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The Bill introduces much needed additional restrictions on the marketing of tobacco products. Creating a licensing system that is clear and transparent will help to restrict the availability of tobacco to young people, both through retailers and the smuggled market. Licensing of the sale of tobacco would be a positive move for all retailers selling legitimately to adults. It will result in greater revenue for legitimate retailers as illegal traders are forced out of the market. New regulations are coming into force that will mean heavier penalties, including a ban on sales of tobacco for persistent offenders. However, as a lethal and addictive product, there is a need for coherent, systematic regulation.

Is there therefore a case for a tobacco licensing scheme? The Bill introduces additional restrictions on tobacco marketing. If it and the amendments are successful, new offences will be created, including displaying tobacco products at the point of sale, selling tobacco products in vending machines and adults purchasing cigarettes on behalf of children. In addition, there are existing requirements not to sell tobacco products to people aged under 18, not to display tobacco advertising larger than one side of A5 and to display signs warning that tobacco products may be sold only to those over the age of 18. Last year, new penalties were introduced for the repeated sale of tobacco products to minors, which now results in the suspension of a retailer’s right to sell tobacco products. This amendment will improve

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compliance by providing retailers and enforcement officers with a single framework that sets out and regulates the responsibilities of a retailer when selling this highly dangerous and addictive product.

So far, the effort to restrict the sale of tobacco products to young people has focused on legitimate tobacco retailers, but we know that vending machines and retailers are important sources of cigarettes for young people, as are illicit outlets ranging from sellers of smuggled tobacco to adults who believe it is acceptable to provide cigarettes to children. This amendment gives powers to create an offence of selling tobacco without a licence. It would apply to all those who sell tobacco to young people. The measure is extremely popular with the general public. According to a YouGov survey conducted last year, 87 per cent of adults support requiring businesses to have a valid licence to sell tobacco, which can be removed if they are caught selling to underage smokers. A strong licensing system will support trading standards officers in implementing tobacco sale laws and enable them to support retailers to understand their role in preventing sales to underage children and enforcing the law where retailers continue to fail to comply. Licensing will help tackle smuggling. Retailers say that one of the biggest challenges they face is competition from illicit sources of tobacco. Smuggled tobacco currently makes up a significant proportion of the market share—13 per cent of cigarettes and over 50 per cent of hand-roll tobacco.

This amendment will allow trading standards officers to prosecute illegal sellers of tobacco for selling without a licence and so improve local enforcement. This is a measure that protects responsible retailers at the expense of those who are breaking the law. The system will be straightforward and transparent. Retailers who comply with the law will not be further inconvenienced and the measure will minimise the illegal competition from retailers selling to underage children and those selling illicit tobacco. A commitment to review the system of licensing for tobacco should be part of any comprehensive strategy being developed. The availability of tobacco to children from shops represents a significant problem and clamping down on it is key to achieving a reduction in the number of young people smoking and, in the long term, in overall prevalence.

Lord Campbell-Savours: I shall be very brief. If a dog owner needs a licence, I cannot see why a retail tobacconist should not have one. I shall make one comment in one sentence—

Lord Naseby: Will the noble Lord give way?

Lord Campbell-Savours: I shall when I have finished the sentence. A single-coloured pack for all tobacco manufacturers within a licensing system would stop the sale of smuggled products in retail shops.

Lord Naseby: The noble Lord should know by now that you do not need a dog licence in England.

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4.45 pm

Lord Campbell-Savours: My adviser has corrected my statement, which was wrong. But I am sure that there is something for which we need a licence that is quite mundane.

Lord Faulkner of Worcester: Selling alcohol.

Lord Campbell-Savours: Yes, selling alcohol. My main point is that a single-coloured pack and a licensing system would cut back on smuggled products being sold in retail shops in the United Kingdom. Could my noble friend comment on that proposition?

Lord Stoddart of Swindon: I thought I had better just say a few words. When I ran a grocery shop, I actually had a tobacco licence. I am not at all sure that it did any good but, nevertheless, it was a licence, which could be removed. But of course these are different times; the tobacco licence was abolished after the war.

We are talking here about a licence that puts further pressure on retailers. They are under huge pressure at the moment not to sell to young people. They can be fined £2,500 if they do sell—and now, under this, they would be under threat of losing their licence, although they might innocently have sold a packet of cigarettes to an underage person. Frankly, I think that we need to nurture our small shops at the moment, whatever they sell. We are already in recession and are in danger of going into depression. The last thing that we should be doing at this point is adding further burdens to retailers and to put them under further pressure of fines, and perhaps even imprisonment—but, worst of all, losing their livelihoods.

