Hackney Council’s tobacco investments back in the spotlight
Report challenges council's tobacco investments. Photograph: Hackney Citizen
Claims made last year by Hackney Council that its pension funds have a ‘duty’ to invest in tobacco have been called into question.
A recent report by FairPensions and anti-smoking charity ASH challenges the view that investors have a legal duty to maximise financial returns through investments in industries such as tobacco.
According to its own figures, Hackney Council invests about £10.5 million of its pension funds in tobacco stocks including British American Tobacco and Imperial Tobacco.
Defending its role in pumping public money into tobacco firms, a spokesperson last year told the Hackney Citizen: “The Council’s Pensions Sub-Committee has a duty to maximise returns for its pension fund. This situation is not specific to Hackney and is the same principle that all councils in London follow.”
But with global tobacco sales falling and analysts even predicting the demise of smoking altogether, the report questions whether tobacco is a prudent long-term investment.
Martin Dockrell, Director of Policy and Research at ASH, said: “The problem is not just falling sales. All around the world the big tobacco companies face a perfect storm of tougher regulation and higher taxes while more governments sue for billions of dollars in healthcare costs.”
Professor Lindsey Davies, President of the Faculty of Public Health, fears a conflict of interest for councils investing in tobacco as planned NHS reforms will give local authorities a bigger say in public health.
He said: “Under the government’s plans to reform the NHS, directors of public health will be employed by local councils. That means that it will be the responsibility of the town hall, not just the local hospital, to provide anti-smoking services.
“The very organisation that is supposed to be taking the lead in protecting our health could be using public money to invest in tobacco. This is a clear conflict of interest that will undermine councils’ credibility and the public’s trust in the health services they receive.
“We would urge all councils to use the many alternative, and more ethical, forms of investment for their pension funds that still maximise financial return.”
Large shops and supermarkets are now required to cover up cigarettes and hide tobacco products from public view following new legislation that came into effect on Friday 6 April.
All tobacco products must be out of sight except when staff are serving customers or carrying out other day-to-day tasks such as restocking. Shop managers who do not comply with the law could be fined up to £5,000 or face imprisonment.
Diane Abbott, MP for Hackney North and Stoke Newington, said: “It’s shocking that despite a ban on tobacco advertising, children are still being lured into a lifetime of addiction because of the way glitzy packaging makes cigarettes look so appealing.
“The reality is that smoking is a deadly addiction that kills half of smokers but many young people are simply unaware of this. Introducing plain packs would minimise the dangerous allure of cigarettes and reduce the chances of children starting to smoke.”
Smoking is one of society’s biggest preventable killers, causing more than 80,000 deaths in the UK annually. Nearly two thirds of current and ex-smokers say they started smoking before they were 18, with five per cent of children aged 11-15 regular smokers.
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