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Earl Howe: I shall speak to Amendments Nos. 24 and 30. I support the remarks of my noble friend Lord Naseby and the noble Lord, Lord Faulkner. The issue is of considerable concern to UK airlines. In-flight retail services on board UK charter and scheduled airlines have for many years represented a significant revenue stream for those carriers.
There are two main issues as regards these provisions. The first, as the noble Lord, Lord Faulkner, has clearly set out, is that the restrictions that the Bill proposes for the in-flight magazines of UK airlines are specific to those airlines and do not apply to foreign-owned airlines. There are strong grounds for arguing that the provisions are discriminatory and anti-competitive in that sense.
One can ask what that concern amounts to. My belief is that to make such a distinction between UK and non-UK carriers diminishes—in a way that perhaps matters more to smokers than to non-smokers—the service that UK airlines offer to their passengers. We are asking UK airlines to take a hit on their revenue stream arising from on-board retail operations. We have to ask whether that is fair and whether we want to do that when the business of passenger air transport is such a competitive and global one.
The second issue relates to the practical inability of UK airlines to represent merchandise at point of sale. The specific nature of retailing on board an aircraft does not allow for point of sale material or merchandising displays to indicate the range of products available to passengers in flight. There is no room to do that. The only opportunity is through in-flight retail brochures. On that subject, we should bear in mind that airlines compete not simply with one another, but, when it comes to retailing, with ordinary shops in the high street and at airports. The Bill will allow shops to mount advertisements and displays at the point of sale, whereas airlines will be debarred from the nearest practical equivalent to a point-of-sale display.
There are a few elements of the Bill on which we have to pull ourselves up short and ask whether the game is worth the candle. In-flight publications are one example. Do the Government and the noble Lord, Lord Clement-Jones, really believe that the photographic representation of some cigarette cartons beside a price list of merchandise in an in-flight retail brochure promotes smoking or is equivalent in force or status to the advertising of cigarettes on billboards and in magazines? I find that difficult to accept and I question whether these provisions should be in the Bill.
There are other concerns. Why are airlines singled out for such treatment and not ferry companies or cross-Channel rail and coach companies? We may be clear in our minds about what we think a UK airline is, but there are grey areas. The Bill purports to give us a clear definition, but we all know that life in the airline industry is not always as straightforward as it may seem from the outside. British Airways, for example, contracts out some of its services to other carriers. A contracted-out flight may still be listed as a BA flight, but those who book to travel on it will find a different company name on the side of the aeroplane. That practice is known as code sharing. Can the noble Lord, Lord Clement-Jones, tell us whether such contracted-out flights are covered by the Bill? If they are not—which I suspect is the case from the definition in the Bill—why not? If I am wrong and they are covered, what action is the carrier airline expected to take to be sure of complying with the law?
I hope that the noble Lord, Lord Clement-Jones, does not believe that British Airways, for example, goes about consciously promoting tobacco products. On the contrary, BA has told me that it does not promote or encourage smoking in any way and never has done. Smoking is banned on all BA flights. As far as I know, most domestic flights of other UK airlines are also non-smoking. The only activity that comes remotely close to the promotion of tobacco on board UK airlines is the sale of cigarettes and cigars in-flight, with the benefit of a retail brochure that is given to each passenger. I question whether that activity warrants the discriminatory treatment in the Bill. I hope that the Government and the noble Lord, Lord Clement-Jones, will be prepared to think again about the issue.
The Parliamentary Under-Secretary of State, Department of Health (Lord Hunt of Kings Heath): I shall resist the temptation to debate Second Reading principles with the noble Lord, Lord Naseby. We can debate the subject of people employed in the industry on a later amendment.
There are two substantive issues: first, whether in-flight magazines should be covered by the Bill; and secondly, whether there should be a level playing field between UK and non-UK airlines. Having listened to the debate, I accept that there is a persuasive argument in favour of a level playing field. When the Government put the Bill before Parliament before the election, we felt that it would not be right to impose a requirement on airlines that did not have their principal place of business in the United Kingdom. I acknowledge that, as my noble friend Lord Faulkner suggested, we have received representations from British Airways in particular that it would be wrong to impose a requirement on British carriers that does not apply to its foreign competitors. I accept that that is discriminatory. I also accept that in this difficult time
for a very competitive aviation industry we need a level playing field. That is why I am sympathetic to the amendments.
