Clause 9 - Prohibition of free distributions

Tobacco Advertising and Promotion Bill [Lords] – in a Public Bill Committee at 4:30 pm on 14 May 2002.

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Photo of David Wilshire David Wilshire Conservative, Spelthorne 4:30, 14 May 2002

On a point of order, Mr. Amess. Before I speak to the amendments, I would welcome your advice. In an attempt to make progress and for other reasons that I shall mention if the chance is available to us, will you give me guidance? Amendment No. 42 is the lead amendment, and it crosses my mind that I might have to move it in order not to lose the others. In the great spirit of co-operation this afternoon, it crossed my mind to not move the amendment. Would that mean that we could not discuss the other amendments that are grouped with it?

Photo of Sir David Amess Sir David Amess Conservative, Southend West

If the hon. Gentleman wishes to discuss amendments Nos. 39, 43, 40 and 50, he must move amendment No. 42. We could have separate Divisions.

Photo of David Wilshire David Wilshire Conservative, Spelthorne

I seek only your guidance, Mr. Amess, on whether I must move amendment No. 42 to guard against losing the remaining amendments, or whether I may help the Committee by saying that I am happy not to move it. I do not want to say that I do not wish to move amendment No. 42 only to be told that I cannot discuss the other amendments.

Photo of Sir David Amess Sir David Amess Conservative, Southend West

If the hon. Gentleman does not move amendment No. 42, he cannot discuss amendments Nos. 39, 43, 40 and 50.

Photo of David Wilshire David Wilshire Conservative, Spelthorne

That is exactly the trap into which I thought that I might fall, which is why I asked for your ruling, Mr. Amess. I shall move the amendment with reluctance and a heavy heart because I could write the riposte as a script.

I beg to move amendment No. 42, in page 4, line 28, leave out 'or permits'.

Photo of Sir David Amess Sir David Amess Conservative, Southend West

With this it will be convenient to take the following amendments: No. 39, in page 4, line 29, leave out 'or effect'.

No. 43, in page 4, line 36, before 'each', insert

'all reasonable steps are taken to ensure that'.

No. 40, in page 4, leave out lines 40 and 41.

No. 50, in clause 11, page 6, line 15, leave out

'or whose effect is to do so'.

Mr. Wilshire: In order to help the Committee to make progress, I tell the Minister that she need not pour great scorn on me for being in favour of amendment No. 42 or read me many pages of briefing on it because I shall ask leave to withdraw it.

I plead guilty to drafting amendment No. 42, and displeasure should not fall on any of my hon. Friends because they were not party to it. In my defence, I can say only that I was listening to an especially tedious debate in the Chamber last Friday afternoon while I examined the Bill. Perhaps that frame of mind caused me to draft the amendment.

Photo of Tim Loughton Tim Loughton Shadow Spokesperson (Health)

I cannot believe that last Friday's debate was so tedious that it could distract my hon. Friend's attention. The debate was, of course, on the Home Energy Conservation Bill, which is the private Member's Bill of the hon. Member for Brighton, Kemptown (Dr. Turner). Quite extraordinarily, the hon. Gentleman talked out his own Bill.

Photo of Sir David Amess Sir David Amess Conservative, Southend West

Order. I ask hon. Members to get back to the matter that we are discussing.

Photo of David Wilshire David Wilshire Conservative, Spelthorne

Absolutely, Mr. Amess. Perhaps I drafted the amendment as it reads because I was so riveted by the debate in the Chamber.

I turn to amendments Nos. 39 and 50, which make the same point of principle. The amendments would remove ''or effect'' and

''or whose effect is to do so''

respectively. The subject has cropped up during our discussion of other clauses, but I thought that it required careful thought with respect to this clause.

The title of the clause is ''Prohibition of free distributions''. It states:

''A person is guilty of an offence if in the course of a business he . . . gives any product or coupon away to the public in the United Kingdom''.

That is clear enough; for once we have a collection of words that we can clearly understand. However, subsection (1)(b) reads,

''causes or permits that to happen, and the purpose or effect of giving the product or coupon away is to promote a tobacco product.''

I accept that, in a court of law, it should be possible to say that the purpose of doing something was to promote tobacco. To establish the purpose of doing something, one must decide one's purpose before acting. If this legislation is put on the statute book, it will be reasonable to say, ''If you have deliberately done something along these lines, you are guilty of an offence.'' I accept that.

However, I cannot accept that if you. Mr. Amess, were to do this sort of thing, you would be found guilty, if the effect of what you did was to promote a tobacco product. It would be grossly unfair if you were to be treated like that, because you might have done something innocently and for the best of reasons that was a million miles away from promoting tobacco products.

If these two amendments are not passed, the clause will provide that, with hindsight, we can demonstrate that someone has committed an offence, even though he had no means of knowing that it was an offence

until afterwards. That is not good legislation. An innocent person does something for the best of motives, and subsequently, because of an effect beyond that person's control, he finds that he have done something that is contrary to this provision. That cannot be right, because he would not have known in advance that that would happen.

