§ The Parliamentary Under-Secretary of State, Department of Health (Lord Warner) rose to move, That the draft regulations laid before the House on 26 May be approved [21st Report from the Joint Committed].
§ The noble Lord said: My Lords, the regulations will prohibit the practice of brand sharing, where a tobacco product is promoted by a non-tobacco product, or vice versa, in the United Kingdom.
§ We made a commitment in our manifesto, and in the 1998 White Paper Smoking Kills, to place a comprehensive ban on advertising. Smoking remains the principal avoidable cause of premature deaths in the UK, killing 120,000 people per year. It costs the NHS between £1.4 billion and £1.7 billion per year, and one out of every two smokers will die from a smoking-related illness.
§ It is estimated that banning tobacco advertising and promotion will result in a 2.5 per cent reduction in the number of deaths caused by smoking, eventually saving up to 3,000 lives a year. The ban on advertising is a vital part of the department's tobacco control strategy, and plays an important part in the struggle against tobacco.
§ We consulted on the point of sale, brand sharing and sponsorship regulations together for the three months between August and November 2002. The Tobacco Advertising and Promotion Act 2002 banned tobacco advertising in the press and on billboards from 14 February 2003, and most tobacco sponsorship from July 2003. On 16 March 2004, we made regulations to restrict advertising at the point of sale to a maximum A5-sized area, which will come into force on 21 December 2004, and the regulations on brand sharing are the next step. We consulted very widely. Views were sought from consumers and health groups as well as from retailers and manufacturers of tobacco products.
§ It is very important to legislate to prevent brand sharing. As direct advertising has been increasingly restricted over the past two decades, the tobacco industry has tried to promote tobacco through different means. Promoting tobacco using other products, such as clothes or smoking accessories—that is brand sharing—is one of those methods. An early example was in France, where Worldwide Brands Limited was found guilty of breaching tobacco advertising laws with products like "Camel" branded boots.440
§ Research has made it clear that advertising bans work best when they are comprehensive. Having taken the important step of banning advertising in the press and on billboards, we must continue this work by prohibiting the promotion of tobacco products on other items.
§ A brand-shared item has a dual function: its original function as well as the function of promoting tobacco products. An example of brand sharing is Marlboro Classic Clothing. Marlboro clothing tries to capture the image Marlboro wants to project, of a kind of—dare I say it?—"rugged cool". The clothes have their normal function but also have the additional aim of promoting Marlboro cigarettes.
§ Another example of brand sharing would be if an Alco pop manufacturer launched a brand of cigarettes with the same branding as the Alco pop, linking the two products together and promoting the tobacco product with the Alco pop's brand. Those examples are where a tobacco brand is used on other products. Brand sharing also occurs where another item is promoted on a tobacco product. An example of that is "House of Commons cigarettes", which I am pleased to say have now been discontinued.
§ We need to be clear that prohibiting brand sharing is not stopping legitimate business diversification. If a tobacco company wishes to diversify into other goods, that is perfectly legitimate as long as the tobacco brand is not used. An example is Phillip Morris Companies Inc., which owns both the "Marlboro" brand and the food business "Kraft". The latter is not brand sharing, because Kraft does not have the same branding as Phillip Morris tobacco products, and Kraft products do not promote tobacco products.
§ One of the key reasons to prohibit brand sharing is to discourage young people from smoking. Research shows that they are particularly susceptible to brand sharing. The Centre for Tobacco Control in Strathclyde University in 2001 found that awareness of brand-shared products among 15 and 16-year olds was associated with the probability of being a current smoker. Young people are very brand conscious, and this legislation will remove tobacco branding from the market, taking away the availability of tobacco-branded clothing and other items which could be seen as attractive or "cool" to young people.
§ We do not yet have a large amount of tobacco brand sharing in the UK. Our aim in these regulations is to prevent future expansion into brand-shared goods by the industry. Now that the comprehensive ban on advertising is in place, the tobacco industry will be looking for new opportunities to promote its products. Brand sharing is one such opportunity. That is why we made clear from the time of the passing of the Tobacco Advertising Bill in 2002 that regulations will be made to prohibit brand sharing. The industry has been aware of these plans for a long time and has been fully consulted on them.
