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Sorrell: ‘Ad industry needs clear plan from Tories and quick appointment of new PM’

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By Sam Bradley, Senior Reporter

July 7, 2022 | 6 min read

Prime minister Boris Johnson’s resignation and eventual departure may have significant consequences for Britain’s advertising and marketing agencies.

Boris Johnson leaves office

Boris Johnson has resigned as Conservative leader and will leave office later this year / Creative Commons

Following news that the premier would step down in the autumn following the selection of a new Conservative party leader, Sir Martin Sorrell, executive chairman and chief executive officer of S4 Capital, is calling for a swift appointment of a new party leader and a fresh approach to the post-Brexit economic situation.

Sorrell tells The Drum: “As there’s considerable economic uncertainty in the UK – and elsewhere – we need a clear plan from the new leader and, consequently, a quick appointment. Delay is a negative.”

He says any incoming prime minister would have to swiftly lay out a plan to lead the UK’s economy through a potential recession.

“Given the state of government finances post Covid support, tax cuts or increased government spending are probably not on, so the plan has to lay out the short-term pain and long-term gain, when taxes can be cut and spending increased. The plan has to include focus on education, technology and infrastructure, back to a post-Brexit ’Singapore-on-Thames’ or ’Singapore-on-steroids’.”

Several candidates to present that plan have already emerged, he notes. “Who can do that? Maybe Sunak or Javid or Zadawi or Wallace. The chancellor will be key too. Sunak plus Javid? Wallace plus Sunak/Javid/Zadawi?

“Labour and Liberal Democrats are probably licking their chops too. A new leader and two years may change things, but 12 years in power is probably too long, along with the damage caused by the last PM’s inelegant exit. What type of Labour government would we have?”

Other agency leaders suggest that Johnson’s time in office would not be long mourned by the industry.

MSQ’s Peter Reid tells us: “While there are lots of economic issues that need to be addressed, it’s the lack of integrity and the public’s loss of faith in the government as to why Johnson had to go.

“Going forward, given these economic challenges, what’s needed is a safe pair of hands – someone who puts the right economic decisions ahead of any politics. That’s imperative for the long-term health of this country, not just our industry.”

Despite the close historical relationship between the Tories and the advertising business (Saatchi & Saatchi, and later M&C Saatchi, helped create groundbreaking campaigns that helped the party to victory in past decades, while former cabinet minister and one-time leadership candidate Michael Heseltine was one of the founding publishers of Campaign magazine) Johnson’s government hasn’t looked kindly upon the industry.

Just last week, the government’s cost of living tsar David Buttress trailed a campaign to ask businesses to divert marketing spend away from advertising and into price cuts as a means of passing on profits to consumers.

Its anti-obesity policies, meanwhile, included a strict ban on advertising foods high in fat, sugar and salt (HFSS) before the 9pm watershed – a move opposed by agency chiefs and trade bodies. When that rule’s introduction was postponed until January 2024, the ISBA’s director general Phil Smith said the government’s “timetable left business no time to adapt to the final shape of the rules”.

Johnson’s major policy platform upon taking up office – finally settling and implementing the UK’s exit from the European Union – also worked contrary to the aims of the sector. The exit prompted an 11% drop in business investments across the economy by 2019 and agency clients that previously exported goods to the continent were hit hard.

Reid says: “From an industry perspective, Johnson leaves behind a whole list of negatives. Brexit has been a real low when it comes to losing access to the best talent, but the move to privatize Channel 4 and the general attitude towards the BBC – which we should be celebrating – has also been particularly damaging. Sadly, I’m skeptical that a change in Conservative leader is going to help change that.

“While we may not be rejoining the EU anytime soon, I think the best we can do for our everyday lives and our industry is to go back to the single market – or at least make a new Brexit deal that allows for better access to talent and frictionless trade. It still seems a long way off, but one can hope.”

More recently, Johnson’s government has presided over a period of rising inflation and higher interest rates. Those factors have damaged agencies’ capacity to raise new capital via the stock market or lending, while putting pressure on junior staff to meet higher costs of living.

Spokespeople for WPP, Dentsu, Accenture Song and Havas each declined to comment. Omnicom, Interpublic Group, Deloitte and Publicis Groupe were also approached.

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