Therefore, the phrase ''or effect'' should be removed from the clause, and from elsewhere in the Bill. Amendment No. 39 seeks to remove ''or effect'' in one place, and amendment No. 50 seeks to do that in another. I would be interested to learn whether the Minister can justify using hindsight to make a criminal of someone who never intended to be one. If she cannot, she should accept the amendments, or something like them, which she could introduce on Report. I look forward to hearing her comments.

Amendment No. 43 seeks to make the legislation more sensible. Subsection (3) lists the circumstances in which an offence is not committed under subsection (1). The third of them states that no offence is committed if,

''each person to whom it is given—

(i) is engaged in, or employed by, a business which is also part of the tobacco trade, and

(ii) falls within subsection (4)''.

Therefore, if each person is involved in the trade, that is all right, up to a point. However, common sense must take a hand in this. For example, one might give something away to a group of people. That group could number many thousands of people, if one is talking about the number of people who are engaged in a particular trade, and it would certainly number many hundreds of people, in certain circumstances. However, the clause refers to

''each person to whom it is given''.

The hon. Member for Luton, North (Mr. Hopkins) considers tobacco manufacturers to be wicked people who will take advantage of every opportunity that is offered to them, but even if they are acting with the best will in the world, how can they be certain, if they are having to double check on 1,320 people—to clutch a figure out of thin air—that every one of them is engaged in the trade? That is what the clause demands, because it says ''each person''. Are we to allow situations to arise in which a prosecution can be brought because of the merest of slips that means that one person does not fit? There is no scope here for common sense, which is why amendment No. 43 proposes to insert

''all reasonable steps are to be taken to ensure that'' each person fits. That is a much more practical, sensible and realistic way in which to draft legislation. Given the number of people who might be involved and the scope for misunderstanding and genuine error, we should be looking for best endeavours. That is realistic.

I have a slight difficulty with amendment No. 40. On the original list of amendments, it proposed the deletion of ''lines 41 and 42''. Someone has spotted the point that I was going to make, and it has now been

changed to ''lines 40 and 41''. If anyone is working on the old list on which I was working, that is not what we are discussing; we are discussing leaving out lines 40 and 41.

The clause refers to when

''the product or coupon is given to each such person in his capacity as such a person.''

The same argument applies as to amendment No. 43. It relates to the phrase

''given to each such person''.

Whether the number of such people is 1,000 or several thousand, those who take shelter in that defence must be able to show that they gave to each such person.

Again, that seems to fly in the face of common sense. Why does it matter? If the person involved took all reasonable steps to ensure that the people involved were engaged in the trade, that should be adequate. If they can prove that they did so, does it matter whether ultimately each such person was working in that capacity? If they miss one person, rather like if they give to one person too many, which was my first argument—that is, if there are 1,230 and they give to only 1,229—they have, as I understand it, lost their defence under the clause. I should be grateful to hear why the Minister believes that the provision is necessary and that it is not necessary to suggest another formula of words that would deal with the issue in a much more realistic and practical way.

I have already spoken to amendment No. 50, which deals with effect rather than purpose, and I shall not repeat myself. However, some substantial issues are involved and I should be grateful if the Minister would comment on them before we decide whether to press any of the amendments to a Division.

Photo of Jim Murphy Jim Murphy Labour, East Renfrewshire 4:45, 14 May 2002

I am delighted to catch your eye, Mr. Amess. I shall comment briefly on the Opposition amendments.

I mentioned this issue on Second Reading, when I strongly welcomed the fact that coupons and the free distribution referred to in the Bill will be prohibited. I declared an interest then, and I declare another now. Unbeknown to me at the time of Second Reading, for a good period of her life my mother helped stock cigarettes into cartons and boxes in the cigarette processing plant in Glasgow. I have declared my interest and made more confessions. On Second Reading, I admitted to having smoked and to a dubious taste in music. My family connection with the industry only strengthens my support for the action that the Government are taking in the clause.

We have discussed purpose and effect. The tobacco industry and Opposition Members who represent its interests will claim that the purpose of coupons and free distribution is to encourage brand loyalty and to thank customers for purchasing their products. That may be the stated purpose, but the effect is entirely different. We are all aware—Conservative Members should acknowledge this—that the effect is to encourage and maintain the smoker's addiction. The industry also aims to entice additional purchases. Surely, everyone would accept that. On Second Reading, I talked about the effect of such coupons,

which is to encourage smokers—such as those in my own family—to purchase a cheap set of six whisky glasses for £100 worth of cigarettes. I have since been given a copy of the Benson and Hedges gratis magazine, which describes in greater detail the effect and purpose of coupons. A cursory glance shows that the effect of coupons is not only to encourage maintenance of the addiction and additional purchases of cigarettes; the magazine shows the extent to which tobacco companies use coupons to reward the smoker's addiction through the distribution of supposedly free gifts. Such gifts include a child's swing, of all things: smoke cigarettes and get a free swing for your child. The fact is that one would have to purchase £6,000 worth of cigarettes to receive a supposedly ''free'' child's swing. The aim is to encourage the smoker to purchase additional cigarettes. In return for a £6,000 investment in his addiction, a smoker could feel a warm glow—as well as blocked lungs—by providing his child with a nice, little play swing. That is an additional effect of coupons. If a smoker spends over £200 on cigarettes, he can be rewarded with a ''my little honey doll''. What is the purpose of such a gift?

