Alcohol and tobacco investments anger
OBJECTIONS have been raised after it emerged more than £20m of Devon’s public sector pensions funds are invested in tobacco and alcohol companies.
Councillor Gordon Hook, Lib Dem member for Newton Abbot South, responded angrily to revelations by county council leader John Hart that the Devon Pension Fund, of which the authority is a member, had investments in unspecified companies in the sectors.
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Cllr Gordon Hook
Responding to a question raised by Cllr Hook at the county council’s latest cabinet meeting, Cllr Hart said: “The county council does not have any investment funds with tobacco or alcohol companies, but it is only one of 89 member bodies that comprise the Devon Pension Fund.
“At December 31, 2009, pension fund investments in tobacco companies were valued at just under £8m — 0.4 per cent of the total fund — and investments in alcohol companies were valued at just under £14m — 0.6 per cent of the total fund.
“It is the primary role of the fund committee, acting in the role of administering authority for the Devon Pension Fund, to obtain the best investment returns for the fund. It cannot deliberately limit the ability to obtain the best investment returns by negatively screening out specific investment sectors. Long-term performance returns indicate that both the tobacco and beverage sectors have outperformed the market as a whole.”
Cllr Hook said: “I totally accept that it is right and proper to attempt to get the best return on money invested, with the exception of companies that are clearly unethical investments, such as the two areas I have highlighted.
“How can it be right to invest in ‘the killing’ industries and the one — alcohol — which is responsible for a large percentage of crime, vandalism and anti-social behaviour?
“As a nation, we spend billions, literally, on health care for those who are killing themselves with tobacco and booze and on an over-stretched police force who are being employed to clear up the mess of alcohol-induced stupidity — and our pension funds are reaping the financial benefits of this abuse.
“The justification offered seems to be that these two investments are out-achieving the market — so does that mean it’s okay if they are doing well? I think not.”
8 Comments
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by oliver, Exmouth
Tuesday, March 16 2010, 10:53AM
“John; do you ever drink alcohol? If so, where do you imagine it comes from? There is a huge difference between alcohol and tobacco; modest quantities of alcohol are generally good for you. Any amount of tobacco is bad for you. However, both are legal, and there is no fundamental reason why a pension fund should not invest in them, though personally I wouldn't buy shares in tobacco companies.”
by Simon E., Exeter
Monday, March 15 2010, 11:13PM
“I wonder if any of the money is invested in arms companies?”
by SKoM, Cullompton
Monday, March 15 2010, 4:37PM
“John
This is not a payment to the company, it will be in shares purchased on the stock market.
These would have been issued years ago by the company so their aquisition by the pension scheme does not benefit the companies.
It is important that any pension scheme invests its funds in a well-balanced portfolio.
You should be pleased that the trustees are running this properly as you wouldn't want to have the taxpayer making up the shortfall.
By the same logic, should the exchequer benefit (as it does in huge amounts of tax) from these industries?”
by Cutter's Choice, Bully State
Monday, March 15 2010, 4:28PM
“Tobacco and alcohol are both legal products. There are many shares that I disaprove of.”
by Keith, Redhills
Monday, March 15 2010, 4:20PM
“I am surprised more of the money is not invested in those sectors if they consistently outperforms other areas of the market. Sack the current investment managers and recruit some with even less ethics.”