Banning HFSS adverts

Meeting: 
MQT on 2018-09-13
Session date: 
September 13, 2018
Reference: 
2018/2347
Question By: 
Gareth Bacon
Organisation: 
GLA Conservatives
Asked Of: 
The Mayor

Question

How much revenue do you expect to lose by banning HFSS (high fat, salt or sugar) adverts across the Transport for London network?

Answer

Answer for Banning HFSS adverts

Answer for Banning HFSS adverts

Answered By: 
The Mayor

Thank you, Chairman.  Thank you for the question.  Child obesity in London is a ticking time bomb.  The number of children aged 10 and 11 in London who are overweight or obese has reached almost 40%.  This is among the highest rates in Europe.  There is a clear link between weight and a whole host of health issues.  This is something we need to address now.  If we do not, we risk placing a huge strain on our already pressurised health services in years to come.  Public Health England estimates the cost of obesity in England to the National Health Service (NHS) is £6.1 billion per year.  The Government estimates the overall cost of obesity to wider society is £27 billion per year.  There is no single intervention that will solve London’s child obesity problem.  It requires a range of policies, as outlined in my draft London Food Strategy, and this is an area in which I as Mayor have the power to take action and contribute to tackling the problem. 

 

The proposed ban on advertising junk food in TfL’s advertising estate is just one of several ways that we are trying to tackle the problem, but we do know it can make a difference and that it matters.  Research by the National Centre for Social Research and Cancer Research UK found that advertising does impact children’s food choices and that seeing unhealthy food in advertising, particularly those aimed at children, creates extra pressure on children and families when it comes to choosing what to eat and drink.  Junk food ad bans have already been used in Amsterdam as part of a package of measures in the city to tackle childhood obesity.  Together, these measures have already resulted in childhood obesity falling by 12% overall and by 18% among the most deprived children. 

 

The proposed ban would reduce children’s direct exposure to junk food advertisements and it would be aimed at products, not brands, so a brand could still advertise a healthier product in their range.  The revenue of advertising of less healthy food and drink on the TfL advertising estate is estimated to be in the region of £13 million per year.  However, we do not necessarily expect there to be any significant impact on overall revenue as we expect brands advertising these products to switch to advertising the healthier products in their range.  Our consultation has only recently closed.  We are now considering all the responses.  At this stage we are not yet in a position to confirm what restrictions on junk food and drink advertising would involve but my officials are working with industry partners to ensure we minimise any unintended consequences.

 

Gareth Bacon AM:  Thank you very much for that lengthy answer, Mr Mayor.  You have just stated confidently that you would not lose the money, you would replace it elsewhere, which is at odds with what we heard at the [London Assembly’s] Budget [and Performance] Committee in June and July [2018] when we met with finance officers from TfL and also people from the Advertising Association.  Where do you expect that money to come back from?

 

Sadiq Khan (Mayor of London):  I think the phrase I used is, “We do not necessarily expect there to be any significant impact on overall revenue”.  The estimate in the previous year in relation to the advertising that is spent on, in inverted commas, ‘junk food’, foods high in fat, salt and sugar, is £13 million, but as I said, the proposed ban is aimed at products, not brands.  It is possible for somebody who has other options to redirect their adverts to other options.  It could be the same product advertising or using the space or it could be somebody else.  We are not quite sure yet how it pans out.  Obviously, it is contingent on what discussions we have with the industry over the next few weeks and months. 

 

Gareth Bacon AM:  We heard repeatedly from both the industry experts and TfL that replacing this was not going to be at all straightforward, and of course according to TfL’s Business Plan it is not just replacing it and staying static.  Over the lifetime of the Plan it predicts and therefore requires an increase in advertising revenue on the TfL network by more than 51%.  Are you in a position where you can afford to let this go?

