Essex County Council invests millions in the arms trade, according to ethical campaigners.

The Campaign Against the Arms Trade (CAAT) lists the council as one of the top offenders in the country for pumping cash into the shares of arms manufacturers.

The council holds 5.77million shares across seven military companies, including BAE Systems which sells Hawk Jets around the world, and tank manufacturer Alvis.

Ian Prichard of CAAT said: "It is staggering that organisations committed to public welfare and health continue to hold shares in arms companies that sell weapons across the world."

However despite these investments, Essex County Council says it operates an ethical investment policy.

CAAT believes this is because the council operates a policy of "engagement".

Liz Morton of CAAT explained: "'Engagement' is where investors talk to companies, identify problem areas, try to persuade the companies to commit themselves to change.

The process has been successful in improving environmental practices, but engagement alone is hopeless where a company's product is the fundamental problem.

"Producing and selling arms is a fundamental problem. The arms trade is not a normal, legitimate business and should not be treated as if it is."

A spokesman for Essex County Council simply said: "In common with most pension funds, the Essex County Council pension fund does not place restrictions on investment managers in choosing investments in quoted companies except in limiting the size of single investments.

"We expect the companies in which we invest to adopt and pursue socially responsible business practices."

Published Friday April 9, 2004

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