§ Companies affected by the brand-sharing regulations will have 12 months to comply with the regulations. The regulations will come into force on 31 July 2005.441
§ There are exceptions to the regulations to ensure they are proportionate. We extended those exceptions in response to the consultation, to make sure that the regulations are fair and do not penalise the wrong firms. The exceptions are quite complicated and I do not propose to detain your Lordships for too long by going through them in detail at this stage.
§ After the three-month consultation period, the regulations were notified to the EU under the technical standards directive between September and December 2003. No observations were made by other European member states. In fact, the legislation is very much in line with EU measures. EU directive 2003/33/EC is due to come into force on 31 July 2005 and will bring into effect a comprehensive advertising ban across the EU. The amount of tobacco promotion in the EU will drop dramatically at that point. That is part of the worldwide move away from tobacco promotion, which is becoming increasingly unacceptable in a modern world that is moving towards being more responsible and less tolerant of the marketing of that dangerous product.
§ In conclusion, the regulations are an important element of our comprehensive ban on tobacco advertising and I encourage your Lordships to support their approval as part of the important fight against this harmful product.
§ Moved, That the draft regulations laid before the House on 26 May be approved [21st Report from the Joint Committee].—(Lord Warner.)
§ 11.15 a.m.
§ Lord Skelmersdale: My Lords, the Minister is nothing if not versatile. Only this morning, I heard him talking about hospitals and MRSA. A few hours later, here he is extolling the anathema of smoking, as it were, and the latest government plan to reduce the consumption of cigarettes in this country by dint of secondary legislation.
§ The noble Lord mentioned consultation. Like the London Borough of Tower Hamlets—not a body that I would usually pray in aid for my arguments—I found the passion most peculiar. I challenge the Government to justify it in terms other than those that I shall describe. This Wednesday, your Lordships debated a Motion in the name of my noble friend Lord Griffiths of Fforestfach on the subject of the Civil Service. Much of that debate centred on the relationship between civil servants and Ministers—quite rightly. What did not come out—at least, not from my reading of Hansard—was the help that Ministers receive from civil servants in Parliament and the effect of Parkinson's Law on those Ministers. The fact that work increases to fill the time available applies to them especially, with the result that the more Ministers there are, the more legislation is sausage-machined through Parliament.
§ That brings me directly to the subject of the regulations. It is fair to say—and I am sometimes fair, even to the noble Lord, Lord Warner—that the Tobacco Advertising and Promotion Act 2002 provides in Sections 11 and 19 for regulations such as 442 these. The object of that Act was to stop the advertising of tobacco products by a variety of methods in order to reduce the prevalence of smoking, especially the number of new smokers taking up the habit. I would be the first to admit that that is a worthy aim.
§ About 12 million adults in the UK smoke cigarettes—28 per cent of men and 26 per cent of women. About 10 per cent of them die every year from tobacco-induced diseases. That has remained static during the lifetime of this Government, while between 1971 and 1976, consumption fell by more than 37 per cent.
§ The House will readily understand that the promotion of tobacco products is highly likely to persuade people to take up smoking. It is hardly surprising that the tobacco companies believe that there is no evidence that banning advertising reduces consumption, but that increasing prices dramatically does. For many of your Lordships, a phrase of Christine Keeler's will spring to mind. But the Act and the first regulations made under it will prove the point one way or the other. The second set of regulations, the subject of today's debate, is riddled with inconsistencies.
§ The first is one of policy. What evidence is there that brand sharing increases tobacco consumption? Yes, I heard what the Minister said about the university research, but I have not read it nor do I know whether it has been peer reviewed—which is so important in these matters. I can understand that clothing might help to increase the sales of perfume, as they are linked products, but why should the sale of aftershave, albeit by a company of the same name, perhaps with the same logo on the outer wrapper, persuade people—and non-smokers at that—that they should go out to buy that particular brand of cigarette or other tobacco product?
§ I am glad to hear that the regulations have been referred to the EU, as were the Act and the previous regulations, as the Minister mentioned. It occurs to me to wonder whether the Government have investigated whether the regulations are consistent with the Paris convention for the protection of international property and the Trade-Related Aspects of Intellectual Property Rights Agreement (TRIPS). As so often, the devil is in the detail. What is even more confusing is that a firm escapes the charge of brand sharing if the intent was not to promote the sale of tobacco products and the firm could not have reasonably foreseen that it would have that effect. How on earth can the point be proved either way when, almost inevitably, it will sooner or later end up in a court of law?