 

Sadiq Khan (Mayor of London):  The Business Plan will be produced later on this year.  Advertising revenue is a revenue stream that is really important to TfL.  I do not accept we will necessarily lose £13 million in advertising revenue.  Let us wait and see what happens.  I am confident that those products will still use up some of the advertising, if not all of it, and if not that we will find someone else to replace it.  I have explained the cost to the NHS on an annual basis and the cost to our economy.  If there was a small dip in TfL’s finances it would be a price worth paying.  It is a similar argument I use, by the way, when people say to me, “Why are you encouraging people to walk and cycle? You are losing fares revenue from public transport”.  There is a benefit of people being encouraged to walk and cycle even though we are losing fares from public transport.

 

Gareth Bacon AM:  I understand the public health argument, Mr Mayor, and I do not think anyone particularly disagrees with it.  The point is that TfL is in a very parlous financial state.  I think that is something that is an indisputable fact.  We are hearing repeatedly that TfL are going to be back in surplus within three financial years, recovering from a £1 billion deficit today, and a key part of that is not just holding static on the advertising but increasing it, as I said earlier, by more than half on the current figure.  How are you going to achieve that?

 

Sadiq Khan (Mayor of London):  Chairman, first, I do not accept that TfL’s finances are in a perilous state.  TfL has never had a surplus.  Since its formation in 2000 it has always operated in deficit.  The previous Business Plan had no plans to reach a surplus.  At the end of the five‑year Business Plan from the previous Mayor, we would still be in deficit.  Our Business Plan, which will be reviewed and updated later on this year, does have a plan for us to reach a surplus.  That is in the context of us losing, on average, £700 million a year. 

 

I accept that advertising provides an important revenue stream for TfL.  I do not accept necessarily at this stage, unless I see evidence to the contrary, that a junk food ban on the TfL estate would lead to a significant dent in our revenue streams.

 

Gareth Bacon AM:  Mr Mayor, the Business Plan is predicated on returning to surplus based on massive increases in ridership when the trend is down, it is predicated on Crossrail opening on time and on budget, and we heard last week that that will not happen for the better part of a year, and it is predicated on investment in advertising going up by more than 51%.  Why should anybody listening to this exchange have any confidence that TfL are going to deliver that?

 

Sadiq Khan (Mayor of London):  We are going to work on the new Business Plan going forward.  I am confident with the current Business Plan.  You will appreciate, as someone who held the previous Mayor to account, that the TfL budget has been in deficit since 2000.  This is the first administration, my one, to reduce the operating costs of TfL.  I was told it could not be done.  We have managed to do it.  Then we did it for the second year in a row.  We have reduced the operating costs of TfL.  It is the first time it has ever happened in TfL’s history.  We have made huge savings.  We were told that could not happen.  We have also, by the way, frozen fares.  We were told that could not happen as well.  I am confident in the team we have in place to make sure we continue to make efficiencies in TfL going forward.

 

Gareth Bacon AM:  Mr Mayor, I still have not heard an answer to the question though.  How, when it has never been done before? You said this yourself and you are completely correct.  TfL has never delivered a surplus.  It is delivering a record loss, or it is forecast to at the moment, and to achieve the surplus that it has said that it is going to it will have to break all records, for ridership, advertising and the cost savings that you have correctly identified.  Why should we be confident on that? The key thing, the thing that TfL was betting the house on, was Crossrail, on time and on budget.  We heard that mantra repeatedly and endlessly.  We heard it in June, we heard it in July [2018], there was an All‑Party Parliamentary Group at the House of Commons that heard it in late July, and then the following month you, Crossrail and TfL were summoned before the Assembly because now it was going to be some indeterminate date off into the autumn [of 2019].  Why should anybody listening to this exchange have any faith in what you have just said?

 

Sadiq Khan (Mayor of London):  I know you do not intentionally want to mislead people.  I was not summoned before the Assembly, I asked the Chairman to come before the Assembly.  It is important that you do not again mislead ‑‑

 

Gareth Bacon AM:  Mr Mayor, that is semantics and you are deflecting.  Please answer the question. 

 

Sadiq Khan (Mayor of London):  I am sorry, Chairman, but the Assembly Member has a habit of having false premises in his question and I would have thought you would have picked him up, putting aside our differences and being an impartial Chairman.

 

Gareth Bacon AM:  Mr Mayor, you are deliberately wasting time.

