Tobacco Advertising and Promotion Bill

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John Robertson (Glasgow, Anniesland): Does the hon. Lady agree that the business of airlines is to carry passengers? The selling of duty-free goods is incidental, and is only a service.

Mrs. Spelman: The hon. Gentleman must have escaped the deluge of lobbying that we received. Perhaps he is fortunate in living a long way from an airport. Birmingham international airport is in my constituency and local Members of Parliament were made very aware of the impact of the loss of duty-free business. To some extent, that business has been recovered in the airports by the growth of retail shops. However, airlines can sell only a limited range of products that people want to buy on board an aircraft . Differential duty is one of the things that make the product attractive.

Mr. David Taylor (North-West Leicestershire): May I put a different interpretation on the hon. Lady's assertion that to some extent there has been a recovery from the losses caused by the abolition of duty free? Would it not be more accurate to suggest that the whole case for duty free was overblown and overstated, and that the risk of losses was never as great as was suggested?

Mrs. Spelman: I do not think that the matter was wholly overblown and overstated, although I can only talk with any confidence about Birmingham international, which is my local airport, as it is that of the hon. Gentleman. One of the ways in which that airport has been able to recover is through expansion—it is creating additional retail outlets. However, it is difficult to create additional retail space at congested airports, such as Heathrow.

Mr. John McFall (Dumbarton): When the measure was adopted in 1991 by the then Conservative Government, the then Chancellor, Lord Lamont, would surely have had that in mind. It was a unanimous decision of the Finance Ministers.

Mrs. Spelman: With respect, I do not think that Lord Lamont would have had any idea that the airlines would be banned from advertising their own duty-free products on their airline. That is a very important point. I suspect that there would have been even more noise from the duty-free lobby had it known that it was going to be shut down in such a way.

Clear differences are emerging in the Committee on the issue. We regard the measure as unfair. Airlines cannot display their duty-free goods in aeroplanes due to the lack of space. Products cannot easily be displayed on a trolley, and in due course, we shall ask the Government what constitutes a display. Perhaps that aspect of the airlines' business will only be able to continue through the use of displays. We shall, therefore, need a clear definition of one. The airlines will no longer be able to use their in-flight magazines to inform their customers about the value of the tobacco products that they carry on their aeroplanes. That places them at a clear disadvantage with regard to their competitors, and it is on the anti-competitive aspect of the legislation that we wish to hear a response from the Minister.

Mr. Luff: I speak as someone who comes from a printing family and who has a major commercial printer in his constituency. I have no idea what view it will take of the matter, but it prints a large number of glossy magazines in high volumes—many famous titles. The Minister should make it clear that it will not be placed at a competitive disadvantage if it is requested to tender for a magazine that is based on the other side of the English channel, but has a small sale in the UK. We all know many such titles.

It is important that the Minister makes it clear that the proposal in clause 4(1)(c), and the related definition in clause 2, will not put a printing company at a serious disadvantage when it tenders for international print contracts.

The Bill contains a definition of ``advertisement'', but what constitutes an advertisement in the context of airlines? Does a simple listing on a page of the prices of Marlboro, Silk Cut and Rothmans without any picture of the pack constitute an advertisement? People try to make their in-flight magazines attractive, so there would normally be a picture of the product with a price alongside. Would a picture of the pack be regarded as information or an advertisement? If one accompanied the listings with images—for example, the image of a cowboy to illustrate Marlboro—that would become an advertisement. Will the poor old cabin crews at Birmingham international airport spend all their time explaining to people aboard international flights exactly what cigarettes they can and cannot buy?

Mr. Ian Bruce: The Minister may take the prize for the most unintended consequences in any Bill, and we are on only clause 4.

One weekend, I had the great good fortune to go to the Channel Islands to re-flag Condor Ferries to the United Kingdom flag. That was a great honour, especially as we all hear about shipping that flags out in the other direction. The change in safety regulations meant that Condor Ferries re-flagged its vessels in the UK. Tobacco sales are a massive business for airlines. If they want to get round the problems and stay more or less within the Civil Aviation Authority, they can base themselves in the Channel Islands or the Isle of Man. One of the unintended consequences of the Bill may be companies such as, say, Virgin Atlantic-Channel Islands. I suspect that tax would be another advantage of flagging out.

Mr. David Taylor: The hon. Gentleman asserts that the sales of cigarettes on aircraft are massive. Does he have any figures for sales or profit margins? I think that they would both be significantly less than he suggests for UK-based airlines.

