Clause 4 - Advertising: exclusions

Tobacco Advertising and Promotion Bill [Lords] – in a Public Bill Committee at 2:45 pm on 9 May 2002.

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Photo of Mr Adrian Flook Mr Adrian Flook Conservative, Taunton 2:45, 9 May 2002

I beg to move amendment No. 8, in page 2, line 13, leave out

', or is contained in, a communication'.

I regard this as an exceptional Bill of unprecedented character, because it seeks to ban virtually every possible means of bringing a particular product to the notice of the public. Yet we must not forget that it is perfectly legal to manufacture, sell, buy, use and, more importantly from the Government's point of view, tax that product.

Elements of the Bill impose prohibitions that are wholly disproportionate to the assumed and unsubstantiated claimed benefits. It is anticompetitive and restrictive of trade, it infringes important fundamental freedoms and rights and it bears all the hallmarks of legislation that will give rise to serious challenge in the courts.

The ban on advertising that the Bill imposes is obviously supposed to be total, save the exclusions in the clause, which are minor and poorly and inadequately drafted. That is why we tabled the amendment.

The amendment would amend subsection (1)(a), which states that an advertisement is not an offence if it is a communication or is contained in a communication made in the course of a business that is part of the tobacco trade, and is for the purposes of that trade and directed solely at persons in that trade, who are subsequently defined. The supplementary provisions of subsection (2) apply.

The Government tell us that they have no intention of prohibiting advertising or promotion in the tobacco trade. After all, as I said, manufacturing and selling tobacco are perfectly legal activities. However, my contention is that the subsection does inhibit such advertising.

The subsection refers to advertisements that are communications or contained in communications. The word ''communication'' can be interpreted in two senses. In the Bill, we should consider terms as having their natural meaning, as I said in our previous sitting in relation to the natural meaning of the word ''promotion''. According to the ''Oxford English Dictionary'',

''a communication may be a letter or message containing information or news, or, the imparting or exchanging of information by speaking, writing, or by using some other medium.''

In paragraph (b), the word ''communication'' and the same phraseology are used a second time, but by inference of what follows, a communication is something sent to a person who requests information. In that context, I would welcome guidance from the Minister as to whether communication is used in the same sense as in

paragraph (a). That would not seem to be the case, given the Government's remarks in the other place in November. Lord Filkin stated that the exclusion would apply

''to trade journals and magazines, mail shots for tobacco companies to retailers and handouts at trade exhibitions.''

However, Lord Filkin went on to say—and this is the worrying point—that that was not an ''exclusive'' list

''and there may be other forms as well.''—[Official Report, House of Lords, 16 November 2001; Vol. 628, c. 853.]

The amendment seeks to discover what those other forms are. Apart from things that may be sent or handed to persons within the trade, which may comprise advertisements, there are display advertisements at trade shows, and advertising at other trade events and within wholesalers' premises such as cash and carrys. All constitute communications, but are different from communications that may be handed or sent to a person. The amendment seeks to ensure that advertising and the promotion of tobacco products is permitted, provided that it is conducted within and solely for the purposes of the tobacco trade.

Photo of Yvette Cooper Yvette Cooper The Parliamentary Under-Secretary of State for Health

Even after listening to the hon. Gentleman's argument, I still cannot see why his amendment is necessary. To be honest, I do not see how it would change the Bill in any way. He seemed to be saying that advertisements in wholesalers are not communications, but they are. They would be permitted as exclusions in the Bill subject to the conditions in clause 4 (2) only if they were directed solely at people engaged in the trade with particular ''responsibility for making decisions''. Otherwise, communications would also include such advertisements. It is not clear how removing ''communication'' would add to the Bill. It is hard to see how one could advertise without communicating. How could one have a tobacco advertisement that was not a communication of some sort? The amendment does not add to or detract from the Bill, so it is unnecessary.

Photo of Mr Adrian Flook Mr Adrian Flook Conservative, Taunton

The intention of the amendment is that removing the words

''or is contained in, a communication''

clarifies and simplifies the rest of the paragraph. It is a probing amendment, and because the Minister showed great interest in not answering it, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Mr Andrew Hunter Mr Andrew Hunter Conservative, Basingstoke

I beg to move amendment No. 9, in page 2, line 15, leave out from 'persons' to end of line 19 and insert

'engaged in any capacity in that trade (even if they are also engaged in another trade),'.

Photo of Mr Peter Pike Mr Peter Pike Labour, Burnley

With this we may discuss the following amendments: No. 10, in page 2, line 16, after 'are', insert 'investors in,'.

No. 20, in page 2, line 26, leave out subsection (2).

Photo of Mr Andrew Hunter Mr Andrew Hunter Conservative, Basingstoke

I would also like to welcome you to the Chair, Mr. Pike.

Amendment No. 9 is especially interesting and curious because it seeks to amend an amendment made in the House of Lords so that the Bill reverts to its wording. In that debate, the argument put forward by Lord Faulkner was a reductio ad absurdum—it took the argument to a ridiculous point. He argued that the Bill, as originally worded, could apply to anyone selling cigarettes, and cited an example of a part-time girl on the cheese counter at Sainsbury's who, one day, happened to work in the tobacco kiosk. He said that the Bill, as originally worded, would describe that person as being engaged in the trade. That argument does not stand up. It takes things to a ridiculous level. It contradicts the position that the Government have adopted so far, which is that to define creates a loophole. Most of us thought that it was the other way round, and that the purpose of a definition was to close loopholes. There was an inconsistency in the acceptance of the amendment in the other place and the changing of the words compared with the position adopted by the Government not least about their reluctance so far in our proceedings to define the word ''advertisement''.

The second argument advanced in another place in favour of the present wording in the Bill was that it was important to make a distinction between those who were really at the heart of the tobacco trade and those on the periphery who could not be said to be part of the trade. We are at the point of whether definitions close or create loopholes. The Government would have us accept that a definition creates loopholes, so why close a loophole at that point in the Bill. Their approach has so far been to let the courts decide, so why not let them decide now?

I should be grateful for the Minister's guidance on the Government's interpretation of ''directed solely at'' in subsection (1)(a). In earlier discussions with publishers, it is understood that the Department said that if a trade publication made for the purpose of the tobacco trade and directed at people engaged in the trade was made available by retail sale on news stands, the exclusion would not apply. I should appreciate clarification on that, as it will affect the amendment. I believe that the Minister confirmed that view when we considered the previous Bill in Committee. Is that so, and is there scope for reconsideration?

The interpretation of subsection (1)(a) is highly questionable. It does not accord with what is in the Bill. The clause states that the exclusion is available if a tobacco advertisement is made for the purposes of the tobacco trade

''and directed solely at persons who''

are engaged in that trade in any capacity. The key issue is that it says nothing whatever about the means by which the tobacco advertisement might become available or whether it might accidentally or unintentionally be seen by someone not in the tobacco trade to whom it is not directed. If the Government's interpretation of subsection (1)(a) is that it is an offence for a trade publication available on a news stand to contain a tobacco advertisement, surely the situation is getting out of hand.

I shall outline the facts. Trade publications that are directed solely at people involved in the trade are usually available by subscription or provided free of charge by mail to persons in the trade. Some trade publications are also stocked and sold by ordinary retail outlets—although, generally, not in large quantities—for the convenience of people who are involved in the trade and who do not subscribe to the publication, or who occasionally need additional copies, or for other reasons.

Those publications have no appeal to the general public; they do not purchase them to read, although they are available in ordinary retail outlets. However, I understand the Government's position to be that offences would be committed under clauses 2 and 3 by publishers, distributors, producers of advertising for, and sellers of any trade publication that was made available by retail sale. I ask the Minister to consider that situation, because it should be remedied; the Government should take a different view of clause 4(1)(a), or accept the amendment.

Later in proceedings, when it will be more relevant to look at it in detail, we shall refer to the European Court of Justice and the recent case decided by the Swedish district court—I am referring to the Swedish consumer ombudsman versus Gourmet International Products AB. That has greater relevance to another part of the Bill, but it is also relevant here, and I refer to that ruling because I am sure that the Minister is aware of it. I hope that the Minister is willing to revert to the original wording of the Bill, and to offer an assurance that an offence will not be committed if a trade publication containing a tobacco advertisement is sold in ordinary retail outlets.

I shall speak more briefly about amendment No. 10, because I am optimistic that the Government will respond positively to it—that they will accept its logic and sense.

Investors in a tobacco supplier have an obvious interest in the tobacco products of the companies in which they invest. They have exercised a choice about which companies in which to invest. Any communication from the company to the investor is for the purpose of trade and, therefore, there is no reason why such communications should not include tobacco advertisements. Currently, investors are not included in the list of persons to whom an advertisement can be directed under paragraph (a), and I hope that the Minister will agree that they should be included.

Photo of Tim Loughton Tim Loughton Shadow Spokesperson (Health) 3:00, 9 May 2002

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.

Photo of David Wilshire David Wilshire Conservative, Spelthorne 3:15, 9 May 2002

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.

Photo of Yvette Cooper Yvette Cooper The Parliamentary Under-Secretary of State for Health

Amendment No. 10 alters clause 4(1)(a) to create an additional exclusion from the advertising ban to allow tobacco companies to send unsolicited advertisements for their products directly to their investors. The Government oppose the amendment. The Bill does not prevent companies from communicating with their investors about their shareholding—about the company's profits and losses, about the arrangements for the annual general meeting, or about any of the other issues about which they might need to communicate with their investors. However, it is right that investors should have the same protection from unsolicited advertisements and promotional material as the rest of us. People who have shares in tobacco companies will be among the 70 per cent. of smokers who want to give up.

Photo of Tim Loughton Tim Loughton Shadow Spokesperson (Health)

Of course, everyone should be entitled to the same protections. Does the hon. Lady agree, however, that adults who have invested their money in companies whose business is largely—or wholly—the production of tobacco products are wiser about the perils of those products than others about whom we have spoken? Should not such people be dealt with under a special category of people who are better informed than those at whom the legislation is aimed?

Photo of Yvette Cooper Yvette Cooper The Parliamentary Under-Secretary of State for Health

If such people wish to receive advertising material—in the same way as everybody else—they can do so under the exclusion in clause 4(1)(b). If they make a particular request, they can receive a communication in reply. That option is open to them, as it is to others. They should not be dealt with as a special category because that would create a loophole. There would be nothing to stop tobacco companies giving free shares, or inviting people to buy one or two shares, and thereby creating a database of people that they could bombard with advertising.

Photo of Tim Loughton Tim Loughton Shadow Spokesperson (Health)

If tobacco companies, or any other quoted companies, were to give out free shares they would soon fall foul of the Financial Services Agency. In normal circumstances, such activity is not allowed.

Photo of Yvette Cooper Yvette Cooper The Parliamentary Under-Secretary of State for Health

Either way, it is important that investors should be afforded the same protection as everybody else. I do not see why they should be treated differently simply because they bought, some considerable time ago, some shares in a tobacco company. I do not see why the tobacco industry should be permitted to bombard those people with promotional material that contains advertisements of any sort. It is right that such people should be able to receive information if they request it, but tobacco companies should not be given an exemption and should not be able to promote their products—products that ultimately kill—to investors.

