House of Commons Hansard Debates for 11 May 1995

Column 912

the position somewhat of, say, the Church in Australia? Its members will have to raise the stipends of priests and others. Leadership and inspiration to achieve that will have to come from the archbishop. People will be looking to him for that.

Mr. Field: I agree with that. I shall touch on that point later, if I may, but I do not think that we shall find the archbishop wanting in that respect.

Sir Michael Colman is the third hero. It would not be amiss if I told the House that, when Sir Michael first came before Committee members, we asked him to introduce his team. He introduced with ease those who were sitting with him at the table, but he somehow thought that we meant that he should introduce the whole of the party from the commissioners, and he found some difficulty in doing so. I caught the eye of two of the Conservative members of the Committee. They were looking at one another and the expression on their faces said, "Oh dear, we are clearly going to have some difficulties here." By the end of that meeting, however, the honesty with which Sir Michael had answered our questions was such that the whole Committee was won over to him and had a certain admiration for the qualities that he was bringing to his task. I give just one example. When one of the Committee members asked him about activities in the Church Commissioners, he said if they had gone on in his company, that would have been unlawful. There was no pulling of punches, no wish to disguise, no intention of hiding the seriousness of the events under consideration. It is good news that Sir Michael was chosen; the way in which he has gone about his business since then is also good news.

The last events that I shall describe as heroic--because they are events and not people--relate to the commissioners' pay and pensions record. They have been slightly defensive about, and critical of, the report in that they believe that it should have emphasised their record more. I am sure that other hon. Members will rightly do so, and I have no wish to steal their thunder, but it is important to understand that the reason why the Church Commissioners are there, and the reason why they have stewardship over national resources, is to pay pensions and to help supplement stipends. I am anxious to compliment them on their record, but they are in business to do that.

Let me turn to the main substance of the debate, to its seriousness and how it will impact on the established Church and the parish system. It is important to put on record the fact that, because of gambling with borrowed money and speculation in the property market, at least £800 million of the capital base has been wiped out. It does no one any credit when some in the Church Commissioners continue to pretend that that had something to do with the movement of markets. In our report, we cite funds that, although not identical--no fund is identical to the moneys held by the Church Commissioners--are similar to the portfolios held by the commissioners. We showed that, in the period during which the capital base fell by £800 million, other funds were successful in increasing the real value of their capital base. Therefore, I hope that, from this day, we shall have no more of such talk and complacency, with some commissioners still peddling, in public debates, the idea that the markets are really accountable and responsible for what has gone on.

Column 913

The charge against the commissioners is simple. By their actions, they have so undermined the capital base that the stream of income to the commissioners has been permanently curtailed. If there had been wiser stewardship, the capital base would not only have recovered to the extent that it has recovered in the past few years, but become much larger.

The second impact of the commissioners' actions--apart from up to £800 million being wiped off the value of the assets--is that, because the Church is now plunged into such a crisis over the payment of pensions, a sum will have to be transferred from the much-reduced capital base into a pension fund to meet past pension commitments. In a moment, I shall discuss the sums that the Select Committee recommended. At a minimum, one is talking about £700 million to £750 million. If we add together what will need to be transferred and what was needlessly lost from the capital base, we see that we are talking about a period of stewardship that has almost halved the size of the capital base that the Church Commissioners had not many years ago. That is a record of which most people would be ashamed.

A number of sores remain, to which the Select Committee drew attention in its report, and which will not go away. Some of my hon. Friends, if they manage to catch your eye, Mr. Deputy Speaker, will raise those issues, so I shall not dwell on them in detail, although I want to list them.

The first is the string of private companies that the Church Commissioners established so that they could undertake some of the property development work. The procedure was designed so that they could get round the legal limits on exempted charities. There are many private or joint property companies. Last night, the Church Commissioners kindly put on the board for me, and for other hon. Members, perhaps, a note that they had prepared on these bodies. The list was too large for me fully to digest before the debate today, so it is a matter to which we shall return.

I cite one paragraph of our report, which shows the activities in which the Church Commissioners were engaged. I refer to paragraph 3 of appendix 10, which is a letter from the National Audit Office to the commissioners. It says:

"The Commissioners have paid out £3.2 million ostensibly for professional services provided by CC Projects but for which no services have been provided. Indeed the company has no staff". Those sums, which were moved around to overcome the restrictions placed on the commissioners to prevent them from eroding their capital base and converting it into income, are of continuing concern to many people. The role of those companies will not go away. The second issue that will not go away is what is euphemistically called the Ashford great park development. I use the word "euphemistically" because, according to the pictures I have seen, the area is still farm land. No development has taken place and no planning permission has been gained, but £80 million has been spent on the site. The Select Committee's recommendation was that the archbishop should seriously consider establishing a further committee of inquiry to examine how £80 million could disappear from the

Column 914

commissioners' assets into land that is not terribly good farming land and that remains without planning permission.

I am almost lost for words in trying to describe how £80 million could have been spent on that development. A careful investigation to try to trace those to whom that £80 million went from the commissioners might yield some interesting answers, and might even result in some people wishing to pay back some of the funds to the Church Commissioners.

