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Bexley Council's pension fund invests £15m in tobacco firms
BEXLEY Council has been branded "contradictory" for investing more than £15m in tobacco firms despite the habit costing the borough more than £50m a year.
Results from a Freedom of Information request show £15,050,000 of the council's pension funds are invested in tobacco companies with around £4.18m in British American Tobacco and £2.65m in Imperial Tobacco Group.
Stats from the charity Action on Smoking and Health (ASH) suggest the dirty habit is costing Bexley £52.8m a year through factors such as NHS care (£10.4m), smoking breaks (£11.1m) and domestic fires (£1.9m).
The figures appear yet more worrying when Bexley Care Trust is desperately fighting to persuade smokers to kick the habit through its stop-smoking services which cost £262,000 to run.
From April next year the government will be giving responsibility for improving public health to local authorities, which means Bexley will be responsible for tobacco control and stop-smoking services.
Yet, as of March 31, three per cent of its £480m total pension fund value is tied up in tobacco companies.
Stephen Nelson is the principal director of South East London Chamber of Commerce. He said: "The council's pension fund is managed by external investment experts.
"The council does however invest heavily in its anti-smoking initiative. On the face of it that may appear somewhat contradictory. I would hope that they will review their policy."
Research manager at ASH, Amanda Sandford, said: "With the shift to local authorities responsible for health this is a critical time for all councils to review their investments and to see if there are other anomaly areas they maybe invest in, such as the alcohol industry.
"Particularly with tobacco there can be little justification."
The charity's director of research and policy Martin Dockrell added: "Pension fund managers would have us believe they have no choice, but there is no legal obligation to invest in tobacco companies."
A spokesman for Bexley Care Trust said: "Smoking cessation remains a high priority in Bexley and for the London Health Improvement Board that want to reduce smoking in the capital by 20 per cent over the next six years."
Paula Chadwick, chief executive of the Roy Castle Lung Cancer Foundation, said: “Smoking causes nine out of ten lung cancers and has devastating health consequences in the local community.
“We are very disappointed to hear of local authorities investing in the tobacco industry via their pension schemes.
“We hope they will consider more ethical investments in the future.”
News Shopper repeatedly asked to speak to council leader Councillor Teresa O'Neill for a five minute chat on the matter.
We were told she was in meetings "all day" on Friday, Monday and yesterday.
Bexley Council's response
A spokeswoman said: "The London Borough of Bexley pension fund, rather than the council itself, makes investments in order to secure future pension payments for its members.
"The fund publishes a statement of investment principles which includes the following policy on socially responsible investment: "The council’s overriding duty to the members of its pension fund and council tax payers is to maximise financial returns within a prudent pattern of risk.
"Subject to complying with that duty, the council expects its investment managers to engage actively with the companies in which they invest with a view to encouraging those companies to adopt practices and procedures in respect of social, economic, governance and environmental matters which - meet all legal requirements, reflect good practice and provide sustainable competitive advantage; and protect the company and its shareholders from harmful publicity."