Pension funds 'may ditch tobacco firms'
MORE than £31 million invested by councils in tobacco companies could be withdrawn as the authorities prepare to take on responsibility for improving public health.
Staffordshire Pension Fund has millions invested in firms including British American Tobacco, Imperial Tobacco and Japan Tobacco.
The Sentinel has learned the fund, which covers staff at all of the region's councils, also invests in Carlsberg and Greene King brewers, and the firm which owns McDonald's restaurant buildings.
It comes as councils prepare to take over responsibility from the NHS for improving health levels in the areas they cover which has prompted critics to accuse them of double standards.
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From April, councils will regain responsibility for public health for the first time since the 1970s.
It means local authorities will run or commission campaigns to reduce obesity, cut smoking rates, curb alcohol consumption and promote healthy lifestyles.
Charity Action on Smoking and Health (ASH) accused the councils of tying up more money in tobacco than the amount it will have available to campaign for people to quit.
The Staffordshire Pension Fund is worth almost £2.7 billion and covers workers at every council in Stoke-on-Trent and Staffordshire, as well as university, police and fire service staff.
Expert groups invest the money in businesses and property to deliver a return for members.
Figures show investments in tobacco and booze have proved successful. Holdings in British American Tobacco and Imperial Tobacco were bought at a combined total of £8.1 million but are now worth more than £11.2 million.
Investments of £1.3 million in Greene King have risen in value by £305,100.
Councillors who sit on the panel in charge of scrutinising the investments say withdrawing from tobacco firms would prove complicated – because they have a responsibility to get the best return for members in the same way company directors have to maximise profits for shareholders.
Moorlands councillor Christina Jebb, who represents the opposition Liberal Democrats, said: "We have to balance our responsibility to public health and our responsibility to the proper management of the pension fund."
Martin Dockrell, of ASH, dismissed the arguments on duty to pension members.
He said: "At best it's a gross simplification of the truth. It is a duty to act in the best interests of pension holders and taxpayers but that doesn't mean there is an obligation to invest in tobacco.
"Share prices are very high at the moment but many analysts believe they are overvalued. With taxation rising, new regulation like plain packaging now possible and falling use, it could be said that now is a good time to sell."
Councillor Ian Parry, cabinet member for finance on Staffordshire County Council, which administers the fund, said the investments are under 'review'.
He said: "The fund is invested in a range of shares, bonds and property. Currently just over one per cent – which equates to £31 million – is invested in tobacco companies, which have historically given a good rate of return.
"However, the county council's pensions panel is working with its advisers on a review of its investments in tobacco companies. It's essential we balance the financial needs of the fund with an ethical investment strategy."
5 Comments
by jamking9999
Tuesday, February 12 2013, 9:08AM
“Tobacco is very different to all the other product categories mentioned here, and as such should be treated differently. Only tobacco kills when used as intended, with half of all life long smokers being killed by tobacco. It kills hundreds of people in Staffordshire every year, so for the council to continue to invest in killing its own people when it takes on responsibility for improving health in April is unacceptable.”
by dougalcross
Monday, February 11 2013, 8:46PM
“Not only pension funds are beating up the tobacco industry. I notice that supermarkets are hiding the fags behind advertising boards. If you want a pack of 20, you whisper to the lady who sneaks a packet out for you. A bit like buying off-ration (black market) meat during the war. Except, of course, that the fags are sold legally.
The nanny state strikes again. And I've always thought that if a bloke's done a hard days work, surely he's earned a pipe or two of Bruno with his evening pint?”
by BeeGee49
Saturday, February 09 2013, 6:36PM
“Then they must also "dump" the Pharma Industry as there are also known dangers in the Smoking Cessation prescription drug Champix
http://tinyurl.com/bzpn4us”
by suffolkpunch
Saturday, February 09 2013, 4:50PM
“I'm sure Councils would prefer to invest in more risky shares, like Icelandic banks? NOT.”
by BucknallMel
Saturday, February 09 2013, 12:00PM
“This just shows that they should have paid more attention to where their money was being placed to begin with. It's all very well to just rake in the cash but we're not talking about private investors, we're talking public organisations with a responsibility to behave ethically. Talking of which, have they asked if their money is being used to back exploitative and environmentally destructive businesses? Do the companies they invest in pay a decent living wage to employees, do they operate pollution control standards, or observe humanity in the treatment of animals? I'm betting not.”