The hon. Member for Basingstoke (Mr. Hunter) raised questions about amendments Nos. 9 and 20. The Government reject those amendments, which seek to restore clause 4(1)(a) as it stood when the Bill was introduced in another place, but which was amended. The intention of the amendment in the other place was to prevent the creation of a loophole whereby a tobacco company could promote its product to anybody working for a company that was involved

in the tobacco trade, even if many of those people had no engagement with decisions whether or not to buy or sell tobacco products. The example referred to by the hon. Gentleman was cited in the other place. It concerned a person working in the kiosk in Sainsbury selling tobacco products, who had no responsibility for any of the decisions about how they were sold or displayed, and how that person should not be subjected to advertising and promotional activity simply because of where he works.

The tobacco industry should be able to continue to trade because, as hon. Members have said, it is legal to do so. That is why the exclusion is in the Bill. However, that should be no excuse to put, for example, a tobacco advertisement in the Tesco staff magazine simply because, among other products, Tesco sells cigarettes. That is why we reject amendments Nos. 9 and 20.

The hon. Member for Basingstoke referred to trade magazines on general sale in newsagents. Surely, that is strong evidence that communications are not being directed solely at people in the trade. It might be different if a newsagent were keeping such magazines under the counter and selling them only to people in the trade. A trade magazine that is on general sale to the public does not fit within the exclusion under clause 4 about it being directed solely at people who are engaged in the trade. If people want to put trade magazines in general newsagents, fine, but the wise thing to do would be to remove the tobacco advertisements from them. That is why the Government oppose amendments Nos. 9, 10 and 20.

Photo of Tim Loughton Tim Loughton Shadow Spokesperson (Health) 3:30, 9 May 2002

The Minister's response to amendment No. 10 was breathtaking. She soon had to resort to a complete misinterpretation of what the amendment is designed to do. She says that investors are no different from everyone else and that companies should not be permitted to ''bombard'' them with adverts because they happen to have bought some shares some time ago. Shareholders in tobacco companies have no special immunity against the effects of the products that the companies produce, but that was not my point. I was talking about not bombarding, as she puts it, such shareholders with adverts but the contents of an annual report that will be sent to shareholders in the normal course of events, which may contain examples of adverts and advertising campaigns that the company has used in other parts of the world.

Clause 3 states:

''If a newspaper, periodical or other publication . . . containing a tobacco advertisement is in the course of a business published in the United Kingdom'',

a list of people are guilty of that offence. An annual report and account of a UK-based company, which is a publication produced in the UK in the course of its business, clearly falls foul of clause 3 and is not subject to any of the defences in clause 5(5), in particular. The Minister has not explained whether companies that reproduce such adverts as part of their reporting process would be exempted or fall foul.

A possible beneficial side is involved. I as a shareholder in one of those companies might be made aware of what seemed to be an especially unscrupulous advertising campaign that the company was carrying out in a developing country, for example. If I thought that that went well beyond the morals of a company in which I wanted to invest and that report and accounts alerted me to it, I might choose to be an investor in that company no longer, and my opinion of that company might be affected as a result.

Under the Bill, the company could not make me aware of any of those campaigns, whether in the annual report or in any other literature sent to shareholders in the normal course of events under the Companies Acts, regardless of whether that constitutes bombarding. A great deal of censorship is involved, which might have a counter-productive effect.

It was rather telling when my hon. Friend the Member for Spelthorne (Mr. Wilshire) mentioned that he was a modest investor in the shares of British American Tobacco. Gasps of horror and ''Surprise, surprise'' could be heard from Labour Members. It is a perfectly legitimate process, occupation, hobby or interest to be an investor in shares of quoted companies that happen to be in the tobacco business. It is perfectly legitimate to work for them. Labour Members may remember that the hon. Member for Hampstead and Highgate (Glenda Jackson) appeared some time ago in a high-profile series of advertisements for a company called Hanson that had the slogan ''A company from over here doing rather well over there''. The company owned Imperial Tobacco, whose major business was manufacture of cigarettes. If Labour Members are to start pouring scorn on legitimate shareholders in such companies, they might want to pour scorn on one of their colleagues who was paid to appear in advertisements to promote the business of a company with a considerable interest in tobacco manufacturing.

Photo of David Wilshire David Wilshire Conservative, Spelthorne

Does my hon. Friend agree that if it is wrong to invest in something that kills people, surely it is wrong for the Government to take tax from a company that kills people? In that case, is banning the tobacco industry the honourable thing to do?

Photo of Mr Peter Pike Mr Peter Pike Labour, Burnley

Order. Hon. Members must keep to the amendment rather than discussing something that is way beyond it.

Photo of Tim Loughton Tim Loughton Shadow Spokesperson (Health)

Indeed, Mr. Pike. The point that my hon. Friend made is entirely consistent. One could also mention recent cases of senior directors of companies that produce arms contributing to Labour party funds, but I shall not go down that path because you would not wish me to, Mr. Pike.

I want a specific answer to the question of a specific and reasonable scenario that I mentioned earlier. Would a company, such as British American Tobacco, Gallaher or Imperial Tobacco Group, that is based in the United Kingdom and involved in tobacco manufacture or retailing—any supermarket, for example, because they all have tobacco stands—be

penalised for printing details or pictorial reproductions of advertising campaigns that were used legitimately in other countries in its reports and accounts? The report would be sent only to the company's shareholders, and would be sent automatically without the need for a request each year, as would be required under the Bill if they were on a mailing list. That is a specific and detailed question to which I would like a specific and straight answer.

Photo of David Wilshire David Wilshire Conservative, Spelthorne

I, too, was unimpressed by the Minister's response. When I discussed annual reports, I failed to persuade her that she should accept the amendment. Let me see whether there is the possibility of meeting half way.

I explained that there are two issues surrounding the annual report: promotion and effect. The entire focus of the Minister's response was to ask why investors should be bombarded with adverts. I am happy to meet the Minister half way. I do not support the amendment because I want to create a loophole for advertisements with the purpose of promotion. Can the Minister and I agree that sending promotion to investors should be illegal, but can we find a compromise on effect? I happily concede on promotion because I did not mean that in the first place.

I give the Minister an example that might produce a compromise. An annual report would be sent out that indicates how well the company has done. If the company produced a range of brands and one of them had significantly influenced its share value, it would have to report that to the stock exchange anyway. The report could say, ''This year, the sales of brand A have slumped. We have had difficulties because it is a high-tar cigarette, and Government health warnings on the packet and the campaign on the dangers of tar has had an impact. Brand A has suffered badly, which has affected our profitability.'' The report might continue to say, ''Your directors have tried to counter the loss of profits by introducing a new brand: brand B. Brand B is low tar and not as damaging to your health as brand A.''

Photo of David Wilshire David Wilshire Conservative, Spelthorne

The hon. Gentleman keeps interjecting. If he wants to debate whether the Government should ban smoking, let us have that debate.

Photo of Mr Peter Pike Mr Peter Pike Labour, Burnley

Order. The Chair does not like sedentary interventions. Hon. Members who want to contribute to the debate should rise to make their contributions.

Photo of David Wilshire David Wilshire Conservative, Spelthorne

I just wanted to flag up that, if the Committee under your chairmanship, Mr. Pike, wants to have a debate about making tobacco illegal, let us have it. If that is the real agenda of Labour Members, it is right that the public should know about it. Hon. Members should not hide behind the Bill, saying that something remains legal. A company that is conducting legal business and wants to send out an annual report must be entitled to do so. The effect of

that makes for an interesting debate, but it is not relevant to the clause.

Let us suppose that brand B has been introduced and the directors say in the annual report how successful it has been because it is less damaging to health. That company could have tens of thousands of small investors, who will receive an annual report without an advertisement or a deliberate attempt to promote smoking. However, it might suggest to investors in the company that they should consider, for the purposes of their health, switching to brand B. If that were to happen, the effect of the annual report would be to boost the sales of brand B. I suspect that a court would hold that that would run foul of the Bill and its reference to ''effect''.

Perhaps the Minister will meet me half way. Let us leave to one side the bombardment point. We do not want anything to go to an investor when the purpose behind it is to promote, but should not we make an exception for annual reports to investors? Let us consider the effect of complying with the Companies Acts and reporting that something new and successful has led to other people switching to that brand. The hon. Member for Glasgow, Anniesland (John Robertson) keeps saying that the products kill, but some are more likely to kill than others. If the effect of an annual report is to reduce the risk to the smoker, even the hon. Gentleman may welcome it and not regard tobacco as something that should be made illegal.

Photo of Yvette Cooper Yvette Cooper The Parliamentary Under-Secretary of State for Health

Opposition Members have said that they do not want investors to be bombarded with tobacco advertisements. Unfortunately, that is exactly what the amendment would allow. Companies could send unsolicited advertisements for their products directly to their investors. It may not be their intention, but they could do so under the amendment. I do not understand why banning tobacco advertisements prevents companies giving their investors all the information that they need, whether it is about their activities, their marketing, their profitability or their technological development. The Bill bans advertisements, and that brings me to the point of the hon. Member for Spelthorne that an advertisement must have the effect of promoting tobacco products. The argument would be whether it was an advertisement, and if it were it would be covered by the Bill, and rightly so.

Photo of David Wilshire David Wilshire Conservative, Spelthorne

Surely the purpose of the annual report is to advertise the success of the company. That is the advertisement.

Photo of Yvette Cooper Yvette Cooper The Parliamentary Under-Secretary of State for Health

The information that investors rightly want and should be entitled to is information about their investment and how the company is doing. They should receive the knowledge that is necessary for them to decide whether to continue investing in that company. That should not give the company a licence to advertise their products at those investors, merely because they are investors. That is the distinction. Investors can receive advertisements alongside everyone else, if they so choose, by requesting them in the way that is covered under subsection (1)(b). However, I do not see why investors should be treated differently when it comes to the

advertising of tobacco products as set out in clause 1. Ultimately that would create a loophole, which would be unacceptable.

Photo of David Wilshire David Wilshire Conservative, Spelthorne 3:45, 9 May 2002

That response was so bizarre that it requires pursuit. The Minister's answer shows her failure to grasp the purpose of an annual report and the way in which it is produced and published. If the Minister cannot grasp that one of the primary purposes of an annual report is to be an advertisement for a company, I suggest that she goes to a presentation by a major company in the stock exchange.

Photo of David Taylor David Taylor Labour/Co-operative, North West Leicestershire

As the hon. Gentleman suggested, one purpose of an annual report is to promote the company as an attractive vehicle for investment. It is never designed to promote the products produced by the company.

Photo of David Wilshire David Wilshire Conservative, Spelthorne

I accept that the hon. Gentleman has a point. However, the problem with that argument is that the Bill makes it clear that the thing itself does not have to be the advertisement. We covered that ground when we discussed the fact that it is the thing contained within that runs foul of the law. Perhaps the purpose of an annual report is not to promote the sale of tobacco, but it would have that effect, and that worries me.

Photo of Mr Adrian Flook Mr Adrian Flook Conservative, Taunton

Earlier, I declared an interest. I used to work for a financial public relations company, and I was involved in designing and promoting annual reports. I can state categorically that such reports are produced for no other reason than to provide information for investors about what the company does and, more importantly, as a promotion—to tell people what the company does and to promote its products to the wider world.