§ Another exclusion is to be found in Regulation 4(3)(b), which was noted by the Health Development Agency. Incidentally, that quango is on the Minister's list of bodies subject to review. In essence, it said that the fact that a tobacco brand had been used on a non-tobacco product before 1 September 2002, rather than later, was immaterial. Regulation 4(3)(b) also applies only to the use of a tobacco brand on a non-tobacco product, not vice versa. So, as the Dunhill name was first used on non-tobacco products, where does that 443 leave Dunhill tobacco products? If they are to be let off by that provision, where do the regulations say so? Perhaps they are not to be let off, in which case they and we should be told. Or do the Government believe, as I suggested earlier, that the use of the name does not have the purpose or effect of promoting Dunhill-branded tobacco products? If so, it must be inconsistent, if Silk Cut, for example, buys a company that makes scarves after the magic date, for that to be branded a sales gimmick to sell more cigarettes. More precisely, a German firm called Reemsta was bought by Imperial Tobacco in May 2002. By dint of that, it acquired the licence to buy and sell Davidoff Cigarettes. It also has a very big business in men's toiletries on the continent. Is it not in the same boat as Dunhill, having a valid use of a non-tobacco product name by virtue of Regulation 4(3)(b) but questionable use on tobacco products? Why does Regulation 4(3)(b) not apply to Regulation 3(2)? Indeed, why is Regulation 3(2) in these regulations at all? It seems totally outside the main purport of the regulations.
§ If matters are left as they are in the regulations, when they come into force companies will be open to accusations against them, claiming that the use of a common name has the purpose and/or the effect of promoting the tobacco product rather than the scent, hairspray, handbag, scarf or whatever it intends to sell.
§ Lastly, given the tobacco companies' history of defending themselves, if necessary, by going to law, what sum has the department set aside to defend the regulations? As I have said, we all agree on the Government's aims to reduce smoking, but is this the way to go about it? I am sure that that point will be made by my honourable friend Mr Loughton in another place when the order is debated on Monday. If they believe that brand sharing is the real danger that the Minister said it was, the Government should think again about how to legislate on it.
§ Lord Clement-Jones: My Lords, I thank the Minister for his introduction; it was dogged rather than rugged, perhaps. I am grateful for his lucid exposition. I am in no doubt about the importance of brand sharing as a way of getting through in ways that advertising is sometimes not permitted to do.
§ But I have rather mixed feelings about the regulations. First, I am pleased that they are before us and that implementation of Section 10 is taking place. I am also pleased that extensive consultation took place before the final version of the regulations was brought before us. Generally, I will certainly not rerun all the arguments in favour of the original Bill. I am afraid that I listened with incredulity to the noble Lord, Lord Skelmersdale, rerun some of the arguments. The argument was won; the Bill went through this House; I was very pleased to be able to help deliver one of the Government's manifesto commitments, if I may so; and the Government adopted the Bill in the Commons at the time. I was pleased by that quick action, and I do not believe that we would necessarily have been in this position unless I had picked up the Bill and run with it in this House.444
§ I am in a slightly difficult position. I am one of the Bill's parents but I do not recognise its progeny in all respects as regards the regulations. Many of the organisations responding to the consultation are disappointed by the outcome. If they looked at the regulations now, they would say much the same thing. The regulations are very complicated, which is probably the one point on which I agree with the noble Lord, Lord Skelmersdale. The Minister will be aware of many of the adverse comments made by campaigning organisations, voluntary organisations, local authorities, the BMA and other health organisations, criticising quite a number of the provisions of these regulations. Their objections are manifold.
§ First is the crucial question of the pre-existing nontobacco-based exemption in Regulation 4(3)(b), which could drive a coach and horses through the regulations. To give a frivolous example, could we be talking about Scooby Doo cigarettes in the future? I do not know. We do not have to look very far for a real, live example. I am not nearly as doubtful about Dunhill's ability to sell all its other products. These regulations give it carte blanche, and the name Dunhill is mainly associated with cigarettes. Its continued ability to sell its other products will help to reinforce its cigarette brand. These regulations, as I interpret them, allow it to do that.