Mr. Geoffrey Clifton-Brown (Cirencester and Tewkesbury): Is not the whole investment in Ashford symptomatic of what happened in the crisis? The Ashford development was not mentioned in the Church Commissioners' reports until 1991, by which time £72 million had been spent on it. It was valued then at between £10 million and £20 million, and today it is valued at £3 million. The problem was the secretive way in which the commissioners went about their work. They did not tell anyone who was closely involved with the Church what was going on under their investment policy.

Mr. Field: It is worse than that. From looking at the annual reports, one could be fooled into thinking that the Church Commissioners were being open. Property portfolios were listed by value, up to certain sums. None of the figures was incorrect, but some of them were misleading. For example, a huge shopping development in the north-east which cost £360 million could be put under the heading of developments of more than £20 million. Although it would not be wrong to say that that development cost more than £20 million, some might think that the information was there to mislead people rather than to help them to have an informed debate. I very much endorse the point about secretiveness made by the hon. Gentleman.

The third issue that will not go away--the Select Committee has recommended that we follow it up--is the role of the National Audit Office in this tale. We asked the commissioners to provide us with their correspondence with the National Audit Office, which had been established as their auditor. We shall want to know why, for example, over the years, when the National Audit Office expressed its disquiet at some of the activities of the commissioners, and particularly at the way in which they presented their accounts in public, so little attention was paid by the commissioners to that, and why the National Audit Office did not take matters further. The Select Committee has already decided that it will look at that issue in greater detail at a later stage.

I now focus on some of the issues about which I and my hon. Friends are concerned and which help to point the debate to the future. I had intended to bill the first issue as the question of openness, but the hon. Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) put the other side of the tale and referred to the commissioners' excessive secrecy. There is a need for the archbishop and Sir Michael Colman to break the culture of secrecy within which the commissioners have worked for more than a century. It will be hard for the commissioners, who have served long in the commission, to throw away this wretched habit--one can get hooked on such things--but it is necessary for them to do so.

Column 915

I quote from a letter from Dean Webster which I received this morning and which illustrates the strength of the secrecy. He says: "I was a Church Commissioner for fourteen years and served on the Board of Governors, the Assets Committee and the General Purposes Committee. The borrowings for property investment and the CC Projects were never revealed to the Commissioners."

That letter is from somebody who was at the very heart of the elected structure of the Church Commissioners. He was excluded from the key decisions, not only in the preparatory stage and in their execution, but for some time after the decisions had been executed. The first thing that the archbishop and Sir Michael Colman must do is break the culture of secrecy to which so many of the long-established commission staff are so addicted.

Secondly, the Government need to look at exempted status for the commissioners and for other charities. Not so long ago--in 1985--the House passed, almost with acclamation, the Charities Act. In our debates then, we were assured that the exempt charities would continue their status and we were told how well run they were. The commissioners are an exempted charity, which raises questions about who advised Ministers on how exempted charities were run. Those questions obviously centre on the Church Commissioners today but also go beyond them to the other exempted charities.

There are two other important matters: the pension fund and the reform of the commissioners. There are clearly those who are pushing, from among the commissioners and, no doubt, from within the Synod, the view that a very large sum of money should be taken from the remaining assets of the Church Commissioners and transferred to a pension fund. The Committee is anxious that a pension fund should be properly established. It is anxious that that will, in a sense, act as the outward, visible sign to those who are retired or have earned pension commitments that past pension commitments will be met. It seems to us the proper way to advance.

We are not mindful to advocate that the sort of the sums suggested by the chairman of the pension board should be transferred into that new fund. We went for the lower figure, which Sir Michael Colman put forward to the Committee, about £730 million. That may need to be topped up in the future, but it ought not to be so topped up now that the commissioners are crippled in doing any of their other work or so that we would need another Bill before Parliament to transfer any surplus funds back to the commissioners. We need to establish a fund and it needs to be properly, but not excessively, funded. The second major reform that follows from what I have said and from the inquiry that the Bishop of Durham is conducting involves the changing structure of the commissioners. That great reforming Prime Minister Robert Peel, when he first established the Ecclesiastical Commissioners, created a tightly drawn body of people who worked hard, made the decisions and ensured that they were carried out. It was only when the bishops felt left out, and the other clergy felt unrepresented, that Lord John Russell extended the Church Commissioners to their present scope. We believe that the body needs to return to being the tightly organised, effective group that Peel originally established. However, in considering how to effect that and the pension fund, the question arises as to whether they should be dealt with by a Measure or by a Bill. Some people have all too readily ascribed to some of us who

Column 916

are pleading for a Bill motives that they would not wish to be ascribed to themselves. When I debate the issue, I try to put aside partial affections for the Church of England and view things as rationally as possible.

It seems to me, as I hope that it seems to other hon. Members, that if those two major reforms come to the House as Bills, the House will be able to debate them fully and amend and improve them if need be, before they become effective. I am told that there are some in the General Synod who will wish to move by a Measure. A Measure, put simply, will mean that we shall have an hour and a half of debate. We shall not be able to amend it in the way that we could amend a Bill. We shall be able only to approve or to reject it.

