Tobacco Advertising and Promotion Bill [Lords]

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Mr. Wilshire: I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment proposed: No. 33, in page 3, line 44, at end insert—

    '(3)(c) In the event of an interruption in the availability of the items set out in subsection (2), the relevant 12 month period is the most recent 12 month period during which there was no interruption to such supply.'.—[Mr. Wilshire.]

Question put, That the amendment be made:—

The Committee divided: Ayes 3, Noes 12.

Division No. 5]

Hunter, Mr. Andrew
Loughton, Tim
Wilshire, Mr. David


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Bailey, Mr. Adrian
Barrett, John
Cooper, Yvette
Fitzpatrick, Jim
Hall, Mr. Mike
Hopkins, Mr. Kelvin
Khabra, Mr. Piara S.
Mallaber, Judy
Moffatt, Laura
Murphy, Mr. Jim
Turner, Dr. Desmond
Ward, Ms Claire

Question accordingly negatived.

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

Tim Loughton: Several issues need to be addressed because, the longer the debate on the amendments moved by my hon. Friend the Member for Spelthorne continued, the more apparent it became that the clause is a pig's ear. It was clear from the outset—the Minister admitted it—that the use of the 50 per cent. sales figure is arbitrary. My hon. Friend the Member for Basingstoke mentioned other systems, in particular the system in Holland, that could be equally open to abuse if tobacconists were so minded. My hon. Friend the Member for Spelthorne mentioned that ''sale price'' lacks any definition.

I gather that we are considering 380 specialist tobacconist businesses, which is a very small number of establishments out of the total of 22,000 retail outlets that sell tobacco products. The Minister told us that they are singled out and given special treatment in the Government's clause because the Government recognise the concerns of small businesses. If there are 22,000 retail outlets that sell tobacco products, which are commonly dominated by cigarettes, I guess that a substantial proportion of the remaining 21,620 outlets are also small businesses. It is not the case that every outlet that sells cigarettes is a big business—some are, especially supermarkets, most of which have tobacco counters—compared with outlets that sell specialist tobacco products, such as cigars, snuff and specialist tobaccos, although such businesses are usually small. I do not understand how the Government's preferential treatment of specialist tobacconists stacks up if their prime concern is to ensure that they do not act disproportionately toward small businesses. The Government are doing that because of what is written in the rest of the Bill.

The Minister almost gave credence to the fact that, for the first time, the Bill admits that different tobacco products cause differential harm—she may wish to justify her comments. The Bill's wording recognises that certain tobacco products are less harmful and that other products, especially cigars, are sold to people who are less susceptible to advertising hype or gimmick. For instance, I am sure that my hon. Friend the Member for Basingstoke hardly regards—if he notices at all—the advertisements that might be displayed in his specialist tobacco shop, and that advertisements in glossy magazines do not encourage him to visit it more frequently. His buying patterns are unlikely to be influenced by advertisements in the vicinity of the shop, behind the counter, attached to the till—or wherever.

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There is an admission that some tobacco products might do less damage, and are less effective in influencing the smoking habits of certain people. I think that the clause admits that that is the case. Therefore, I hark back to clause 4, with regard to which the Minister refused to give retailers who sell cigars and specialist tobacco in particular—or exclusively, as in one of our amendments that addresses that—rather than cigarettes, any dispensation to carry on their business on a mail order basis, so that they can send price information to their mail order customers, without those customers having to request that information on each occasion. Therefore, there is a considerable anomaly between the way that the Government are treating the 380-odd specialist tobacco suppliers in this clause, and the treatment that they were not prepared to give them elsewhere in the Bill—in earlier clauses, and in amendments proposed by us that would have been consistent with what the Government are trying to do in this instance.

