Surrey County Council (SCC) has been accused of a shocking conflict of interest after taking over the task of helping people quit smoking, while investing more than £12m in tobacco companies.

Campaigners and opposition councillors have slammed the conflict of interest that has arisen since SCC took over responsibility for public health, including anti-smoking initiatives, on April 1.

The council has £12.5m of its pension fund invested in tobacco companies including British American Tobacco and Japan Tobacco.

And the amount it has invested in tobacco companies over the past five years has risen by £4m despite all the evidence of the harm smoking it does to individuals and the cost to society.

On Monday the Smokefree Action Coalition of health organisations announced that 2,847 children in the county will have taken up smoking in the past year.

Asked about SCC’s investments in tobacco companies, Liberal Democrat County Councillor Colin Taylor, who has been on the health scrutiny committee for a decade: "I’m shocked. This is a total contradiction.

"It’s been reported for a good many years that smoking is a health hazard. It’s one of the major triggers of cancer."

Coun Taylor said it was a good time to persuade the council to stop investing in tobacco companies.

He said: "We will make sure we take up this issue at the first possible opportunity."

Martin Dockrell, director of research and policy at campaigning charity Action on Smoking and Health, said there was a ‘conflict of interest’ between public health duties and investment in tobacco companies.

Mr Dockrell said: "Councils find themselves in a tricky situation.

"On the one hand their pension fund managers tell them it would be illegal to refuse to invest in tobacco companies on ethical grounds, on the other hand they are working to protect their local community from an industry that kills half its lifelong customers."

When asked how the council squares this dilemma, a spokeswoman said: "The pension fund is run for over 100 public bodies in Surrey, including the county council, and only a tiny amount - around 0.5 per cent - is invested in tobacco companies.

"We have a responsibility to ensure we invest in businesses that maximise returns and provide the best value for taxpayers' money."

She said the council could not say how much money it planned to spend on anti-smoking initiatives and has yet to put together a program, adding: "It will obviously be one of our priorities."

At the end of March the council had £3.2m invested in British American Tobacco, £3m in Japan Tobacco, £2.6m in Altria Group and £1.6m in Swedish Match.

Last year the council had £12.3m invested in tobacco company equities and bonds, up from £8.4million in 2008.

The council's Pension Fund Board will be reviewing its investment strategy at the end of May.

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