Photo of David Wilshire David Wilshire Conservative, Spelthorne

My mind was beginning to wander again and I might have said something unfortunate. Will the hon. Gentleman say what the thing is?

Photo of Jim Murphy Jim Murphy Labour, East Renfrewshire

Members of the Committee may not be aware that the hon. Member for Spelthorne and I spent more than a week cooped up in a cabin on a Royal Navy frigate. We discussed such issues, among other things. It is fairly clear that it is a little doll, given in return for spending hundreds of pounds on tobacco products, polluting the household, encouraging passive smoking and passive contraction of diseases. By way of compensation, one can reward a child with a little squeezy doll.

I am identifying the purpose and effect of coupon programmes. A travel cot can be purchased with coupons, although one would have to spend over £2,000 on cigarettes to receive one.

Photo of Kelvin Hopkins Kelvin Hopkins Labour, Luton North

I am interested in what my hon. Friend has said and I totally support his argument. Does he agree that one of the effects is not only to maintain the addiction, but that the smoker would buy as many cigarettes as possible, so that he may receive the child's swing or little honey doll even sooner, perhaps this year rather than next?

Photo of Jim Murphy Jim Murphy Labour, East Renfrewshire

My hon. Friend is correct. Smokers may do their shopping by tobacco coupons in time for Christmas gifts. He is right to draw attention to the fact that there are deadlines on some of the offers. To qualify for the supposed special offer, one must purchase a certain quantity of cigarettes by a certain deadline. The purpose and effect of such an offer would be an increased consumption of tobacco products within a certain time.

Photo of Tim Loughton Tim Loughton Shadow Spokesperson (Health)

The hon. Gentleman is making an interesting contribution, but I am sure that he does not seriously think that people who are stupid enough to smoke are also stupid enough not to realise that they could buy lots of swings or honey dolls outright with the money that they would have to spend on cigarettes.

Also, is it not a fact that smoking diminishes a smoker's sperm count and affects fertility? That means that smokers are rather less likely to exchange vouchers for a carrycot or whatever, because they could not have children in the first place.

Photo of Jim Murphy Jim Murphy Labour, East Renfrewshire

I am not in a position to question the hon. Gentleman's understanding of science or human biology, but I am sensible enough to know that if someone is trying to purchase a swing for a child, they already have a child, and sperm count is not uppermost in their mind.

Another example of the enormous pressure and incentives used to increase consumption of tobacco comes from the same wonderful colour brochure. If one spends more than £2,500 smoking more than 10,000 cigarettes, one qualifies for a cardiovascular workout mini-step. How remarkable.

Photo of David Ruffley David Ruffley Conservative, Bury St Edmunds

The hon. Gentleman has shared a delicious piece of irony with us. I would like more information. I have never seen such coupons. I do not know how a smoker might get hold of them, where they might be found and how widely distributed they are. Could the hon. Gentleman tell us the scale of the problem that he is describing?

Photo of Jim Murphy Jim Murphy Labour, East Renfrewshire

I am delighted that the hon. Gentleman acknowledges that such coupons are a problem, and I anticipate him voting with us if the issue is forced to a Division.

Coupons are regularly found inside packets of cigarettes. I shall show the hon. Gentleman the range of brands that contain them in their boxes. Cigarette package frontages show the brands to which one would have to be loyal in order to receive the gifts. They are a widely used incentive, the effect of which is to encourage greater levels of smoking. The coupons are available to many families throughout the country, including mine. They are a widely used marketing tool that encourages a degree of brand loyalty and—more importantly for the purposes of the Committee—increased smoking and addiction.

Photo of David Ruffley David Ruffley Conservative, Bury St Edmunds

I am a nearly reformed smoker who smoked both Silk Cut and Marlboro Lights cigarettes, and I cannot recall coming across any of the coupons that the hon. Gentleman describes. I am not making a judgment about the merits of such coupons; I am fascinated by what he says. However, given my experiences, it is not clear to me that coupons are widespread. That is why I intervened earlier. Perhaps the hon. Gentleman could elucidate how many smokers might be affected by the regime.

Photo of Jim Murphy Jim Murphy Labour, East Renfrewshire

I have a letter from Benson and Hedges about its coupon regime. As a non-smoker, I am well aware that Benson and Hedges is a considerable market player. My father did not, and does not, smoke Benson and Hedges, but there are coupons in the cigarettes that he purchases, too. I gather that they are widespread, and their effect is to encourage and increase consumption of tobacco products. I identified that example of incentives to highlight a callous way of encouraging greater consumption.