Photo of David Wilshire David Wilshire Conservative, Spelthorne

I will be eternally grateful to my hon. Friend. His is the voice of real experience, rather than mine as a lay investor in a company. If I am not succeeding in persuading the Minister or the hon. Member for North-West Leicestershire (David Taylor), they should go to the City and sit in on a presentation made by a major company to the stock exchange, especially to pension funds. I would not like to probe hon. Members' pension funds too closely.

Photo of John Robertson John Robertson Labour, Glasgow Anniesland

The hon. Gentleman mentions pension funds. Call me an old cynic, but I imagine that pensioners investing in pension funds could be inundated with annual reports containing advertisements. Such investors may not be aware that their pension fund invested in tobacco industries. They would be appalled to receive such advertising through their doors. Is that not exactly what the Minister is trying to avoid?

Photo of David Wilshire David Wilshire Conservative, Spelthorne

The hon. Gentleman suggests that pension fund investors receive that sort of information. They do not. We are discussing pension fund managers. If the Minister said that to pursue the matter would mean that everyone who had a pension would be sent something, I would agree that the hon. Gentleman was right, but I do not believe that to be the case.

Photo of John Robertson John Robertson Labour, Glasgow Anniesland

Are you telling me that that is impossible under the law? Is there is no way that you can send anything to investors in pension funds from a company that is being invested in to support that pension fund? Can you categorically tell me that?

Photo of Mr Peter Pike Mr Peter Pike Labour, Burnley

Order. The hon. Gentleman must not use the term ''you''.

Photo of David Wilshire David Wilshire Conservative, Spelthorne

I am not a pension fund manager, and have never made any attempt to learn whether a pension fund would give me a list of its policyholders. I sincerely hope that it would not. The only way that one could communicate with the policyholders of a pension fund would be to get such a list. I should imagine that if a pension company were to send adverts for tobacco, it would immediately fall foul of the Bill. I understand what the hon. Gentleman says; if he were right, I would be on his side, but I am fairly confident—with the caveat that I am a layman in such matters—that he need not worry on that score. However, if I am proved wrong, I shall apologise.

Photo of Tim Loughton Tim Loughton Shadow Spokesperson (Health)

Perhaps I can help my hon. Friend as someone who was in the fund management industry for 16 years. When I ran individual and collective funds—a unit trust—if I had held a tobacco company's shares, there would be a report of that in the accounts that would go to the collective fund's manager, in whose name, or in whose company's name, the shares would be held. There is no direct contact between the tobacco company and the hundreds of thousands of pension fund holders who happen to hold a stake in that pension fund. The hon. Gentleman's fears are completely and utterly unfounded.

Photo of John Robertson John Robertson Labour, Glasgow Anniesland

That does not answer the question.

Photo of David Wilshire David Wilshire Conservative, Spelthorne

I hear what the hon. Gentleman says, but I hope that my hon. Friend the Member for East Worthing and Shoreham has answered half his question. I shall now try to answer the other half.

On the question of pension fund managers being bombarded with information, I think that that already happens and will continue, not because people would send such information unsolicited, but because any pension fund manager who wants to keep his job and be successful will make it his business to ask for the maximum amount of information, in order that the investment decisions made on behalf of the pension fund investors are made in a sensible and knowledgeable way. We do not have to worry about the pension fund managers; they exist to get that information, and will ask for it. There are not many of them anyway, so there would not be thousands of people being bombarded with information. I hope that that reassures the hon. Gentleman that we are not seeking to do what he suggests.

What concerns me is that the annual report is in itself intended to be an advertisement. The presentations made by companies to pension fund managers, unit trust managers and others are deliberately designed to sell the product, and the products are shares in that company. The success of a company and its ability to invest in the future depends upon its success on the stock market; it can then raise more money. My hon. Friend the Member for

Taunton (Mr. Flook), who is the expert, has confirmed that the annual report is intended to be an advert. People like him have earned their living producing such adverts.

Photo of David Taylor David Taylor Labour/Co-operative, North West Leicestershire

The hon. Gentleman may care to correct a statement that he made. I think he said that the products that are made make shares in the company. Is that what he means?

Photo of David Wilshire David Wilshire Conservative, Spelthorne

If I said ''the products that they make'', I apologise. What I intended to say, and hope that I did say, was that the products that the presentation sells are shares. If I did not make that clear, I apologise.

Photo of David Taylor David Taylor Labour/Co-operative, North West Leicestershire

Will the hon. Gentleman explain why increasing the demand for the shares of Gallaher or whoever would be linked to the promotion of tobacco products and greater sales of those products?

Photo of David Wilshire David Wilshire Conservative, Spelthorne

It would do so for the very reason that I gave. I was seeking, by talking about the presentations to the pension fund managers, to demonstrate beyond all doubt that the annual report is itself an advertisement. I should have thought that fund managers are far too hard bitten to fall for any of that smoking rigmarole.

We have established via pension fund managers that the document is an advert. We must then fall back on the fact that anything contained in it that has the effect of promoting tobacco is illegal. It is at that point that we switch to the hundreds of thousands of small investors, who get the same document through the letterbox. The document is an advert because of the purpose for which it was produced, mainly for the pension funds, in which the primary decisions are taken. The presentation goes to tens of thousands of people, and if they read it, the effect may be to make them decide, ''I will buy brand B''. That way, brand B has been promoted via an advertisement. That concerns me.

Photo of David Ruffley David Ruffley Conservative, Bury St Edmunds

I rise to support my hon. Friend's point. Labour Committee members should read clause 1 again, where a tobacco advertisement is defined as,

''an advertisement—

(a) whose purpose is to promote a tobacco product, or

(b) whose effect is to do so''.

Within the terms of that definition, statements in an annual report would, beyond peradventure, amount to tobacco advertisements.

Photo of David Wilshire David Wilshire Conservative, Spelthorne

I thank my hon. Friend. I am relieved that someone present has a better memory than me. I was floundering to remember which clause included that definition. That goes right to the heart of the argument that we had about clause 1: we were told that we need not worry, because there needs to be both ''purpose'' and ''effect''.

Photo of David Ruffley David Ruffley Conservative, Bury St Edmunds

There needs to be purpose or effect.

Photo of David Wilshire David Wilshire Conservative, Spelthorne

Exactly so. We now have the proof that to include ''effect'' is going too far.

I agreed to meet the Minister half way. If the purpose is to promote a tobacco product, I am on her side. I do not want to allow annual reports deliberately to include advertisements. I hope that I have said

enough to persuade her that we have a difficulty with the matter under discussion. It will be said, ''There is an effect. It is an advertisement. It will have an effect on the investors.'' If the company does not include information that it is legally bound to communicate, it will be in breach of the Companies Act, and the Financial Services Authority and other organisations will come down on it like a ton of bricks. I hope that the Minister will respond to the spirit of my offer to meet her half way, by saying that she sees the point that I am trying to make.

Photo of Yvette Cooper Yvette Cooper The Parliamentary Under-Secretary of State for Health

We have been round the houses on this matter. Companies can choose which and how many pretty pictures they include in their annual reports—they can put in whatever they want. If they publish a tobacco advertisement—that is, an advertisement whose purpose or effect is to promote a tobacco product—and if the exclusions explicitly set out for people engaged in the trade and so forth do not apply, they are covered by the Bill.

Companies are entitled to promote or advertise their shares through annual reports or other sorts of circular to their investors, but they are not entitled to advertise their tobacco products unsolicited to their investors. That provision is right. I do not see why the tobacco companies should be given a loophole through which they can bombard their investors with advertisements for tobacco, as this amendment would allow—advertisements that promote tobacco products or have the effect of doing so.

Companies will not be prevented from providing their investors with all of the information that they legitimately require and need about the marketing or the business of the company and so forth. We have dealt with this subject at length and I oppose the amendment.

Photo of Mr Andrew Hunter Mr Andrew Hunter Conservative, Basingstoke

We have had a reasonably full and lively debate on these amendments and any objective listener will conclude that the Government's position is weak. It is weak with regard to amendment No. 20, because it has been argued that definitions create loopholes, but the Government intend to reject an amendment that would remove an unnecessary and unwanted definition from the Bill.

The Minister's remarks about amendment No. 9 were also unconvincing. Trade magazines are sold in general retail outlets, but only a few of them are purchased because they are aimed at the people in the trade, rather than the general public. The Minister's argument that to allow that to continue would demonstrate that the general public was being targeted does not hold up.

I am most disappointed with the Government's defence against amendment No. 10. It failed to convince me. I do not propose to repeat the arguments, which have been well expressed. Reduced to its essence, it is clear to anyone who knows anything about the subject that the annual report is an advertisement. Likewise, to form a judgment on a company, it is essential to have marketing and advertising details. It is simply wrong for the Government to exclude, or ban, such information from investors.

On such occasions, it is important to concentrate one's power. I beg to ask leave to withdraw amendments Nos. 9 and 20, but we want to press amendment No. 10 to a Division.

Photo of Mr Peter Pike Mr Peter Pike Labour, Burnley 4:00, 9 May 2002

Amendment No. 20 cannot be withdrawn because it has not been moved.

Photo of Mr Andrew Hunter Mr Andrew Hunter Conservative, Basingstoke

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment proposed: No. 10 in page 2, line 16, after 'are', insert 'investors in,'.—[Mr. Hunter.]

Question put, That the amendment be made:—

The Committee divided: Ayes 5, Noes 12.

Division number 4 Adults Abused in Childhood — Clause 4 - Advertising: exclusions

Aye: 5 MPs

No: 12 MPs

Aye: A-Z by last name

No: A-Z by last name

Question accordingly negatived.

Photo of Tim Loughton Tim Loughton Shadow Spokesperson (Health)

I beg to move amendment No. 11, in page 2, line 19, at end insert—

'(ab) if it is contained in a specialist publication solely directed at existing adult users of tobacco products and containing editorial and material only relating to such products,'.

Photo of Mr Peter Pike Mr Peter Pike Labour, Burnley

With this it will be convenient to discuss the following amendments: No. 12, in page 2, line 20, leave out from 'in', to end of line 22 and insert

'a communication to an individual who has in writing provided to the person who, apart from this subsection would commit an offence, his name and address, his age expressed as being over 18 years, and a wish to receive communications of the kind to which this subsection relates, and has not in writing subsequently withdrawn that wish, or'.

No. 14, in page 2, line 22, after 'product', insert—

'(ba) if it is not for cigarettes or hand-rolling tobacco and is, or is contained in, a communication which is sent or transmitted by a specialist tobacconist to an identified individual,'.

Photo of Tim Loughton Tim Loughton Shadow Spokesperson (Health)

We move on to another specialist technical area relating to specialist publications and the treatment of advertisements in them, especially as it involves other people in the trade.

We propose three amendments, which have been grouped together. Amendment No. 11 would add an additional provision that would exclude from the prohibition in the Bill anything that falls within its terms.

There are several specialised tobacco publications, I am led to believe, but I have never had the pleasure, or the boredom factor, of having to indulge in them. One is called Cigar Aficionado and is published in New York. Another, which sounds like the sort of thing that appears on ''Have I Got News For You'', is called Cigar World and is published in the UK. Neither of

those are trade magazines as such, but they are aimed at discerning consumers.

Under the Bill, I understand that Cigar Aficionado, which is published overseas, and other magazines like it would be allowed to circulate in the United Kingdom, whereas Cigar World, which I am sure is a good read, would not. What is the benefit of a disproportionate clause that would discriminate against a domestic publication? My hon. Friends have alluded to the recent ruling in Sweden—the Swedish Consumer Ombudsman v. Gourmet International Products AB—which is relevant to the Bill. The European Court of Justice also gave a ruling. Will the Bill require changes in the light of those judgments?

