Archive for January, 2012

BBC News – ‘Sell tobacco shares’ Nottinghamshire County Council urged

BBC News – ‘Sell tobacco shares’ Nottinghamshire County Council urged.

The GP Chairman of the Nottinghamshire Local Medical Committee has called on the council to pull out of tobacco investments, as reported on the local BBC news.

The usual excuses are trotted out by the council, such as it is only 1% of the fund, implying that it is insignificant.  If it is insignificant, then they ought to have no problem selling the stake in tobacco, and shifting the investment to other so-called defensive stocks.

A council investing in tobacco is like a police force investing in organised crime!  Yes it produces a good income, but tobacco costs Nottinghamshire far more than any investment income. Using the ASH ready reckoner tobacco is estimated to cost the county (County and City) just shy of £300m a year.

Why is it investing in a product that costs the county so much and kills over 1800 people there each year?  How can you lead on public health when you part own the very companies that are directly responsible for this death toll?


Region’s fund attacked over tobacco investment – Main Section – Yorkshire Post

Region’s fund attacked over tobacco investment – Main Section – Yorkshire Post.

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Councils told to stub out big tobacco pension deals – UK Politics – UK – The Independent

Councils told to stub out big tobacco pension deals – UK Politics – UK – The Independent.

A major story is published in today’s Independent newspaper, showing that councils have up to £2 billion invested in tobacco, at least £1.3 billion in direct investments, the rest in collective investments such as tracker funds.  The story is based on Freedom of Information requests to all council pension funds, of which 60% responded (one presumes the others are all in breach of the FOI Act!).

The printed version includes a map showing that funds in the North West, North East and Yorkshire have the largest holdings.  These areas also have the highest smoking prevalences in the country and smoking takes a huge toll on these communities, both in health terms and economically.  How sad and shocking that councillors in charge of pension funds seem to think that this is a price worth paying when alternative investments are readily available without the associated toll of death and misery for their constituents.

Yesterday the government released the new public health outcomes framework, which will apply to local authorities in their new public health leadership role from 2013.  Amongst the outcomes to be measured are adult and teenage smoking prevalence, and smoking in pregnancy, all of which already have ambitious reduction targets in the Tobacco Control Plan for England.

In addition the framework has a vision to improve healthy life expectancy and reduce health inequalities.  Smoking is the major cause of premature mortality (easily more than drugs, alcohol, road crashes and other types of accidents, suicide, and diabetes added together), and killing half of life long smokers, typically after a prolonged period of suffering from lung diseases such as COPD and cancer.  Smoking is also by far the single largest factor driving health inequalities, with up to half the difference in life expectancy between the poor and better off attributable to smoking.

So, from April 2013 Councils will be expected to drive down smoking prevalence in their localities.  Yet if they continue to hold tobacco investments they will clearly have a huge conflict of interest as their fund managers seek to maximise financial returns from tobacco companies while their public health teams seek to minimise tobacco use.  Surely the public health must come first!

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An ethical dilemma for pension investors | This is Leicestershire

An ethical dilemma for pension investors | This is Leicestershire.

Leicestershire has £6.8m invested in tobacco companies.  Once again a council spokesman refers to maximising returns for beneficiaries, completely ignoring the huge costs imposed on Leicestershire’s public services and employers by smoking, which far outweigh the income they receive from these investments.

There is also an assumption that tobacco is an essential investment for maximising returns, yet Norway, one of the biggest funds in the world,  has outperformed the market since it pulled out of tobacco.

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Staffordshire Pension Fund has £787m deficit | This is Staffordshire

Staffordshire Pension Fund has £787m deficit | This is Staffordshire.


This article reports that Staffordshire has £7.5 million invested in two tobacco companies (there may be more).

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Anger as council pensions cash in on tobacco – Main Section – Yorkshire Post

Anger as council pensions cash in on tobacco – Main Section – Yorkshire Post.

More council pension funds are ‘outed’ as having tobacco investments, despite their forthcoming leadership role in public health.  It is strange how the managers hide behind fiduciary duty to fund members, yet seem to ignore their duty to local tax payers, given that smoking acts as a net drain on local economies.

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Heat on Labor over tobacco investments

Heat on Labor over tobacco investments.

Australia has become something of a world leader in tobacco control, not least with its recent legislation on plain packs and very strong Ministerial support for taking on the tobacco industry.

It comes as something of a shock then, to find that a major Government Superannuation Fund has substantial tobacco investments, and that arguments in support of this position closely mirror those from UK funds, such as not interfering with the freedom of fund managers to select investments.

Such a position is really a dereliction of duty, as the cost to Australian taxpayers of tobacco addiction far outweighs any income from tobacco investments.  As this fund was apparently created to limit pension costs for future taxpayers, it is ironic that the government, through this fund, partly owns the very companies it is about to fight tooth and nail through the courts.   Plain packs is the policy which has the industry screaming with good reason.  If successful the government could badly damage some of these companies, not only in Australia but around the world as other jurisdictions follow suit, and reduce future returns to the pension fund.

It is difficult to see how the fund can continue to part own the companies which are challenging the democratically elected government’s position and law which has such strong general support in the country.

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