I should like to mention free distribution. I am a teetotal non-smoking vegetarian, but I nevertheless occasionally visit Glasgow pubs with my wife and friends. Like many people, I am often confronted by usually younger ladies, who offer to swap the contents of a cigarette packet for a full packet of an alternative brand. The effect of that free distribution is not only to switch brand loyalty, but to increase the consumption of cigarettes and, therefore, the level of addiction to specific tobacco products. I do not know what happens to the cigarettes one hands in—the one or two in the packet that one takes to the pub. However, instead of purchasing a packet of 20, one swaps the cigarettes that one has left for a brand new packet of 20 and ends up smoking 38 or 39 cigarettes. The aim is not to promote brand switching but to increase consumption.

In my experience, there are only two conditions for free distribution. One is the compulsory adding of one's name to a database to receive subsequent mailings and advertising, and the other is increasing one's consumption by swapping a small number of cigarettes for a full packet.

Therefore, I welcome the clause as drafted not only for its purpose, but in respect of its effect. Opposition Members who claim to fear an excessive use of retrospective legal judgment should see that there is a clear legal defence within clause 9(5). I am surprised that the hon. Member for East Worthing and Shoreham (Tim Loughton) did not allude to it in full. I welcome the clause and oppose the amendments because of the purpose of the tobacco industry and the effect of free distribution and widely distributed coupons.

Photo of Yvette Cooper Yvette Cooper The Parliamentary Under-Secretary of State for Health 5:00, 14 May 2002

There are a series of amendments to clause 9, most of which relate to free distribution, although one refers to brand sharing. The hon. Member for Spelthorne (Mr. Wilshire) did not speak to amendment No. 42 and I understand that he intends to withdraw it, so unless he indicates otherwise, I shall not speak against it.

The effect of amendment No. 39 would be that any of the offences in clause 9 involving free distributions would be permitted only if the purpose of the gift is to promote a tobacco product, and not when the effect is to do so. I oppose the amendment because the line that we have taken consistently throughout the Bill is that it must cover cases involving purpose and effect. We should not confine the Bill to purpose. We should take a consistent approach in clause 9 and cover advertisements and promotions that are either intended to promote a tobacco product or have the effect of doing so.

The Bill provides clear defences to protect people when their connection with the promotion could be said to be blameless. Clause 9(5) provides that

''A person does not commit an offence . . .

(b) where it is alleged that the effect of giving the product or coupon away was to promote a tobacco product, if he could not reasonably have foreseen that that would be its effect.''

If they could not reasonably have foreseen it, they have a defence under the Bill. In such circumstances, because of the burden of proof, the prosecution would first have to prove beyond reasonable doubt that the effect of the distribution was to promote a tobacco product. Secondly, if defendants put forward credible evidence claiming that they could not reasonably have foreseen the effect, the prosecution would have to prove beyond reasonable doubt that they could have. The defence is already in the Bill.

Amendment No. 43 seeks to provide that

''all reasonable steps are taken to ensure that''

the product or coupon reaches the particular people permitted under clause 9(4). I have sympathy with the intention behind the amendment, but I believe that it is not appropriate and ask the Committee to reject it. Free gifts can be a powerful tool in tobacco companies' armouries, and gift schemes can be used to tempt lower-income smokers. The advertising agency used by Gallaher provided a document to the Health Committee in 1999 that stated:

''Who are we talking to: Glasgow's smokers—they smoke because they enjoy it. They also love the gift scheme, with over 50 per cent. of the club franchise unemployed this probably explains its popularity''.

Clearly, an attempt is made to use free gifts, promotions and coupons to encourage smoking and promote tobacco products.

The Bill allows free gifts in some circumstances for the purposes of the tobacco trade. Paragraphs (a) to (d) of subsection (3) list the circumstances and include the provision that each person who receives the gift must be engaged in the trade.

The amendment would weaken subsection (3) such that people would not be liable if they had taken all reasonable steps to ensure that the gifts were received only by the person in the trade. I have some sympathy with that intention, but the company responsible should take some responsibility for ensuring that the free gifts sent out reach the right people.

We are allowing an exemption from the comprehensive ban in particular circumstances. It should not become an excuse for simply having a huge mailing list that is updated once every 12 months, simply to check, and using it to promote a product to a large number of people without being clear that those people are part of the tobacco trade and involved in the right sort of decisions and decision-making positions in the tobacco trade. It is right that the provision is clearly drawn to ensure that it does not become subject to abuse. Sufficient exemption has been given to carry on the trade with no detrimental effects.

Amendment No. 40 would delete subsection (3)(d), which provides that the product or coupon must be given to each such person in their capacity as a person involved in the trade, as set out in the rest of the clause. The provision distinguishes between giving to people as part of their job a free distribution such as a new cigar that they want to be sold in specialist tobacconists, for example, and allowing people simply to give everyone on the list free products for their own use and effectively targeting them as smokers or

potential smokers, as opposed to contacting them in their capacity as part of the tobacco trade.

Amendment No. 50 relates to the principle of removing effect from the Bill in relation to brand sharing. Brand sharing is especially important, and we shall have an opportunity to discuss it later.

Documents in the public domain reveal how the tobacco industry reacted many years ago to the threat of increasing restrictions on direct advertising by developing a strategy to use its brands on other products, such as Marlboro Classic clothing. The tobacco brand receives extra advertising that is free of the advertising restrictions placed on tobacco brands, such as the presence of a health warning. Recent research concluded that:

''when other variables that are known to be associated with smoking are controlled for, awareness of coupon schemes and brandstretching were both associated with the greater possibility of being a current smoker''.

