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Lord Skelmersdale: My Lords, I had not expected to be here this evening and shall not make a speech on the Bill. But there is one matter that concerns me and when the Minister winds up I hope that he will be able to help me. Clause 4 deals with advertising exclusions. Subsection (1)(d) states,

that is a defence to Clauses 1 and 2. Why is that not hybrid?

7.4 p.m.

Lord Clement-Jones: My Lords, we have had a very interesting and an unusually gladiatorial debate today. From the outset on these Benches I want to state unequivocally our welcome for the introduction of the Bill. We have long advocated the banning of cigarette advertising on public health grounds. Indeed, my honourable friend Simon Hughes attempted to bring in a Bill to that effect in 1996. Despite the successful

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legal challenge to the European directive in the European Court of Justice last October, which was alluded to by the noble Lord, Lord Tomlinson, the Government have reacted and introduced this Bill quickly and I congratulate them on that.

This Bill is supported by a huge range of organisations such as the British Medical Association, the Royal College of Nursing, the Royal College of Physicians, Diabetes UK, the National Consumer Council and the Consumers' Association. As we have heard from noble Lords such as the noble Lord, Lord Walton and the noble Lord, Lord Patel, it is no wonder that smoking is a major factor in lung cancer, strokes, heart disease, diabetes and a variety of other conditions such as asthma. If we are to reduce the incidence of these conditions we need to reduce smoking levels. On these Benches we believe that this Bill will make a significant contribution to reducing deaths from smoking, perhaps more than the 3,000 or 2.5 per cent modestly claimed by the Government in the Explanatory Notes. As such, we believe that this Bill is a proportionate response.

In resisting the Bill, the tobacco manufacturers have used a number of arguments, many of which have been rehearsed today by noble Lords. First, an advertising ban infringes the principles of free speech and violates Article 10 of the European Convention. But no advertiser has unfettered freedom of speech. The existence of the British Codes of Advertising and Sales Promotion administered by the Advertising Standards Authority recognises that. Furthermore, there are provisions in the convention giving an exemption when issues of health promotion come into play.

Secondly, the tobacco industry argues that its advertising does not increase consumption or encourage people to take up smoking; it is pricing which is all important. The noble Lord, Lord Faulkner, dealt extremely ably with that. He made some particularly powerful arguments especially in the light of the fact that he is a communications professional.

The industry maintains that advertising is aimed at promoting brand loyalty--the noble Lord, Lord Harris, was very strong on that point--persuading people to switch brands or launching new ones. But it is all too clear that the advertising efforts of the tobacco companies are aimed at expanding the market as well. The former chairman of McCann-Erickson was quoted by the noble Viscount, Lord Simon, to very good effect on that point.

The internal documents from the tobacco industry's advertising agencies referred to by the noble Lord, Lord Faulkner, which are now generally classified under the title, "Keep Smiling, No-One is Going to Die", to which the health committee of the other place gained access, give a depressing glimpse of the motives and practices being pursued by the industry and its advertisers. They show very clearly how the aim is to increase consumption as well as brand share. Efforts are made to make smoking socially acceptable. They show that the industry is actively involved in increasing per capita consumption and recruiting new

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smokers. In that context the young are a key target. It is all about adding aspiration and street credibility to smoking. The advertising agencies conduct a huge amount of research into lifestyles and motivation of the young.

It is also quite clear that sponsorship and advertising are treated as one. Sponsorship is as important as advertising in promoting brand image. Above all, and most depressingly, there is a revelation of a lack of principle and sharp practice in these papers by the advertising agencies and their clients in devising market strategies.

In its report last year the Select Committee was quite correct in concluding, on the basis of the evidence,

    "advertising agencies have connived in promoting tobacco consumption, have shamelessly exploited smoking as an aspirational pursuit in ways which inevitably make it more attractive to children and have attempted to use their creative talents to undermine government policy and evade regulation".

That underlines the need for flexibility in this Bill and in particular that is why we support Clause 7. It is in order to combat the ways in which the advertising agencies are going to chance their tactics in response to the provisions of this Bill.

The key issue in all of this is the recruitment through advertising of young people to the smoking habit. That is the key commercial objective of the tobacco companies. The article in the British Medical Journal of 3rd March has been cited in the debate today. Young people are extraordinarily aware of advertising. About 90 per cent are aware of postal advertising in this area.