Before those siren voices in the Synod try to gather support for that campaign, let me again detail the difficulties that the House had when considering the Measures dealing with women's ordination and compensation. We were told that those Measures were linked, and that we could not debate them separately. Perhaps we should have probed whether that advice was correct. My view is that the House would have approved women's ordination by something like 500 votes to 10 votes and disallowed by not quite such a wide margin the Measure that dealt with compensation. Those of us who wanted women's ordination felt trapped because we had to support a compensation Measure that put us in the position of paying people to exercise their consciences. Many of us pleaded that the Church should be as tolerant as possible of those who did not agree with the reform introducing women's ordination--after all, before the vote, they were in the majority. However, if those people decided that it was so abhorrent to them, they should have left as non-jurors, and gone without the money. Our views were not heeded. Not only is compensation costing about £3 million a year-- it might eventually cost the Church £50 million--but it is clear that some unscrupulous clergy are using the Measure as an early retirement deal rather than in connection with their objections to women priests. Had we had the chance, the Church would have had its Measure on women's ordination, and that on compensation would have been rejected.

We need a Bill, because the necessary legislation will be immensely complicated. Any complicated piece of legislation can be improved by open debate. There is nothing to lose by having such a debate. The House does not want to overturn the 1919 enabling legislation. That is accepted. We argue that the issues of the pension fund and changes to the Church Commissioners' constitution go beyond what was envisaged in the 1919 legislation, which delegated to the Church the authority to act on legislative matters within its day-to-day running and to bring more significant changes in the canons over to the House to be approved. We now want to change a structure which had been approved before 1919 and, therefore, I hope that wiser counsels will prevail in the Synod when it debates whether Measures or Bills will come to the House.

We take an interest in this matter not only because of pensions and the need to safeguard the pensions of people who are already pretty poorly paid but because we know that parish priests everywhere carry out an important role in our constituencies. However, we are also interested and involved in the debate because the Church of England predates the state. It is impossible to think about English

Column 917

history without thinking about the Church of England. When the modern state was invented, the Church was coterminous with it. It is only much more recently, with growing secularisation, that there has been a clear division between the two.

It is as an English person that I speak today. I am grateful for the role that the English Church has played in our national life and much concerned about the future of that role, given what has happened to its historic resources, the gambling with borrowed funds in the property market and the need to create a pension fund with some of the remaining capital.

It is because I am concerned to try and get the right decisions for the Church of England that I have approached this debate, and the Committee's report, in this way. I hope that it will find favour on both sides of the House.

5.18 pm

Mr. Michael Alison (Selby): I congratulate the hon. Member for Birkenhead (Mr. Field), in his distinguished capacity as Chairman of the Select Committee on Social Security, on having taken the initiative in including the Church Commissioners in his Committee's comprehensive study of pension funds. I congratulate him and our other parliamentary colleagues who have served on the Committee on its examination and for the thorough- going and assiduous study that they have made of the Church Commissioners' fortunes in the widest, and also in the narrowest, sense. The resulting report, whatever else one may think of it, is a veritable encyclopaedia of useful and essential facts about the commissioners and their responsibilities. As the Church Commissioners are directly and specifically accountable to Parliament, as well as to the Church of England, today's debate and the report that we are debating are both timely and relevant. Many of our constituents have a direct or indirect stake in the issues raised in the Committee's examination. In his eloquent and intriguing speech, the hon. Member for Birkenhead produced his tripod of heroes--the journalist, the archbishop and the First Church Estates Commissioner. I endorse entirely his designation of those heroic figures. I only wish that I could label as heroes all the members of the Social Security Committee, including its Chairman. The trouble is, there are no heroes in Parliament. If one is a hero on one side of the House, one is an anti-hero on the other. Nevertheless, the hon. Gentleman and his colleagues have done a splendid job.

Paragraph 17 of the report, a seminal paragraph, refers to the significance of losses. It mentions the £800 million loss, putting the word "loss" in inverted commas, thereby slightly pulling the punch. In a verbal presentation, which the hon. Member for Birkenhead has just given, it is beyond the wit of man to include inverted commas.

Nevertheless, the famous paragraph 17 about the losses could be set as an examination piece for candidates aspiring to be journalists, archbishops or Church Commissioners. It could examine the way in which losses can be presented as grotesque and unbelievable or as not nearly as bad as they appear. There are many different ways of looking at the figures. The hon. Member for Birkenhead produced a slightly gloomier version in his

Column 918

speech than he did in his report. I make no complaint about that, because his report has laid bare many important and significant figures.

My inescapable role today is to speak on behalf of the Church Commissioners. I shall focus on the Select Committee's main recommendation which is that a separate, contributory pension fund should be established for future clergy pensions. The need for that was spelt out in the hon. Member for Birkenhead's speech and is mentioned fully in the report. It is vividly illustrated by the figures in table 1 of paragraph 15, again a seminal paragraph and set of figures.

