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'Don't light up' says Hertfordshire County Council, as it invests £24m in British American Tobacco
A ruling Hertfordshire politician has defended the decision to launch a countywide anti-smoking campaign while the council has more than £20 million invested in a tobacco company.
The new policy, which describes smoking as “an unacceptable cost to Hertfordshire”, was drawn up after the county council took over the responsibility for public health from the NHS in April.
However, the county council’s pension managers still ploughed £23.9 million into British American Tobacco this year, the largest single investment in the fund.
Following the revelation, the council has faced calls to review its pension fund so it could “demonstrate a level of consistency”.
This week, the county council said it had a responsibility to get the best value for the taxpayer from its pension fund investments.
Derrick Ashley, cabinet member for resources and transformation, said: “Our pension fund managers have a legal duty to make sound investment decisions to secure the best long-term returns for the pension fund. At present, this may include investments in tobacco companies and those that sell tobacco products.
“However, where possible we seek to align pension investments with our policies.
“In light of this, and our statutory responsibilities for public health, the pensions committee has been asked to consider how, while still fulfilling its legal duty and not adding cost to the public purse, it might be able to align its portfolio of investment with the principles and intentions in the council’s policy statement on tobacco control.”
He continued: “It is crucial future Council Tax payers don’t have to pick up the bill for the pension fund.”
According to the county council, smoking is the largest cause of preventable death in Hertfordshire, killing 1,700 people a year – more than the next six most common causes of death combined.
The anti-smoking policy, discussed on Monday, said the council “intends to continue to reduce smoking prevalence with focused, sustained and co-ordinated action on a number of fronts”.
Councillors and officers were also told to refuse any partnerships, payments, gifts or services from the tobacco industry.
It asked pension fund trustees to “align their portfolio of investment” with the new smoking policy, as long as it didn’t affect their legal duty or profits.
The new policy highlights a particular difficulty in convincing “black and minority ethnic communities” to give up smoking, for cultural reasons.
British American Tobacco sold an extra five billion cigarettes in Asia during the first six months of this year compared with the same time last year, while sales in all other regions dropped.
Sales increased in Pakistan, Bangladesh, Vietnam, South Korea, Indonesia and Philippines, resulting in profits of £875 million, up by £60 million compared to 2012.
The number of cigarettes sold in the first six months of this year dropped in the Americas, Europe, Eastern Europe, Middle East and Africa, although profits were still made.
The company, which has its headquarters in London and produces Dunhill, Lucky Strike, Kent and Pall Mall cigarettes, made global profits of £5.97 billion last year but did not pay a penny of UK corporation tax.
While smoking generates £227 million a year in tax, the bill for health care and associated costs are an estimated £278 million a year, leaving the Hertfordshire taxpayer £50 million out of pocket.
A spokesman for British American Tobacco said any profit made in the UK was cancelled out by its operating costs for its offices, and that in 2011 £1.447 billion of global corporation tax was paid.
The county council’s pension fund also covers workers in local councils, Watford, Three Rivers, Hertsmere and Dacorum.
Politicians at Watford Borough Council voted unanimously for a Labour motion to bring in standardised unbranded packaging, at a meeting on Wednesday, November 20.
The motion argued the initiative would make smoking less attractive to young people.
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