Twenty years ago, when an advertising slump finally enabled ITV to persuade its then regulator to allow sponsor credits in programmes, the broadcaster was warned that it was treading on a slippery slope. Advertisers would simply substitute sponsorship for direct advertising, ITV would be no better off, and programme brands would be damaged by direct and inappropriate association with named products.

Sponsor credits now abound on commercial channels, earning tens of millions of pounds for hard-pressed broadcasters. Viewers largely ignore them, or fast forward through them. They are part of the screen furniture. But now, television advertising is again in free fall, with revenues down 15 per cent this year after dropping sharply last year.

So it will come as a relief to broadcasters and producers alike that Ben Bradshaw, the Culture Secretary, has overturned his predecessor’s somewhat pompous refusal to lift the ban on product placement in UK-originated programmes. Given that product placement has been exhaustively debated, it is frustrating that Mr Bradshaw is proposing a three-month consultation before confirming the lifting of the ban.

The ban always seemed blinkered. The notion that viewers needed protection from covert commercialism was easily dealt with by requiring acknowledgements in programme credits for any placement. In today’s media-savvy world, such nannying was anyway quaintly old-fashioned.

In television schedules awash with “reality” shows — where producer manipulation renders any relationship with “reality” meaningless — it would be a breath of fresh air to have regulars at The Rovers Return in Coronation Street supping recognisable lager brands and munching from familiar packs of pork scratchings. Viewers are largely bemused to see soap characters eating breakfast from cartons labelled Corn Flakes, rather than from those branded Kelloggs.

After all, we have long been used to massive amounts of product placement in Hollywood movies, as well as in US-produced television shows. Does anyone watching Desperate Housewives in the UK care if all the cars in Wisteria Lane seem to come from the same manufacturer? In the US, there are hundreds of thousands of placements and billions of dollars earned every year.

British movies, too, are heavily dependent on product placement: think of James Bond and his array of branded goodies, from cars to watches.

Indeed, one of the ironies of the ban on product placement was the prospect that it might have prevented Channel 4 from broadcasting its Oscar-festooned film Slumdog Millionaire, on the basis that it was a lightly disguised advertisement for the commercial product Who Wants To Be A Millionaire? The lead producer of the film had been WWTBAM’s creator, and Channel 4 had directly financed the film, so classifying it as UK production. Channel 4’s chief executive was the sole commercial boss who publicly opposed product placement. The rules of hubris and nemesis tell us that he is likely to be removed, along with the product placement ban, just in time for a first airing of the movie on Film Four.

There is one major difference between the product placement issue and the sponsorship debate of two decades ago. Sponsor credits only help broadcasters. Product placement helps producers to reduce their costs, which indirectly aids broadcasters but also makes UK producers more competitive in the world market. Our production industry is second only to the US in its worldwide sales: with the decline in total spending by recession-hit UK channels, and with programme budgets under increasing pressure, any relief for the £1 billion- a-year independent sector will be more than welcome.

How much money is at stake? Briefing from the Culture Secretary’s own department suggests £100 million a year. The advertising industry’s more cautious figure is £70 million. In relation to TV advertising revenues of more than £3 billion a year, these seem quite small sums. But when profits are being squeezed, or turned into losses, even £70 million can be a life-saving injection.

The lifting of the ban will be welcome in other ways. Broadcasters have looked to producers in recent years to provide advertiser-funded programming, where a single commercial player puts up most of the budget, but at the price of dislodging the producer editorially. Product placement will allow producers to find multiple commercial partners to help to absorb broadcaster budget pressures, while retaining editorial control.

Children’s programming and all BBC output will remain unsullied by these commercial placements. Indeed, BBC output may experience a clean-up. Stories abound of covert placement in BBC shows, so perhaps official approval of placement in the commercial sector will reduce the illicit pressures on BBC production managers.

Lord Reith compared the prospect of commercial broadcasting in the UK with the arrival of bubonic plague. In the heady days before the launch of ITV, the BBC could be relied on at various times to protect its audiences from news bulletins being read by divorced announcers, starting prices in the horseracing results and from risqué jokes.

Under European Union guidance and Westminster edicts, our regulators still keep a fatherly eye over our viewing and listening welfare. Ownership restrictions, limits on the length of advertising breaks, watersheds, impartiality rules, bans on advertising officially disapproved products — Ofcom’s monthly bulletins list breaches of regulations you may not have realised existed. So for this belated triumph of common sense, two cheers: a modest relief for producers and broadcasters, but also a welcome acknowledgement of the wisdom of consumers.

David Elstein is a former chief executive of Five

Times Recommends

• Fundamentalist brew: faith and power
• Big guns wheeled out for the marginals
• Wanted: new merchants of light