Clause 6 - Specialist tobacconists
Tobacco Advertising and Promotion Bill [Lords]
10:45 am
Mr David Wilshire (Spelthorne, Conservative)
Amendment No. 32 is designed to probe the Government on the meaning of the clause and amendment No. 33 deals with a matter of greater substance. We may wish to press that amendment, although that will depend on the progress of the debate.
First, on amendment No. 32, subsection (3) states:
''The sales referred to in subsection (2) are to be measured by sale price''.
The Bill does not contain a definition of ''sale price'', which could have several meanings. The hon. Member for Luton, North mentioned spelling out principles; we should spell out definitions.
I think that I know what the Government mean, but I suspect that if we are not careful we could easily create a loophole for the tobacco companies, which the hon. Member for Luton, North does not much care for. Inserting the word ''actual'' would at least quantify the concept of the sales price. That word may not be right or what the Government mean. However, ''sale price'' has many possible meanings. The meaning could be the recommended price of a product or the discounted price. It could be the price before or after duty is charged, or the price before or after the addition of value added tax. It could be a price subject to a deal whereby the product is added to other items before an overall discount is applied.
If a prosecution were brought that was based on the ''sale price'', has any lawyer given thought to the following? If the clause says only ''sale price'', a defence could be offered that the recommended sale price is so and so and, when calculating sales figures, the recommended list price of the product rather than the actual or discounted price should be used because the discount that is given is based on the value of the customer and the overall business that he brings. Such business need not come only from tobacco products
because it could come from many other items. One could argue that the discount applied was that granted to the customer, not the product. A good lawyer could have quite a bit of fun with that defence and I imagine that it would be difficult to return to this Act—as it will be—and point out that the clause says ''sale price''.
Has any thought been given to that problem and does a definition of ''sale price'' apply generally in law? The hon. Member for Luton, North mentioned principles. However, we are returning to previous debates. I promise you, Mr. Winterton, that we will not have those debates again in general terms but, in your absence, we have had several discussions on the need for definitions to avoid doubt. This is a further case. What is the ''sale price''?
We tabled the amendment to stimulate discussion and to allow us to get our minds around the subject. My colleagues and I are not wedded to the word ''actual'', but that word would define ''sale price''. If the Minister does not like the word, I would be happy to hear an alternative. I stress that amendment No. 32 is a probing amendment and we do not necessarily wish to press it to the vote.
Amendment No. 33 raises a different issue. I am the first to admit—given that I drafted the amendment—that when a layman drafts an amendment, it is perfectly possible for it to be a load of nonsense in legal terms. Therefore, I am not deeply wedded to the wording. If the Minister says that the wording is useless and offers me a different form of words that has been researched by Parliamentary draftsmen, I will be delighted.
I have chosen those words because I am trying to tackle an important issue. Clause 6 says that specialist tobacconists can have exemptions or dispensations with regard to the provisions of the Bill. The Government have decided that that should be the case and that is fine with me—although the hon. Member for Luton, North would claim that the tobacco companies might be able to take advantage of that.
The clause seeks to define a specialist tobacconist by reference to sales. It states that if a business has been established for less than 12 months, the available information should be examined, and that if a business has been established for longer than a year, the previous 12 months' figures should be studied. If those figures show that the turnover of the business does not divide in such a way that it can be classified as a specialist tobacconist, I assume that that business will no longer be a specialist tobacconist and that, therefore, it will no longer be able to take advantage of this dispensation. The Government are saying that a business will be classified as a specialist tobacconist if more than 50 per cent. of its turnover is in tobacco products. That is fine—although we could argue whether that is the correct percentage, and that could be discussed in a stand part debate.
The Government have said that that is how they will measure whether a business is a specialist tobacconist, but it is possible for a business that has been a specialist tobacconist for many years to have a different year in trading terms. The trading patterns of that business
might change because the owner does things that alter the nature of the turnover. If those things are done voluntarily, that is fair enough; the owner might know what they are doing because they are aware of the need to stay within the Government's rules but choose not to do so—or not to take remedial action during the course of the year to ensure that the business does stay within the rules. If proprietors of such businesses choose to be in that situation, or are so silly that they do not bother to address it, they richly deserve their fate, because matters are within their control.
However, as Committee members who have run businesses know, circumstances can arise over which one does not have any control. I ran a retail business during the miners' strike; we lost our electricity supply and our sales plummeted. How much they fell depended on the time of day when our electricity was cut, because there is a pattern to when people buy things within the day as well as within the seasons. I had no control over the loss of the electricity supply. My turnover figures for that year were very different than those for many previous and subsequent years.
A specialist tobacconist might be unable to get specialist tobacco products because of a strike of some sort—such as a distribution, a manufacturing, or a shipping strike. It appears that we are returning to an era of industrial unrest, so any of those strikes could happen and they could last for a protracted period. Therefore, a business might find that its turnover of tobacco plummets and that there is nothing that it can do about that. The Government are stoking up the industrial unrest and it would be grossly unfair if they caused a strike and then penalised entirely innocent businesses.
This amendment is intended to address that problem. As I have said, its wording might be unacceptable to the lawyers, but it seeks to say that if a business is caught up in a strike that it cannot control and that affects its previous 12 months' figures, the figures for the 12 months before that—when there was no interruption of supply—must be used. The amendment would take out of a financial calculation a year in which unusual trading was not a result of the business's action or inaction.
The provision gives rise to another issue. Given crop failures and climate variation, it is possible that the availability of tobacco in its usual quantities from particular places may vary. As a non-smoker, I must rely on what other people tell me, but I gather that there are distinct differences in tobacco and that if someone smokes tobacco that comes from Africa, it does not automatically follow that he will want to smoke tobacco that is grown in America.
A specialist tobacco business may be based on a particular brand and be popular among certain customers because the tobacconist is obtaining the product from a particular area. If that crop fails or the change of climate restricts its availability and the tobacconist switches to another product that his customers do not like or with which they are not familiar, the turnover of the business could plummet in
the short term. It would take that business a while to build up a new clientele who would appreciate the new product.
Again, the interaction of supply in such a situation will be out of the control of the retailer. It is unreasonable to expect the business to be closed down and to run foul of the Bill because, in the short term, it had to change its product. I should be grateful for the Minister's response to such matters. I do not want her to comment on the wording of the amendment, other than to say how she could improve it. What are her views about an uncontrollable interruption of supply? Does she believe that it should be excluded from the financial calculations under the Bill?