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Lord Naseby: I understand where the Minister comes from. I basically agree with him. The big problem is that the promoter of the Bill has explicitly put up very high hurdles. So while the Minister is probably right, he may not be entirely right. If he is not entirely right, because the hurdle is so high and the penalties so relatively great, we shall find some people in a situation that no Member of the Committee would want. That is the problem.
Lord Hunt of Kings Heath: There are two points that I should like to make. First, if the hurdles are high, then the defences contained in the Bill are substantive; and, secondly, the noble Lord is right to draw attention to the question of penalties. I have no doubt that we shall debate Clause 16—I doubt whether that will be today—when we return to Committee stage.
It is worth making a point that the penalties are penalties Xup to". I have no doubt that the penalties handed down by the court will be proportionate to the offence.
Lord Clement-Jones: This has been an interesting short debate on Clause 5. Before talking about the substance of the clause, perhaps I should say that many of those with the interests of the Internet service providers at heart are much more satisfied with the contents of the clause as amended today, and as the Government have indicated that they will agree that it should be amended in the future.
I turn to the point made by the noble Lord, Lord Naseby, about Clause 5(5). I can confirm that that clause has now been deleted. Also, I have indicated that I will accept, and the Government have indicated that they are very happy to formulate, an addition to Clause 5(6)(b), which adds the words Xreasonably able". That would bring the subsection much closer and the position of the ISPs much closer to the e-commerce directive. That effectively answers the question asked by the noble Lord, Lord Naseby, about information society services. Under Article 12, which is labelled Xmere conduit", the Internet service provider—the information society service—is treated as a mere conduit, provided that it does not do certain things. The second element is provided by Article 13 labelled Xcacheing". It is designed to be closer to the e-commerce directive. To that extent, ISPs' problem with their treatment under Clause 5 no longer stands.
For the life of me, I cannot see in principle why one should split off electronic communications from other forms of communications, provided that we get the treatment right in the e-commerce directive, in terms of the defences available through other forms of publication. The whole purpose of Clause 5 is bring all those defences together, which it does effectively.
As regards trading standards, I entirely accept what the Minister said. I have some experience of campaigning against Sunday trading laws. They were fairly arcane, yet trading standards officers were good at enforcing them, if I remember correctly. They have a body called the Local Authorities Co-ordinating Body on Food and Trading Standards that spreads best practice and is extremely effective. They have the concept of home authorities, which means that the place of establishment of a business is the area in which the trading standards officers have prime responsibility for enforcement. They are then consulted by trading standards officers in all other parts of the country where offences or alleged offences take place. So there is a pretty good network. Trading standards officers will have no problem enforcing the Bill.
As regards the substance of the clause, we are back in the public policy debate about the threshold. As the Minister said, we are discussing substantive defences. Several times during the Bill's passage, we have considered particular situations. During our last sitting, we considered printers; today we have considered the paper boy. I am sure that Members of the Committee could come up with other examples this afternoon—although I hope that they do not.
But when we consider the clause, the reasonableness of the defences is apparent. They are perhaps not as broad as the noble Lord, Lord Naseby, would want, but, as I have said, there is a public policy issue. It is not enough for someone to have absolute knowledge that there is a tobacco advertisement in a magazine that he happens to publish, print or distribute. There is a greater duty on the prosecution. Ministers and I have admitted that. There is no hidden agenda; the defences are broad. They are perfectly capable of being administered by trading standards officers and dealt with by the courts.
Clause 5, as amended, agreed to.
Clause 6 [Specialist tobacconists]:
Lord Monson moved Amendment No. 49A:
- Page 3, line 36, leave out from Xthings)" to the end of line 38 and insert Xon which premises more than 100 brands or brand variants of tobacco products are stocked and available for sale"
The noble Lord said: The amendment in no way challenges the Bill's main purpose. The Committee will be aware that Clause 6 allows specialist tobacconists certain modest and tightly drawn exemptions from the restrictions on point of sale advertising that apply to other tobacco outlets. There are remarkably few specialist tobacconists left. It is estimated that there are no more than 380 in the country. Unfortunately, the Bill draws the definition of Xspecialist" in such a restrictive way that many of those 380—almost certainly more than 100—will fail to qualify for those limited exemptions. The reason is that, as the Bill stands, no tobacconists deriving more than half their income from cigarettes or rolling tobacco are deemed to be specialists. Put another way, they must derive more than half their gross income from cigars, pipe tobacco, snuff and smokers' accessories.
At Christmas time, when people in a last-minute panic often tend to rush into such places and snap up cigars, cigarillos, pipes, cigar cutters, fancy ash trays and so forth for their nearest and dearest, that target may be readily attainable. But that is not necessarily so at other times of the year. How does one remedy that? The noble Earl, Lord Liverpool, in his amendments suggests by way of remedy that the threshold in subsection (2) be lowered from one-half to one-third, thus permitting two-thirds of their sales by value to comprise cigarettes and rolling tobacco.
That would certainly be an improvement and well worth having faute de mieux. However, one problem is that whatever fraction one chooses, it is extremely difficult to monitor. If someone goes into one of the specialist shops to buy a packet of Silk Cut and 10 cigarillos, presumably the shop will have to issue two separate receipts so that the sales can be divided up.
The remedy I propose is different. It is modelled on the system which prevails in the Netherlands, a fact which should make it extremely attractive to Liberal Democrats and new Labour, given that the Netherlands is socially liberal, progressive, health conscious and, above all, Europhiliac. In the Netherlands, Xspecialist tobacconist" is defined simply as one which stocks more than 95 brands of tobacco or tobacco products, thus setting it totally apart from the average kiosk, corner shop or self-service store which would find it wholly uneconomic to stock much more than one-third of that amount.
