Anger as Shropshire Council invests in tobacco

Shropshire Council has invested £6.4 million of taxpayers' cash into tobacco firms, it was revealed today.

Council bosses have used the money from pension pots to invest in a number of cigarette stocks. But the move has been criticised by anti-smoking campaigners.

However, council chiefs today insisted they would not withdraw the investment. It follows a question raised at a recent meeting by Ludlow East county councillor Tracy Huffer.

She called on the council to disinvest the money in areas "where the council could be accused of profiting from deaths and so remove this conflict of interest before any legal challenge takes place".

Justin Bridges, treasury and pensions service manager, today said: "Shropshire County Pension Fund has taken legal advice on the acceptability of the fund investment in tobacco stocks and as a result of this, has no plans to withdraw the investment in the future unless the regulatory environment changes through regulatory amendment or successful legal challenge."

But Martin Dockrell, director of policy and research at Ash – Action on Smoking and Health – said the council had a number of other options and urged them to think again.

He said: "The fact is there is no legal obligation for the council to invest in tobacco companies. They can choose not to.

"Councils have to work under tight constraints when investing. But they can have the presumption to stay clear of tobacco companies."

Councillor Keith Barrow, leader of the council, said in response to Councillor Huffer: "The over-riding fiduciary duty of the pensions committee is to maximise investment returns in order to pay pension benefits to scheme members and keep employer contribution rates down.

"Shropshire County Pension Fund currently has only 0.64 per cent of the total fund invested in tobacco companies.

"The fund believes good governance is an important element in reducing the risk of corporate failures in the future, and over the long term is committed to corporate best practice that will enhance investment returns."