It is important to keep effect in the Bill. My hon. Friend the Member for Eastwood (Mr. Murphy) made clear the impact that tobacco promotion through coupons and free distribution can have and the rather dubious links between the promotion and the sorts of gifts on offer. If we removed effect from the Bill and left only purpose, the tobacco company could argue that the purpose was to make money from other goods, or related to brand loyalty, for example, and it might be difficult for the prosecution to prove an additional purpose beyond reasonable doubt, but the effect might be screamingly obvious to everyone. It might be to promote a tobacco product. We must not permit through brand sharing promotions that clearly have the effect of promoting a tobacco product, because it could be argued that there may be alternative purposes. To remove the word ''effect'' from the clause would weaken it. Defences are in place; it is right that they are, but it would be wrong to accept the amendments. The Government reject amendments Nos. 42, 39, 43, 40 and 50.

Photo of David Wilshire David Wilshire Conservative, Spelthorne

What a change takes place in Committee after a good lunch. Had we received such a response from the Minister earlier, we would probably have made more progress. Having touched on the matter of ''effect'' many times in previous sittings, at last we have heard a coherent argument why the word should stay in the clause.

Lunchtime has had such a calming influence. The dogs are off the leash on the Opposition Benches and can contribute to the debate. I welcome the contribution of the hon. Member for Eastwood. It makes a refreshing change to listen to a different voice, even if I could not understand what he meant by ''little honey doll''. If the hon. Gentleman could listen to himself with an English ear, he might realise why I was confused and asked him to explain what he meant. However, as soon as I knew that it was a little honey doll, all my anxieties went away.

Some of the matters to which the hon. Gentleman referred should be dealt with in the clause stand part debates. I know that my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) wants to make some general remarks about the clause, so I shall not broaden this debate; otherwise you,

Mr. Amess, may rule that we cannot have a clause stand part debate—and that would never do. The hon. Member for Eastwood seemed to doubt whether I was in favour of banning coupons. I hope that, by now, he knows that I think that the Bill is an abuse of human rights, but if the Government are determined to ban tobacco advertising, I am entirely with him that it is right to catch coupons. There is no disagreement between us, once we accept the principle of what the Bill will achieve. It is the principle with which I am in disagreement.

The hon. Gentleman focused his remarks on a swing for the kiddiewinkies, if one smoked £6,000 worth of tobacco. If someone smoked that amount of cigarettes, he would not have the puff left in him to push the swing, which made me wonder why that particular item was in the catalogue. I said earlier that I am guilty of being naïve because I take everyone at face value. I have to plead guilty of other things, too, one being that I am a sensitive soul. When the hon. Gentleman said that he and I spent a week cooped up together, my sensitive nature made me decide that an explanation was necessary. We were on HMS Newcastle as part of the armed forces scheme. It was an enjoyable time and all I can say, on reflection, is that despite the fact that the hon. Gentleman is a non-smoking, teetotal vegetarian, he is good company.

Of all the ingenious arguments that have been advanced during the past four sittings, to have introduced a debate about sperm count was even beyond my wildest expectations of what could be discussed when referring to tobacco advertising. I congratulate my hon. Friend the Member for East Worthing and Shoreham on doing just that. I learn something new every day to add to my armoury of debating skills.

In order to spare my blushes—I hope—the Minister kindly said that she would not speak against amendment No. 42. I am grateful for that and I do not intend to provoke her.

As I said, I listened carefully to the response to amendments Nos. 39 and 50, and I heard a coherent argument on why there should be the consistency of keeping the word ''effect'' in the Bill. I accept that, especially because the Minister pointed out that the clause contains defences such as

''if he could not reasonably have foreseen''.

That is a safeguard, and I shall not press the amendments.

I found it curious that the Minister prayed in aid the concept of ''not reasonably have foreseen''. That means that being reasonable is a defence for such matters. However, when the hon. Lady addressed amendment No. 43, which would introduce the concept of ''reasonable steps'', it was curious that she was pleased about the use of reasonableness in one context, but said that that amendment was unreasonable. As consistency throughout the Bill and reasonableness are good ideas, surely that should lead

her to accept the amendment, especially because she said that she has some sympathy with its intentions.

The Minister seems to accept that I am barking up the right tree on this occasion—I may be permanently barking. If she does not like my wording or the way in which I have introduced the concept of reasonableness, which is the concept that she believes is right in other contexts, I hope that she will table amendments on Report that will allow her to say that the Bill is more consistent.

The Minister's justification for rejecting the amendment was that companies should take responsibility for their actions because the consequences are so serious. All members of the Committee would agree that companies must act reasonably and responsibly. My amendment does not say in any way that a company does not have to accept responsibility. It says exactly the opposite; the company must take all reasonable steps, and we expect a responsible company to do that. Accepting the amendment would not undermine a company's requirement to be sensible.