The commissioners are 100 per cent. responsible for clergy pensions, and the larger the growth in the burden of pensions, the smaller is the contribution by way of subsidy that the commissioners can make in other directions such as the day-to-day costs of the clergy and the parishes. I am glad to be able to tell the House that, having worked intensively on a package of pension reforms since last autumn, the Church of England has been able to reach broad agreement on the establishment of a new contributory pension fund for future service. At a national conference held a fortnight ago, the Church Commissioners, together with the Church of England pensions board, representatives from the 43 dioceses in England and the central board of finance--the General Synod's financial agency--agreed the principles and guidelines for setting up the new fund. It will probably be in place from the beginning of 1998. The little list that I have given of all those involved in the consultation and agreement is a vivid illustration of the complex intermeshing of interests and representative groups, organisations and administrative and executive bodies which make up the differential which drives the axle in the Church of England. It is difficult to escape from that clumsy and, in some ways, easily overheated piece of administrative machinery. From the beginning of 1998, the Church Commissioners' pension liabilities will become limited and calculable because of the proposed cut-off point of liability, and the new contributory fund will start on its era of future liability. It will be the dioceses--ultimately, the parishes and their individual

supporters--that will be the contributors, not the pensioner beneficiaries.

I shall list the recently agreed guidelines which will be presented to the Church of England General Synod for discussion and ratification in July this year. The first is a recognition that the present financial subsidy from the Church Commissioners to the ministry of the Church of England cannot keep up with the growth in its current and prospective costs and that the laity will have to contribute more. Sir Michael Colman--I am delighted that he made such a splendid impression on the Select Committee when it took evidence from him--in a heartfelt aside when being examined by one of the hon. Members present today, asked:

"Do you realise that pensions in payment in the Church of England have increased from £18 million in 1981 to £70 million today?" That was in December 1993. It is an illustration of the gigantic growth in pension liability and of the unavoidable necessity of getting extra lay support.

Secondly, extra contributions from the laity will have to be forthcoming, via parochial and diocesan contributions, to the new separate fund to provide support, particularly for the cost of future pensions. In effect,

Column 919

active parishioners will have to recognise for the first time that the cost of a future pension for a serving clergyman is part and parcel of the current cost of maintaining him in his daily work as an incumbent. They are already quite used to supporting and sustaining him in that daily work.

Thirdly, the commissioners have confirmed their continuing ability to meet their existing liability for past service, including pension increments. Fourthly, transitional measures will have to be put in place to help poorer dioceses and parishes to work up their pension contributions. Finally--the hon. Member for Birkenhead touched on this in an important passage in his speech--legislation will be needed to give the Church Commissioners the power that is at present denied them to use their capital for pension purposes. I shall talk more about legislation in a moment.

I hope that the House and the hon. Member for Birkenhead will feel that considerable progress has already been made in the essential dimension of pension security, which has, in many ways, been the Select Committee's overriding concern. The report's recommendations in that area are, in some ways, an endorsement of what is proposed as much as a trigger for change. They are none the less welcome for that.

The Select Committee in its report and the hon. Member for Birkenhead in his speech have been trenchant and unsparing in their criticism of the stewardship of the Church Commissioners in the recent past. I am glad that they have also been positive and constructive. It might help if I summarise briefly how the commissioners have sought to respond to constructive criticism. I do not believe that they can be accused of complacency. After all, in July 1992 the Financial Times article--the manifestation of the first new hero of the hon. Member for Birkenhead--picked up and blazoned in a headline story the serious implications of financial malaise that the 1992 Church Commissioners' annual report had somewhat over-technically and guardedly laid bare.

The Select Committee's report reasonably and fairly states in paragraph 3:

"The Archbishop of Canterbury responded immediately to this news by establishing an inquiry (known as the Lambeth Group), whose report was published in July 1993."

That is the first appearance of the second hero, and I am delighted that the hon. Gentleman gave the archbishop credit so early in his report for a response to that article. Much had already been studied, scrutinised, suggested and set in train by the time that we had reached today's debate. Incidentally, members of the Lambeth group represented a majority of non- commissioners over commissioners. The group's 1993 recommendations have been acted on vigorously and promptly. On receiving the Lambeth group report, the Church Commissioners' board of governors immediately put in hand the pension fund reforms to which I have just referred. To assess long -term liabilities, an eminent actuarial firm, Watson, was appointed to give independent actuarial advice on our expenditure commitments, particularly clergy pensions. Its findings echoed those of Bacon and Woodrow, another leading actuarial fund which had provided similar advice to the Lambeth group two years ago. The Watson report provided the actuarial basis for the on-going work of the funding of clergy pensions.

The board tightened its regulation and oversight of the Church Commissioners' Assets Committee, which is effectively the investment engine room of the Church

Column 920

Commissioners. The board established an independently chaired audit committee in 1993 to scrutinise matters relating to, among other things, the appointment of an external auditor, the presentation of the commissioners' accounts and internal financial controls, and to consider any representations made to it by any person. On the matter of the appointment of an external auditor, we have consulted the Treasury, as we are required to do in the 1947 Measure governing the commissioners, and have been given the go-ahead to embark on a selection process.