Thirdly, the manufacturers claim that it is wrong to ban the advertising of a legal product. I believe the noble Lord, Lord Geddes, in particular raised that argument. That is a complete red herring. Guns and pharmaceuticals are products which can be manufactured and sold legally subject to regulation, but they are also subject to advertising restrictions.

Fourthly, the manufacturers claim that there is no evidence that a ban on advertising will be effective. Many noble Lords dealt with that point in their speeches today. There is abundant evidence provided that such bans are comprehensive, covering all media. It is where they are partial that the evidence is not clear. The noble Lord, Lord Hunt, catalogued the evidence. He mentioned the report of Dr Clive Smee. I believe that the noble Lord, Lord Glenarthur, interestingly, mentioned the 1999 report of the World Bank. However, I come to totally different conclusions from those of the noble Lord. The report states:

    "Policymakers who are interested in controlling tobacco need to know whether cigarette advertising and promotion affect consumption. The answer is that they almost certainly do, although the data are not straightforward. The key conclusion is that bans on advertising and promotion prove effective, but only if they are comprehensive, covering all media and all uses of brand names and logos".

That was very much the conclusion that Clive Smee also reached.

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I turn to the fifth argument used by the manufacturers. We now have to call that not just humbug but perhaps the "humbuggery" argument advocated by the noble Lord, Lord Tebbit. I follow him on one point; that is, in respect of the European failure to cease subsidising tobacco growing in southern Europe. The Health Select Committee dealt with that point well. The desire to cease that subsidy is not inconsistent with a desire to ban advertising and the promotion of cigarettes. All of us would wish to see that subsidy cease, but I certainly do not follow the noble Lord into the wider realms of his arguments under that heading.

In some respects the Government's policy in this area does not go far enough. I deeply regret the Government's decision to delay the ban as regards global sports such as Formula 1 racing until 2006. Formula 1 cars were described by Tobacco Reporter--which I must admit is a publication I have not come across before--as,

    "the most powerful advertising space in the world".

I can testify to the association of Formula 1 with glamour, having followed the sport for many years. I am a keen follower of Formula 1. It is quite possible to run teams without tobacco money. My father-in-law, a fanatical non-smoker, did so for many years. He was able to secure sponsorship throughout the time that he ran a Formula 1 team. In fact, the FIA, the governing body of Formula 1, has said that it could comply with the measure by 2002. I agree with the Select Committee that sponsorship should not be treated more leniently than advertising. In fact, Formula 1 is the very sector that should not have any concessions at all. The tobacco industry boasts of its initiatives on youth smoking, but continued sponsorship of Formula 1 gives the lie to that. It is the most aspirational sport of the whole lot.

I have a further reservation about the Bill which has been raised by the noble Lords, Lord Haskel and Lord Faulkner. If we are to have a ban which is consonant with the terms of the primary legislation, the regulations must be effective, whether they concern point of sale material, displays or direct mailing. We must not have any ambiguity as regards the way in which the ban on sponsorship to promote tobacco consumption works. That is extremely important. I agree with the noble Lord, Lord Dubs, that we need clarification in that respect.

In the years since Sir Richard Doll discovered the link between cigarettes and cancer, as described by the noble Lord, Lord Walton, it has become clear that voluntary agreements on the promotion of tobacco are not adequate. As the Commons Health Select Committee stated in its report,

    "Voluntary agreements have served the industry well and the public badly".

We welcome the Bill. It is not a petty, puritanical pique--I believe that the noble Lord, Lord Harris, used that phrase--it is not unenforceable, as the noble Lord, Lord Naseby, seems to think, and it does not mean the end of e-commerce as we know it. It is not a witch-hunt; it is not even the thin end of a wedge. It is

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a significant and important step. We welcome the fact that the Bill is part of a comprehensive strategy designed to discourage smoking and prevent deaths. However, the next steps must be taken in the European and international dimensions. As a first step towards that we very much welcome the Bill.

7.14 p.m.

Earl Howe: My Lords, this has been a fascinating debate and I thank the Minister for moving the Second Reading in his characteristically clear and helpful way.

Let me begin, if I may, by repeating something that I made a point of saying during the debate on the gracious Speech. I have been, and I remain, open to persuasion on the merits of this Bill. I ask the Minister to accept that there is no difference between us on the end that we have in view, which is to reduce the prevalence of smoking, particularly among young people. He is right to say what he did about the damage that smoking does to people's lives. I shall not repeat the statistics he quoted, which we have rehearsed often in this Chamber. It is the duty of any government to look for ways of raising standards in public health, and cigarette smoking must be a prime target in that sense. Deaths caused by smoking, as the noble Lord, Lord Walton, reminded us, represent one in five of all deaths. We cannot be complacent about that, which is why I would never allow myself to condemn a Bill of this kind before considering the evidence in its favour.

