Clause 4 - Advertising: exclusions
Tobacco Advertising and Promotion Bill [Lords]
3:15 pm
Mr David Wilshire (Spelthorne, Conservative)
I should like to follow on from what my hon. Friend says and take his argument a little further. To avoid any misunderstanding, I happen to have a modest number of shares in British American Tobacco. That it is not a declarable interest, but it is relevant to the debate. [Interruption.] It is not declarable. The comments of Labour Members demonstrate why it is important to pursue the subject. One can only assume that they do not know that BAT does not sell anything in the United Kingdom. That is why I say that the interest is not declarable.
The very fact that I am a shareholder is relevant to the point that I want to make. The Companies Act 1989 places a duty on all British companies—such as BAT—to report to their shareholders. It is not adequate for the Minister to respond by saying that an annual report does not need to have an advert in it. We had a debate on an earlier clause, when you were not in the chair, Mr. Pike, on why the Government thought it necessary to include both advertisements that have the purpose, and those that have the effect, of promoting tobacco.
It is perfectly possible for an annual report to have no advertisements, and the directors of a company need not deliberately set out to use the annual report as a vehicle to advertise their product. It is not that for which the amendment is seeking an exception; that would be using something for the purpose of advertising. The problem is that the report might have the effect of being an advertisement to an investor. I understand that, under the Companies Act, companies are legally obliged to tell shareholders how well the company has done, and to say what the prospects are for the investors.
An utterly factual annual report could have no illustrations, and make no attempt to advertise, and could set out only what is required under the law. Citizens of this country could get such an annual report from a tobacco company that is doing nothing illegal; it is selling a product and making a profit. I know that some hon. Members do not like the idea of profit, but selling is a perfectly legitimate activity. If that company is particularly successful, and if the annual report suggests that the product is a good
investment, the effect of producing the annual report may be to encourage smoking, because a person may receive the report and think, ''I am doing very well out of this; it must be a successful and enjoyable activity, so why don't I smoke and help to increase the profits of my company?'' People could think like that, and it could be argued in court that that is what that annual report was achieving. Therefore, that document would fall foul of the law, because it would have the effect of promoting smoking and the use of tobacco.
A company that finds itself in that situation would be in a dilemma. On the one hand, it would be required to comply with the Companies Act and, on the other hand, it would be required to comply with this Bill. If it did what the law required by complying with both, one way or the other it would be committing an offence: it could either leave things out of its annual report and commit an offence under the Companies Act, or it could put things in it that it legally had to include and commit an offence under this Bill. The Minister must take that seriously—rather than look bored because I am yet again raising a matter that she does not want to get her mind around—because it is important.
I return to the point that I made about British American Tobacco. It has not briefed me in any shape or form on this—I have had no contact with it about the legislation. Those Labour Members who do not understand the vagaries of the international tobacco business may not be aware that a brand is not owned solely by one company. If I have got the following example wrong, I apologise to the owners of the brand, but company A might be the producer of Benson and Hedges cigarettes for sale in the UK and BAT could be the producer and marketer of that brand elsewhere in the world. That is the way that the tobacco industry works.
In those circumstances, there is a further problem with regard to sending information to investors—or to anyone else. A company that does not sell anything in this country might report on the success of a brand that it produces. That company will be reporting on something that takes place overseas, and the Bill does not deal with things that happen outside the UK. However, by reporting on the sales of a particular brand, which is entirely legal in the rest of the world, that company might inadvertently be producing an advert for a brand that is produced by a different company for sale in the UK. It is not possible to say that there are foreign brands and there are British brands; it will not be good enough to say that a company that trades abroad will not be caught by this, because its activities will spill over into the activities of a company trading here. I am not talking about advertisements in glossy magazines that might accompany the annual report; that is a different issue, and they would be advertisements under the definition. However, I bring the Minister back to the crucial point of having to comply with financial legislation and produce information, the effect of which could be held to be encouraging smoking.
I would like the Minister to clear up those points, before I discuss amendment No. 20.