We need to be very careful about what we are doing, as the noble Lord, Lord Naseby, pointed out. We have a duty to protect the freedoms of the individual. That is one main reason why Parliament exists, apart from raising money for the Government. Parliamentarians are there to protect the individual liberties of people—and, unfortunately, some people appear to have forgotten that.

Lord Faulkner of Worcester: I certainly agree that it is Parliament’s duty to protect people’s individual rights, but Parliament prescribes the limit of those freedoms when there is a greater public good to be gained from their being restricted. The more we take measures that make it more difficult for tobacco to be sold to children and thus make it more difficult for children to start smoking and become addicted to this terrible product, the better it is. That is a legitimate aim of Parliament. It is legitimate to restrict freedoms when the greater good benefits as a result from it.

Far from attacking retailers, I would see this as a huge benefit for them. The reputable retailers will be delighted that the retail sale of tobacco is licensed, because they will all I am sure take every effort to ensure that the product is not sold to people to whom it should not be sold, such as children, and it will do something to drive out the illegal selling of tobacco—

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Lord Stoddart of Swindon: The noble Lord talks about the illegal selling of tobacco, but I assure him that most of the tobacco sold illegally is not sold in tobacconists’ shops. It is sold in all sorts of other places, and it will be very difficult to find them, because it is illegal anyway at present to sell contraband items. How they are sold at present is already illegal and, in spite of what the noble Lord says, this will not injure the criminals who sell contraband, but it will hurt law-abiding retailers, who will be under threat if they make a little mistake.

Lord Faulkner of Worcester: I do not agree with the noble Lord at all. One of the effects of having a positive licensing system for the sale of tobacco is that it will distinguish much more clearly the legal sale to adults from the illegal sale. I have no doubt that the incidence of illegal sales will decrease if there is a positive licensing system. The other benefit is that it would help the purposes of the amendment of the noble Earl, Lord Howe, debated last Thursday in which he proposed that adults who buy cigarettes for children should be subject to a particular law and penalised for that. If anyone were selling to adults for the purpose of selling on to children, the licensing system would catch them as well. I would hope that he would see that there is merit in this proposal.

The point made by my noble friend Lord Campbell-Savours about smuggling is one which I also endorse. Therefore, I think that the proposal put forward by the noble Lord, Lord Patel, in this amendment, to which I put my name, should be considered very carefully. As I did on Thursday and earlier, I declare my unpaid interest as a director of Action on Smoking and Health and a trustee of the Roy Castle Lung Cancer Foundation.

Baroness Thornton: This amendment would provide powers to introduce a wholly new approach to the sale of tobacco in this country. It is an issue on which the Government consulted in 2006, following the 2004 public health White Paper Choosing Health. While many stakeholders supported licensing, particularly health groups, there was much opposition from retailers worried about the cost and work involved in applying for a licence. As noble Lords have mentioned, we are concerned about imposing extra burdens on business in the current economic climate. Many local authorities were also concerned about the extra administrative burden and cost involved in running such a scheme. There are almost 100,000 tobacco retailers in the UK and as many as 90,000 in England alone. Running such a scheme would be complicated and costly.

We responded by bringing in a negative licensing scheme in which a retailer can sell tobacco unless and until they have been found to be persistently selling tobacco to young people. This new law comes into effect from 1 April this year. We would like to see how it works and what happens. We think that the negative licensing system is a more cost-effective alternative to the positive licensing system proposed in this amendment. The new scheme will be a powerful deterrent to retailers selling tobacco to young people under 18 while avoiding the additional burdens on business.

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Noble Lords have asked what effect this will have on tackling the illicit tobacco trade. It goes without saying, as I reported to the Committee in full on Monday, that this continues to be a vital element in our strategy on tobacco. It is important to note that very little smuggled tobacco is made available through formal retail channels, but rather through other locations such as workplaces, car boot sales or even people’s homes. Positive licensing would be unlikely to add further tools in that direction.

However, we are committed to keeping the position under review. As promised in the debate on restricted sales orders last March, we intend to report on the impact of these orders next year. If there is still a problem with the illegal sale of tobacco to young people under 18, we will re-consider the merits of an enhanced licensing scheme. For these reasons, I hope the noble Lord feels able to withdraw the amendment.

Lord Patel: I thank the Minister for her response. The amendment is intended to help retailers, not make their life more difficult. I hear the comments made by other speakers. At this stage, I beg leave to withdraw the amendment.

Amendment 106 withdrawn.