The opinion of the Advocate General of the European Court and the judgment of the Swedish district court are relevant to not only the amendment, but other provisions in the Bill. They draw into question the Secretary of State's statement that the Bill is compatible with the European convention on human rights.

GIP publishes a magazine in Sweden called Gourmet. It is available by subscription and 90 per cent. of its 9,300 subscribers are traders, manufacturers or retailers, while only 10 per cent. are private individuals. The magazine is also available by retail sale. The subscribers' edition of the magazine, which was the subject of the case, contained three pages of advertisements for alcoholic drinks—one page for red wine and two pages for whisky. Those pages were not included in the edition that was sold in shops, which was intended for the general public.

The Swedish ombudsman, who is responsible for consumer protection, applied for an injunction to restrain the publishers from printing an advertisement that was contrary to national provisions that aim to reduce health risks caused by alcohol consumption. The Stockholm district court considered that an interpretation of the provisions of the treaty of Rome was necessary, stayed the proceedings and referred the case to the European Court of Justice for a preliminary ruling.

The publishers of Gourmet argued that the proceedings were based on legislation that was contrary to articles 30 to 37 of the treaty of Rome on freedom of movement of goods and articles 59 to 66 on freedom to provide services. The Advocate General's view was that a ban that extended to advertising in specialist food and drink magazines was disproportionate, which is the essence of the amendment. He found that individuals who chose to read a specialist magazine were highly unlikely to be incited to drink more alcohol as a result of the advertisements, which is partly the point that we made about annual reports. The position of a person who purchased such a magazine was likened to that of a person who had specifically requested advertising material from a producer—in other words, no different to the provisions in clause 4(1)(b) of the Bill.

The Advocate General also noted that commercial advertising comes within the scope of article 10 of the European convention on human rights, which guarantees freedom of expression. Although the applicant did not raise ECHR grounds during the case, the Advocate General said that article 10 was clearly in play—this emphasises the disproportionality of the measure—and the European Court of Justice found that the prohibition on advertising constituted an obstacle to trade between member states, which is prohibited by article 30 of the treaty of Rome. Although such an obstacle could be justified by provisions on the protection of public health in article 36 of the treaty, the European Court of Justice considered that the national court was better able to investigate whether the prohibition of advertising was proportionate and whether the objective could be achieved by less extensive prohibitions or restrictions.

The European Court of Justice also found that although the measure was non-discriminatory, it had a specific effect on the cross-border supply of advertising space and thereby constituted a restriction on the freedom to provide services under article 59 of the treaty although, again, that could be justified by protection of public health under article 56. I am sorry that this is a little technical, but the recent ruling is highly pertinent and requires a response. It had to be decided whether such protection could be provided by measures that had less effect on intra-community trade. It was left to the national court to decide whether the prohibition of advertising was proportionate and whether the objective could be achieved by less extensive prohibitions or restrictions.

Last month, the national court published its judgment. It applied the proportionality test and found that the ban interfered with the free movement of goods and services and that the evidence on the effect of advertising on consumption was inconclusive. Consumption was not increasing and any increase in consumption resulting from the removal of the advertising ban would be negligible, because such advertising had minimal effects, if any. Editorial material is not restricted in any way, and the population is exposed to advertising via the internet, foreign television channels and at the point of sale.

Although the case concerned alcohol, there is a distinct corollary with tobacco. The court therefore concluded that the ban on advertising contravened articles 28 and 49 of the treaty and went beyond what was necessary to achieve any legitimate public health goal. In all substantial respects, the case could legitimately refer to tobacco products.

The relevance of the opinion of the European Court and the judgment of the Swedish national court are of immense importance to the Bill and to the draft directive being considered by the European Council and the European Parliament. The judgments reinforce the necessity that, in human rights terms, although restrictions can be justified on the grounds of public health, any restrictions must be both necessary and proportionate. In the Swedish case, the courts found that they were not. The same could well be found of certain restrictions in this Bill, not least the

prohibition of tobacco advertising other than in publications or communications permitted by clause 4 (1)(a) and (c). We believe that the Bill is vulnerable to successful challenge in the European and United Kingdom courts on human rights grounds.

My amendment goes some small way towards correcting the Bill's excesses. It is inconceivable that publications devoted to tobacco products would be bought by non-smokers, those attempting to give up smoking or children. The Minister referred earlier to retailers who may stock such publications. Members of the public do not generally pick up such things, but those with an interest in the tobacco industry may wish to buy them from a newsagent if they are not available on subscription.

There is no sound reason why specialist tobacco publications for which the United Kingdom is the principal market should be prohibited, but similar publications with large UK circulations for which the UK is not the principal market should be permitted. It is simply anti-competitive and rather ridiculous, which goes to the heart of the problems that we have with this part of the Bill.

The essence of amendment No. 12 is to allow people who have provided written permission for details about tobacco products to be sent to them, to continue to do so on an ongoing basis, without constantly having to repeat that request. That is straightforward. We are dealing with intelligent, informed adults who have an active interest in tobacco products and want details about them. We are not dealing with children or people who may be seduced into smoking or smoking more because of access to a specialist publication.

I am sure that many hon. Members will be familiar with amendment No. 14 because of a letter-writing campaign organised by the Association of Independent Tobacco Specialists. The association has written to many members of the Committee and to hon. Members representing constituencies in which such specialist retailers are based—some 350 establishments. I am happy to table this amendment, which is about cigars and such products, but not cigarettes or hand-rolling tobacco. We are not talking about big fat cat tobacco manufacturing companies that Labour Members seem to have such a downer on, but about a few small specialist retailers who make an honest—and, at the moment, not particularly easy—living. They are legitimately carrying on their businesses, and there is no attempt to close them down. The Association of Independent Tobacco Specialists has not opposed the Bill, but it is worried that, despite the Government's assurances, its businesses will be hit. It also points out that cigar smoking is not prevalent among young people. It is primarily an adult pursuit.

Photo of Pete Wishart Pete Wishart Opposition Whip (Commons), Shadow Spokesperson (Culture, Media and Sport), Shadow Spokesperson (Environment, Food and Rural Affairs), Shadow Spokesperson (Transport) 4:15, 9 May 2002

Is the hon. Gentleman aware of the Hamlet cigar campaign? It has been formidable in the past few years in trying to attract young adult smokers with certain advertising. I reject the notion that the cigar industry is benign and

that it is simply wants to maintain its existing market. I believe that it is trying to attract new customers.

Photo of Tim Loughton Tim Loughton Shadow Spokesperson (Health)

I take issue with the hon. Gentleman, although he made a perfectly legitimate point. I am not aware of cigar smoking being targeted at young people. We have received letters from retailers who say that their businesses are not aimed at that market and I have some sympathy with them.

We have received a letter from a specialist retailer involved with the Association of Independent Tobacco Specialists. It says that it sells cigars, snuff, and pipe tobacco through specialist tobacconists by mail order. It recognises that the Bill is targeted substantially at the selling of cigarettes, especially to young people. However, other specialist tobacconists who sell mainly fine cigars and other non-cigarette products are in a special situation. They do not market to, or attract, young people, but appeal to mature, mostly male, smokers who wish to choose from a wide range of premium products. As specialists who gain more than half their sales from cigars, snuff and pipe tobacco, they are pleased that the Bill will allow them to advertise on the inside and outside of their premises. They fully accept that they will not be allowed to advertise cigarettes or hand rolling tobacco.

The specialists say that the logic of the dispensation has not been extended to mail order and other forms of direct selling of non-cigarette products. Like almost every other specialist tobacconist, such companies also sell fine cigars by mail order and electronically via websites. In many cases—certainly among those who have written to me—that forms a significant proportion of their total trading. Sometimes, direct marketing creates the majority of their total sales.

Specialist tobacconists trade by mail order and via their websites because few specialist tobacconists remain in the United Kingdom. I believe that the figure quoted to me was 350. Many customers cannot visit those tobacconists, because it would be inconvenient in terms of distance or location. Despite the Government's assurance that it is not the Bill's intention to threaten such businesses, many retailers believe that it will. If they cannot use their mailing lists to inform customers of price changes without obtaining individual permission every time, the mail order and website operations will not be cost effective. There will be a knock-on effect, in that the shop side of the business will not be sustainable without the mail order side of the business. Those shops would then have to close. The only beneficiaries will be their overseas competitors.

If those shops go out of business, the people they supply to—specialist cigar smokers—will not all of a sudden say, ''Oh, well, in that case we shall give up smoking.'' They will seek other outlets, and in many cases those outlets will be overseas competitors. We will be hitting small retailers that have legitimate business to do. That has nothing to do with cigarettes or hand-rolling tobacco.

Photo of David Ruffley David Ruffley Conservative, Bury St Edmunds

Does my hon. Friend think that the Department of Health has consulted the Under-Secretary responsible for small businesses and the Department of Trade and Industry on that issue? It is

clear from my hon. Friend's argument that the provision could be a real blow to the small business sector, which I thought Her Majesty's Government were keen to promote.

Photo of Tim Loughton Tim Loughton Shadow Spokesperson (Health)

Yet another inconsistency, as my hon. Friend mentions. I doubt very much whether the Department of Health has taken any regard of the wishes of colleagues and other Departments, as I fear that the Government, despite all their joined-up rhetoric, do not practise what they preach. Another reason why I think so is that the Minister has responded to the Imported Tobacco Products Advisory Council, which sent me a copy of the letter that she sent it.

Photo of David Taylor David Taylor Labour/Co-operative, North West Leicestershire

The hon. Gentleman suggests that the Government are inconsistent in wanting both economic development, with a strong, stable economy, and a ban on tobacco advertising. I suggest that the hon. Gentleman reads the speech of the right hon. Member for Maidstone and The Weald (Miss Widdecombe) in the fox hunting debate which, mutatis mutandis, applies to our discussion. There is no inconsistency in wanting jobs but not at any price—not at the cost of health, or animal welfare in that case.

Photo of Mr Peter Pike Mr Peter Pike Labour, Burnley

Before I call the hon. Member for East Worthing and Shoreham, I shall give the Committee some guidance on what I propose to do as regards time. I know what the two Front-Benchers are hoping to achieve. I propose that we run on. If we have not concluded our proceedings by 6 o'clock, we will adjourn, but hopefully we will have concluded by then. The matter is not completely in my hands, because I do not know if or when there will be Divisions on the Floor of the House.

Photo of David Wilshire David Wilshire Conservative, Spelthorne

On a point of order, Mr. Pike. That is eminently sensible from our point of view. We thank you for that.

Photo of Mr Peter Pike Mr Peter Pike Labour, Burnley

I thought that it might be helpful for hon. Members to know what I am considering.

Photo of Tim Loughton Tim Loughton Shadow Spokesperson (Health)

The intervention of the hon. Member for North-West Leicestershire had little relevance to the debate, and I am sure that you would have ruled it out of order if we had pursued the subject, Mr. Pike. [Interruption.] It is totally irrelevant because the Government are not seeking to ban specialist tobacco shops, whereas they are seeking to ban fox hunting outright. There is no direct corollary between the two. The Government are perfectly happy for specialist tobacco shops to continue. The amendment would allow those specialists shops to continue mail order selling. In some cases, that amounts to the majority of their business, and without it they would be greatly disadvantaged and their future would be called into doubt.

