Tobacco Advertising and Promotion Bill [Lords]

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Mr. Wilshire: 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

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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.

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Yvette Cooper: 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.

Tim Loughton: 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?

Yvette Cooper: 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.

Tim Loughton: 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.

Yvette Cooper: 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

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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.

3.30 pm

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