I do not believe that we are as far apart on the subject as it might appear. I said that I do not wish to press amendment No. 42, and I suspect that if I withdraw it, the other amendments will fall. If that is the case, I am entirely content. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Tim Loughton Tim Loughton Shadow Spokesperson (Health) 5:15, 14 May 2002

I beg to move amendment No. 41, in page 4, line 31, leave out subsection (2).

Photo of Sir David Amess Sir David Amess Conservative, Southend West

With this it will be convenient to take the following amendments: No. 28, in page 5, line 18, at end insert—

'(6A) For the purposes of this section, a coupon shall not be deemed to have the purpose or effect of promoting a tobacco product if it only provides for the product with which it is packed or sent to be sold at a discount on a single subsequent purchase of that product.'.

No. 44, in page 5, line 19, leave out subsections (7), (8) and (9).

Photo of Tim Loughton Tim Loughton Shadow Spokesperson (Health)

The amendments explore a similar theme. I shall major on amendment No. 28, although I shall mention amendment No. 41 first.

Amendment No. 41 would remove subsection (2), which states:

''It does not matter whether the product or coupon accompanies something else, or is given away separately.''

The subsection is unnecessary because one must differentiate between in-pack and on-pack offers. In-pack offers are coupons contained inside a packet of cigarettes and on-pack offers advertise money off on the wrapping of the packet or group of packets.

Amendment No. 28 exempts coupons that allude only to the product in which they are contained. A coupon in a cigarette pack that offers 10p off a subsequent purchase of a pack of that brand of cigarettes does not promote greater expenditure; it merely gives a reward for loyalty, if a customer buys another packet of the same brand.

When manufacturers wish to make special price offerings, three principal options are available to them:

first, revised terms to wholesalers and retailers that enable them to make special price offerings to their customers; secondly, on-pack discount price marking and pricing flashes offering, for example, 10p off; and thirdly, in-pack price offerings, such as the coupon option that I have mentioned.

There can be no guarantee for the owner of the brand and the smoker that revised price terms for the trade will automatically filter through to the consumer, as intended. Packets of the same brand of cigarettes can be—and are—sold at widely varying prices at different outlets.

With regard to the Government's intentions, on-pack price offers such as price flashes are less desirable than discreet in-pack price offers, such as coupons that offer a price reduction on a single subsequent purchase of the product. Therefore, we are going for the lesser of available evils, which will have a beneficial effect. Such price offers are directed only at existing smokers, and they are noticed only by them. They are of interest only to them. Therefore, they will not entice non-smoking adults—or children—to take up the filthy habit. They are most unlikely to be of an order that will encourage existing smokers to smoke more, or to continue to smoke. We are talking about offers such as 10p off a subsequent packet of cigarettes, rather than £100 off a subsequent 25 packs, or whatever.

I have no doubt that the Minister will say that even in-pack offers will have the effect of promoting a tobacco product, but I ask her to consider the most important point, which is whether the measure is proportionate. With regard to many of the amendments that we have addressed this morning, she has responded by saying that the existing legislation is proportionate. Will she apply that principle to what is being proposed now? In the context of the Bill in general, it is an important principle, but it should be applied to the provisions of this clause in particular. Otherwise, the issue that the amendment addresses will be contested later in the courts. It is a probing amendment that proposes a limited exemption.

Amendment No. 44 seeks to delete subsections (7) to (9). It is a consequential amendment. The subsections should be deleted if the limited forms of coupons that amendment No. 28 proposes are allowed.

There will always be some price-cutting promotion, and our greatest fear is that the absence of advertising and promotion could lead to wholesale price-cutting, which would result in a greater increase in smoking. We are trying to limit and cap the effects of any promotions. The proposed legislation prohibits direct marketing schemes but, in the interests of proportionality, it will go too far by interfering with suppliers' freedom to make special price offers directly to existing smokers of a particular brand of cigarettes.

Amendments Nos. 41, 28 and 44 are relatively modest and proportionate probing amendments, to which I would like the Minister to respond. I do not think that they take away from the Government's intentions.

Mr. Andrew Hunter (Basingstoke): I reinforce the argument advanced by my hon. Friend the Member for East Worthing and Shoreham about amendment No. 41 by inviting the Minister to consider subsection (1), which states:

''A person is guilty of an offence if in the course of business he—

(a) gives any product . . . away''.

My emphasis is on ''any''. In light of that all-embracing word, surely it follows logically that subsection (2), which the amendment would delete, is redundant. Given the wording of subsection (1)(a), I shall be surprised if the Minister can mount an effective argument to say that subsection (2) is needed.

On amendment No. 28, I emphasise that an in-pack coupon is clearly directed not at the general public, but the smoker. It is therefore entirely different in kind from the general advertisements that the Government seek to ban. I may argue with the Government about the effects of that ban, but surely they should acknowledge that, within their own terms of reference, an in-pack coupon or token does not amount to advertising.

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

Amendment No. 41 would omit subsection (2), which makes it clear that a product or coupon given away with something else will be caught under the Bill. Subsection (2) ensures that there is no doubt that the offence set out in subsection 1(a) includes coupons given away, either with something or separately. Subsection (2) should remain in the Bill, and I oppose the amendment.

