Ashfield councillor says smoke-free Nottinghamshire 'impossible' with pension fund tobacco investments

Official documents show that Nottinghamshire’s Pension Fund currently has more than £2m in a direct investment in British American Tobacco.

Coun Lee Waters (Ash Ind), pensions spokesperson for the Independent Alliance opposition group at County Hall, claims that there are tens of millions more hidden away in other holdings.

He has repeated his call for the pension fund to withdraw any investments and exposure to tobacco holdings.

Coun Waters’ call comes after the Government launched a consultation to drive to phase out smoking and tackle youth vaping.

Coun John Doddy (Con), chairman of the council’s health and wellbeing board has agreed to write to the consultation with his committee’s full support.

He described the measures as ‘a game changer’.

Coun Waters, who represents Hucknall South said, “I agree wholeheartedly with Dr John Doddy that the health benefits of phasing out smoking will be incredible.

"What I find frustrating is that Nottinghamshire Council’s pension’s fund still has an investment of more than £2m in British American Tobacco.

"The fund is also exposed to many tens of millions of pounds in tobacco companies.

"As a member of the pensions committee, I have repeatedly called for them to divest in tobacco companies.

"As things stand, Coun Doddy’s comments, whilst well intentioned, are at odds with the investments of his own council’s pension fund.

"If Nottinghamshire’s Pension Fund doesn’t get rid of their tobacco investments then a smoke-free Nottinghamshire is impossible.”

Coun Eric Kerry (Con), chairman of the Nottinghamshire Pension Fund committee, said: “The pension fund has always taken the view that it should not take direct decisions to not hold particular shares as this goes against the fiduciary duty of the scheme trustees to obtain the best returns in order to ensure we can pay future pensions.

“This investment in British American Tobacco (which is currently the fund’s only direct tobacco holding) matures in March 24 and is a tiny percentage of the fund at 0.03 per cent.

“The pension fund committee considered tobacco investment at the January 2022 working party with recommendations going to the pension fund meeting in March 2022.

“The working party considered a report from William Bourne, independent adviser to the fund.

"Members of the committee considered the fund’s weightings in tobacco-related investments, whether a financial case can be made for exclusion, and the practical implications of such a decision.

"The legal and regulatory background was discussed.

“Members noted and welcomed that this is a significant reduction on the two per cent exposure held in 2017.

"The current low valuations of tobacco companies and their expected inflation-correlated future dividend stream make it impossible to make a financial case for a blanket exclusion.

"This together with the low level of exposure to the sector mean there is no financial case for exclusion.

"The practical and cost implications of such a decision were considered.

“As a result of this review the committee decided to continue to monitor the exposure to the tobacco sector in the pension fund.

"Since this decision the fund’s exposure to tobacco has reduced further but will be reviewed again at the working party in January 2024.”