Mr. Bruce: I am sorry that I gave way to the hon. Gentleman. He is clearly such a little Englander that he has never been on an aircraft—he has never tried to get his case into the overhead locker while all the cigarettes and whisky are falling out. I hope that he will get out more. My hon. Friend the Member for Meriden said how much the airlines were stressing their duty-free sales. Such sales have only been abolished within the European Union.

I suggested that the hon. Member for North-West Leicestershire (Mr. Taylor) did not get out much. If he did, he would know that if he tried to shove a book into that pocket in front of the seat on the plane, he would not be able to because it would be stuffed full of magazines advertising products. Perhaps we could provide some videos of aircraft for him, as he has not had a chance to travel under the new Labour Government. I thought that the Whips always wanted to send people away on overseas visits.

Mr. Taylor: Do you have the figures?

Mr. Bruce: I do not. I am sorry. I came back from meeting our troops in Kosovo via the Royal Air Force, which will no doubt end up being prosecuted, on an airline that carried all the magazines and so on. The flight was actually run by Airtours. I did not know that I was to serve on this Committee until Saturday, so I am afraid that I have not had a chance to find detailed information.

John Robertson: Will the hon. Gentleman give way?

Mr. Bruce: I ought to make some progress. We are trying not to delay the Government's programme, but to ensure good legislation. I represent Weymouth and am next door to Poole. Also, many companies are now using Portland as a port. All of them sell cigarettes. They do not necessarily have what could be described as a shop; certainly an airline cannot have a shop. How will they be affected? Most companies produce brochures advertising such offers as that produced by Condor Ferries, which invited people to travel to Guernsey with a reasonably priced ticket that included 200 cigarettes and a bottle of whisky. Those offers can be found in travel brochures and other such publications. One of the purposes of encouraging people to go on day trips is that they can buy low-cost cigarettes and whisky.

3.45 pm

It is extraordinary that an international airline cannot comply with the law if its head office happens to be in the United Kingdom. It will therefore be at a competitive disadvantage compared with those airlines that carry the products to and fro. If several subsections are needed to deal with the problem, how can the Minister claim that it is not an important matter? Surely, the sensible thing would be to say that an aircraft is a flying tobacconist. To ban point-of-sale information, including in the in-flight magazine, is nonsensical. It is a place where people buy tobacco. If it were treated as a shop, we would not have to go into such detail. If American Airlines say to a United Kingdom printer, ``I understand that your printing prices are much better than we can get out in the States. Would you like to print one of my in-flight magazines?'', he would have to say, ``I am sorry, I can't do that.'' I hope that the Minister can give us some good news.

Mr. Barron: The obvious fact about airlines based in this country is that they come within our jurisdiction because they are based here. What confuses me about amendment No. 23, which is about airlines, is that on Second reading and at earlier sittings of the Committee, Opposition Members claimed to be concerned about smuggling and consumption. Although I accept that trade on airlines is not smuggling—we have to accept that it is legal—it is attractive because of the cost. Smuggling happens for exactly the same reason. Tobacco that is smuggled into the country can be purchased for a lower cost because the taxation imposed by the Treasury for public health reasons does not need to be paid.

The Opposition complained on Second reading about smuggling and the resulting low price of cigarettes and tobacco and the consequent increase in consumption. In Committee, they are in favour of advertising cigarettes at lower prices than one has to pay on the mainland. That is confusing.

Let me give Opposition Members some more information. I quote the Health Select Committee's unanimous second report ``The Tobacco Industry and the Health Risks of Smoking''. It mentions what advertising agencies do in this country and elsewhere. The section of the report entitled ``Measures to restrict marketing'' includes a brief explanation of the voluntary code that the hon. Member for South Dorset said was a good idea.

The report says that although the Advertising Standards Authority is the final arbiter on advertising tobacco products in this country, under the voluntary code, an organisation called the Committee of Advertising Practice operates the pre-clearance procedures for cigarette advertisements. That is all within the voluntary code. The report of the Health Committee states at paragraph 82:

    ``Musto, Merriman, Herring & Levi, in a creative brief from 1998 noted that `CAP's rules and regulations considerably restrict what we can do in the UK...But CAP rules don't apply outside the UK. There are some very good media opportunities targeting UK consumers abroad—particularly aimed at holiday charter flight traffic.''

That was one of the findings of the Committee. This is an area where they can even get around the voluntary code that Opposition Members have been defending in this Committee. Under those circumstances, perhaps they ought to withdraw the two amendments that relate to airlines. One day, I hope they may join us in supporting a call for international action on the advertising of tobacco products on airlines throughout the world.

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Prepared 1 February 2001