Photo of Mr Andrew Hunter Mr Andrew Hunter Conservative, Basingstoke

What is the deficiency of the wording in subsection (1)(a), which says

''gives any product or coupon away''?

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

Subsection (2) is purely about providing clarification, so that no one can argue in court that something given away as part of another gift—in a free newspaper, for example—would not be covered by the Bill. The intention of the ban is clear in subsection (1); subsection (2) only clarifies, but it is right to include it to prevent mistaken legal defences being mounted.

Amendment No. 28 would allow coupons that give a discount on the next packet. Although manufacturers will not be able to include coupons for honey dolls, children's swings or other products, they may, if the amendment is accepted, include coupons that allow purchasers to buy another packet of cigarettes at a discount. In the end, the effect of the two types of coupon is the same. Whether the inducement to keep buying the same brand for extra coupons is a honey doll or carry cot, or whether it takes the form of a coupon that gives 50p, 10p or whatever off the price of the next packet, the effect is to get the smoker to buy the next packet of cigarettes.

Tobacco companies may argue that they are promoting brand loyalty, but they are also promoting the purchase of the next packet of cigarettes. It is true that the impact might be aimed at existing smokers but, as 70 per cent. of smokers say that they want to give up, we should be trying to protect them. It is right that those who want to give up should not be continually bombarded with new

inducements to buy the next packet of cigarettes. That is why I reject amendment No. 28.

Amendment No. 44 would remove the power to make the regulations that ban distributions made for a nominal sum or at a substantial discount. That is one of the sets of regulations that, at this stage, we anticipate need not to be laid. However, it is right that we have such powers should abuses arise. An obvious way of avoiding the problem of not being able to send out free distributions would be to say, ''All right, we will distribute a packet of cigarettes for 10p, or a gift such as honey doll for 20p.'' We have the regulation-making power in place as a way round the free distribution prohibition. To remove that regulation-making power—which is a reserve power—would open a potential loophole that would undermine the entire of clause 9. That is why I oppose the amendment.

Photo of Tim Loughton Tim Loughton Shadow Spokesperson (Health) 5:30, 14 May 2002

I am grateful to the Minister for her response, although I fear that some of the regular arguments to which she resorts—such as the use of ''bombarded''—were creeping in.

With regard to amendment No. 44, the hon. Lady said that there was no intention to use the power, but it should be included just in case. That argument is wearing a little thin. I take her point about amendment No. 41 going against the clarifying nature of that part of the clause. However, I do not buy the argument that a coupon—not, as she said, coupons—that offers a reduced price for the next packet of the same brand of cigarettes would have a significant effect on the habits of a particular smoker. He is already dedicated to smoking, by continuing to do so, and I do not think that a coupon constitutes 'bombarding' him. The Minister should give greater credibility to the brand loyalty argument, although I see why she does not want to do that.

Offering a 10p or 50p discount is different from the offer of an inducement to become the proud owner of a honey doll or carry cot, or—as I believe the hon. Member for Eastwood mentioned—to take advantage of a cardio-vascular work-out. I think that we will continue to agree to disagree on that issue, and I do not think that we will make any further progress on the amendment.

I beg to ask to leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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

Photo of David Wilshire David Wilshire Conservative, Spelthorne

I shall try not to detain the Committee for long. I am worried that clause 9 provides yet more regulating power, despite the fact that the Minister says that she has no need to use it. Subsections (7) to (9) were the subjects of an amendment, and they add to my collection of doubts about what it is that we are doing. Subsection (7) states:

''The Secretary of State may make regulations providing for this section to apply''.

Subsection (8) states that the regulations

''must provide for the meaning of 'substantial discount'''.

Curiously, we were told before lunch that it was proper to say that regulations ''may'' provide for a definition. Suddenly, it is a good idea that they ''must'' provide. Before lunch, we had a wonderful argument about why we did not need ''must''. Now, without a comment, we are asked to agree to ''must''. Where is the consistency throughout the Bill that was trumpeted in an earlier debate?

Consistency suggests that, if references are made to the need for definitions, one either ''may'' or ''must'' make them. One cannot pick and choose and say, ''You may make those but you must make the others'' without some reason being given.

The clause states that

''the regulations must provide for the meaning of 'substantial discount'''.{**W4**}

The mind boggles at what ''substantial discount'' might mean. It might simply be one person's opinion, and to have an order-making provision that involves somebody defining ''substantial'' is an abuse of the process of Parliament.

Clause 9(9) states that the regulations would apply

''with such modifications . . . specified in the regulations as the Secretary of State considers appropriate.''{**W4**}

Methinks that Henry VIII is back again. The clause is saying, ''We can have any definitions that we like by order, and, having made them, we can vary them.'' Consistency, parliamentary democracy and the rule of law no longer matter to the Government. The Minister owes us an explanation for continuing to trample over the things that we hold precious in this country.

