Oops we broke EU rules

How the government has had to change its guidance for car manufacturers after it was caught flouting

My favourite word today is ‘emblazoned’. That’s what adverts for cars will have to be from now on - emblazoned with details of fuel consumption and CO2 emissions, thanks to a sudden change in advertising rules by the government.

The 4x4 campaign has been working on this for about a year now, but the endgame was surprisingly easy, with the Department for Transport changing its guidelines for advertising within three months of asking. They haven’t come over all green, or even responded to the high cost of petrol, but were correcting a legal error they made more than seven years ago in exempting the majority of ads from an EU law.

One of the aims of the 4x4 campaign has always been to get advertising rules changed, since we were fed up seeing our efforts to change the image of 4x4s counteracted by shiny ads on billboards and in magazines that contained nothing to show their climate impact – or the colossal amounts they cost to run. Complaining to the Advertising Standards Agency about specific ads got us nowhere - we always got the answer that the ads followed the government’s guidelines to manufacturers, and therefore were ‘compliant with the law’.

Inspecting these guidelines in more detail, we spotted the problem. A 1999 EU Directive says fuel economy and CO2 emissions information must be provided in all promotional literature for cars, and that this should be displayed as prominently as the main selling information. However, the Department for Transport’s guidelines for car advertisers (published by the Vehicle Certification Agency in 2001), wrongly stated that 'primarily graphical' adverts do not need to include CO2 information and specifically excluded billboards from their rules. Manufacturers, of course, then gleefully exploited this loophole to leave fuel economy and CO2 out of as many adverts as they could, including billboards and most ads in glossy magazines as well.

Working with the Friends of the Earth legal team, we concluded that the DfT’s guidelines represented a significant breach of European law and wrote to them in March this year to point this out. We also threatened to take it to the High Court if they didn’t bring the guidelines up to scratch, which probably helped.

After a quick review by the Department, we got confirmation yesterday that they are revising their guidance notes from today to make prominent CO2 information compulsory on all billboards and posters advertising cars in the UK.

The letter said: "We have concluded that our guidance is incorrect in respect of primarily graphical material. For this reason we will be amending this section of the Guidance Note on the VCA website by close on 20th June to read as follows;

“The Regulations define 'promotional literature' as 'all printed matter used in the marketing, advertising and promotion of a new passenger car...'. We are of the view that this definition does include material which is largely graphical, with limited textual content (perhaps containing only the model name and an advertising slogan). We therefore consider that street advertisements are subject to the requirements of the regulations.”

So that’s it. Job done with remarkably little fuss, showing what a small group can achieve when the law is on our side. Thanks to a simple letter, from now on, people choosing a car will be able to get vital information on CO2 emissions and fuel economy much more easily, and will be able to make greener and cheaper choices of car.

This, in turn, will help encourage car-makers to build more efficient vehicles, something they have been very slow to do. Despite having a Europe-wide target of reaching average emissions of 120 grams per kilometer of CO2 by 2012, most companies are way off achieving this. With information on fuel costs at their fingertips, people power and simple consumer choice should now be able to drive manufacturers in the right direction at last.

Sian Berry lives in Kentish Town and was previously a principal speaker and campaigns co-ordinator for the Green Party. She was also their London mayoral candidate in 2008. She works as a writer and is a founder of the Alliance Against Urban 4x4s
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Let's turn RBS into a bank for the public interest

A tarnished symbol of global finance could be remade as a network of local banks. 

The Royal Bank of Scotland has now been losing money for nine consecutive years. Today’s announcement of a further £7bn yearly loss at the publicly-owned bank is just the latest evidence that RBS is essentially unsellable. The difference this time is that the Government seems finally to have accepted that fact.

Up until now, the government had been reluctant to intervene in the running of the business, instead insisting that it will be sold back to the private sector when the time is right. But these losses come just a week after the government announced that it is abandoning plans to sell Williams & Glynn – an RBS subsidiary which has over 300 branches and £22bn of customer deposits.

After a series of expensive delays and a lack of buyer interest, the government now plans to retain Williams & Glynn within the RBS group and instead attempt to boost competition in the business lending market by granting smaller "challenger banks" access to RBS’s branch infrastructure. It also plans to provide funding to encourage small businesses to switch their accounts away from RBS.

As a major public asset, RBS should be used to help achieve wider objectives. Improving how the banking sector serves small businesses should be the top priority, and it is good to see the government start to move in this direction. But to make the most of RBS, they should be going much further.

The public stake in RBS gives us a unique opportunity to create new banking institutions that will genuinely put the interests of the UK’s small businesses first. The New Economics Foundation has proposed turning RBS into a network of local banks with a public interest mandate to serve their local area, lend to small businesses and provide universal access to banking services. If the government is serious about rebalancing the economy and meeting the needs of those who feel left behind, this is the path they should take with RBS.

Small and medium sized enterprises are the lifeblood of the UK economy, and they depend on banking services to fund investment and provide a safe place to store money. For centuries a healthy relationship between businesses and banks has been a cornerstone of UK prosperity.

However, in recent decades this relationship has broken down. Small businesses have repeatedly fallen victim to exploitative practice by the big banks, including the the mis-selling of loans and instances of deliberate asset stripping. Affected business owners have not only lost their livelihoods due to the stress of their treatment at the hands of these banks, but have also experienced family break-ups and deteriorating physical and mental health. Others have been made homeless or bankrupt.

Meanwhile, many businesses struggle to get access to the finance they need to grow and expand. Small firms have always had trouble accessing finance, but in recent decades this problem has intensified as the UK banking sector has come to be dominated by a handful of large, universal, shareholder-owned banks.

Without a focus on specific geographical areas or social objectives, these banks choose to lend to the most profitable activities, and lending to local businesses tends to be less profitable than other activities such as mortgage lending and lending to other financial institutions.

The result is that since the mid-1980s the share of lending going to non-financial businesses has been falling rapidly. Today, lending to small and medium sized businesses accounts for just 4 per cent of bank lending.

Of the relatively small amount of business lending that does occur in the UK, most is heavily concentrated in London and surrounding areas. The UK’s homogenous and highly concentrated banking sector is therefore hampering economic development, starving communities of investment and making regional imbalances worse.

The government’s plans to encourage business customers to switch away from RBS to another bank will not do much to solve this problem. With the market dominated by a small number of large shareholder-owned banks who all behave in similar ways (and who have been hit by repeated scandals), businesses do not have any real choice.

If the government were to go further and turn RBS into a network of local banks, it would be a vital first step in regenerating disenfranchised communities, rebalancing the UK’s economy and staving off any economic downturn that may be on the horizon. Evidence shows that geographically limited stakeholder banks direct a much greater proportion of their capital towards lending in the real economy. By only investing in their local area, these banks help create and retain wealth regionally rather than making existing geographic imbalances worce.

Big, deep challenges require big, deep solutions. It’s time for the government to make banking work for small businesses once again.

Laurie Macfarlane is an economist at the New Economics Foundation