An independent firm of surveyors were appointed in the spring to scrutinise the commissioners' property portfolio and to give strategic advice on it. The commissioners' new property group is working with the benefit of that advice. It is worth noting that the report by the surveyors found that, with few exceptions and taking into account certain admitted imbalances, the commissioners have a prime UK property portfolio.

The commissioners have long acknowledged, however, that we are too heavily weighted toward property in our investment portfolio and that re-balancing needs to take place. That is happening. For example, the House will probably know that the Metro centre in Gateshead is up for sale. That highly successful shopping centre, owned by the commissioners, is expected to fetch a sale price well above cost. To strengthen internal management--

Mr. Jenkin: Will my right hon. Friend give way?

Mr. Alison: Certainly.

Mr. Jenkin: I hope that my right hon. Friend will forgive me, but I hear in his comments an echo of some of those made when the Select Committee was taking evidence. The Church Commissioners may well have a prime portfolio, but the Committee's assessment, from the evidence that it took, of the internal rates of return on the money invested simply does not match what the commissioners should have been able to generate. It is most important to emphasise that point. The Church Commissioners may well have some prime properties, but the prices that the commissioners paid for the development or purchase of them has never been justified by the returns.

Mr. Alison: My hon. Friend has to bear in mind the fact that the property portfolio taken in the round includes the agricultural estate. That estate is inherited and we have no control over the assets contained in it. The returns from each farm vary considerably and significantly and are themselves subject very often to rent controls, over which we have no real power or authority. Taking the property portfolio in the round and discounting the fact that we have very little control over the agricultural sector and very little ability to change the assets or get out of a particular farm, because of the tenancy restrictions, and isolating the property assessment purely to, let us say, commercial or retail shopping premises, the returns could be seen to be somewhat better, given manifestly failed enterprise investments such as Ashford great park, than my hon. Friend suggests. Certainly, for the most part, such investments were the result not of wild speculation but of considered advice from reputable agents such as Chesterton.

Mr. Jenkin: There may well be a residual agricultural property holding with the commissioners, but that does

Column 921

not explain why, for example, as table 3 in paragraph 35 shows, UK retail property rose from 7 per cent. of the portfolio to 32 per cent. of the portfolio by 1993. The Committee also demonstrated in the report where the quality of advice and analysis of those retail developments was substantially lacking.

I return to my main point. The money invested by the commissioners in retail property as a portfolio is not justified by the holdings of the Church Commissioners. It is incumbent on all the commissioners to be realistic--I am not questioning my right hon. Friend's motives in any way at all--about the fact that the performance of their property portfolio has been very disappointing indeed.

Mr. Alison: With the indulgence of the House, I shall repeat the point that I was making when I initially gave way to my hon. Friend. The commissioners have long acknowledged that they are too heavily weighted towards property in their investment portfolio and that re-balancing needs to take place. I make no bones about that. I do not dispute that, within that over-extended investment, there have been some disastrous investments.

I am reasonably arguing, however, that, within an over-extensive cornucopia, there are some good, solid assets which have been bought and in which we have invested on the advice of reputable, competent professionals in the field. I am trying to explain ways in which we are seeking to improve the advice and control that are to be put in place increasingly under Sir Michael Colman's leadership. That will mean that more and more highly competent professional advice will help us to isolate and pin down assets within a much smaller property portfolio, which will produce the kind of returns which my hon. Friend is correctly seeking and postulating.

Mr. Clifton-Brown: An examination of each section of a commercial pension fund against an index of performance of other pensions funds is undertaken every quarter at least. In his capacity as a Church Commissioner, would my right hon. Friend tell us whether that happens in the Church Commissioners' fund? In his opinion, is the re-balancing happening--quickly enough? The Lambeth report recommended that the property section of the fund should be reduced. I note from the Social Security Select Committee report that a normal commercial pension fund would have a property portfolio of no more than 16 per cent. whereas, even today, the Church Commissioners' property portfolio is 32 per cent.--double the amount.

Mr. Alison: My hon. Friend is slightly misconceiving the nature of the Church Commissioners' assets and investments portfolio, because it cannot properly be described as a pension fund or even be considered analogous to a pension fund. It is not a closed pension fund with regular income flowing into it. It is quite a different kind of investment portfolio for which no new money comes in. In relation to its income, it is possibly over-capitalised. The problem is not too much capital but too little income flowing from it. To attempt to regulate and assess it, and measure it by reference to a proper pension fund is misleading and precisely one of the difficulties which has arisen in focusing the management of a fund which was

Column 922

not originally a pension fund. It had no new money coming into it, but it began to manifest vast new pension-oriented obligations, which, not being a pension fund, it was not properly equipped to dispose of or to handle.

In reply to my hon. Friend's intervention, may I say that I do not think that Sir Michael Colman, his advisers and, probably, the Church of England's pension boards look at the assets of the Church Commissioners, now and in the future, in precisely the same way as those responsible for a closed pension fund of, for example, a trade union, would assess and evaluate it. They are two different creatures.

