Clause 4 - Advertising: exclusions
Tobacco Advertising and Promotion Bill [Lords]
3:00 pm
Mr Tim Loughton (East Worthing and Shoreham, Conservative)
I, too, extend my welcome to you, Mr. Pike. We are also looking forward to Mr. Winterton chairing the Committee at some stage.
I wish to talk briefly to amendment No. 10, which would exempt investors in tobacco companies from the restrictions in this Bill, as my hon. Friend has explained. It is perfectly clear to anyone that investors and, most probably, equity holders in quoted tobacco companies have obvious interests in those companies and knowledge of what they do. Most investors have their eyes open about the business that a company conducts. An equity holder will be interested in the
company's progress, its financial profitability and the business that it will carry out. The major quoted tobacco manufacturing companies, such as Philip Morris, Gallaher and Imperial Tobacco Group, have manufacturing, marketing and retailing businesses throughout the world, and most countries are not covered by prohibitions on advertising. Many hon. Members may want the ban to extend further, but that is not the issue. If the Bill is enacted, tobacco advertising will be banned in this country, which will affect many tobacco manufacturing companies and their offshoots that operate in this country. However, that would not affect their businesses in many other countries.
I do not knowingly hold direct holdings in any quoted tobacco companies, although the few collective unit trusts and investment trusts that I have may contain holdings in tobacco companies. However, if I were an investor in such a company, I would want to know about that company's activities throughout the world, as I do about any company in which I have invested. It would not be unusual for an annual report of such a company to give a review of the company's activities worldwide during the previous year. It would be likely that that would include a report on marketing activities in specific countries, which could include details of promotion and advertising campaigns. It would not be uncommon for examples of campaigns and actual adverts to be included in an annual or half-yearly report. Under corporate responsibility requirements, that could be included in environmental reports that are produced with the annual reports, because two thirds of FTSE companies produce them for their shareholders and stakeholders beyond equity holders.
It would be perfectly reasonable to expect that quoted tobacco companies might include pictures and replicas of adverts run in other parts of the world where that is legal and legitimate when disseminating information to their shareholders. As I understand the Bill, it would impose a degree of censorship on what tobacco companies could report to their shareholders in this country in their annual reports. That is absolutely crazy and wholly unnecessary because direct investors in tobacco companies have invested with both eyes open. They know that they have invested in a company that produces tobacco products and they have no qualms about that. Such people are not impressionable to tobacco advertising because they have actively sought to invest in a tobacco company, whether or not they are smokers. They would have to be over the age of 18 to be permitted legally to own shares because otherwise the shares would be in the name of a trustee and the literature would not be sent directly to a minor.
The Bill risks hitting unnecessarily the perfectly legitimate dissemination of information by quoted tobacco companies to their legitimate and aware shareholders, and I am sure that that was never its intention. We are here to restrict and prohibit advertising that may be deemed to promote smoking, or encourage people to take it up or smoke more. That is the Government's thinking behind the Bill, and I
appreciate that; we just disagree on whether the Bill will have the effect that the Government want.
Surely it was not the Government's intention to penalise shareholders who have invested in tobacco companies and are not impressionable smokers or soon-to-be smokers. That is our point, and it is perfectly sensible. If the Government do not accept amendment No. 10, the Bill will represent a rather odd form of censorship of companies that are going about their perfectly legitimate business. Hon. Members may have opinions about whether it is a good business to be in, but it is legitimate for any Committee member to invest in those quoted tobacco companies. However, it is not legitimate to restrict what those companies can put into their annual report to their shareholders.