NHS could be forced to invest pension fund in tobacco sector after ruling over Suffolk County Council’s investment
PUBLISHED: 07:00 16 February 2016
Government proposals to clamp down on public bodies taking “ethical” issues into consideration over their business deals could force local councils to retain pension fund investments in tobacco companies.
And it could mean that NHS pension funds could have to invest in the tobacco sector for the first time in a decade.
The Government’s Cabinet Office says the main purpose of the ban on public bodies taking “ethical” decisions on investments or purchasing is to prevent them from being able to boycott foreign countries like Israel.
Suffolk county councillors have been trying to find a way of disinvesting from tobacco companies for almost two years after an overwhelming majority of them voted in favour of disinvestment at a full meeting of the authority.
However, a QC advised the pensions committee – which also includes representatives of other bodies that pay into the Suffolk Pension Fund – that withdrawing pension funds from the tobacco sector could be seen as against the fund’s fiduciary duty.
So the fund retains several millions of pounds invested in tobacco companies.
Opposition leader at the county council Sandy Martin has been leading the calls for the pension fund to sell its investment in tobacco companies – and felt it was wrong for the Government to tell public bodies they could not apply a moral position when deciding where to invest pension fund money.
He said: “I can see that they can say whether it is right or wrong to invest in a particular sector, but to say you cannot make a judgement about whether an investment is right or wrong is something else altogether.”
Cabinet Office minister and West Suffolk MP Matthew Hancock is taking the leading role in enforcing the changes.
He is due to tell an Israeli audience this week: “We need to challenge and prevent these divisive town hall boycotts.
“The new guidance on procurement, combined with changes we are making to how pension pots can be invested, will help prevent damaging and counter-productive local foreign policies undermining our national security.”