Amendment 107

Moved by Baroness Northover

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

“Reporting of promotional activities

The Secretary of State may by regulation require manufacturers to disclose the particulars of their tobacco product-related promotional activities.”

Baroness Northover: I shall speak to Amendments 107 and 107B, which are in my name and those of other noble Lords. Amendment 107 would give the Government extra tools to evaluate more effectively measures which are aimed at controlling marketing by the tobacco industry, especially that which may be aimed at young people. I am extremely glad that, whatever side of this debate that we are on, there seems to be general agreement that children should not start smoking and that cigarettes are not a good, even if they are, for historic reasons, lawful. All of us approve any decline in consumption. I therefore hope that I can command support for the amendments.

Amendment 107 would give the Government powers to require tobacco manufacturers to disclose the scale and scope of their marketing activities. This information is essential if the Government are to identify and develop effective policy responses to marketing tactics used by the industry to get round the ban on advertising, promotion and sponsorship. All the information will be published in aggregate at industry level, as in the case of the US and Canada, rather than identifying individual companies.

As we know, the Tobacco Advertising and Promotion Act 2002 sought especially to reduce the power of tobacco manufacturers to recruit new, young smokers.

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The Act has dealt effectively with the conspicuous marketing which is generally described as “above the line” advertising. It failed to deal with what the industry calls “below the line” advertising such as price promotions, retailer incentives and point-of-sale display—we have heard a bit about that.

The evidence suggests that there has been an expansion of below-the-line promotional activity. It is possible to identify a number of activities which are designed to get round the advertising ban. We heard last Thursday and on Monday from the noble Lord, Lord Rea, and from the noble Lords, Lord Patel and Lord Rea, today about the famous Mr Good of Imperial Tobacco. I remind the Committee that he spoke of the 2002 ban and the need, as he put it, for its marketing team to become more creative. We have heard a little about how he sought to do that. He noted the increase in sales from changing the appearance of a particular pack. Mr Good has become very famous in these Lords debates during the past few days. I feel that he may be rather more reticent in future, but I welcome his openness on this point. Whether he is still with Imperial Tobacco, I would be very interested to know. Requiring the industry to provide information on these activities is essential if the Government are to monitor the creative measures that the industry will develop and to which Mr Good referred.

The Canadian reporting regulations require the industry to report on how much it pays to retailers, which has been extremely useful in providing evidence that, even after a retail display ban is implemented, the industry continues to pay retailers for handling and selling tobacco products. My noble friend Lady Barker asked some extremely pertinent Written Questions in this area, seeking to find out whether the UK Government had figures on how much tobacco companies had spent on marketing within the United Kingdom in the past five years, whether the figures were based on estimates, were collected by the Government or supplied by the tobacco companies, and related questions.

The Answer came that the department had requested information from the tobacco industry on its payments to retailers for the display of tobacco products in shops, but the tobacco industry has for some reason refused to provide such information. The Government do not have the powers to require the tobacco companies to report on marketing expenditure and, therefore, given such lack of co-operation, hold no such information. I therefore trust that the Minister will see the amendment as a very useful tool to have at her disposal or that the tobacco industry will decide that it is best to reveal that information.

Amendment 107B was also mentioned in an exchange on Monday. The Framework Convention on Tobacco Control is an international treaty of the World Health Organisation to which the UK is a party. Article 5.3 seeks to protect public health policy from the influence of the tobacco industry. It states that when parties to the treaty are setting and implementing public health policies related to tobacco control, they shall,

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We are all very well aware of those tactics, understandable as of course they are—

5 pm

Sitting suspended for a Division in the House.

5.10 pm

Baroness Northover: I shall backtrack slightly. I was talking about Amendment 107B and reminding noble Lords, who are no doubt extremely familiar with this WHO convention, that it states that when parties to this treaty set and implement public health policies related to tobacco control, they shall,

As I was saying, we are extremely well aware of these tactics, which are very understandable as this extremely strong industry battles further for its sector. The kind of methods that it uses include casting doubt in the minds of the public about what they can trust or believe, suggesting that cause and effect is not necessarily the case, that statistical data do not provide answers, that their seemingly unbiased research undermines the public health case, and of course—that easiest of things—seeking delays in the implementation of what, to others, is self-evidently right. We know them all and saw them in the debates on the 2002 Bill, which I remember extremely well.

Years ago, I was an historian of 20th-century medicine. You cannot study and teach that without being extremely well aware of how the tobacco and health debate was played out in the 20th century prior to and beyond the definitive researches of Sir Richard Doll. He published before I was born, and here we are still. We are fortunate that we do not have to rely on a few personal stories but have extremely wide-ranging, incontrovertible statistical evidence. However, if noble Lords want a personal story, perhaps I may add to those that we have already heard.

