Millions of pounds invested in tobacco firms through a County Hall-managed workers’ pension scheme could be pulled.

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Herts County Council is looking at reinvesting some of the cash from its pension fund, after a new tobacco control policy was passed earlier this month.

As of the start of the year, almost £47m was held in ‘big tobacco’ through the County Hall-managed Local Government Pension Scheme – which oversees investment for many bodies, including Stevenage Borough Council and North Herts District Council.

The most recent figures show that at the end of 2012 £46,939,566 was invested in tobacco firms, accounting for 1.82% of the total pot.

But now it may be reinvested elsewhere after the county council’s cabinet passed the policy, which asked if pension investments could be matched with the authority’s own policies – if there is no “cost to the public purse”.

Derrick Ashley, cabinet member for resources, said: “Our pension fund managers have a legal duty to make sound investment decisions to secure the best long-term returns for the pension fund. At present, this may include investments in tobacco companies and those that sell tobacco products.

“However, where possible we seek to align pension investments with our policies.”

When the subject of tobacco investment was raised in 2011 the county council said it “does not constrain the fund manager”.

Speaking at the time, the then chairman of the pension committee and deputy county council leader David Lloyd – now police and crime commissioner for Hertfordshire – said: “If you start to look into areas such as tobacco you get into a position where you are not managing to get the best investment for pensions.

“It’s ethical that future council taxpayers don’t have to pick up the bill for the pension fund.”

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