§ The 18-months' transitional period was very widely criticised. It would be very useful to have the Minister's view on why we must have such wide preexisting exemption and the 18-months' transitional period. It was clear to all the manufacturers that the brand sharing regulations would be introduced; in fact, one of the major retailers has already closed down its operations and ceased operation more widely in this area, as it knew that the provisions were coming.
§ The question on which I seek the most clarification from the Minister is the burden of proof. He has heard the wide criticisms made of the difficulty in that regard. I am a very rusty lawyer in this area, but there seems to be a very high hurdle as regards purpose. The Independent Television Commission said in its evidence that it would need internal documents to prove purpose. That is what one might call a very subjective test; it is quite difficult to prove. However, the element of effect, which was dealt with in the original Clause 10, seems to cure some of the problems. Effect is a much more objective test; that is why I supported the original Clause 10—now Section 10. That double-pronged attack of purpose and effect allowed us to ensure that brand sharing did not take effect.
§ I would like to hear the Minister's commentary on the matter, but I am reasonably content that the exception in Regulation 4(1) requiring the person concerned to prove a negative purpose and effect will be effective. I therefore disagree with those who think that that exception is weak. It will be useful to hear the Minister's view.
§ There is no doubt that brand sharing is a very useful tool to a tobacco manufacturer. I thought that the consultation paper summarising some of the evidence 445 in this area was very cogent. There is very high awareness of brand sharing among young people, especially young smokers, and it is used when other forms of promotion are not available. But there is doubt about whether the regulations will be wholly effective. At this stage, the Government should undertake to review the regulations at an early stage to see just how effective they have been. I do not know whether that should be at the one-year mark or after two years, but I would like the Minister to give that undertaking so that we can see whether the regulations have their intended effect.
§ Lord Monson: My Lords, as the noble Lord, Lord Skelmersdale, has pointed out, the order is likely to be fairly ineffective in reducing the incidence of smoking and hence is somewhat draconian. I wish to question some of the assumptions on which the order is based, as revealed in the Explanatory Memorandum. I declare my usual interest as a wholly unpaid supporter of FOREST.
§ It is claimed, yet again, that 120,000 people die from smoking each year. How is that figure arrived at? As I have pointed out on more than one occasion, to no avail, not much more than 15 years ago, shortly before he died, Lord Houghton of Sowerby tabled a Question to ask how many deaths per annum could be attributed to smoking. The Answer given was 50,000. A little while later, that was doubled overnight to the surprisingly round figure of 100,000. A few years later, it was raised to the suspiciously precise figure of something like 111,437. Then again, following that claim, it was raised to the suspiciously round figure of 120,000. I suppose that it will go on climbing as the years go by. Let us assume for the sake of argument that 120,000 is correct. What proportion of that 120,000 is taken up by people who represent genuinely premature deaths? That is to say, people who die 10 or 15 years earlier than they might otherwise have done. How many are people who die only two or three years earlier than they might have done? We all must die some time, after all. Most of us would much rather die at the age of 77 from smoking-related heart disease than at the age of 79 from Alzheimer's disease.
§ 11.30 a.m.
§ Then there is the cost to the NHS, which the Explanatory Memorandum puts at between £1.4 and £1.7 billion. Is this cost not greatly exceeded by the revenue from duty on tobacco and tobacco products? It always used to be claimed that this was the case. Has that changed? Of course, money is not everything; there are considerations other than financial. I do not imagine that the Minister can answer my first question without further reference, but he could almost certainly say what the annual revenue is from duty on tobacco and tobacco products.
§ I will now, having been critical, make a constructive suggestion about the compulsory health warnings. The order reiterates the need for compulsory health warnings. It really does not work to say "smoking kills". A cigarette is not a stick of dynamite or a phial 446 of cyanide. The public are well aware of that. They know subliminally that although many people die early, many go on smoking into their 80s and 90s. Noble Lords might have heard of Madame Calment of Arles, who lived to the age of 121 having smoked two cigarettes a day until the age of 116. It kills some people; it does not kill others. It depends to a large extent on your genes, I suppose.