There is also a greater reason why the clause is a mess, which my hon. Friends began to touch on in their references to earlier amendments, and that is the issue of fluctuating sales. With regard to subsections (2) and (3)(a), there is a glaring anomaly. Subsection (2) defines a specialist tobacconist, and if a retailer is able to comply with that definition, he or she will be exempted from some of the advertising restrictions set out in subsection (1). It states that if more than half of a retailer's sales ''derive'' from cigars, snuff, pipe tobacco and smoking accessories, he or she will benefit from those exemptions. However, that figure will be quantified on the basis of the 12-month accounting period that is set out in subsection (3)(a)—or, if figures for an entire year are not available, of the period for which accounts are available—and that must, necessarily, refer to a time in the past, because accounts are produced historically. Typically, accounts for a financial year—such as the normal financial year that starts on 5 April, or a calendar financial year for which some retailers might take accounts—will be produced about three months after that year has finished. Therefore, we are talking about a definition that might be 15 months out of date, yet subsection (2) refers to the present tense. Which period will be taken into consideration when the decision is taken about whether an advertisement should be removed?

It is conceivable that a situation will arise where for the last 12-month period for which accounts are available the tobacconist was selling more than 50 per cent. of his goods in the form of cigars and permitted tobacco products, but he got rid of all such cigars and specialist tobacco products, or they were subject to fluctuations in supply, such as difficulties with regard to the crop from Zimbabwe, or because of customers who buy Havana cigars on their way back to the United States.

I cite that example because although one is not allowed to import for retail purposes Havana cigars from Cuba into the United States, there has been a

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thaw in the relationship between those nations. We have seen evidence of that in the past few days, with the former President's visit. That being so, Havana cigars are readily available in the United States and American buyers will not have to use suppliers in the United Kingdom. The anomaly that an inordinate amount of our money subsidises tobacco producers in Greece and Italy may also change.

Mr. Hunter: My hon. Friend regards subsection (3)(a) as primary in terms of annual accounts for tax purposes. Does he agree that it could also be taken to refer to monthly running accounts of the previous 12-month period, which would vary?

Tim Loughton: My hon. Friend is right. That is another anomaly in the definition of accounts. I assume that the clause refers to the conventional sense of accounts in which accounts for a 12-month period are produced a few months after the end of that period. That would be most people's understanding. Most businesses do not run on a rolling accounts period, although some could. There is no definition of how the accounting period should be interpreted or of what makes up the sale price.

The more I read the clause, the more I see that it is full of flaws. A tobacconist could trade in full knowledge that his sales of specialist cigar and non-cigarette products fall well below the 50 per cent. threshold, yet the accounts for the past 12-month period, that have not yet been produced, perfectly justify taking advantage of the exemptions, because at that stage he was selling more than 50 per cent. The following year, the reverse may be true. The clause is nonsensical.

The Government have not made a proper case for treating specialist tobacconists in a particular way. Although there are grounds for giving them special treatment, there are also grounds for protecting the many thousands of other small retailers who do not fall within the definitions of a specialist tobacconist, but are open to all of the vagaries of the small retailer that the Minister suggests she wishes to protect. She is patently not doing so because of what happens in the rest of the Bill. The clause is a mess. I welcome clarification from the Minister because the more one examines the detail of the clause, the more one sees that it could be open to all sorts of abuse.

Yvette Cooper: The clause was inserted because we recognise the concerns of small businesses that appeal to a narrow, adult market with products such as cigars and snuff. Ours is a proportionate response that reflects the fact that the industry is long and established and primarily concerns small businesses. It is not about giving an exemption to all small businesses. That would be wrong.

The clause reflects that the market is predominantly adult and that advertising will be permitted in particular circumstances, within or outside the shop, for cigars, snuff and pipe tobacco. Although cigars and pipe tobacco may be less harmful than cigarettes and hand rolling tobacco, they pose considerable health risks. A European study found that the risk of lung cancer was five times higher for cigar smokers than for

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non-smokers. It is important that although allowance has been made for specialist tobacconists, we should be clear that that is not an exemption from a comprehensive ban, and that clause 6 (1)(c) has the power to deal with any abuse that may arise as a result of the exemption.

The accounting period is clear; it is

    ''the most recent period of twelve months for which accounts are available''.

I think that a 12-month period is right, and will provide the correct level of allowance. It would be wrong to make further provision for specialist tobacconists. The exemption is clearly restricted to a particular set of businesses, and we should be clear that the overall aim of the Bill is to ban tobacco advertising for very good health reasons.

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