Church Funds Investment Measure

Motion to Direct

19:59:00

Moved by

That this House do direct that, in accordance with the Church of England Assembly (Powers) Act 1919, the Church Funds Investment Measure be presented to His Majesty for the Royal Assent.

My Lords, this is another piece of reforming legislation; it updates legislation dating from 1958, which enables various Church of England bodies to invest in pooled funds. These are known collectively as the CBF Church of England funds. Approximately 11,500 Church bodies invest in these funds; they include diocesan boards of finance, parochial church councils and cathedral chapters. The current assets of the funds are in the region of £3 billion. The legislation authorising these pooled investment funds—the Church Funds Investment Measure 1958—is out of date and prevents those funds being regulated funds. To address this, the measure provides for the transfer of the CBF Church of England funds to what is known as a charity-authorised investment fund. The structure for this type of fund was created in 2016 by the Financial Conduct Authority working with the Charity Commission. It has significant advantages for investors. First, charity-authorised investment funds are jointly regulated by the Charity Commission and the Financial Conduct Authority. This offers investors greater protection and reassurance that the funds are regulated and overseen in accordance with industry best practice while maintaining their charitable status. Secondly, no VAT is payable on the fees of the managers of these funds, resulting in a modest saving for charities that invest in them. The Measure permits the trustee of the CBF Church of England funds to transfer the assets of those funds to a charity-authorised investment fund. The result will be the CBF Church of England funds, instead of being unregulated as is currently the case, will become authorised and regulated jointly by the Financial Conduct Authority and the Charity Commission. Value added tax will also cease to be payable on investment managers’ fees, resulting in a cost saving to church investors. Again, the Ecclesiastical Committee has found the Measure to be expedient. I beg to move.

My Lords, as the House knows, I am chairman of the Ecclesiastical Committee. We considered this Measure, we heard evidence from the Church and we deemed it expedient. Perhaps I could just add that, since the Church of England is the established Church, it is entirely appropriate that suitable Measures from synod should become Acts of Parliament, which is what is happening at the moment—and these two Measures are appropriately being brought to this House.

My Lords, no one disputes that the present system creates this for Parliament. My argument is not that it is happening; my argument is that it should not happen because we should not have an established Church. It is quite incredible—and I hope that the outside world listens to this debate—that the Church of England suddenly has a £3 billion fund that it now wishes to be regulated, which is good, but also that it can save money by not paying VAT. Again I point out that, by having the Bishops in this House, the Church has a special and privileged position to be able to argue for that. So while the system of the established church remains, Parliament’s time is going to be wasted with this kind of discussion about the governance of the Church of England, when with any other church it would be for the equivalent of the synod to make that decision without having to come to this Parliament to make the decision of synod. That is all my argument is—that, regardless of whether this is a good or a bad Measure, it should not be coming to Parliament because we should not have an established Church; it should be an equal church among many religions and faiths across the country, and Parliament should be debating other things rather than the internal governance and how to use £3 billion of the Church of England’s funds.

I am grateful for the comments that have been made. I leave the matter at that. We greatly value the leadership of the noble and learned Baroness, Lady Butler-Sloss. I would like to record, if I may, our thanks to her for her diligent chairing of the Ecclesiastical Committee.

Motion agreed.

20:04:00

Sitting suspended.