Mr. Clifton-Brown: I fear that my right hon. Friend has slightly missed my point. Any investment fund can be measured on its performance against a basket of other funds. Therefore, it is quite possible to measure whether the Church Commissioners' fund in agriculture measures up to other pension funds in agriculture. It is quite possible to measure whether the Church Commissioners' equity fund matches the equity performance of other funds. Can my right hon. Friend tell me whether the Assets Committee or the commissioners regularly review their own performance against an index of other funds?

Mr. Alison: Indeed they do. They do not necessarily always compare the fund with other pension funds, but they compare it with other comparable investment holdings and investment trusts. The assets of the fund are regularly measured, and we in the Assets Committee get regular sight of comparable movements. The fund is not assessed and evaluated in terms of its performance precisely as though it is a pension fund. It is reasonable that it should not be so assessed. I should like to elaborate on the attempted responses that the Church Commissioners have made to the criticisms of the hon. Member for Birkenhead and those of the Lambeth group. We have sought to strengthen internal management by creating two new professional posts on the Church Commissioners' staff. One is a deputy secretary responsible for finance, Mr. Christopher Daws, who wrote to the hon. Member for Birkenhead, who, in turn, mentioned that letter today. The other post, that of chief surveyor, is now held by Mr. Andrew Brown, who is in charge of the property portfolio.

They are both highly professional officers. Mr. Brown has been working in particular on long-range financial planning. It can therefore be said that we have acknowledged past mistakes, heeded criticism relating to them and acted on them in every area. I hope that the House will agree that such swift and comprehensive action for reform is not evidence of complacency.

Mr. Simon Hughes (Southwark and Bermondsey): In advance of the Turnbull report, have the processes followed by the commissioners been relaxed, so that meetings are open rather than closed, to enable members of the General Synod and others to attend? Has any attempt been made to make the organisation far less hierarchical? The only representatives of the ordinary members of the Church appear to be deans, who are hardly at the bottom of the hierarchical pile when it comes to representing the person in the pew. It does not look as

Column 923

though the organisation has been subject to much democratic scrutiny so far. Has that failing been noted and has it been, or is it about to be, corrected?

Mr. Alison: I am bound to tell the hon. Gentleman that, in advance of the Turnbull report and the recommendations of the Select Committee on Social Security, apart from a fresh breath of stimulating air and ozone that has come through the arrival of Sir Michael Colman and the appointment of the two important new officers, whose names I have just given--after all, "the spirit giveth life", not the body necessarily--no fundamental structural changes have yet been made. The proceedings of the committees are governed as heretofore by the same regularity, membership and attendance. There is no point in tinkering with that aspect of the machinery, which is under the intense scrutiny of the Select Committee and Turnbull, in advance of what those experts will deliver to us. Nothing fundamental has changed in the mechanics and nuts and bolts, but a new spirit is abroad in the commission as a result of the appointment of the new First Estates Commissioner and the new leadership.

Mr. Frank Field: I talked in general terms about complacency, which was unfair on the commissioners' staff. The right hon. Gentleman has been clear about how matters have changed, but, on 24 April, the first, leading letter published in The Times came from Mr. E. G. Nugee QC. Much of that letter revealed such complacency. In the House we are expected, even pre- Nolan, to declare interests. That gentleman could have well declared his interest because, if I am right, he was the commissioner to whom other commissioners went for a legal opinion on whether the commissioners could borrow. They did so to pursue the wretched policy that has led to the events that we are debating today.

Mr. Nugee gave a legal opinion on what the commissioners' position would be on borrowing. That was a highly contentious opinion. The Select Committee asked for that opinion, but we were given only part of it. We did not press our powers to ask for all of it. Mr. Nugee then had the nerve to write to The Times and referred to "loss", suggesting that, somehow, the market brought about the paper losses. I had in mind people like Mr. Nugee when I spoke about complacency. I did not have in mind the good members of staff who serve the commission well, the new breed of staff who are coming in or the first three Church Estates Commissioners currently in post. A group of commissioners, however, are still unbelievably complacent about their stewardship.

Mr. Alison: The hon. Gentleman has introduced a non-hero to offset the three heroes whom he presented to us earlier. I am not responsible for that non-hero--alas, I wish that I could be responsible for the three heroes who were presented to us earlier. I am responsible for neither.

Mr. Nugee's letter was not stimulated by me and I doubt that it was stimulated by Sir Michael Colman or his staff. Mr. Nugee expressed his own views, but, to do him justice, he mentioned the £800 million "loss", as does the Select Committee in the famous paragraph 17 of its report. Mr. Nugee has done nothing more significant than to quote a relevant passage from the report of the hon. Member for Birkenhead.

As I have said, there are various ways of presenting a fascinating assemblage of figures--paragraph 17 of the hon. Gentleman's report has produced such a fascinating

Column 924

assemblage of figures. Mr. Nugee, our new anti-hero, has produced an interpretation of those figures with which I know the hon. Gentleman disagrees. I am not responsible for Mr. Nugee, but I take note of what he has said. It is reasonable for someone like Mr. Nugee to demonstrate that there are different ways at looking at sets of figures. Statistics are notoriously malleable and elusive when one tries to pin them down to reveal the reality and their ultimate truth.

