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Five months ago our Prime Minister said—this is a broad point but I am sure most people would agree with it—

“Investment in ... ideas, brands, and research and development”,

will be a vital feature in,

If a trademark cannot be affixed to a product or its packaging, it is virtually worthless—useless. I doubt if the proposers of this amendment have thought through all the implications of its express reference to trademarks.

Lord Naseby: I would like to follow the noble Lord, Lord Borrie, because I have done a little delving on the legal situation, and it would be helpful for the Committee to understand the legal position. Prohibiting the use of trademarks—in other words, brands—on tobacco packaging would, first, impose restrictions on the registration and use of trademarks based on the nature of the goods and services for which such marks are registered, contrary to the harmonised European international system of trademark protection. The noble Lord has already mentioned the European Court of Human Rights and TRIPS. Secondly, it would be unlawful interference with the human right, established by the European Court of Human Rights, to free speech between the manufacturer and the consumer of a product. Thirdly, it would constitute a barrier to the functioning of the internal market, which is contrary to EU law. Fourthly, it would undermine the very basis of intellectual property rights, which are, as the noble Lord said, of a global nature and of great significance and which need to be protected internationally, with implications far beyond the tobacco industry.

Lord Campbell-Savours: Can we establish that the clause does not say “have to”, but “may”, following consultation?

Lord Naseby: My experience of “may” in some 40 years in Parliament is that it always results in “shall”. I assume that it will get to “shall”. I am therefore hoping at this point to knock it on the head and to do the work, probably, of Her Majesty's Government, who would like also, I suspect, to knock it on its head.

Lord Walton of Detchant: There is nothing in the amendment that makes it illegal to display the trademarks; it simply allows the Secretary of State to introduce regulations making such provisions as may be necessary to fulfil the intentions of the amendment.

Lord Naseby: I suspect that the interpretation of the European Court of Human Rights would be exactly the same as mine. Intellectual property rights are a cornerstone of the whole of western civilisation and economic activity, hence both their significant value to their owners and to the wider economy, and the need for them to be effectively protected at both domestic

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and international levels. The UK Government are not entitled to interfere with trademarks and related intellectual property rights in respect of lawful products by reference to the nature of those products, because such interference would be contrary to the harmonised EU and the international system of trademark protection, with which we are obliged to comply. The protection of trademarks is harmonised at the EU level by means of the trademarks directive and Community trademark registration. The UK may not introduce measures that are inconsistent with that harmonised regime, which requires the consistent protection of trademark rights across the EU. Plain packaging regulations would be contrary to the harmonised regime.

Accordingly, the UK Government cannot introduce plain packaging without breaching its obligations under EU and international law. Such breaches would render the regulations liable to be struck down. Furthermore, plain packaging regulations would amount to deprivation of a manufacturer’s valuable property rights, in the trademark, copyright and designs incorporated in the packaging, as well as in the good will arising in the resulting brand, which would be contrary to Article 1 of the First Protocol of the ECHR. Such deprivation is unlawful, and it would require the payment of compensation to those who had been deprived. Given the commercial value of manufacturers’ trademarks and related rights, it is clear that the compensation due in these circumstances would be very substantial.

Plain packaging would inevitably inhibit the ability of manufacturers to communicate with consumers in relation to—I emphasise this—a lawful product. That ability, both of the manufacturer to communicate and of consumers to receive information, is protected by Article 10 of the European Convention on Human Rights, which recognises free speech, including commercial free speech, as a fundamental right. Prohibiting a rights holder enjoying his intellectual property rights in respect of a lawful product creates for the first time globally a pariah class of goods, in respect of which the universal protection of intellectual property rights does not apply. If the principle of such discrimination by reference to the goods themselves were established, its application would not logically be limited to tobacco products. It would probably be extended to alcohol and, surely, to certain food products. That seems to me to be the situation.

If it ever happened—a totally unlawful prospect—first, the competition would be on price, as the noble Lord said; the price would come down and consumption would go up. Secondly, if we have a problem now with the illicit importation of cigarettes—27 per cent of cigarettes are already imported illegally—once there is plain packaging, it will be as easy as wink for any distributor, any retailer, any car-boot seller anywhere in the United Kingdom to ensure that they have their illegal sources and you will not be able to tell where on earth the cigarettes have come from. Once again, Her Majesty's Government will lose £3 billion or £4 billion. Referring briefly to the question asked on the Floor of the House, if we are so short of money that we cannot provide drugs for those two categories which I mentioned this afternoon, I am sure that we should be saving on £3 million or £4 million-worth of illegal importation.