My hon. Friend the Member for Bury St. Edmunds (Mr. Ruffley) is right to suggest that the Minister has had little, if any, contact with other Ministers to take soundings on the subject. In a brief, nay, curt letter that she sent just 10 days ago to the Imported Tobacco Products Advisory Council, she says:

''I am afraid that the Government does not support the amendment you suggest. The Bill therefore bans all direct mail advertising for tobacco products unless the advertisement originates at the request of the customer on each and every occasion. This protects people from being bombarded with advertising material.''

That is a familiar phrase. The ''bombarding'' test has now been imposed on specialist tobacconists, even though there is a particular case for allowing them to sell by mail order. Mail order is not going to attract first-time smokers or children to smoking. It is aimed at a specialist market of people who take up and continue smoking cigars or pipes in full cognisance of what they are doing, and of the implications of it. I fear that the tone of her language and the term ''bombarded'' suggests that she has no sympathy with that. That is a shame, but will the hon. Lady revisit some of the more detailed points raised by the three amendments? I make a particular plea for the specialist small tobacconists to be able to continue their activities, without an obvious effect on the most vulnerable people whom we are all keen to protect. I look forward to the Minister's reply, as I am sure that she has now had time to formulate a response to the Swedish case, given that it came up a few weeks ago. Unless the Government have fully taken that into consideration, it threatens to undermine a great deal of what they are trying to achieve under the Bill, much of which I agree with.

Photo of Yvette Cooper Yvette Cooper The Parliamentary Under-Secretary of State for Health

Amendment No. 11 would create an exemption for specialist publications aimed at existing smokers. Amendment No. 12 would create an exemption for a specialist publication for which people have not withdrawn their request in writing, and amendment No. 14 would exempt anything sent by a specialist tobacconist to an identified individual, who does not have to be an existing customer. I shall explain why the Government oppose the amendments and will take each one in turn.

Amendment No. 11 does not refer specifically to a specialist tobacconist, but says that a specialist publication—by anyone, including major tobacco companies—could be directed at existing adult users of tobacco products. It would allow tobacco companies to send all sorts of publications, as long as they were described as specialist publications, about their products to anyone who is a smoker. That would create a massive loophole. We know that 70 per cent. of smokers say that they want to give up. We also know that tobacco advertising is often targeted at preventing people from giving up smoking or making it more difficult for them to do so.

For example, advertisements are aimed at people during the new year period—exactly when people may be considering giving up smoking. It is not right that, just because people smoke, they should be bombarded—an appropriate word—with advertisements that may make it more difficult for them to give up. Given that tobacco is an addictive product, if people want to try to give up smoking, they should have the right to do so and receive the right support to that end. I strongly oppose amendment No. 11, which would allow tobacco companies to send a tobacco advertisement to existing smokers or users of tobacco products.

Amendment No. 12 would create a slightly less gaping hole. It would allow specialist publications to be sent to people who at some point in their lives had expressed a wish to receive them. Members of the Committee will have continued to receive mail from organisations that they have no recollection of having agreed to, or will have received information because of once filling in a coupon. What about people who may at some time in their lives had wanted to receive a specialist publication, but who had decided three or four years down the line to give up smoking? If such people continually receive advertisements, leaflets with special offers of free gifts and promotional material on tobacco products from tobacco companies, they would find it more difficult to give up smoking. The fact that, at one point in their lives, they had said that they wanted such a communication should not be the green light for them to be sent such communications for years to come. Many people take up smoking and decide later to give up; that is their right, and if they choose to do that, they should be free from tobacco advertising.

Amendment No. 14 raises the issue of specialist tobacconists. We recognise that they face special circumstances, and clause 6—which we shall discuss later—addresses them. They are legitimate businesses, and that clause sets out different circumstances for them.

However, specialist tobacconists should not be able to send out communications to any identified individual, which is what the amendment proposes. That individual does not have to be a customer, or someone who has requested information. That individual can just be someone whose name the tobacconist knows. Their name might have been bought, because companies circulate and share lists of customers, and then they start sending them unsolicited mail, which, in this instance, would, in effect, be a tobacco advertisement. If specialist tobacconists were allowed to do that, it would be a significant loophole.

It is right that specialist tobacconists, like everyone else, should be able to respond to requests by individuals for information about tobacco products, as is set out in clause 4(1)(b). However, it is also right that they should only respond to individual requests, which is why we oppose amendment No. 14.

The hon. Member for East Worthing and Shoreham asked if the decision by the European Court of Justice with regard to Sweden had any bearing on the matter under discussion. It does not. I do not think that anything in the judgment casts doubt on the Bill's compliance with the treaty obligations.

The decision that the Swedish courts made on proportionality and impact addressed alcohol advertising. Alcohol advertising raises different public health issues from tobacco advertising. That is why we are proposing a ban on tobacco advertising in this country, rather than one on alcohol advertising.

Photo of David Ruffley David Ruffley Conservative, Bury St Edmunds 4:30, 9 May 2002

I am carefully following the Minister's comments. She referred to a European Court of Justice ruling. Will she flesh out her remarks, because she was

talking about the Swedish case, but the judgment relates to the European Court of Justice?

Photo of Yvette Cooper Yvette Cooper The Parliamentary Under-Secretary of State for Health

Two judgments have been made; the first was made by the European Court of Justice, and the second was made by the Swedish courts. The European Court of Justice referred the matter back to the Swedish courts. In effect, the European Court of Justice said that although a law on alcohol advertising, and restricting that to trade journals, was an obstacle to trade between member states, it could be justified on public health grounds, provided that it was proportionate to the objective to be achieved, and it asked the Swedish courts to determine whether it was proportionate.

I do not believe that discussions about the proportionality of banning or restricting alcohol advertising have any bearing on the proportionality of banning cigarette and tobacco advertising, because of the massive health impact of smoking. We have looked at all the proportionality issues, and the impact of tobacco on public health has led us to decide to go ahead with the Bill.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

I wish to reinforce the Minister's point about the difference between alcohol and tobacco. I chair the all-party group on alcohol misuse, and I hope that Committee members will not pursue an argument that seeks to compare alcohol and tobacco. Smoking is always dangerous and addictive, but the great majority of people who consume alcohol do so in reasonable quantities; it does not damage their health, and it is addictive to only a minority of them.

Photo of Yvette Cooper Yvette Cooper The Parliamentary Under-Secretary of State for Health

I agree with those points. Alcohol and tobacco create different public health issues, and that is why it is right that we go ahead with this ban and reject the amendments.

Photo of David Ruffley David Ruffley Conservative, Bury St Edmunds

I do not want to upset the hon. Member for Luton, North (Mr. Hopkins) by unnecessarily pursuing the Gourmet case, as I have a lot of sympathy intellectually with what he said in his intervention and with what the Minister says. Intuitively, there must be a qualitative difference between the adverse public health impact of alcohol and that of tobacco. I shall not quibble and argue that point, but I should like to expose the legal advice that Her Majesty's Government have received on the matter. If the Committee and Ministers are not clear about exactly where they stand legally, the Bill might be defective and subject to legal challenge. I shall not argue about whether alcohol is more damaging and injurious to public health than tobacco. I need not judge the merits of that argument. I am merely testing the legal watertight quality of the drafting in light of the Gourmet case, transcripts of which were made available in English only last week. We are dealing with legal information and rulings that post-date the publication of the Bill. [Interruption.]

Photo of Mr Peter Pike Mr Peter Pike Labour, Burnley

Order. There is too much discussion in the Committee.

Photo of David Ruffley David Ruffley Conservative, Bury St Edmunds

Thank you, Mr. Pike.

These are not idle speculations, and they are not meant to be destructive legal speculations. I want to ensure that—

Photo of John Robertson John Robertson Labour, Glasgow Anniesland

I wonder whether the hon. Gentleman, with his obvious great knowledge, could tell me whether anyone has ever died of passive drinking.

Photo of David Ruffley David Ruffley Conservative, Bury St Edmunds

The hon. Gentleman has not listened to a word that I have said, being too busy chuntering away at the back. I went out of my way to concede the point that the hon. Member for Luton, North and the Minister made about the different potentially adverse impacts of alcohol as against tobacco to public health.

With the greatest respect to the hon. Gentleman, I am not trying to argue that point one way or the other. Labour Members may be right. I am trying to expose a slightly different argument. He is perfectly entitled to criticise, but my point is intended to be helpful and to prevent our agreeing to defective legislation or drafting that has not been tested in the fullest sense against current legal opinion. My information and advice may be incorrect, but I am advised that Her Majesty's Government may not have got it right, and I want to expose those arguments so that we do not go down a blind alley.

The Minister said that she believes that the Gourmet case does not pose any problems to Her Majesty's Government in proceeding with the Bill as drafted. However, it might be helpful briefly to remind ourselves of the Gourmet case, the gist of which was that the Swedish district court was unsure whether national rules that imposed an absolute prohibition on certain specialist advertising, to which the debate has adverted, might be regarded as having an effect equivalent to a quantitative restriction within the meaning of article 30 of the relevant treaty, and whether Swedish law was lawful in prohibiting specialist advertising, in relation to alcohol, rather than tobacco. The argument is analogous and has found favour with some legal commentators, who believe that the case may pose a problem for the Bill as drafted.

The district court in Sweden stayed proceedings under Swedish law and referred the questions to the European Court of Justice, which found that, on the restriction of trade and the freedom to provide services, the EC treaty did not preclude a prohibition as specified in Swedish law unless it was apparent that, in the circumstances of law and fact that characterise the situation in the member state involved, the protection of public health against the harmful effects of alcohol can be ensured by measures that would have less effect on intra-Community trade.

On obstacles to intra-Community trade and the freedom to provide services, the key question was the proportionality test. Were the obstacles to such trade proportional when set against the underlying purpose of protecting public health? In other words, the intention of protecting public health was set against the injurious effects of alcohol in the Swedish case. In my view that is on all fours analogous to the

prohibition proffered by this Bill to stop the harmful effect of tobacco on public health.

The European Court found that the ban was too extensive and not proportional as defined by European Community law. As a consequence, the advertising ban in question could not be applied. Legal advice received by the Opposition argues that the ruling has great and wide importance to the Bill and I am advised that that was recognised when the Advocate General gave his preliminary opinion, which was endorsed by the European Court.

The ruling has been a great consolation to the Swedish drinks industry, which sees itself as vulnerable to the type of ban that the Government propose for the tobacco industry in the United Kingdom. The Swedes think that the prohibition that they have been fighting with the specialist drinks industry is of exactly the same type faced by the tobacco industry in the UK if the Bill is not amended.

There is no European directive in force on tobacco advertising. Without one, the Bill sits in much the same legal framework as the Swedish alcohol case referred to the European Court of Justice. We must make it clear to the Minister that the drafting could cause legal problems in relation to proportionality. The Bill could be open to serious challenge. I do not believe that any hon. Member needs to be reminded about the critical importance of proportionality, because it also relates to the European convention on human rights. That is a separate issue, and we do not have time to go down that legal vista.