 

Tony Arbour AM (Chairman):  Mr Mayor, you made the point yourself.  There is no need to expand on it.  You say you were first.  There we go.

 

Sadiq Khan (Mayor of London):  Fine.  I am glad we agree.  I was not summoned before the Assembly.  I asked the Chairman to come before the Assembly to explain what Crossrail Ltd had told me the week before.

 

Gareth Bacon AM:  Mr Mayor, the central point ‑‑ the central point, Mr Mayor ‑‑

 

Sadiq Khan (Mayor of London):  There you go, Chairman.

 

Gareth Bacon AM:  ‑‑ is that we have heard endlessly that Crossrail was going to be on time and on budget and the advertising is part of TfL’s Business Plan, as is the massive increase in fare revenue that we are all predicting.  “On time and on budget” turned out to be massively late and way over budget.  You appeared in front of the Assembly.  We can disagree about “summoned” or whatever.  I accept your point.  You were not summoned, you appeared before the Assembly.

 

Len Duvall AM:  Chairman, we have somewhat strayed from the original point of the question.  I kept quiet when we moved into the surplus of TfL.  We are now moving into Crossrail.  Are you going to make a ruling on this?

 

Tony Arbour AM (Chairman):  I am not going to make a ruling.  The Mayor can decline to answer those points giving the argument that you have made, that he is here to answer a question on the revenue.

 

Len Duvall AM:  Chairman, in view of that, my point of order is still there.  The leniency that you are giving in terms of ranging widely from the original question, I expect you to give to every Member around the table as we ask our questions as well. 

 

Tony Arbour AM (Chairman):  I am very even‑handed in these matters.  Do carry on, Assembly Member Bacon. 

 

Gareth Bacon AM:  Mr Chairman, I appreciate that the Leader of the Labour Group would want to protect the Mayor over the disastrous unravelling of TfL’s Business Plan but I would appreciate the Mayor giving me an answer.

 

Sadiq Khan (Mayor of London):  Sorry, Chairman, I missed the question.

 

Gareth Bacon AM:  Oh, for heaven’s sake.  He has not missed the question, he is wasting my time, which is a well proven tactic.  Mr Mayor, the TfL Business Plan forecast an increase in advertising revenue of 51%.  Your policy is going to put a big dent in that.  It has also forecast a massive increase in ridership across the entire network, including Crossrail being delivered on time and on budget, and we now know that is going to be nearly a year late.  How would anyone listening to this exchange have any faith that the numbers that you are talking about will be hit in the timescales envisaged?

 

Sadiq Khan (Mayor of London):  The concern the Assembly Member has is that our ban on junk foods could cause a serious dent in TfL’s budget.  I have explained, in answer to the first question, that the estimates we have for the amount of monies raised via junk food advertising is in the region of £13 million a year.  We are confident that those products spending £13 million a year will advertise other brands in the range of goods that they sell.  If they do not, we think the £13 million can be replaced elsewhere.  The context is £13 million versus the £6.1 billion the NHS spends as a consequence of obesity and the £27 billion cost to the economy as a consequence of obesity.  Anybody who saw the newspapers yesterday and saw that we are number three in the world in relation to obesity levels would be shocked that the Conservative Party once again has put its head in the sand ‑‑

 

Gareth Bacon AM:  Chairman, this is a waste of time.

 

Sadiq Khan (Mayor of London):  ‑‑ on addressing a really important issue.  And you know what? We should know by now that is what you can expect from the Conservatives.

 

Tony Arbour AM (Chairman):  No, Mr Mayor, there is no need for this partisan exposition. 

 

Gareth Bacon AM:  Brilliant grandstanding, I have to say.

 

Tony Arbour AM (Chairman):  I did say right at the very beginning that everyone is working on a time limit and I wanted to reduce filibustering.  That clearly was a filibuster to relate your expenditure to the expenditure of the NHS when we are simply talking about TfL expenditure.  However, I do expect Members to hold the Mayor to account and not leave it to me. 

 

Right.  Where are we on this?

 

Gareth Bacon AM:  I think the Mayor has wasted enough of my time, Chairman.

 

Tony Arbour AM (Chairman):  We go to the next question now.