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Financial Stability

Volume 481: debated on Thursday 23 October 2008

2. What recent assessment the Church Commissioners have made of the impact of recent economic events on the financial stability of the Church of England. (229205)

If I might differ slightly from the Church of England by way of assessment, I should say that the Church Commissioners manage their investments proactively and are able to move swiftly when economic circumstances change. Even before the credit crunch began, they sensed that times were changing and acted accordingly. Between 2005 and early 2007, they sold more than £400 million of residential property at prices near the top of the market, and they made £250 million from commercial property sales during the same period. However, in the Church of England we must not overlook the role of individual churchgoers in funding the Church’s vital contribution to the spiritual life of this country.

The Archbishops of Canterbury and York were enthusiastically applauded by the public for their recent broadsides against the financial yobs in the City, yet the Church Commissioners’ investment practices, including sales of mortgage portfolios and depositing many millions of pounds in hedge funds, seem to undermine the authority of the archbishops’ acerbic articles. What discussions has the Church’s ethical investment advisory group had to ensure that that sort of investment is proscribed, not least because it risks the spiritual as well as the financial stability of our Church?

The statements of the archbishops added a moral dimension to the current global financial crisis. The commissioners are in regular touch with the ethical investment advisory group, and are in contact with it again in the light of the archbishops’ comments. I assure my hon. Friend that we are committed to our ethical investment policy, which is of long standing, and that all the commissioners’ investment decisions are informed by the work of the ethical investment advisory group.

Can the hon. Gentleman assure me that the financial pressures facing the Church Commissioners will not lead them to any precipitate action in relation to Hartlebury castle, the historic home of the Bishops of Worcester? He will know that discussions are taking place in Worcestershire to ensure that public access to the castle remains and to ensure the continuity of the Hurd library in its historic location. I hope that the Church Commissioners will continue those very constructive discussions.

I am grateful to the hon. Gentleman, who has taken a strong interest in the castle, as have we, over a period of time. He is aware that my door is always open to any representations that he might wish to make.

To return to the broader question asked by my hon. Friend the Member for North-West Leicestershire (David Taylor) about the financial stability of the Church, we invest for the long term and distribute the returns with a view to the long term, thereby aiming to maintain the value of the funds in real terms over time. In other words, we do not allow our support for today’s beneficiaries to disadvantage tomorrow’s beneficiaries.

Further to the answer that my hon. Friend gave earlier, will he assure us that during these difficult times the ethical dimension of funding and investment will not be lost? There is always great pressure at such times to get the greatest returns, but if archbishops are going to talk about moral imperatives, the Church of England and the commissioners must daily live those out in their investment decisions.

I can give my hon. Friend that assurance. I refer again to the ethical investment advisory group, but we should not overlook the role that local churches play. They depend on individuals giving, and that is true for the Church of England. As for the Church Commissioners, we will continue to work closely with the ethical investment advisory group.