From the legal advice received by Opposition colleagues, it appears that the Minister owes us an explanation as to precisely what detailed advice legal advisers to the Department of Health have given Ministers in relation to the Gourmet case. Can she give further assurance beyond her general belief that there is not a problem? Although I accept in good faith that there is no problem in her mind, is there a problem in the mind of any legal adviser, or is this a bogus set of concerns and legal commentators and advisers in the City have got it wrong? If that is the case, I should be most grateful for the Minister's reassurance.

Photo of Yvette Cooper Yvette Cooper The Parliamentary Under-Secretary of State for Health 4:45, 9 May 2002

The crux of the hon. Gentleman's argument seems to turn on proportionality. There are 120,000 deaths from smoking each year. Estimates suggest that a ban on tobacco advertising, promotion and sponsorship would reduce consumption by 2.5 per cent. and, in the long term, save up to 3,000 lives per year.

That is a pretty clear-cut public health case in favour of a comprehensive ban.

Photo of David Ruffley David Ruffley Conservative, Bury St Edmunds

I am grateful to the Minister, but I shall not argue the merits of what she said. I am sure that she is not being deliberately obtuse, and I have great respect for her intellectual powers. However, she answered a question that I did not ask. I am not arguing about whether tobacco is a greater killer than alcohol. My question is more process driven, but it is nonetheless important.

What legal advice has the Minister received from her Department, or from outside it, to suggest that there is no possibility of a challenge on proportionality grounds? Can a legal argument be advanced to support the Government's policy on what proportionality might be? The Minister must have received legal advice on that. The Minister has given the Committee her view, which may be admirable, but the question is legal rather than about policy.

Photo of Yvette Cooper Yvette Cooper The Parliamentary Under-Secretary of State for Health

I understand that the hon. Gentleman is a lawyer and, as such, he will be able to suggest all kinds of legal arguments. However, the issue is about proportionality. The number of deaths that occur each year due to smoking and the number of deaths that could be prevented by a ban on tobacco advertising cut to the heart of the question of proportionality. The numbers give clear evidence of the importance of a comprehensive ban on tobacco advertising that would be wholly consistent with European law.

Photo of David Ruffley David Ruffley Conservative, Bury St Edmunds

I do not wish to delay the Committee unnecessarily. The Minister could well be right—I shall not argue the merits of her clearly expressed view. Have the lawyers in her Department said, ''Yes, it is very unlikely that there would be any successful challenge on proportionality''? I would not like to be a Minister going forward with the Bill unless I had received legal advice saying, ''Yes, Minister, your view is right and it is clear that tobacco poses a serious threat to public health. It poses a greater threat than alcohol and the Swedish case is completely irrelevant. There is no possibility of a challenge on proportionality appending the legislation.'' I want to hear only simple clarification that the Minister's legal advisers support the view that she clearly articulated.

Photo of Yvette Cooper Yvette Cooper The Parliamentary Under-Secretary of State for Health

I do not underestimate the tobacco industry's capacity to come up with all kinds of challenges to the Bill on any possible grounds. The Committee's purpose is not to speculate on such challenges or the angles from which the industry might approach a challenge. All our legal advice shows that the Bill is drafted in the strongest possible terms to avoid legal challenges and incompatibility with European or domestic law, to ensure that it can be implemented to prevent tobacco advertising, which we want to get rid of in the interest of public health.

Photo of David Ruffley David Ruffley Conservative, Bury St Edmunds

I do not wish to try the Committee's patience, but we are getting there, as it were. It would be helpful for the Committee to reflect that the tobacco industry may well make a legal challenge. I do not wish to speculate on that although I have no doubt that all sorts of challenges are possible. My question is very specific, and I hope that the Minister will set my mind at rest. Have legal advisors at the Department, or in some other part of Whitehall, advised her on the Gourmet case, and have they said that they do not anticipate any challenges that are made on proportionality grounds by bodies or companies being successful? Were they comfortable giving her that assurance before she went forward with the legislation? Such advice is regularly given to Ministers. I should just like to know whether she has been given any. If she can answer that question, I need not detain the Committee further.

Photo of Yvette Cooper Yvette Cooper The Parliamentary Under-Secretary of State for Health

We are going round in circles. My view, and that of many in the Department of Health, is that the tobacco industry may well challenge many aspects of the Bill, because that is what it has done repeatedly in the European courts every time that Europe has attempted to ban tobacco advertising. I do not think that there is any prospect of it stopping now. I am sure that if the hon. Gentleman were advising the industry, he would come up with more ways in which it could challenge the Bill.

Mr. Ruffley rose—

Photo of Mr Peter Pike Mr Peter Pike Labour, Burnley

Order. Under the Standing Orders, I have allowed the hon. Gentleman to raise the point several times and it is getting repetitive. We must move on.

Photo of David Ruffley David Ruffley Conservative, Bury St Edmunds

I was not going to intervene on the same point.

Photo of Mr Peter Pike Mr Peter Pike Labour, Burnley

If it is another point—

Photo of Mr Peter Pike Mr Peter Pike Labour, Burnley

Order. The hon. Member for Bury St. Edmunds is intervening on the Minister.

Photo of David Ruffley David Ruffley Conservative, Bury St Edmunds

My point is not on the same subject. I accept your strictures, Mr. Pike. May I say gently to the Minister, gracious as she normally is, that she would not want to imply that I am acting for a tobacco manufacturer or anyone related to the proceedings? I have never so acted and never would, and am sure that she will want to put the record straight, being the wise Minister that she is.

Photo of Yvette Cooper Yvette Cooper The Parliamentary Under-Secretary of State for Health

I should hate the hon. Gentleman to draw that impression from my remarks. I pointed out that I was sure that if he as a lawyer, or any other lawyer, were to advise the tobacco industry, he would consider different ways in which to come up with challenges to the Bill. I certainly would expect nothing less from the tobacco industry. However, our legal advice is clear that our Bill is compliant with European law and human rights, is implementable and will ban tobacco advertising across the board.

It is right for us to introduce the Bill; it is a matter for the tobacco industry how it chooses to respond. The advertising ban is supported by a majority not only of Members of Parliament but of the public, as well as the overwhelming voice of the medical profession. Only the tobacco industry and Conservative Members continue to oppose the ban.

Photo of Mr Andrew Hunter Mr Andrew Hunter Conservative, Basingstoke

Are we to deduce from what the Minister has said—at some length—that she has received no legal advice on the Gourmet case?

Photo of Yvette Cooper Yvette Cooper The Parliamentary Under-Secretary of State for Health

Opposition Members are pursuing the matter in immense detail. I have made it clear that we have legal advice not only on the amendments tabled to the Bill, but on its compatibility with European law, whether in light of the Gourmet case or any other. We need to ensure that the Bill will be compatible with the e-commerce directive, too. The issues that have been raised about the Swedish case are on proportionality. It is clear that there is a strong case on public health grounds to introduce the ban, given that it could save 3,000 lives.

Tim Loughton rose—

Photo of Mr Peter Pike Mr Peter Pike Labour, Burnley

Order. I rarely have to apply the Standing Order on repetition, but I am sure that the hon. Members for East Worthing and Shoreham and for Bury St. Edmunds are not happy with the answer that they have been given. I have to be neutral. Both hon. Members are experienced in such matters and know that there are other ways in which to pursue their argument.

Photo of Tim Loughton Tim Loughton Shadow Spokesperson (Health)

From memory, having started the debate, I think that I come in now. We have had a full and interesting debate on three legitimate and detailed amendments, but they were not answered by the Minister to our satisfaction. She said that amendment No. 11 would create big loopholes. That is not the case. I shall return to the matter on Report, by which time the implications of the Swedish case will be known. The hon. Lady brushed it off too freely. Will she make available to members of the Committee the legal advice that she has received on the compatibility of the Bill with the directives and the European convention on human rights, particularly in light of the Gourmet case?

The hon. Lady's last answer was a masterpiece in circumventing the specific question of my hon. Friend the Member for Bury St. Edmunds when he asked whether she had received specific advice on that case. She declined to say whether she had, but talked about the generality of the other advice she had received. For the benefit of the Committee and others who have an interest in such matters, will she publish that advice? We must make sure that, if enacted, the Bill is watertight in terms of its application in the United Kingdom and in the wider world. We must know whether it would fall foul of any European Union rulings. I do not see any reason why she should not publish such information, because it would back up her case.

The Minister's response to amendment No. 12 was slightly disingenuous. We all know that it is difficult to operate a mailing list if people must actively opt into it regularly. Again, the word ''bombarding'' came to the fore. We do not want to deluge people with lots of advertising literature, but some refinements could be made to Bill, whereby people would have to renew their name on a mailing list of specialist suppliers on, say, a five-year basis. They can have an opt-out clause when they no longer wish to receive mailings, because they had found a better supplier or, even better, because they had successfully given up smoking. Various amendments to the Bill could achieve that effect.

The hon. Lady knows that, in its present form, the Bill would kill the mail order business, even though it takes place legitimately between specialist suppliers and fully informed consumers who have full knowledge of the implications of their actions. Amendment No. 14, on behalf of many specialist suppliers, is the most legitimate of all the amendments. It involves only cigars and pipe tobacco, a small number of specialist suppliers and consumers.

We have spoken a lot about proportionality and the effects of alcohol. We will have a better debate on that

when the Government publish their alcohol strategy, for which we have been waiting for five years. We always know the weakness of the Minister's case when she returns either to the word ''bombarding'' or to the great mantra of the 120,000 people who die from smoking each year, a figure that we need to reduce.

The completely arbitrary estimate that a 2.5 per cent. reduction in the number of smokers will be achieved through the ban on tobacco advertising is based on no scientific evidence. It is purely the median point of an estimate of between 0 per cent. and 5 per cent., which reports have suggested is the fall in consumption that might be brought about. The figure of 2.5 per cent. has been plucked from the air.

As I said at the beginning and on Second Reading, if the Government could prove that that would be the result, we would have rather more sympathy with the intention behind the Bill. However, they cannot, and the Minister is rather disingenuous to keep falling back on that mantra, as though every time she mentions the 2.5 per cent. improvement or the 3,000 lives that could be saved, it became 6,000 or 9,000. It does not. She must admit that it is not based on scientific evidence and is purely a slightly arbitrary opinion. That is why we are analysing and scrutinising the Bill in such detail.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North 5:00, 9 May 2002

I find it extraordinary that the hon. Gentleman suggests that banning advertising would have no impact. If advertising has no impact, why do tobacco companies go to such great lengths throughout the world to spend billions to ensure the popularity of cigarette smoking among as many people as possible?

Photo of Tim Loughton Tim Loughton Shadow Spokesperson (Health)

We have been over that argument time and again. Another case that we have made before relates to brand sharing. A legitimate argument relating to brand switching could be advanced in reply to the hon. Gentleman, but a further implication is involved, as the Minister said on Second Reading in response to a proposal for a sunset clause that we shall revisit in Committee. She gave the reason why a sunset clause would not work, which is that it is difficult to determine which factors bring about a reduction in smoking. Advertising may or may not be one, as may other trends in society. Pricing most certainly is one, as we have seen the effects under successive Chancellors who have used it for that purpose. We believe that there is a case that has not yet been answered of an advertising ban being counter-productive if it will lead to tobacco manufacturers having to resort to other means to promote their brand, one of which might be price cutting. Price sensitivity is a key issue, as we have seen in the increase in the number of cigarettes coming to this country in the past five years.

