Midlands council pension pots put into tobacco firms

And it has emerged that bosses at two authorities are demanding that the investors responsible for all the West Midlands council pensions pull out of big tobacco firms.

Pension funds, which have a duty to get the best possible return on investments, continue to invest in big tobacco companies such as Philip Morris, Japan Tobacco International and Imperial Tobacco.

But the arrangement was branded odd today by an MP in light of the new arrangements which have seen responsibility for public health – including the budgets for campaigns to cut smoking and prevent people needing hospital treatment – moved to councils. Two councils – Dudley and Sandwell – today said they want to stop investing in tobacco altogether.

The West Midlands Pension Fund, which administers the pensions of 260,000 current and retired council workers, has an investment portfolio worth £9.8bn. Its portfolio reveals it has £12.3m in Imperial Tobacco, £7.2m in Philip Morris and £1.7m in Japan Tobacco.

The Staffordshire Pension Fund has £15m in British American Tobacco.

Sandwell's health boss Councillor Paul Moore is writing to the West Midlands Pension Fund urging it to take its money out of tobacco. His views were echoed by Dudley Council's leader David Sparks, who said he was 'amazed' that council pensions were still invested in tobacco.

West Bromwich East MP Tom Watson said: "The whole area of ethical investing of pension funds is difficult and needs reform."

But council leaders say tobacco companies have no influence over health policy, despite the pension fund investments.

Ian Parry, cabinet member for finance on Staffordshire County Council, said: "I can assure people that any investment by the pension fund in tobacco stocks has no bearing on the development of public health policy."