The hon. Member for Birkenhead referred to legislation. Let me focus at once on the Select Committee's recommendation that legislation to set up a separate pensions fund and to reform the Church Commissioners should be enacted by a parliamentary Bill rather than a Measure passed by the General Synod and subsequently considered by Parliament. Although there is likely to be much common ground between the Church of England and the Select Committee on other recommendations contained in its report, I fear that there will not be quite such ready agreement on that recommendation. There is likely to be a strong objection to the proposal for several compelling reasons, as the Church of England sees it. The Select Committee bases its argument for a Bill on three grounds. First, it argues that the historic resources of the Church of England were contributed to directly by the monarch and that they belong not to the Church but to the nation as a whole. Of course the resources of the Church of England are at the service of the nation as a whole, and it intends that they should remain so, but, as the Church would argue, they derive mainly from Church, not state, sources. When the assets of Queen Anne's bounty and the Ecclesiastical Commissioners were combined in 1948, 32 per cent. came from Queen Anne's bounty, but 68 per cent. from the Ecclesiastical Commissioners, whose assets derive from Church sources. Those are resources, in short, in which the state and the nation both have a proper interest, but the Church of England has a proportionately greater one, according to those figures.

Secondly, the Social Security Select Committee argues that a Bill would maximise the opportunities for debate on the future of the Church Commissioners. However, although a Bill would undoubtedly maximise the opportunities for the opinions of the House and of another place to be taken into account, there remains as a result an acute dilemma. It would necessarily deprive, to that extent, the Church of England of an opportunity to have, through the elected members of its General Synod, a parallel and proper voice--at least in terms of the constitutional understanding dating from 1919. The matters that we would debate in a Bill in the House are crucial to the future of the Church of England. A Measure, it can be argued, first debated in Synod and then in this and another place, would give an opportunity for all the interested voices to be heard.

Mr. Frank Field: No one disputes that we could hold a debate on it, but we could not amend it. Surely there is nothing to prevent Synod from debating the Bill before it came to this place and another place, so that it goes through all the stages that we would go through.

Mr. Alison: Later I shall suggest a way in which one might proceed roughly along those lines.

Column 925

Thirdly, the Social Security Select Committee argues that there is an urgent task in deciding to whom the commissioners should be responsible and that an Act of Parliament would appear the least contentious way of resolving that. Alas, I am advised that a Bill would be very contentious--at least, in Church of England eyes. In 1919, Parliament decided to delegate a significant, although not a final, say in ecclesiastical legislation to the Church of England through the Church Assembly and its successor, the General Synod. In the past 75 years, Church and state have held to that understanding, including at the time the Church Commissioners, who were brought into existence, by Measure, in 1947. If a Measure were the right course then, it is arguably the right course now.

The arrangements for legislation on Church of England matters in the Church of England Assembly (Powers) Act 1919 embody a partnership between Church and Parliament. It is a balanced partnership, in which both parties have a voice. As a member, like the hon. Member for Birkenhead and others, of the Ecclesiastical Committee, I am, however, well aware of the frustration that several of my colleagues and I feel at their inability to influence the details of legislation on Church matters. It is a take-it-or-leave-it position.

I can tell the House that the Church of England authorities are ready to consider ways in which Members of the House and of another place might be enabled to express their opinions in connection with the details of legislation on the important matters covered by the report, and likely to be contained in any prospective legislation. In other words, my heart is with what the hon. Member for Birkenhead seeks to secure. I believe, from comments made by Sir Michael Colman in the evidence that he gave to the Social Security Committee, that he would be only too happy for Parliament to have an important say in all that.

Mr. Alun Michael (Cardiff, South and Penarth): I should be grateful if the right hon. Gentleman would explain what he proposes. I intend to mention that issue in my remarks. I felt that there was a certain circumlocution in what the right hon. Gentleman said. What precisely is he suggesting?

Mr. Alison: To be honest, we have not worked through the ways in which there might be variations on the existing machinery of the General Synod, through its Legislative Committee, sending across a Measure to our Ecclesiastical Committee, but it might be possible to turn the Ecclesiastical Committee into a type of Standing Committee to consider a Measure before it is crystallised in final Measure form, so to speak.

I shall attempt to elaborate what might happen. A tentative Measure might be informally passed to the Ecclesiastical Committee, so that we had the chance to consider it, make suggested amendments, take evidence about it and send it back, before the whole thing was crystallised and came across as an unamendable Measure.

It is not beyond the wit of man to think of a way in which that might be considered. However, we are seeking to discover whether an experimental innovation would be

Column 926

feasible, to satisfy the aspiration that we have in the House to get into the text and detail of a legislative proposal on a subject that is very important to Parliament.