Our perfectly reasonable case is that banning advertising may not have any impact and may be counter-productive, increasing smoking, because price cutting will be an alternative to which tobacco manufacturers will increasingly turn. The hon. Gentleman's point is answered perfectly by mine.

Photo of John Barrett John Barrett Liberal Democrat, Edinburgh West

Is the hon. Gentleman aware that many studies have concluded

that a reduction in advertising is directly linked to the consumption of tobacco products? A study by Dr. Clive Smee reviewed 19 studies, and another by the National Bureau of Economic Research in the United States studied data from 22 countries. Both found a direct link between tobacco advertising and consumption. More importantly, the World Bank

Photo of Mr Peter Pike Mr Peter Pike Labour, Burnley

Order. We are discussing issues that go wider than the amendment. We must stick to that.

Photo of Tim Loughton Tim Loughton Shadow Spokesperson (Health)

Indeed, Mr. Pike. We are returning to the Second Reading debate. I could, but I shall not, refer to several other reports that produced diametrically opposed views. My point is that there is no incontrovertible scientific evidence that the reduction in smoking that the Minister claims will be brought about by the ban on tobacco advertising—which I want, too—will be the effect. I do not want to go down that route again.

We have had a full debate on the amendments and at this stage I do not propose to press them to a Division, although I would like to be able to return to them on Report. There are considerations that the Minister has not properly addressed, particularly in respect of the Swedish case, and for that reason I ask her to publish the legal opinion. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of David Wilshire David Wilshire Conservative, Spelthorne

I beg to move amendment No. 13, in page 2, line 23, leave out

'(other than an in-flight magazine)'.

I shall deal with the amendment as briefly as possible, but I must detain the Committee for a few moments. It is never possible to disassociate oneself from one's position in the party, but on this occasion I am not speaking as an Opposition Whip. The issue is primarily a constituency one. I have been briefed by British Airways, but I own no shares in the company and the only benefit that I receive from it is the same as that which is available to every Member of the House.

The significance of the matter for me is that British Airways employs 35,000 people at Heathrow, of whom many are my constituents. Many of them are British Airways shareholders, and the knock-on effect of jobs created by the company is huge. Therefore, its continued prosperity—and that of many other airlines in and around the United Kingdom—is crucial to me as a constituency Member of Parliament, as it is to many other Members.

The implications of the amendment are significant. If the Bill is not amended, there will be problems. The in-flight retail sales figures are—for British Airways, which is probably the biggest—about £60 million. Interestingly, Britannia Airways, the largest of the British charter airlines, has reported sales of £29 million. Given the much tighter costings on charter tickets, the prosperity of the charter airlines depends heavily on their in-flight retail sales. If that means of making a profit were to be removed, the price of holidays would increase.

The implications are fairly serious. To put things into perspective, global tax-free sales are worth nearly US$3 billion, of which tobacco accounts for 14 per

cent. In-flight duty-free sales account for about 8 per cent. of that total. Europe is one of the biggest sectors of that market, and airlines flying in and around Europe would be more seriously affected than those operating in other parts of the world.

Photo of David Taylor David Taylor Labour/Co-operative, North West Leicestershire

I am sure that the Committee would be interested to hear about those figures in more detail. Can the hon. Gentleman say what proportion of the £60 million sales achieved by British Airways in relation to tobacco products is gross profit and what proportion that represents of their annual operating costs, or their annual revenue, or their annual profit?

Photo of David Wilshire David Wilshire Conservative, Spelthorne

I understand the hon. Gentleman's point, but that is fairly sensitive commercial information, and I suggest that he contact British Airways, Britannia Airways, Virgin and other British airlines direct and asks whether they will give him that information. I can say that they are significant, but I am not at liberty to produce figures that I have been given in confidence.

There are a number of other misconceptions that it is important to clear up. The reference to in-flight magazines creates the impression that the pamphlet at the back of the seat, containing articles and crosswords, is the offending item. Indeed, it does contain advertisements. Since the abolition of duty-free within the European Union, airlines operating in and around Europe find it incredibly difficult to separate duty-free from non duty-free. Therefore, a habit has developed over recent years: there is an in-flight magazine of the sort that we all understand, and there is a shopping list. We are not talking about the major British airlines' in-flight magazines; with regard to British Airways, we are talking about what is, in effect, a mail order catalogue. For several years, in-flight magazines have not contained tobacco advertisements: what we are talking about is a separate page that advertises what is for sale.

The matter under discussion produces problems for the airlines. The Bill does not prohibit the display of packages; we have been down that route. If one walks through a duty-free shop in an airport, one sees stacks of cigarette cartons, but an airline cannot do that, as it has no means of displaying packets of cigarettes, or the other items that it offers for sale. It can only display such items on its price list. If we prohibit the production of in-flight magazines in this way, we will discriminate against the airlines, and the airports will benefit as a result. However, the airports do not benefit the community as much as the airlines and the businesses that use them, so this is a point-of-sale argument as well.

We have heard many arguments that the tobacco industry is busily trying to get more people to smoke, but almost all the airlines prohibit smoking on flights; British Airways and other British airlines operate a total non-smoking policy, as do almost all the airlines in the world. Therefore, airlines are not trying to encourage more people to smoke; in fact, the opposite is the case.

When the Bill was introduced in the other place, it discriminated between British airlines and non-British airlines, but the Government accepted an amendment

that got rid of that, and I hope that they will do the same thing again. The Bill says that a defence is provided where the principal market of a publication is not the UK. If a publication is here, but it is not intended primarily for here, it will not be caught by the Bill. That is fine. However, the Bill goes on to say

''other than an in-flight magazine''.

No justification is offered as to why in-flight magazines should be picked on. Their principal market is not the UK. I have not yet heard an argument that they must be exempted because, although the UK might not be their principal market, they are still a loophole. If the Minister can offer me such an argument, I should be grateful to hear it.

Even though the Government have accepted the amendment that removes the apparent discrimination between UK airlines and non-UK airlines, there is still a serious danger of discrimination. When we were discussing the definition of publications, I flagged up that we would need to return to this matter when we reached clause 4. It is relevant. A British airline that produces its price list in the UK will be caught, unless it is exempted. That creates a danger: if a foreign airline's price list is not produced in the UK and does not have the UK as its target market, but it is in the pocket on the back of the airplane seat, that raises the serious issue of what is publication. British airlines will be caught. They will have to do something, and that might be what the Government wish to achieve. However, the definitions of publications that we were offered provide a loophole for foreign airlines: they can say, ''We are not publishing in the UK; we are coming in, landing and going away again, which hardly amounts to publication.'' Earlier, the Minister said that British airspace is part of the United Kingdom. If the definitions are what she wants us to accept, an aircraft flying from New York to Paris in British airspace would be caught by the provision, but common sense would have to be applied. Will the Minister apply common sense to this matter?

Are the Government prepared to listen to arguments about why they should not discriminate against British airlines, why they should not make it more difficult for us to compete in world aviation, why they should not put jobs in the United Kingdom at risk—the principal market is not the United Kingdom—and why they should not add extra costs to people's holidays if they do not intend that to happen?

Even if the Government will not listen—the Minister is not listening at the moment—to these arguments, I draw the Minister's attention to the fact that the lead times that the Government envisage after the Bill reaches the statute book are very short. I hope that she understands that those who produce price lists for such volumes of goods have to undertake purchasing, designing and marketing many months in advance.

Photo of David Taylor David Taylor Labour/Co-operative, North West Leicestershire 5:15, 9 May 2002

The hon. Gentleman will perhaps understand the scepticism and cynicism of Labour Members about the Bill's predicted impact on the revenue of British Airways. British Airways, other airlines and airports predicted doom following the change to restrictions on duty free shopping, but doom did not happen. The hon. Gentleman's points relate to a tiny fraction of the revenue of British Airways and they are a diversion from the debate.

Photo of David Wilshire David Wilshire Conservative, Spelthorne

I accept that it would be a diversion to go down the route of duty free sales, but the problems related to airports more than airlines. The airline issue was not explored as fully at the time.

I understand the hon. Gentleman saying that we are considering a small part of a company's profits. All British airlines would be affected, but I am more locked into matters about British Airways than others because of my capacity as a constituency Member. I am not conducting special pleading for one airline because the measure affects all British airlines.

However, even if the matter is small, discrimination against British airlines—and therefore in favour of foreign airlines—does British aviation, my constituents and other hon. Members' constituents no favours at all. The Bill must be even-handed throughout the world, and that is not the case when dealing with foreign airlines that are outside the United Kingdom's jurisdiction. I am arguing for a level playing field.

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

At the beginning of the hon. Gentleman's speech, he made a distinction between in-flight magazines per se and the price list that he flourished. He argued that because there are no advertisements in the in-flight magazine, as opposed to the British Airways shopping magazine, there is no need to regulate it. Whatever anyone may think about displays in the price list, surely there is an argument that we should ensure that in-flight magazines are prevented from containing advertising. If they were the only things left, surely they would be full of cigarette advertisements.

Photo of David Wilshire David Wilshire Conservative, Spelthorne

I fully understand that. The relevant point is that the Government say that any publication that does not have the primary purpose of influencing the British market is exempted. If something that is mainly intended for overseas consumption will not be caught, why pick on in-flight magazines because their primary market is not the United Kingdom? Airlines do not produce for one country but for all countries.

Although I have not talked to the airlines about this point, I do not have difficulty saying that general magazines should not have adverts per se. However, a price list takes the place of a point-of-sale display of packets of cigarettes. Before the hon. Gentleman reaches any conclusion, he must address the fact that a duty free shop has piles of cigarettes on display. That is an unfair advantage vis-à-vis the airline, which cannot have point-of-sale material stacked up in the aircraft. This is a legal activity and perfectly permissible, and if airports can do it, why not airlines? The Minister should reconsider the need for special reference to in-flight magazines. The rest of the clause is perfectly clear.

Photo of Yvette Cooper Yvette Cooper The Parliamentary Under-Secretary of State for Health

The Bill does not ban sales on airlines or point-of-sale information. Clause 4(3) provides for regulations to allow advertisements at point-of-sale. I accept that airlines are in a different position to walk-in newsagents in relation to point-of-sale, and the regulations will need to take that into account. We will consult on those regulations in due course before the Bill comes into effect. We recognise the different position of airlines.

It would be odd to exclude from the tobacco advertising ban companies such as British Airways, which clearly operates in the United Kingdom. Equally, since the Bill was last before the House, we have listened to representations suggesting that there should be a level playing field between different airlines. That is why all in-flight magazines, if they are effectively published in the UK, are covered by the ban. I sympathise with the hon. Gentleman's arguments in terms of the principal market. The difficulty is that it is hard to apply the phrase in the same way when referring to airlines. One would not simply be talking about a market in the UK, France or another country. Often, the market is a load of people in the sky between countries, so the phrase does not apply in an obvious way. As drafted, the Bill is even handed between different airlines, which is the right approach to take. I recognise that, because of the international nature of the companies, this is not a straightforward issue. On balance, we have the right wording and the amendment is unnecessary.

Photo of David Wilshire David Wilshire Conservative, Spelthorne

I thought that the Minister might say something along those lines, and I regret it. However, there is the possibility of progress. If I heard correctly, within subsequent regulations and protocols there is some prospect of finding a common-sense solution about what constitutes publishing in relation to airlines and what can appear in a price list. If that is what the Minister is saying, there is a chance of progress. Representatives of the airlines to whom I have spoken say that they seek only a level playing field—both for UK versus foreign airlines and for themselves versus airports around the world.