It is the extent of that evidence, and its credibility, that we need to look at. I listened very carefully to what the Minister had to say. My opening comment to him is to pick up a point made by a number of noble Lords. If we are going to ban, and indeed criminalise, the advertising of a legal product and anything directly associated with that product, we need to be as sure as we can be that such a ban will work. That may be a statement of the obvious, but it has to be made.

Primary legislation is a powerful weapon. We should use it only when we are sure we need to. The Minister will not hear me say that civil and commercial liberties should never be infringed under any circumstances. There are circumstances where it is right for the state to intervene in that sense. Nor do I hold any love or any brief for the tobacco companies. The territory we are in is that of making finely balanced judgments between opposing moral principles--civil freedom and public health. Perhaps this is where the Minister and I differ.

The reason I lay stress on the need for certainty before legislating is that I start from the premise that we live in a free country. To put it at its kindest, I am not sure that Ministers in the present Government always have that thought in the forefront of their minds. Whereas the Government have the air of being instinctively relaxed about banning and criminalising things, I am instinctively uneasy about it. That is a feeling shared, I believe, by many on this side of the House. That is why I feel the need to look a little further at the strength of the evidence presented by the Minister before being prepared to set my unease to one side.

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There are perhaps two main planks on which the Government's case for this Bill rests. One is the range of evidence indicating that a ban on advertising is associated with reduced levels of tobacco consumption. The other is research that concludes that decisions of young people to start smoking are directly linked to the promotion of cigarettes.

The Minister mentioned the Smee report. That report had a powerful influence on Ministers in the previous government and formed the basis of the anti-smoking strategy that was then adopted, including much tighter, but essentially voluntary, restrictions on tobacco advertising. Perhaps the most important single feature of the current code, in my opinion, is that advertisements must not glamorise cigarette smoking or incite people to take it up. That is tremendously important.

The Minister was kind enough to write to me about the Smee conclusions, and other research, before Christmas, and I am grateful to him. In that letter he ended by saying--as he did today--that quantification of the effects of a ban is not an exact science. That is right. The fact is that the results of research in this area have been very mixed. As he will be aware, while Smee arrived at his own conclusions, subsequent studies have completely contradicted them. A review by KPMG was mentioned by the noble Lord, Lord Harris of High Cross. That review in 1996 concluded--I repeat the words that the noble Lord quoted--

    "There is overwhelming evidence to support the proposition that advertising bans on tobacco products do not reduce tobacco consumption".

KPMG illustrated that by looking at four European countries where a ban had been introduced--Norway, Iceland, Italy and Finland. In none of those countries were trends in tobacco consumption affected by the advertising ban. In Italy during the 20 years after a ban was implemented tobacco consumption continued to rise. Other studies, post-Smee, have reached the same results as did KPMG. So while I certainly would not wish to discount Smee, I do not believe that his report presents us with anything like a knock-down argument.

The other aspect of the Government's case is take-up by young people. Take-up, particularly by teenage girls, is rising. Why should that be? The Government say that it is due to advertising. Again, this assertion is not self evident. The Office of Population Censuses and Surveys, mentioned by the noble Lord, Lord Harris, found that the characteristics most likely to be found among children who smoke compared with those who do not are gender--girls smoke more than boys--having brothers or sisters who smoke, having parents who smoke, living with a single parent, not intending to stay in full-time education after six years, and having relatively few negative views about smoking. The influence of advertising on smoking uptake was not found to be significant. It may seem obvious to Ministers that children first take up smoking as a direct consequence of exposure to advertisements, but if one looks for hard evidence for

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such a correlation it is lacking. In Canada the prevalence of smoking among those aged 15 to 19 actually increased following the introduction of a ban.

I make no apology for being pernickety over these issues because they are central to the Government's case. There is an obvious reason why this is such difficult territory. The biggest single determinant of tobacco consumption is price, as my noble friend Lord Naseby and the noble Lord, Lord Dubs, pointed out. That fact has been recognised by each successive Chancellor in my lifetime and no doubt by Chancellors before that. Between 1971 and 1996 smoking prevalence went down by about 40 per cent. Since 1997, total UK tobacco consumption has increased. We have to ask ourselves the question: what has changed? What has changed is not the extent or nature of tobacco advertising, the rules for which have been the same since 1994; it is something quite other. It is the increasing availability of cheap, smuggled cigarettes.

