Tobacco Advertising and Promotion Bill [Lords]

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The Chairman: 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).

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

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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''.

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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.

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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.

Tim Loughton (East Worthing and Shoreham): 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

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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

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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.

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