Will the Minister, either now or later, provide us with a better understanding of what the regulations might contain? What do the Government have in mind in relation to price lists and foreign airlines? Between now and Report, she may be willing to listen further to the aviation industry to see if some common-sense understanding can be produced. If it can, would she write to the Committee saying, ''I have had the discussions, and this seems to be the sort of thing that can be covered by common-sense agreements''. There would then be no need to press the matter further. However, if that does not happen, I would wish to press the matter to a vote on Report. If I understand correctly, there is hope for common-sense progress.

Photo of Yvette Cooper Yvette Cooper The Parliamentary Under-Secretary of State for Health

We will consult on the regulations regarding point-of-sale. They will take into account the different circumstances faced by the airline industry. The industry will have the opportunity to make representations on the regulations as part of the consultation process. I understand that the regulations on advertising at the point of sale must be made as

soon as the Bill comes into force, so we shall need to have the consultation process before then.

Photo of David Wilshire David Wilshire Conservative, Spelthorne

That is not quite what I hoped to hear. May I press the Minister one stage further? Will the regulations be subject to affirmative resolution in both Houses, as that is not clear in clause 19?

Photo of Yvette Cooper Yvette Cooper The Parliamentary Under-Secretary of State for Health

These regulations are negative. I am happy to set out for the hon. Gentleman precisely which regulations are negative and which are affirmative.

Photo of David Wilshire David Wilshire Conservative, Spelthorne

I was hoping that we could dig ourselves out of that problem, but we are not doing well. I thought that I would hear that the regulations would be subject to affirmative resolution, because clause 19 says that affirmative resolution will apply further on. The issue is sufficiently serious to keep me worried. If the Minister had said that the regulations were subject to affirmative resolution, or that they were not but that she was prepared to consider an amendment to make them so, the House might have had the opportunity to revisit the regulations and discuss them before they were finalised. That would have been another way to find some common ground between us.

I wish that I could say that I am satisfied, but I am not. The Minister has not shown a willingness to talk and listen before Report—I wish that she had. I also wish that she was prepared to write to us. However, I am conscious that if we push the matter now, it will be more difficult to revisit the subject on Report. I hope that we can continue the dialogue before consideration on Report; if not, we will have to come back to the issue on Report, and we will have to divide the House on it. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Tim Loughton Tim Loughton Shadow Spokesperson (Health)

I beg to move amendment No. 7, in page 2, line 25, at end insert—

'(d) if it is, or is contained in, an item of intrinsic value more than 30 years old.'.

There was a debate in the House of Lords that largely centred on the rather nostalgic journey that Earl Howe made with his family to an old railway at Matlock in Derbyshire one sunny day. At that restored railway, he saw several advertisements, going back many years, for various cigarette brands. I have a similar experience. Near where I live in Sussex there is the Bluebell railway, which features in many costume dramas and has many authentic advertisements and station signs, along with other railway paraphernalia. It would be ridiculous if such old adverts were caught under the terms of the Bill.

There are an increasing number of local museums and reconstructions of how people lived in wartime or before then. Invariably, some old tobacco adverts are on display for all to see. Strictly speaking, they constitute advertisements and would be prohibited under the Bill. Also, a large community of collectors of such paraphernalia has grown up. There are collectors' fairs dealing in old adverts, where such advertisements are on display for anyone who chooses to come to see them. Lord Filkin, in the House of Lords, said

''it would be absurd if historic advertisements in museums, for example, were caught by the Bill.''—[Official Report, House of Lords, 16 November 2001; Vol. 628, c. 853.]

I am sure that he is right. He saw the common sense of the matter. We would like reassurance from the Minister about what measures will ensure that such adverts are not prohibited in the general exclusions that we trying to apply to current and future advertisements. Such reassurances would be helpful to those who possess such items, are in charge of places where they are put on display, or collect them.

Photo of Yvette Cooper Yvette Cooper The Parliamentary Under-Secretary of State for Health 5:30, 9 May 2002

I can certainly repeat the assurances of Lord Filkin in another place that it is not the aim of the Bill for historic tobacco advertisements or items of intrinsic value that have branding to be caught. Clearly, cases need to be determined on the facts, but the Bill will not stop museums showing historic posters and items or antique shops displaying old packs or memorabilia of obsolete brands. Those items will not be regarded as advertisements or as the promotion of tobacco products. Obviously, at issue would be whether they were historic paraphernalia.

We would not permit tobacco companies to roll out a load of old posters that were 30 years old or reintroduce a new brand and put up what was supposedly an historic display not in a museum, but on a massive billboard outside a school, for example. That is why the issue is whether or not they are advertisements and the context in which they are put, rather than needing to introduce a particular amendment along the lines proposed by the Opposition. We have a common aim to ensure that legitimate, historical artefacts are available for public education and view, but that there are not any unnecessary loopholes in the Bill.

Photo of Tim Loughton Tim Loughton Shadow Spokesperson (Health)

I am not entirely sure that that is the reassurance that I wanted. It does not seem to mitigate against companies cornering the market in antique Players or Senior Service cigarette signs. Equally, the amendment would be a sensible addition to the Bill without a downside, whereby such items can be excluded specifically in a museum or in an historic context, rather than erected outside schools. However, that point was argued at length in the other place. I hope that it will be dealt with by regulation and, on that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Tim Loughton Tim Loughton Shadow Spokesperson (Health)

I beg to move amendment No. 15, in line 4, page 2, line 35, at end insert—

'(2A) For the avoidance of doubt, in subsection (1)(c) the ''principal market'' is not the United Kingdom where the total number of publications distributed in the United Kingdom (or any part of it) is less than the total number of publications distributed outside the United Kingdom.'.

I regret that this is the last amendment to clause 4 before we move on to other clauses. I hope that it is helpful. It is intended to provide greater definition within the Bill. It makes common sense to include an additional measure under subsection (2) because the definition of ''principal market'' is not clear. It seems again the Minister is happy to leave that to the courts to decide and for large legal bills to be accumulated

during that process. What about a magazine that has 28 per cent. of its circulation market in the United Kingdom, 24 per cent. in the United States of America, 24 per cent. in Germany and a further 24 per cent. in Australia? Which is the principal market? None of them constitutes the majority of more than 50 per cent., although the UK market may be slightly ahead at the time of other markets overseas.

How does one define the principal market of the Financial Times or Hello! magazine? The continental edition of the Financial Times is published in Frankfurt and circulated widely in the United States. I am reliably informed that Hello! magazine is available in many countries and there is obviously also an English edition.

The clause relates to a grey area and we seek to help by adding a definition. I cannot think of any obvious loopholes that would stem from it—that great loophole bogeyman that the Minister invokes to try to bat down amendments. The amendment is self-explanatory. It is intended to help and improve the Bill, rather than detract from it.

Photo of Yvette Cooper Yvette Cooper The Parliamentary Under-Secretary of State for Health

The Bill does not set out a definition of principal market in precise quantified terms for a good reason. The term varies upon the particular circumstances of the case and the number of markets a particular magazine or product has. For example, a publication may have 40 per cent. of its sales in the UK and the remaining 60 per cent. may be spread across 12 or 13 different countries. In those circumstances, hon. Members may rightly think that the principal market of that publication is the UK even though more than 50 per cent. of the sales take place outside the UK. It depends on whether there are two markets—or five, six, seven and so on. The interpretation of what counts as the principal market will vary according to the different nature of the product. That is why it is right not to pin down in the Bill a particular quantification of the principal market, and why it is right for the interpretation to be on a case-by-case basis.

Photo of Tim Loughton Tim Loughton Shadow Spokesperson (Health)

We were trying to be helpful. The Minister has given the matter some thought. The problem is a movable feast and we were purely trying to suggest a way of tying it down—I am sure that there are other ways. It is not a die-in-the-ditch issue and, to make progress, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Photo of David Ruffley David Ruffley Conservative, Bury St Edmunds

I rise briefly to ventilate a concern about subsection (3). I wish to make a slightly different point to that made by my Front-Bench colleagues. Subsection (3) states:

''The appropriate Minister may provide in regulations that no offence is committed under section 2 in relation to a tobacco advertisement which—

(a) is in a place or on a website where tobacco products are offered for sale,


(b) complies with requirements specified in the regulations.''

I would like more guidance from the Minister about how the regulations will operate and I hope that all hon. Members will applaud the reason for that. The subsection suggests that advertising will be allowed—in supermarket kiosks, for example—but it will be of a limited type. Tobacco products are sold in such places—we all have them in our constituencies. The Minister will have the power to say that, within certain parameters and dimensions, tobacco advertising will be permitted. That is my understanding of subsection (3).

My only concern is that no Member of Parliament wants the law of the land to be drafted ambiguously. Trading standards officers, no doubt doing the job to the best of their ability, will have to fulfil their statutory function of ensuring that advertising around a kiosk is within the narrow parameters and does not go outwith the regulations. I have this terrible vision of them tape measuring how far away from a kiosk advertising might be legitimate.

I say that to be helpful, because I am not sure that the explanatory notes are terribly useful. They say that subsection (3)

''covers shops and sales over the internet. In shops, the intention is to allow advertising of the products around the till area, typically on a gantry in a corner shop or in a kiosk in a supermarket, but to ban the advertising material elsewhere on the premises, for example in shop window displays. The Secretary of State will consult on regulations to set out further, detailed conditions''.

The guidance is not that specific and I shall use one example. The word ''gantry'' is used, and the ''Oxford English Dictionary''—I had to check it because I did not know what a gantry was—defines it as a

''bridge-like overhead structure with platform supporting equipment such as a crane, signals, lights or cameras.''

A subsidiary definition is

''a tall framework supporting a space rocket prior to launching'',

and a third definition is

''(in a bar) a collection of inverted bottles with optics for serving measures.''

It rather unhelpfully concludes by saying its origin is

''late Middle English (denoting a wooden stand for barrels): probably from dialect''.

I give that definition not to criticise Government drafting, because they will probably get their way on this point, but in the hope that the Minister will flag up the issue when she is advising and participating in the consultation process. If we are not to have pettifogging rules being breached at the margin and armies of council officials, who have better things to do, going round with tape measures and deciding what is a gantry, I urge her to ensure that proper attention is paid during the consultation process to what could become a red tape nightmare. I hope that she will take my comments in the spirit in which they are intended.

Photo of Yvette Cooper Yvette Cooper The Parliamentary Under-Secretary of State for Health

Clause 4 sets out an important series of exclusions that ensure the proper facilitation of trade in the tobacco industry and cover issues such as point-of-sale regulations. We believe that some advertising at the point of sale is acceptable, but it is an exclusion from the overall ban and as such will be covered by negative regulations. We will have a full consultation on those regulations in due course and

there will be plenty of opportunities for hon. Members and affected stakeholders to put their views forward.

Obviously, we do not want overly bureaucratic regulations. Their purpose will be to ensure that the ban on advertising is not undermined by allowing advertising at the point of sale that gives people information on products and may include some advertising that is currently in place. It is important that it is properly regulated, which is why regulations will be consulted on in due course.

Question put and agreed to.

Clause 4 ordered to stand part of the Bill.