§ To say "smoking kills" is ineffective, and the message loses its impact. Far more effective, as I discovered when I was in Spain earlier this year, is the wording on Spanish cigarette packets. They say things such as "smoking causes chronic bronchial problems" or "smoking clogs the arteries". People can see that smoking does not automatically kill, but they cannot see what is happening inside their lungs and arteries. Messages such as those, by not exaggerating, end up being far more effective in shifting public opinion. That is a genuinely constructive suggestion, which I put to the Minister.
§ Lord Warner: My Lords, I am grateful to noble Lords for their questions, and I will try to answer them. The noble Lord, Lord Skelmersdale, raised the question of the proof of the effect of brand sharing on young people. I cited the Strathclyde research, which is good, sound, solid research, and we stand by it. I did not go into the details of exceptions, but I will briefly outline the provisions on exceptions, because they deal with some of the points raised by the noble Lord, Lord Skelmersdale.
§ There are exceptions to the regulations to ensure that they are proportionate. We extended those exceptions in response to the consultation to ensure that the regulations are fair and do not penalise the wrong firms. Essentially, where the purpose was not to promote a tobacco product and it could not have been foreseen that would be an exception. Where the brand is not used by both tobacco and non-tobacco products, or does not appear to be, that would be another ground. Where the brand sharing occurred before 1 September 2002, the date when the consultation was published, is another consideration. Long-established brand shares first used before 1 September 2002 have an exception from the ban as long as the purpose was not to promote a tobacco product, and the presentation of the name, emblem or other feature does not make it appear that it belongs to the same brand as a tobacco product.
§ Dunhill, which was mentioned, is an example of a long-established brand whose luxury goods are distinct from its tobacco products. That is why it would be enabled to have an exception. The noble Lord, Lord Skelmersdale, raised the subject of Davidoff. That company is likely to suffer losses from the brand-sharing regulations. Unlike Dunhill, whose branding on luxury goods is distinctive enough from its tobacco branding to be exempt from the regulations, Davidoffs brand sharing is likely to fall foul, because it used to have a shared website for both its tobacco and luxury goods, although that has since changed. The response from Davidoff to the 2002 consultation was the strongest received. It argued that 447 it would have to either rebrand all its goods or remove them from the UK market. There are confidential issues here, but it is right that it does not qualify for the exceptions as provided for in the regulations.
§ The noble Lord, Lord Skelmersdale, raised the question of whether the regulations were sound in international law and intellectual property rights. Yes, the regulations were agreed with the Patent Office. The noble Lord, Lord Clement-Jones, raised the issue of the 18-month lead time. I gently say, in my dogged rather than rugged way, that the 18-month lead time was cut to 12 months following the consultation. That is the lead time for implementation that we have provided for.
§ The burden of proof is dealt with in regulation 6.2 and 6.3, where the person seeking to rely on some of the exceptions must raise the issue, but if that is done the prosecution must prove their case beyond reasonable doubt. That is regulation 6.4, since the noble Lord said that he is a little rusty on his law. There was a suggestion that the regulations are defective in that they allow a coach and horses to be driven through them; that is not so. The regulations are clear that the person does not use the product for the purpose of promoting a tobacco product. This will make the room for manoeuvre small for tobacco companies trying to get round the regulations.
§ These are sound regulations. I will not go into detail in response to the noble Lord, Lord Monson. We do not agree on the way in which the figures were calculated; we have not agreed for a long time. I am happy to send him our calculations again. We do not agree with him on "smoking kills"; it is a fair, accurate and effective message. I will read Hansard and respond to him on the detail of his speech. These are good regulations. I say to the noble Lord, Lord Clement-Jones, that we will study their effect carefully. If there are any problems, we will not hesitate to tighten them up where we can. These regulations are sound, they will do the job that they are required to do, and I commend them to the House.
§ Lord Monson: My Lords, before the Minister sits down, will he say whether the revenue from tobacco duty exceeds the cost to the NHS of an estimated £1.4 billion to £1.7 billion?
§ Lord Warner: My Lords, I do not carry that information around in my head. I said that I would write to the noble Lord.
§ On Question, Motion agreed to.