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The hon. Member for Middlesbrough, representing the Church Commissioners, was asked--

Management of Investments

28. Mr. Peter L. Pike (Burnley): What steps the commissioners have taken to transfer day-to-day fund management of UK equities and their fixed interest portfolio; and if he will make a statement. [123698]

Mr. Stuart Bell (Second Church Estates Commissioner, representing the Church Commissioners): The commissioners have decided to transfer day-to-day fund management of their United Kingdom equities and fixed-interest portfolio to Churches, Charities and Local Authorities Investment Management Ltd. Additionally, several experienced members of the in-house team will

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transfer to preserve continuity of management, which, over the years, has produced such good results for the commissioners. It is planned that the transfer will take place on 30 June 2000.

Mr. Pike: I thank my hon. Friend for that answer. One thing that he has not told us, however, is the cost implications. Will large costs and hefty fees be paid to CCLA? If so, what effect will those have on the commissioners' ability to help fund the Church?

Mr. Bell: The commissioners will, of course, pay CCLA a fee. However, an increase in the overall costs of fund management is not expected to affect the distributions that the commissioners make for support of the Church. The policy remains to provide the maximum sustainable level of support to the Church.

Church Repairs and Renovations

29. Mr. Gordon Marsden (Blackpool, South): What assessment the commissioners have made of the contribution to the rural economy in England of repairs and renovations to churches. [123699]

Mr. Stuart Bell (Second Church Estates Commissioner, representing the Church Commissioners): The repair, renovation and development by parishes of rural churches make a significant financial contribution to the rural economy, to supporting and encouraging local skilled craftsman and businesses, and to maintaining rural community life.

Mr. Marsden: I thank my hon. Friend for that reply, which confirms the Historic Houses Association's view that that activity maintains about 7,000 jobs in the sector. Does he agree that the traditional labour-intensive skills to which he referred would be further enhanced and encouraged if £18 million of the £123 million that the Church spends yearly on repairs and renovations did not go straight into paying VAT? Will he also use that information to press home those points on colleagues and Ministers in the Department of the Environment, Transport and the Regions in time for the forthcoming rural White Paper?

Mr. Bell: I am grateful to my hon. Friend for drawing attention to the issue of VAT on church repairs, on which discussions are continuing with the Treasury and the DETR. We are also seeking to persuade the Government not only to review operation of the directive within the European Union, so that it will cover church repairs, but to reduce VAT to 5 per cent.

Mr. Tim Boswell (Daventry): In support of the point made by the hon. Member for Blackpool, South (Mr. Marsden), and in view of the encouragement that can be taken from the remarks just made by the hon. Gentleman, does the hon. Gentleman accept that, even when the Treasury has--as it often has--quite good arguments in principle for a general approach, there is a quite special problem in relation to churches, particularly small churches and large churches in small communities,

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for which the cost of repair and renovation is entirely disproportionate to anything that they can realistically raise?

Mr. Bell: Those points were made to the Minister for the Arts when we saw him. It is not generally known that we have 16,000 parish churches in rural areas, and that they are among the best maintained in Europe. However, the additional burden of VAT on maintenance of those buildings is a serious burden on local, Church- worshipping communities.

Assets (1999 Results)

30. Mr. Ben Chapman (Wirral, South): What implications the commissioners' recently published 1999 results have for their support of the Church; and if he will make a statement. [123700]

Mr. Stuart Bell (Second Church Estates Commissioner, representing the Church Commissioners): The market value of the commissioners' assets stood at £4,400 million at the year end, and the assets provided £156 million in support of the Church's ministry. That sum includes an element of support targeted specifically at parish ministry in dioceses most in need of financial help. The total sum met 20 per cent. of the Church's overall running costs, in 1999, of approximately £760 million.

Mr. Chapman: Given that, could more be done for the very poorest of parishes? Could some of those funds be used to enable clergy to have decent conditions of service? Could the conditions of service and rights of employment that have increasingly been made available to other people in society now be made available to the clergy as well?

Mr. Bell: In fact, £20.6 million of parish ministry support is provided by the Church Commissioners, and £15.1 million is targeted to support parish ministry in areas of greatest need. The archbishop's council is examining the content of the clergy remuneration package, the remuneration of clergy in relation to that of other groups and the financial circumstances of clergy, and its review will be given to the General Synod in November 2000.

Investment in Zimbabwe

31. Mr. John Bercow (Buckingham): If he will make a statement on the commissioners' policy on investment in Zimbabwe. [123701]

Mr. Stuart Bell (Second Church Estates Commissioner, representing the Church Commissioners): As at December 1999, the commissioners' overseas equities were valued at £648.1 million. The commissioners have no investments in Zimbabwe.

Mr. Bercow: In the light of the brutal behaviour of the Zimbabwean Government at home, the way in which they have offended everybody abroad and the fact that they

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are now, without doubt, international pariahs, is the hon. Gentleman aware that that answer, on behalf of the Church Commissioners, warms the cockles of my heart?

Mr. Bell: I am pleased to be able to warm the cockles of the hon. Gentleman's heart. I should point out that the commissioners' overseas investments are managed externally by three fund managers. Those managers have discretionary powers to invest in all world equity markets, including those of the emerging economies, while complying with the commissioners' ethical criteria. The hon. Gentleman makes an important point in relation to those criteria.

Church Land Rents

32. Mr. Paul Flynn (Newport, West): What has been the increase in real terms in the level of rents charged for church land in the last 10 years. [123702]

Mr. Stuart Bell (Second Church Estates Commissioner, representing the Church Commissioners): I am not able to quantify the 10-year return on commissioners' farm lettings alone, but, over the last 10 years, the total return on all the commissioners' agricultural property has been 9.7 per cent.

Mr. Flynn: When the commissioners next adjust the rents, could I urge them to read the inspiring words of the Books of Isaiah and Hosea on Christian charity, which urged that it should be extended beyond the human race to the animal species? Could not the Church Commissioners devise a way to reward those tenants who have already banned the cruel activity of fox hunting on their lands?

Mr. Bell: I would not wish to anticipate the statement of my right hon. Friend the Home Secretary, but I will listen to it with great interest.

GM Crops

33. Sir Sydney Chapman (Chipping Barnet): What advice the Church Commissioners have received about the growing of GM crops on Church land; and how they intend to monitor the results of the current round of trials. [123703]

Mr. Stuart Bell (Second Church Estates Commissioner, representing the Church Commissioners): Following extensive study and consultation, the Church of England's ethical investments advisory group--a copy of whose report has been placed in the House of Commons Library--has recommended to the commissioners that new agricultural tenancies should contain a clause restricting the use of genetically modified seeds and requiring the express consent of the commissioners to the use of their land for this purpose. The commissioners have considered and accepted this advice.

Sir Sydney Chapman: If it can be shown that there is no damage to the ecological system in introducing genetically modified crops--given, however, that controversy surrounds the subject--would the Second Church Estates Commissioner agree that it might be more

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sensible if the Church Commissioners were unilaterally to change their leases and take over control of matters relating to cropping on their land?

Mr. Bell: The Church Commissioners have taken fully into account the continued controversy concerning GM crops. In law, the commissioners have no power to change leases already granted, as their tenants enjoy freedom of cropping within the terms of their lease. As responsible stewards of the land that we own, we remain prudently aware of developments in this controversial area from many perspectives, including environmental stewardship.

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