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4.15 pm

Lord Patel: The noble Lord, Lord Naseby, and the noble Lord, Lord Borrie, question whether my amendment infringes property rights of trademarks. Existing trade obligations protect the property rights of trademarks. On the other hand, a key agreement used by the industry to make the argument is the 1994 Agreement on Trade-Related Aspects of Intellectual Property Rights, often known as TRIPS. The agreement makes provision for Governments to act to protect public health and to provide limited exceptions to the rights conferred by a trademark where that is appropriate. As I interpret it, that means that the rights of trademarks are subject to the wider public good and, therefore, can be constrained when shown to benefit public health.

Lord Naseby: The noble Lord is right: TRIPS has that within its ambit. However, he needs to look very carefully at the creation of a pariah group of products. Society may decide that there are a number of areas where there should be pariah goods but the law, as it stands, requires lots of evidence to meet the public interest, as the noble Lord has suggested, and significant compensation if there is to be any advance in that area. I think Her Majesty’s Government will want to think long and hard and I am not sure that the Chancellor of the Exchequer would welcome any advance on that front.

Lord Rea: I think that quite a good case could be made out to classify cigarettes as pariah groups. I take the Committee back to remarks which I made earlier. I quoted Mr Geoff Good, the brand director of Imperial Tobacco, speaking at a conference in December 2006. He spoke of the UK, as my noble friend Lord Walton pointed out, as a dark market, meaning that former open advertising channels had been blocked by the Tobacco Advertising and Promotion Act 2002. He said that the industry had to be more creative in devising other methods of marketing. He then went on to show that Lambert and Butler had found that their new design for their celebration pack to mark their 25th anniversary had been most successful in increasing their brand share of the market. The pack design is recognised by the industry as a really important factor in increasing sales, especially now that all other forms of advertising have been prohibited.

Baroness Howarth of Breckland: We could avoid all this rather complex and convoluted, but very real, argument about European regulations—I say that as a member of the EU Select Committee who has concerns about this—if the manufacturers stopped using the packs as covert advertising and we found ways of not showing the brands, so ensuring that children do not see them. The noble Baroness asked where we had all been. I had been around the shops and, despite never having been a smoker, I now know new brands of cigarettes because huge branding can be seen across brightly lit and colourful displays. We have already had this debate. As I have said before, this branding is continually displayed next to sweets or attractive items.

We know from the statistics produced by the tobacco industry in the past that in adult life people tend to go for the brand that they have smoked for many years

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and they stick to that brand. Why do we want advertising that will entrap children at an early stage into a brand which they will then smoke continually as they grow up? I shall not repeat all the arguments about the effects that that will have on their health. We have had that debate and the arguments have been made. Anyone who works with children day in and day out will know how they are impressed. All cognitive behavioural psychology now tells us about the way in which children learn. I simply want to make the point again that, whatever intellectual argument we have about property rights—and I know that there is a possible legal argument there—the underlying reason for wanting plain packaging is to ensure that children are not caught at an early age, that they do not then continually smoke that or another brand, and that we have a healthier nation in the long run.

Baroness Tonge: I intervene briefly to support my colleagues, who clearly worked with, and had a lot to do with, children over the years. The noble Lord, Lord Naseby, gave an extremely interesting speech. I, too, am very concerned about whether we break the law. I am not so concerned about manufacturers bringing down the price of cigarettes because the Government could always put the tax up, which would mean that they could be just as expensive. I make it clear that I have nothing at all against adults doing what they want to do with each other in private. Here, we are trying to stop young people taking up smoking, which will injure their health and kill them prematurely if they carry on. That is what we are trying to do. We do not want to stop adults.

From my experience as a student and as a mother of a big family, and from my experience of my children’s friends and of working for many years in a youth counselling centre in Kentish Town, I know that young people are dedicated followers of fashion. They always go for what the herd is doing, what the herd is smoking and what the herd is wearing. That is what they are meant to be like. My brothers taught me to smoke when I was about 16 because they did not want to be embarrassed by a sister who might make a fool of herself if offered a cigarette. I was taught to smoke outside the back door of someone’s house. As I said, young people need to follow fashion. As the noble Lord, Lord Campbell-Savours said—indeed, we are of the same opinion—Black Russian were definitely the vogue when I was a student, but we moved on to Gauloise, which then became extremely chic and everyone went around smoking them.

