here in the United Kingdom, sponsors will have no opportunity to advertise their association with the games during commercial breaks in the BBC’s television coverage. That is why the concept of associating with the games is so important and why we must carefully protect the rights of those companies that will pay for that privilege. It is not just about protecting sponsors’ rights, important though that is. If LOCOG does not raise the sponsorship revenues that it needs to stage the games, the shortfall will be met from the public purse. I have listened carefully to what noble Lords have said on that issue and throughout the debate on the various measures designed to protect the Olympic brand. I am grateful for the contributions that have been made today. However, we must think very carefully indeed when we are considering such substantial sums, which are attainable through sponsorship but which, should they not be attained through any failure on our part, would fall as a duty on the public purse. I am grateful for all the work that has been done today to improve the Bill. As noble Lords will recognise, I have tabled amendments out of respect for the strength, cogency and accuracy of some arguments made in Committee. However, I do not regard the amendment as a compromise; I regard it as a compromising amendment. It compromises the ability of LOCOG to achieve its necessary financial results from sponsorship. That is why it is very important that the London Olympic association right comes into force on the day of Royal Assent. I understand that concerns have been expressed, particularly on behalf of small businesses which have limited resources to make themselves aware of all the issues involved, but I hope that I have succeeded in allaying some of the concerns about what might be perceived as some ignorance about the implications of the right. LOCOG is bent on informing all those concerned, and we are in the closest consultation with the advertising industry. But we do need to protect this right, which is central to the success of the games. We owe it to LOCOG, to the work that it is doing now, and to the challenge that lies before it. We dare not add extra burdens. This is not only about the interests of all of us, including the vast majority of the public who are committed to the games being a success; we have a responsibility to the public purse, and if we do not deliver down one channel, we will be obliged to deliver down another. I hope the noble Lord will withdraw his amendment on the basis of my arguments.