Mr. Michael: If I understand him correctly, the right hon. Gentleman continues to suggest that the Measure would come before the House in a means that was not open to full debate, amendment and the type of consideration that the members of the Select Committee considered appropriate.

Mr. Alison: It would not come before the House to the Chamber of the House, sitting as a Committee of the whole House. However, it might come to the Ecclesiastical Committee in a form in which that committee was asked what amendments it might want to make if the Measure were to come before it in a full-bodied Bill form and, in that tentative way, return to the Legislative Committee of the General Synod with our suggested amendments before the full original panoply of unamendable Measures came before the Ecclesiastical Committee and the House.

I think that the hon. Gentleman has agreed that in that respect there might be some scope for innovation, but that is a tentative, uncharted area, so I do not pretend that it is definitive.

Mr. William Powell (Corby): I wonder whether that can be right, because the Ecclesiastical Committee is not a Committee of Parliament. It is a statutory committee, set up by Act of Parliament in 1919, and the only things that it can do are those matters that are laid down in the statute itself. Therefore, if my right hon. Friend suggests that the Ecclesiastical Committee should proceed in a way that is not laid down in the statute of 1919, there will need to be a prior Act of Parliament to enable it to do that.

As it would be absurd to pass a prior Act of Parliament to enable the Ecclesiastical Committee to proceed in the manner that my right hon. Friend suggests, I am afraid that the solution that he now proposes is inappropriate and impossible to achieve. Will my right hon. Friend and his advisers seriously consider the impossible roadblock that that will create?

Mr. Alison: I take note what my hon. Friend has said. He has sat on the Ecclesiastical Committee for as long as I have and as frequently as I have, and he knows the extraordinary flexibility that it can deploy when it wants to discuss an issue. We witnessed some of those unusual, original and surprising forms of consideration when we considered the Measure regarding the ordination of women. I am not attempting to lay down or to expose or propose anything final and definitive. The hon. Member for Birkenhead--he strikes a sympathetic note with me in this--wants Parliament to have the powers that it has in considering a Bill, to be able to make amendments and consider the matter in its full analytical role, as is usual for us here. That would be extremely difficult for the Church of England to think of--an irresistible force and an immovable object.

If it is possible to find a compromise that will enable the House of Commons to have some say in the details of a legislative proposal before it is finally crystallised, it might be, in some informal way, along the lines that I have suggested. If that proves to be impossible, I suspect that we shall not be able to have a Bill and that it will

Column 927

have to be a Measure. However, I would like to discover whether it is possible to find some way in which the circle might be squared, or vice versa.

Mr. Simon Hughes rose --

Mr. Jenkin rose --

Mr. Alison: I must proceed; my hon. Friend the Member for Colchester, North (Mr. Jenkin) may be able to make his argument in a speech.

The hon. Member for Birkenhead referred to subsidiary companies. For the sake of brevity, I shall, with the hon. Gentleman's permission, skip the passage that I was going to offer the House about subsidiary companies, because he has received a rather more definitive answer in a letter than I can offer in a short paragraph this afternoon. He is at liberty to pursue the matter further if he wishes.

The hon. Gentleman was quite emphatic about the Ashford great park project. There is no evidence to suggest that we need a new, full-blown and inevitably expensive inquiry into the project along the lines that the Select Committee report recommends. However, we are anxious to be responsive and helpful to the Committee in that respect. Therefore, the Archbishop of Canterbury has agreed that the new Audit Committee, with additional independent and external expert assistance, is an appropriate body to carry out an independent investigation that will be set in train forthwith. The Archbishop of Canterbury will take a strong personal interest in the matter. I hope that the hon. Gentleman feels that that is a positive and constructive response to the anxieties that he and his colleagues have expressed in the report.

Many of the issues raised by the Committee are very much at the heart of the work of the so-called Turnbull commission which is reviewing the Church's central structures under the chairmanship of Michael Turnbull, the Bishop of Durham. The Select Committee report contains a particularly felicitous and intriguing historical passage. There are some real nuggets in paragraphs 9 and 10--I suspect the direct imprimatur of the hon. Member for Birkenhead.

Thomas Arnold said that no human hand could save the Church of England, and that phrase rings out quite early in the report. Echoing Thomas Arnold's gloomy prophecy, the hon. Gentleman may also have been tempted to think that no human hand, not even the Turnbull commission, could save the Church of England. As part of its functions, the commission will consider the Select Committee's various recommendations in the next few months. If no known human hands can save the Church, I think that we may find that we are getting close to salvation in the shape of the hero of the day, the hon. Member for Birkenhead, and his team from the Social Security Select Committee. Those human hands have done a lot of valuable work in this area; the Committee has made some constructive suggestions, which the Turnbull commission is taking into account.

We hope that Thomas Arnold's gloomy prophecy will be laid to rest by the new body that will emerge in the spring. We hope that new growth and new prospects will arise from the hon. Gentleman's studies and criticisms and from the Turnbull commission--our new deployment of heroes. The prospects are very good. I reiterate the commissioners' thanks to the hon. Gentleman and his colleagues in the Select Committee for their work in producing the report.

Next Section

Home Page