I wanted to intervene following the speech of the noble Baroness, Lady Golding, because for a moment it made me think of my brothers. I thought that she was going to hand out free samples to us all to try to get us all going again, which for people who were smokers would be very easy to do. She obviously collects empty fag packets, which is very sad.

Baroness Golding: The evidence is there.

Baroness Tonge: From my own experience and my experience of young people, there is no question in my mind that unattractive or plain packaging, from which you would be unable to distinguish what brand you

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were smoking, would discourage young people. They would not bother with it so much, and I want to reinforce what has already been said.

Baroness Thornton: I—

Lord Stoddart of Swindon: I—

Baroness Thornton: The noble Lord may find my comments useful.

Lord Stoddart of Swindon: The main arguments against the new clause have already been made by the noble Lords, Lord Borrie and Lord Naseby, and the noble Baroness, Lady Golding, but there are aspects other than legal ones about it that should be put to the Committee.

We are supposed to be a free democracy in favour of freedom of speech and against censorship, yet we have this new clause before us today. What does it do? I will not read it all out, as the Committee would be a bit bored by that. However, in essence it says to the Government, “Here are a list of things you must do”—after consultation, true—but the list involves not only manufacturers but purveyors of tobacco. It does not really give Parliament the proper opportunity to discuss the matter, because, right at the end, it says:

“The powers of the Secretary of State under this subsection shall be exercisable by statutory instrument which shall be subject to annulment”.

In other words, it is a negative instrument, not an affirmative instrument, so carte blanche is being given to a Minister of the Crown to do exactly as he or she likes, without proper parliamentary discussion or approval. In the House of Commons, they would have an hour and a half—is that still right?—to discuss this important matter, which takes away the right of manufacturers and purveyors of a legal product to display it in a way that they think will make it attractive. It does not matter whether the product is cigarettes or anything else; a right is being taken away from people, affecting their ability to sell a legal product.

I find it amazing and absurd that the Government are in favour of covering up displays in the shops so that people cannot see the packaging anyway. But they are not satisfied with preventing retailers from displaying a legal product—they now want to say that what is hidden must be in terms agreed by the Secretary of State without parliamentary approval. Where on earth are we going in this country? Do we no longer believe in individual freedom or choice? It is going so far as to become frightening. Of course, once you do it with tobacco, it sets a dangerous precedent. Tobacco is not the only product dangerous to health, we are told, day in and grinding day out in the newspapers. One day they tell you something is bad for you, the next day that it is good for you. I am talking about chocolate, sweets and, of course, alcohol. Last Monday the noble Baroness, Lady Coussins, was telling us that although she agrees with the non-display, or the covering up of displays, of tobacco products, she does not believe that the same sort of thing should happen with alcohol.

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4.30 pm

Baroness Howarth of Breckland: I made no comment on alcohol. I have been rather careful—

Lord Stoddart of Swindon: Perhaps I have got—

Baroness Howarth of Breckland: I would like just to answer the noble Lord. I said nothing about alcohol whatsoever. This debate is about tobacco. We have gone down enough side routes. If I were debating alcohol I might have a very strong view about displays.

Lord Stoddart of Swindon: I do not think I referred to the noble Baroness, Lady Howarth.

I find it absurd, frankly, that a person who believes that you should cover up a display for tobacco should be happy to have alcohol displayed in attractive bottles with attractive labels; it simply does not make sense. Once you start on this course, it will surely extend to other products. I am getting sick and tired of freedoms that we have hitherto enjoyed being removed bit by bit in this country, and this is just another freedom that is being removed. I hope that the Committee will reject this new clause—although I am sure it will not.

Lord Walton of Detchant: In the light of the well informed comments from the noble Lords, Lord Borrie and Lord Naseby, would it not be helpful for the Government, in the regulations prescribed under this amendment, to prescribe that plain packaging might well and could properly include, in small lettering, the product name, the manufacturer name and the trademark, so long as that plain packet also showed “Smoking kills”? We are concerned about the development of extremely gaudy packaging that is so compelling for young people when they see these displays in shops.

Baroness Thornton: It might be helpful if I said what the Government’s position was on this. Amendment 105 would enable the Secretary of State through regulations to impose plain-packaging requirements on all tobacco products. I do not intend to rerun the arguments about tobacco and young people at this time; please take those as read. I am going to limit myself to the Government’s position on this one issue.

