Local Authorities: Fossil Fuel Holdings

Baroness Janke Excerpts

Wednesday 24th February 2016 Lords Chamber

[Baroness Williams of Trafford]

My noble friend is absolutely right. I am glad that he said it is complicated because, as a humble junior Minister, I find it quite complicated. Maximising the returns for the investors is the prime responsibility of any pension fund.

[Baroness Janke (LD)]

My Lords, is the Minister aware that many local authorities, while getting a good return on pension funds, disinvest from industries such as the tobacco industry where they have policies on pursuing smoking cessation and good health, which smoking clearly threatens? If she is clarifying what she says is a confusing situation, will she make it clear what counts as being political? Is it investing in renewables? Is it disinvesting from tobacco? Is it in fact obeying government instructions, or is the local authority given some licence to make its own judgments?

[Baroness Williams of Trafford]

My Lords, what is confusing is to confuse the issue of procurement with that of pension fund investment. I think that is where the confusion started. It has not been helped by the media. That is why I was trying to clarify the two aspects of the Question. Local authorities will have all sorts of things to consider when making their pension investments. They will have an obligation to public health. They will have an obligation to help people cut down on excessive alcohol consumption, take more exercise, use less petrol and perhaps walk their children to school, but that does not take away from the prime purpose for which pension funds are designed, which is to maximise the returns for their investors.