In order to try to accommodate the noble Lord, Lord Clement-Jones, and the Government, my proposal is stricter than the Dutch model in that a shop would have to stock more than 100 rather than 95 brands to qualify. Bearing in mind that the tight restrictions set out in Clause 6(1)(c) would still remain in place, and that this restriction would be easier and, I dare say, cheaper to monitor than the restriction proposed in the Bill—a fact which alone must make it attractive to the Government—I hope that the noble Lord, Lord Clement-Jones, will accept the amendment. I beg to move.
The Deputy Chairman: Before putting the amendment forward, I should inform the Committee that if it is agreed to, I cannot call Amendments Nos. 50 and 51 under the pre-emption rules.
The Earl of Liverpool: My Amendments Nos. 50, 51 and 52 are grouped with Amendment No. 49A, tabled by the noble Lord, Lord Monson, and I rise to speak to them. However, I want to support the noble Lord's amendment. As a solution to the problem it is preferable to mine and I hope that the noble Lord, Lord Clement-Jones, will have sympathy with it. I should therefore be happy to lose my amendments.
I am in favour of Amendment No. 49A because it is capable of being established more easily, literally visibly, by the simple process of counting the number of brands and brand-variants of tobacco products stocked and for sale. As the noble Lord, Lord
Monson, said, that approach has been adopted by the Netherlands. However, if that amendment is not acceptable, I shall move Amendment No. 50. Fifty per cent is an arbitrary figure and cannot include the sale of cigarettes and hand-rolling tobacco. I believe that a more preferable proportion is one-third.Amendments Nos. 51 and 52 are of a more minor character and seek to establish that a shop, or part of a shop, and sales on the premises may not be the appropriate practical yardstick. The Bill as a whole does not legislate for specialist tobacconists which operate principally by mail order without shop premises and only the customary marketing tools that are presently at their disposal but largely denied by the Bill under Clause 4.
Lord Naseby: I support the noble Lord, Lord Monson, and my noble friend's contribution. There are a number of key points here. The promoter of the Bill and the Government recognise that specialist tobacco shops are not the main way in which cigarettes reach the market. That is a significant point of recognition. We are indebted to the noble Lord, Lord Monson, for informing the Committee that there are 380 specialist shops. By any yardstick, 380 specialist retailers—I should have checked the number of retailers in the United Kingdom who sell cigarettes, but it must be well over 100,000—will hardly drive a coach and horses through the public policy of the Bill. But it could drive a coach and horses through the specialist tobacco shops. If the legislation gets it wrong they will go out of business. Most of those businesses are single traders, but perhaps one or two own more than one shop. If we get it wrong both the consumer and those businesses will lose. Therefore, it behoves us to get it right.
Reference has been made to the yardstick of 50 per cent of sales. As one who has been involved in business, I am not terribly interested in sales alone. If I were to run a specialist retail tobacco shop—I assure the Minister that I do not have it in mind to do so—I would be interested in where the profit arose. It is the profit which keeps the shop viable. It may be that cigarettes account for 50 per cent of the sales, but I am interested in the profit. I believe that if a retailer gets more than 50 per cent of his profit from products other than cigarettes and hand-rolling tobacco he should be recognised as a specialist tobacco shop.
I am not entirely clear what Xspecialist" means. As the Bill stands, the two elements on one side are cigarettes and hand-rolling tobacco, but there is a move afoot by the Health Council to include cigarette papers. My understanding, which the Minister can clarify, is that the Government are minded to accept that recommendation. I am not an expert on cigarette papers, but I recognise that there is more than one brand and type. It is not just that people who like to hand roll their own cigarettes buy one sort of paper. They tend to match particular tobacco to particular papers for particular occasions. It would therefore be wrong to include cigarette papers on the cigarette sales side of the equation, as opposed to the specialist side
of it, for these specialist shops. I draw a distinction between such specialist shops, and other confectionery, tobacco and newsagent shops.I also wonder why somebody landed on 50 per cent as the threshold. We had a long debate earlier about research, sources of evidence and inquiries that have been made. I hope that the Bill's promoter can tell us that 50 per cent arose as a figure because somebody had done some research and decided that that was the key trigger for making a decision. I hope that he will not say that 50 per cent seemed a fair figure, so that can be the norm.
I understand that the Department of Health has had discussions with the representative organisations of about half the total number of specialist tobacconists in the country, but that they were held when the Bill was originally published. I do not remember the date, but it certainly was not recently. Can we presume that the trade bodies representing about half of the 380 were happy with the 50 per cent threshold? Were they fully appreciative of the fact that this would exclude a significant part of their turnover? I do not know the answer, but I am sure that the Minister can enlighten us.
That raises the question of those who are not members of the trade associations, who may have a very different viewpoint. Part of the purpose of debating Bills is to ensure that the little man, the underdog or minority interest is at least discussed so that if a decision is taken against that interest, it is done consciously. Their views are important. If there are only 380 of them, I should have thought we could find out their views.
I support the comments made about the Netherlands. There is little point in re-inventing the wheel if we have direct evidence from a fellow member of the European Union, which has already enacted legislation that apparently works well. Why not copy that rather than going down a different route? I hope that that argument will find favour with the Bill's promoter.
The other amendments are minor and seek to recognise that a shop or part of a shop or sales on the premises may not be the appropriate practical yardstick. As matters stand, the provisions do not legislate for specialist tobacconists who operate principally by mail order, without any premises. Therefore that is a further dimension.
The noble Lord who originally moved the amendment has spoken to it with conviction. Already in place is a practical example in the Netherlands. Furthermore, the points raised by the amendment are highly relevant. I hope that the promoter of the Bill will recognise that this is a helpful amendment and one that does not seek to push a coach and horses through the public policy dimension.
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