The Government’s position on plain packaging was set out by the Secretary of State in a Written Ministerial Statement made in another place that stated:

“We believe that more needs to be done to develop our understanding of how the packaging of tobacco products influences smoking by both adults and young people. The Government will therefore keep tobacco packaging under close review”.—[Official Report, Commons, 9/12/08; col. 47WS.]

That review, I suspect—I will confirm this if the Committee wishes—will address the points raised by my noble friend Lord Borrie and the noble Lord, Lord Naseby. We have committed to developing the evidence base on whether selling tobacco products in plain or generic packaging could change behaviour and, in particular, protect young people from tobacco industry marketing. However, we consider it premature at this stage to take this major step. To be completely clear, the UK is perfectly capable of being in the vanguard

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of new movements in public health, but I note that no other jurisdiction in the world has yet introduced such legislation. We will work hard to ensure that the emerging evidence on plain packaging is kept under review, and the Government’s policy will change if and when that is appropriate. I hope that, in the light of the Government’s commitment to develop the evidence on plain packaging and to keep the issue of tobacco packaging under review, the noble Lord will feel able to withdraw the amendment.

Lord Patel: I thank the Minister for that response. I am slightly disappointed, because I had thought that we all had enough evidence to support the idea that plain packaging will deter young people from taking up smoking, which is what this is about. However, I will not rehearse the arguments. I thank all Members of the Committee who passionately supported me. I obviously aroused the passion of the opposition. I have found a new friend in the noble Lord, Lord Campbell-Savours—

Lord Naseby: The only passion the noble Lord raises in me is my belief that he and those who support him tend to forget that this Parliament is charged with producing future laws. We are a law-making assembly, not a debating chamber for the pros and cons of whether young people should smoke or not. The amendment’s new law would be totally illegal under the UK framework, the EU framework and the international framework—

Lord Walton of Detchant: No.

Lord Naseby: It is no good saying no; that is a fact.

Lord Walton of Detchant: I am afraid that it is not.

Lord Naseby: I would like to finish my sentence. In that context, I remind the noble Lord that we should be careful when we try to change the law as it is effected internationally as well as nationally.

Lord Walton of Detchant: I am no expert in the law, but all that the amendment would do would be to give authority to the Government to introduce regulations on this matter. That is all.

Lord Patel: Can I continue?

Lord Naseby: The noble Lord made an intervention on my good self. The noble Lord quite rightly says that he is not an expert on the law and he is, I am sorry to say—I do not mean to be abusive—showing his ignorance.

Lord Patel: I make it clear to the noble Lord, Lord Naseby, that I did not table the amendment for the mere purpose of debating it. I tabled it in all seriousness to protect the health of young people. However, I will not prolong the argument. I will think further about whether to bring it back or not but, in the mean time, I beg leave to withdraw the amendment.

Amendment 105 withdrawn.

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Amendment 106

Moved by Lord Patel

106: After Clause 22, insert the following new Clause—

“Licensing of tobacco retailing

(1) The Secretary of State may make such regulations as he considers necessary for licensing the sale of tobacco and cigarettes.

(2) Before making any regulations under subsection (5), the Secretary of State shall consult such persons as are considered by him likely to be affected by those regualtions.

(3) Regulations under subsection (1)—

(a) may make different provision for different cases; and

(b) may contain such incidental, supplemental, consequential and transitional provision as the Secretary of State thinks fit.

(4) The power to make regulations under subsection (1) is exercisable by statutory instrument.

(5) No regulations may be made under subsection (1) unless a draft of the statutory instrument containing the regulations has been laid before, and approved by a resolution of, each House of Parliament.”

Lord Patel: It is my pleasure to move the amendment on behalf of the noble Baroness, Lady O’Cathain, who unfortunately cannot be here today as she has another parliamentary engagement in Paris.

This is a key amendment, which I hope will find favour from all sides. It would create a licensing system for the sale of tobacco, so that it is only sold by those with a valid licence. As a harmful product, tobacco is age restricted. However, although it kills many more people than alcohol or fireworks, you do not need a licence to sell it. Young smokers are sold cigarettes by both legitimate and illicit suppliers. One in five so-called test purchases by those under 18 from legitimate retailers results in a sale. It is likely that the success rate in buying from illicit providers is even higher.

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