Councils attacked for investing pension funds in tobacco shares

Ten London boroughs have been accused of hypocrisy for investing tens of millions of pounds in tobacco company shares while simultaneously running stop-smoking clinics.

An investigation by the London Evening Standard revealed that the councils had invested up to £10m each in the shares of businesses like British American Tobacco and Imperial Tobacco.

Only one borough, Newham, did not invest in tobacco companies. Another five in the 33 surveyed by the paper said they were “not opposed” to buying their shares.

Shares in tobacco companies are attractive to investment managers because of their steady yield.

Local authority pension funds are meanwhile under pressure because of a combined “black hole” of £10bn, the Standard said.

A Kensington and Chelsea spokesman said: “The investment committee has a policy of non-interference with the day-to-day decision making of investment managers, and their mandates do not rule out investment in any legal enterprise.”

Fiona Castle, the widow of Record Breakers star Roy Castle, who died from lung cancer through passive smoking, urged councils to “search their consciences” and switch to ethical investments.

She added: “I’m horrified that so many London councils invest their pension money in this outdated way. It means they lose credibility in telling people to stop smoking.