Close-Up: Live Issue - Why the UK ad industry doesn't stop at the M25.

The pillaging of clients and staff by London agencies is a major issue confronting regional operations, Lucy Aitken reports.

You might have to stop your monocle from falling into your flute of Champagne at the shock, but apparently there is life north of Watford.

And it's not just the cosy Coronation Street world of corner-shop chat and murder by monkey wrench, either. There are big businesses offering substantial billings and even, gasp, a generous smattering of agencies that can bear comparison with their competitors inside the M25.

In Campaign's Top 30 agencies, as ranked by Nielsen Media Research billings, there are four regional agencies: Cheethambell JWT, BDH\TBWA, PWLC and The Leith Agency. Between them, they service an impressive client base that includes Coors and Hotpoint (Leith), Morrisons, Nissan, Crown Paints and Cussons (BDH\ TBWA), Reckitt Benckiser (Cheethambell JWT) and Alliance & Leicester and BSkyB (PWLC). Yet these agencies still come up against prejudice from those who view them as parochial shops with an inferior creative product.

Their predicament isn't helped by stalwarts from the north - such as Nestle Rowntree and Halifax - which venture south in search of an ad agency, leaving regional shops to service those clients with less impressive budgets.

Yet, as any ad agency worth its salt already understands, there's absolutely no reason why a small budget should mean shoddy creative. A colourful poster campaign, 'hair crimes', for City Gent hairdressers in Leeds, for instance, was recognised at last year's Fresh Awards. As if epitomising the nature of many a regional ad, Bil Bungay, the deputy creative director at TBWA\London, made the following observation about the campaign: 'Although this is obviously a very local campaign and hardly the largest client in the world, I am sure it will have raised some smiles around Leeds.'

The agency behind 'hair crimes' is PWLC. Mike Phillipson, the agency's chief executive, has proved that a Leeds-based agency can compete with its southern peers: PWLC is already the UK's third-largest regional agency and bills more business than the London offices of both Fallon and Wieden & Kennedy.