As the noble Lord, Lord Mason, and others pointed out, since 1996 the black market in cigarettes has taken off in the wake of annual tax increases of 3 per cent and then 5 per cent above inflation which have made it attractive for bootleggers to import from the Continent illegally. At 4.22 for a packet of 20, on which the tax take is higher than in any other EU country, it is no surprise that usually law-abiding citizens have been looking elsewhere for their supplies of tobacco. Although the figure is difficult to estimate, it is currently estimated that between 18 per cent and 25 per cent of all cigarettes consumed in the UK are smuggled, resulting in a loss to the Exchequer of 5 billion. The Chancellor suddenly finds himself on the wrong side of the yield curve. And the co-ordinated anti-smoking strategy adopted by the previous government, which involved a combination of high duty, restrictions on advertising and anti-smoking education, is all of a sudden thrown off course.

Typically, the cigarettes that arrive here illegally from the backs of lorries find their way to the less affluent areas of the country, to the school playgrounds, car parks and clubs where young people congregate. The Government are to be commended for taking action to try to reduce the level of smuggling. But they were late off the mark. I agree with the noble Lord, Lord Stoddart, that the scale of the problem is so vast that progress looks likely to remain modest for some while at least.

The distortion of the market brought about by over-high tobacco duty and, in turn, by smuggling provides a much more credible explanation of the rise in smoking prevalence than anything to do with advertising. But that leads me to a further and important point. If, because of the Bill, the tobacco companies are no longer able to compete with each other through advertising, only one means of competition will be available to them--competition by price. My prediction is that we shall see price wars breaking out between brands and an influx of cheap, foreign imports of cigarettes. If it is accepted that the biggest single determinant of cigarette consumption is

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price, then, as my noble friend Lord Glenarthur pointed out so ably, we could see the worst possible situation: that is, consumption rising.

Those are the reasons why my doubts about the Bill remain. As regards smuggling, it could be argued, and has been argued by Ministers, that it should not be a case of either/or. The Government believe in stopping advertising as well as clamping down on bootlegging. That would be a defensible position if one could be certain of the initial premise: that an advertising ban will have a beneficial effect on current smoking prevalence. For the reasons I have given, I do not believe that that will happen.

Therefore, if the Government get their way, as they no doubt will, we believe that it would be appropriate to include a sunset clause in the Bill to take effect after, say, five years. Five years should be long enough in which to determine whether or not the ban has had the effect that the Government now predict. If the Government are proved right, and I am wrong, then there would be absolutely nothing for Ministers to fear. The Act could simply be renewed without political disagreement.

This is an issue that we would wish to pursue in Committee, along with a number of other concerns. We are concerned about the preferential treatment accorded in the Bill to some sports to the detriment of others. We are concerned about the implications for certain international newspapers and other publications that may carry tobacco advertisements. We are very unhappy about Clause 7. We are very worried about the anomalous and unjustifiable effect of Clause 5(5) on Internet service providers. We deplore the reversal of the burden of proof about which my noble friend Lord Lucas spoke so compellingly. We have considerable criticisms of the provisions for brand sharing in Clause 11 which look set to disadvantage legitimate businesses marketing products wholly unconnected with tobacco. Those criticisms on Clause 11 are compounded by our doubts on its legality under EU law.

This is a Bill which, for all the sound and fury which accompanies it, will, I fear, do little if anything to advance the cause that is common to the Government and ourselves. It may even have the opposite effect from that intended. As such it is difficult to regard it as other than at best window dressing and at worst misconceived. It is, therefore, with a mixture of interest and a considerable helping of scepticism that I look forward to the Minister's response.

7.27 p.m.

Lord Hunt of Kings Heath: My Lords, it has been an interesting and wide-ranging debate. The first comment I wish to make to noble Lords is that this is not a witch-hunt against smokers. It is not an attack on freedom. It is a genuine effort to try to tackle the single greatest cause of avoidable death in the United Kingdom. The noble Lord, Lord Walton, underpinned the responsibility of Government to develop policies which can help to discourage people from starting to smoke and help those who want to give up.

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Perhaps I may say to the noble Viscount, Lord Oxfuird, that the Bill, of course, is not a stand-alone provision. It has to be seen as a key part of a much wider and comprehensive strategy to tackle smoking that was set out in the White Paper, Smoking Kills, which was published in December 1998.

