Tobacco Control Plan

Iain Stewart Excerpts

Thursday 19th October 2017 Commons Chamber

[Sandy Martin (Ipswich) (Lab)]

I am concerned about the damage that smoking does to my constituents. Almost 15% of the population of Suffolk smoke. More than 7,500 admissions to Suffolk hospitals every year are attributable to smoking. Those who do not quit will have roughly a one in two chance of dying prematurely from smoking-related diseases.

The tobacco industry is deliberately producing products that it knows will kill its customers. While the market for cigarettes is mercifully in decline in the UK and other rich countries around the world, it is still growing in low-income countries, where the industry regularly uses tactics that would be illegal in this country, including the deliberate sale and marketing of cigarettes to young people and children. As a result, more than 7 million people die from the consequences of tobacco use each year. Almost four fifths of the world’s 1 billion smokers now live in low and middle-income countries. Money spent on tobacco is money not spent on other household needs. In Kenya and Bangladesh, tobacco cultivation has replaced food crops, leading to local food insecurity. In Malawi, at least 78,000 children are forced to work in tobacco fields, preventing most of them from attending school. Tobacco growing around the world is responsible for a loss of biodiversity, land pollution due to the use of pesticides, soil degradation, deforestation and water pollution. The result of all that deeply destructive and irresponsible activity is that the four major tobacco manufacturers are some of the most profitable businesses on earth.

It is impossible to hold an ethical investment in a tobacco company. To invest in tobacco is to seek to make money from environmental destruction, social exploitation, disease and premature death. That is increasingly understood by investors, because last year AXA, one of the world’s largest insurers and a major part of the Ipswich economy, divested more than $2 billion of tobacco industry assets. I welcome its decision. Tobacco-free investment policies have also been announced by AP4, one of the most influential pension funds in Sweden; Medibank, the largest health insurer in Australia; Fonds de Réserve pour les Retraites, France’s public pension fund; the Irish sovereign investment fund; and CalPERS, the largest public pension fund in the USA. So far in 2017, tobacco-free investment decisions have been made by AMP Capital, Bank of New Zealand, SCOR, PME, ACTIAM and Aviva, the largest insurer in the UK. In addition, ABN AMRO, the global bank, will cease lending to tobacco manufacturers. Those very welcome individual decisions now constitute a clear trend.

In that context, it is increasingly absurd that large investments in tobacco are still held by local authority pension funds across the United Kingdom. There is a fundamental contradiction between the local authorities’ public health responsibilities and their investments in tobacco, which actively promote the biggest public health problem confronting this country.

I understand that pension fund trustees have a duty to run their funds to secure strong returns for beneficiaries. Local authority workers depend on sound investments for their pensions. Case law has now made it clear that local authority pension fund trustees may consider non-financial factors when setting investment strategies, provided that any restrictions they place on investment as a result of such consideration do not significantly affect financial returns. But how immoral does an investment have to be before the financial returns no longer trump the moral question?

[Iain Stewart (Milton Keynes South) (Con)]

The hon. Gentleman is making a powerful argument, but will he consider the fact that many tobacco manufacturers are actively investing in non-tobacco products, which may change their whole future investment strategy? In the light of that fact, should not investors—pension funds and so on—look at that long-term development of such businesses rather than their current position?

[Sandy Martin]

I thank the hon. Gentleman for his intervention, but I do not agree with him. If a company is producing something that is detrimental to the whole world, the best approach is to disinvest from it.

How bad does an investment have to be before its financial returns no longer trump the moral question? Are there no factors that could lead a pension fund to divest on moral grounds alone? Such factors could—and in my view should—include the UK’s treaty obligations. For example, article 5.3 of the framework convention on tobacco control, to which the UK is of course a party, states:

“In setting and implementing their public health policies with respect to tobacco control, Parties shall act to protect these policies from commercial and other vested interests of the tobacco industry in accordance with national law.”

Guidelines for the implementation of article 5.3 were agreed back in November 2008 at the third conference of the parties to the convention. Recommendation 4.7 states:

“Government institutions and their bodies should not have any financial interest in the tobacco industry, unless they are responsible for managing a Party’s ownership interest in a State-owned tobacco industry.”

I am delighted that the UK has no state-owned tobacco industry, but the level of public investment in private tobacco firms in this country flies in the face of the convention.

As leader of the opposition at Suffolk County Council—before I was elected to this august House—I brought forward a motion proposing that the county’s pension fund should disinvest from tobacco funds. The motion was passed unanimously. The pension fund committee then commissioned legal opinion on how to divest, but the opinion was that the committee could not legally do so.

Does the Minister believe that our local authorities should also invest in, say, pornography—a very profitable business I am led to believe? Profit should not be the only consideration for pension fund investment. We can and must do better, and responsible disinvestment by local authority and public sector pension funds is the right place to start. This is an issue on which the public health Minister could usefully engage, and I hope he will make a commitment to do so when he replies to the debate.