Tobacco Advertising and Promotion Bill [Lords]

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Tim Loughton: 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.

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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.

Mr. Wilshire: 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?

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

Tim Loughton: 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 retailingóany supermarket, for example, because they all have tobacco standsóbe

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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.

Mr. Wilshire: 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.''

John Robertson (Glasgow, Anniesland): It is still killing people.

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

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

Mr. Wilshire: 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

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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.

Yvette Cooper: 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.

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

Yvette Cooper: 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

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

3.45 pm

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