Smoking Profits

Divestment campaigns are often promoted by various pressure groups to achieve their political aims but do they work? The Royal Society for Public Health urged councils to recognise the “vast and calculated global harm caused by multinational tobacco firms” and divest.

Yet councils are investing millions of pounds in some of the world’s largest tobacco companies at the same time as funding for services to help people stop smoking is being slashed, an investigation by The Independent has revealed. Investments in cigarette giants including Phillip Morris and Imperial Tobacco by local authorities in England have increased by hundreds of millions of pounds over the past five years. At the same time, councils have nearly halved the money available to help smokers to beat their addiction.

Over the five year period to April, total investments in tobacco companies by the 50 local authorities that responded to The Independent’s request jumped by more than £300m. That saw total investments climb from £1.007bn in 2012-13 to £1.317bn in 2016-17. Over the same period, the 113 local authorities that responded to a request for figures on stop-smoking services had cut spending from £101m to £55m.

One council, the Royal Borough of Windsor and Maidenhead, saw investments in tobacco firms through its independently managed pension fund climb from £5m in 2012-13 to £27m in the last financial year. Meanwhile, the borough cut funding for smoking-cessation services from £278,000 to £97,000.

In Wiltshire, where investments more than doubled to £23.8m while funding for health initiatives to wean smokers off cigarettes was trimmed by more than two-thirds.

Kent County Council saw pension investments in tobacco firms rise from £26m in 2012-13 to more than £70m five years later. In Warwickshire, investments spiralled from £1.8m to £11m over the period while in Northamptonshire, investments trebled to almost £30m. The West Midlands Pension Fund holds the largest total investment, with more than £100m spread across cigarette companies in Europe, Asia and North America.

In Bromley, tobacco firm investments doubled from around £5m to £11m, while council-funded stop smoking services have been scrapped entirely. The south London borough said its pension fund managers “cannot make any illegal investments, nor any investments contrary to UK defence or foreign policy, but are otherwise able to make investment decisions to secure the best returns”.

Royal Society for Public Health's chief executive, Shirley Cramer, said: "They should not with the other hand be boosting their financial stake in the tobacco industry – which continues to pour billions into fuelling smoking-related harm.” 

Dr. Penny Woods, of the British Lung Foundation, said smoking-related costs of more than £12bn to the taxpayer each year meant cutting services was “not just short-sighted economically, but dangerous for the nation’s health”.

In 2013, responsibility for public health was taken from the NHS and handed to local authorities. Since then, smoking-cessation services have been squeezed because of a “cut in the public health grant and the wider cuts to local authority budgets”, a report in the Journal of Public Health found. The report’s authors warned that services were now reliant on support from councillors and stop smoking initiatives could be easily scrapped if their priorities changed.