I readily say to the noble Earl, Lord Howe, that we do not pretend that a ban on tobacco advertising on its own will deliver the Government's targets for reductions in smoking prevalence. But--this is crucial--it will remove much of the tobacco industry's ability to undermine the impact of positive health messages with its own advertising and marketing.

This will mean that the 70 per cent of smokers who wish to give up will not be surrounded by sophisticated pro-smoking propaganda. The overall effectiveness of our NHS smoking cessation programme, and the impact of our tobacco education campaign, will be enhanced. The result will be more people giving up and better health in this country.

The noble Lord, Lord Geddes, questioned me on the European Convention on Human Rights. Ministers have certified that the Bill is compatible with those rights. Article 10 of the convention says that the right to freedom of expression,

    "shall include freedom to ... impart information ... without interference by public authority".

However, the convention also provides that freedom of expression may be restricted by law for a number of reasons, including the protection of health. On that basis, we believe that the proposed restrictions on advertising for the protection of health are both necessary and proportionate.

We all agree on the common agricultural policy tobacco regime. Of course we contribute to the EU budget as a whole and not to any particular part. The Government strongly disapprove of the tobacco regime on health, expenditure and control grounds. I assure the noble Lord, Lord Tebbit, and others that we shall continue to press for progressive disengagement from that regime.

The noble Earl, Lord Howe, rightly said that we have to be sure that the ban will be effective. Any number of studies have been quoted tonight. As I said in my opening speech, absolute certainty cannot be provided. It was fair, open and honest of me to say that. However, I believe that there is sufficient evidence to show that advertising has an impact on consumption. I have already quoted some studies. I refer your Lordships to the World Bank, which suggested that the implementation of the original EU directive could have reduced cigarette consumption in the European Union by nearly 7 per cent. I also refer your Lordships to recent evidence from the US researchers Saffer and Chaloupka, who studied data from 22 countries and concluded that tobacco advertising increases tobacco consumption.

The noble Earl, Lord Howe, referred to children. University of Manchester researchers in the mid-1990s found that awareness of certain brands of cigarette was linked to an increased risk of the onset of smoking among 11 to 13 year-olds. I also refer him to a study of

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adolescents in California between 1993 and 1996, which found clear evidence that tobacco industry advertising and promotional activities can influence non-susceptible people who have never smoked to start the process of becoming addicted to cigarettes.

My noble friend Lord Tomlinson asked why the UK is not joining in the action being taken in the US. We have not ruled out attaching ourselves to the case, although we have ruled out joining in as a party to the action. There are other ways in which the UK can support the Commission's action. We are considering our options.

The noble Lord, Lord Lucas, asked about the Internet, as he often does. I recognise that regulating the Internet in one country is not easy. We shall continue to press for wider bans on Internet tobacco advertising in Europe and globally. The alternative to seeking to show a lead in the UK is to take no action and to leave this new potent technology to the tobacco industry to exploit. That is not a comfortable prospect. Understandably, the Internet is now the first choice means of advertising and communication for a wide variety of purposes, but it ought not to be an unregulated domain. The Bill will enable us to stop tobacco advertising on UK websites. We cannot prevent access to websites in other countries where it is legal to advertise tobacco, but we can take action against those facilitating such action in appropriate cases.

I understand that the representatives of Internet service providers have raised concerns about the Bill, as a number of noble Lords have pointed out. The question of whether ISPs are publishers or distributors is complex and there is no legal certainty about it. That is why the Bill was amended in Committee in the House of Commons to furnish ISPs with robust defences regardless of the opinion of any court. I understand the concerns that have been expressed. We are prepared to listen to those concerns and discuss them with representatives of the industry as the Bill proceeds through your Lordships' House.

The noble Lord, Lord Tebbit, and others raised the related issue of Clause 7. The clause gives the Secretary of State the power to amend any provisions if it becomes necessary to do so in consequence of any developments in technology concerning publication or distribution by electronic means. We do not propose to treat advertising by electronic means less or more favourably than any other forms of advertising. However, the sheer pace of technological change makes it very difficult to predict what new means of publishing or distribution might emerge. We think that it is right to cater for potential developments in this way. The Delegated Powers and Deregulation Committee did not object to the clause. We have no immediate plans to make an order under the clause. If and when it appears to be right to do so, the use of the power will be subject to the affirmative resolution procedure.

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