Lord Naseby: Will the Minister clarify that point? Are we to have a level playing field just because things are difficult, or is he saying that we should have one in any case?
Lord Hunt of Kings Heath: I am saying both. Having considered the arguments I am persuaded that it would be better to treat all airlines in the same way. I shall be interested to hear the views of the noble Lord, Lord Clement-Jones, on that. I also took account of the points made by a number of noble Lords that airlines—and British airlines in particular—are going through a pretty tough time at the moment. In that context, I am reluctant to do anything that makes life more difficult for them.
There is also the question of whether we should extend the advertising ban to all in-flight magazines, given a level playing field. My noble friend Lord Faulkner was right to suggest that airline passengers are in the same position as any other passengers or members of the public in that many will be current smokers who want to give up. I believe that they should be protected from intrusive advertising in in-flight magazines as elsewhere.
As regards the point made by the noble Earl, Lord Howe, I ought to make it clear that my understanding is that regulations under subsection (2) of Clause 4 will allow Ministers to specify what advertising will be allowed in connection with the sale of cigarettes and other tobacco products on planes. Should the Bill be passed in both Houses, there will be consultation on those regulations, including the catalogue issue which has been raised as I accept that that matter needs to be resolved in that context.
11.30 a.m.
Lord Naseby: Before the Minister sits down, in relation to those consultations will he use the guidance to which he referred in a previous discussion on the Bill when he said in relation to point of sale at the retail end:
- XIn general the Government are happy with the way in which tobacco products are displayed in shops . . . nor do we expect any significant change in the way in which tobacco products are commonly displayed in gantries either in the corner shop or supermarket"?—[Official Report, 16/11/01; col. 817.]
Lord Hunt of Kings Heath: That is a fair point. I recognise that one would have to translate that principle to, if you like, a trolley that is trundled through the gangway—if that is what it is called—between passenger seats. In general, I agree with the
noble Lord's interpretation although clearly one has to await the outcome of the consultation on the regulations.
Lord Clement-Jones: This has been an interesting debate. It may surprise the noble Earl, Lord Howe, and the noble Lord, Lord Naseby, to hear that I agree with much of what they said. There is a good case for a level playing field. That has also been put by the noble Lord, Lord Faulkner, and the noble Lord, Lord Hunt. I believe that the current provision discriminates against UK airlines. Many of the points were well made.
I shall not venture into the area of code sharing as I believe that Amendment No. 23 and the consequential Amendment No. 30 should be accepted. Of course, there is a difference between those who have said that in-flight magazines should be caught by the measure and those who believe that they should be excepted. I firmly fall down on the side of those who believe that they should be caught on a non-discriminatory basis. The Minister and the noble Lord, Lord Faulkner, referred to regulations under subsection (2) of Clause 4. I noticed that the noble Earl, Lord Howe, talked about in-flight retail brochures. In-flight magazines are rather more than that, but I am sure that the measure could allow some kind of in-flight advertisement on a trolley or whatever, as the noble Lord, Lord Hunt, mentioned. That subsection clearly provides for that kind of material to be permitted by regulation.
To try to enforce a discriminatory measure as between airlines which are foreign-owned and those which are UK-owned could constitute a minefield, as the noble Earl, Lord Howe, said, especially with regard to airlines which engage in code sharing. Therefore, I believe that Amendments Nos. 23 and 30 are acceptable and that tobacco products can be sold on board aircraft with appropriate material.
I have said that I agree that in-flight magazines should continue to be caught by the legislation. It is not a question of that material coming inadvertently into a minor market such as we talked about in connection with ordinary publications. In-flight magazines are carried on aircraft owned by airlines. They are flown into this country. The system is clear. Airlines are responsible for the material that they carry. Therefore, I do not believe that there is any case for excluding in-flight magazines from the provision. I accept the points made by both the Minister and the noble Lord, Lord Faulkner, with regard to the public protection aspect. I refer to those who wish to give up smoking being reminded of it by glossy advertising in the in-flight magazine that they happen to read. I propose to accept Amendments Nos. 23 and 30, but not Amendments Nos. 24 or 22.
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