Photo of Mr Andrew Hunter Mr Andrew Hunter Conservative, Basingstoke

I shall be extremely brief. I have a technical drafting point to make and I do not expect the Minister to reply to it now, although she may take it on board. The offence under clause 9 is defined in subsection (1). Subsection (3) refers to no offence being committed under subsection (1). However, subsection (5) refers to the offence being committed ''under this section'', rather than ''under subsection (1)''. For the sake of consistency, purely in drafting, should subsection (5) not read ''under subsection (1)''?

Photo of Tim Loughton Tim Loughton Shadow Spokesperson (Health)

To be consistent, and in the interests of showing that the Opposition have done their homework and scrutinised every word of the Bill, I refer the Minister to the top of page 5, line 2, which refers to

''the purchase of tobacco procucts''.{**W4**}

I noticed the spelling mistake some time ago, as one would expect from the amount of scrutiny Opposition Members have given the Bill. When I tried to table an amendment to correct it, I was told that it would require the Bill to go back to the House of Lords and then be reconsidered by the Committee, which would take up considerable parliamentary time.

Keen that we are to ensure that the Bill makes progress to its next stage of parliamentary consideration, we do not wish to sabotage it by pushing a point about a single spelling error. I do not know what processes are now available to the Minister

to ensure that we do not have a Bill that contains a glaring spelling error. I draw her attention to it out of good will and hopefulness. No doubt, she will get her officials on the case PDQ.

Subsection (1)(a) reads,

''gives any product or coupon away to the public in the United Kingdom''.

When does a member of the public cease to be a member of the public? I am thinking of a private club, of whatever description for whatever activities may go on in such a club. Do members of such a club, who could see coupons or special offers while within the confines of that club acting as private members in private, still constitute members of the public? It is not an entirely flippant point, because being within a private club can sometimes allow for certain entitlements.

Subsection (1) continues:

''the purpose or effect of giving the product or coupon away is to promote a tobacco product.''

My wife is a keen collector of Tesco reward points. She swaps them not for little honey doll whatsits or carrycots, but for money-off vouchers for groceries. In theory, such groceries may include purchases from the tobacco counter of Tesco. If those vouchers were used to purchase cigarettes, they could be deemed to have the purpose or effect of promoting a tobacco product. Unless a specific exclusion were made that a money-off voucher could not be used to purchase tobacco—and perhaps alcohol—it would be legitimate for my wife to use her voucher to buy cigarettes, cigars or any other tobacco product, although that is unlikely because she does not smoke, unlike me. Has the Minister considered whether supermarkets such as Tesco and other shops that run reward schemes might fall foul of the clause? Will it be necessary for supermarkets to include exemptions for products against which their money-off vouchers may not be used?

Those couple of serious points show how people could unintentionally fall foul of the Bill's terminology.

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

I shall address substantial discount and the use of the word ''must''. It is right that the Bill uses the word ''must'' because there could be a need to set out regulations on products and coupons that are available for a nominal sum or at a substantial discount. Substantial discount is a relative concept and may mean different things to different people. Therefore, it is right that the regulations must define substantial discount, whatever the circumstances or worries that they address.

In another place, Lord Filkin said that substantial discount is

''a relative concept and may mean different things . . . For example, many people would see £1,000 as a substantial sum, but if it was the discount off a car costing £50,000 it might not be seen as a substantial discount''.—[Official Report, House of Lords, 18 January 2002; Vol. 630, c. 1266–67.]

Points were made about the definition of ''public''. The word is defined in clause 21, and the public include people in private members' clubs, but not members of a family. A person who gave a product or coupon to his relations would not be giving it to the

public, but a person who gave such an item to a member of a private members' club might.

I take the point about the spelling error and the drafting, which was raised by the hon. Member for Basingstoke (Mr. Hunter). I shall take up those points with the parliamentary draftsmen and ensure that they are resolved and that Parliament's intention is clear—whether on ''procucts'' or ''products'', as the spelling error sets out.

The test on Tesco vouchers is clear. Anyone who gives away a product or coupon with the purpose or effect of promoting a tobacco product will be caught. Each case will be determined on a case-by-case basis. Clearly, coupons that are aimed at promoting Tesco or Sainsbury's are unlikely to be interpreted as promoting a tobacco product. In the end, it will be a matter of fact or an individual case having to be decided in that respect.

Photo of Tim Loughton Tim Loughton Shadow Spokesperson (Health) 5:45, 14 May 2002

The Minister says that the issue is not entirely clear, but would not a safer way to get round the problem be to add an extra provision to the Bill to the effect that any coupons or vouchers would specifically have to mention the tobacco products. If they did not, they would not fall foul of the clause. Given what the hon. Lady said, a voucher given by Tesco for its products, which could include tobacco products, would be caught by the Bill.

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

I am not sure that that is the case. I shall happily consider the matter further before we discuss the Bill on Report. Tesco should be allowed to promote its business, nevertheless the intention behind the clause is to prevent the promotion of a tobacco product. I shall examine whether further amendments need to be made to the clause, but I think that that is highly unlikely. I do not believe that the Bill would stop coupons and promotions by Tesco and other companies that use free distributions in that respect.

Question accordingly agreed to.

Clause 9 ordered to stand part of the Bill.