On Monday night, I was waiting for my son at a sports centre. As I watched, a man sitting outside took a long draft on a cigarette, then his whole body convulsed in pain as he coughed. His body slowly recovered and, as soon as it had done so, he drew in the cigarette smoke once again. He had to do it, even with the excruciating pain that it was causing his body then and there. If noble Lords ever doubted addiction—the absolute need to smoke, even with a terrible immediate pain—they should have seen him. I was quite glad that my son, along with other kids, saw him as they came out of the sports centre. My heart went out to him because, if you like, there was no free will about that.

I am now a spokesperson on international development and, as the Committee heard, the parent of teenagers. Therefore, I am immensely grateful for the regulation of tobacco and the public health messages promoted in the UK. At the same time, I am appalled by the spread of the sale of tobacco in the poorest developing countries, as I know what a time bomb in health terms they have coming down the track. We need all the tools at our disposal to counter in the UK—and, I hope, overseas—this particular problem. We are not

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naive; we know the history and the present position of the tobacco industry. The World Health Organisation has observed that even when tobacco companies devote portions of their profits to corporate social responsibility projects, things are not quite as they may seem. The WHO states that so-called,

5.15 pm

Of course, the tobacco industry is actively lobbying against UK health policy on this issue now. As we heard on Monday from the Minister, last autumn MPs received postcards from the Save Our Shops campaign. Nowhere on those postcards was it disclosed that the campaign was industry-funded. Save Our Shops was branded as “Responsible Retailers”, which was actually a campaign of the Tobacco Retailers Alliance. The Tobacco Retailers Alliance is funded by the Tobacco Manufacturers’ Association, which in turn is funded by the three UK tobacco companies. Why am I not surprised?

I offer these amendments to the Government to try to help them. The second amendment would enable them to establish a review of their guidelines on their engagement with the tobacco industry in respect of tobacco control and see the extent to which we are adhering to the important and hard-fought-for WHO convention. Government action to protect tobacco control policies from the commercial and other vested interests of the tobacco industry requires the insulation of tobacco control policy development from the tobacco industry to the greatest extent possible. Engagement with the tobacco industry should be limited to only those areas where it is strictly necessary; for example, to regulate tobacco products and the industry itself. Such engagement must be transparent and recorded. As I mentioned on Monday, the FCO has guidelines and makes it clear that it should not be involved in the promotion of tobacco products.

As was referred to earlier, we have a particular responsibility as the UK Parliament to protect public health, especially the future of our children. I offer these amendments to the Government as a couple of tools to help them in their primary concern. I beg to move.

Lord Faulkner of Worcester: I congratulate the noble Baroness, Lady Northover, on introducing these clauses. I put my name to one of them and am happy to support the other. If I might be allowed a small party point, I hope that her presence in this debate alongside the noble Baroness, Lady Tonge, indicates that the Government and those of us who believe in tobacco control will be able to count on substantial support from the Liberal Benches when we debate these issues on Report. It is important that these measures get through for all the reasons that have been expressed in successive debates in this Committee.

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We do not need to go over old ground or to describe why the tobacco industry and tobacco products are not normal. It is unlike any other industry because of its product’s uniquely deadly characteristics. If I might add my own personal anecdote to that of the noble Baroness, when I first started working in a consultancy in the early 1970s, the firm I worked for had Imperial Tobacco as one of its clients. Since I knew a bit about Parliament, I was encouraged to get involved in some of its parliamentary relations activities. I can tell the Committee that the main objective of Imperial Tobacco’s parliamentary activity was to be sufficiently nice to a number of Members of Parliament in all parties to ensure that on a Friday, when Private Members’ Bills came up in the House of Commons to limit tobacco advertising and sponsorship, there would always be two or three of them there to say “Object!” at the crucial moment. For many years, this tactic worked brilliantly. The Government did not have the courage to introduce their own legislation at that time, and it was easily possible to block Private Members’ Bills in this way.

Lord Campbell-Savours: At the same time, they usually had a function going on somewhere in the Palace of Westminster to help people along with a drink or two.

Lord Faulkner of Worcester: My noble friend is absolutely right. If they were not able to get along to the function in the Palace, no doubt they would have been invited to Glyndebourne, Wimbledon, the test match, rugby league or many other activities that they were then allowed to sponsor. As I understand it, invitations are still made available to Members of the House of Lords and the other House. A number of them appear on the Register of Members’ Interests.

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