HL Deb 26 October 1988 vol 500 cc1683-8

7.33 p.m.

The Lord Bishop of Southwark rose to move, That this House do direct that, in accordance with the Church of England Assembly (Powers) Act 1919, the Measure be presented to Her Majesty for the Royal Assent.

The right reverend Prelate said: My Lords, this Measure is the latest in a series of measures which have been presented in recent years and which are designed to modernise and improve the pension provisions for ministers in the Church of England. I am old enough to recall a very different situation in which it was not legally possible to retire until one was 70 years of age. Even then it was often impossible for a retiring minister to afford adequate housing. Now, on completion of 37 years' service and on retirement at the age of 65, a full pension of £5,330—that is, two-thirds of the minimum stipend payable in the previous year—is awarded to those of incumbent status and others such as deacons, deaconesses and licensed lay workers.

The sum payable is reviewed annually and increased each April by at least the same proportion as the previous year's increase in the national minimum stipend for incumbents. In addition, a tax-free capital sum is also payable on retirement to help with the purchase of a home. At present this is just over £14,000. On top of that, low interest loans are available to enable pensioners to enter into what amounts to a share equity scheme, easing still further the difficult transition into retirement for those who have lived in tied accommodation during their ministry. I should add that the pensions board also makes available homes for rent and sheltered and residential accommodation for the more frail.

Widows, who form a substantial proportion of the Church's pensioners, are entitled to a survivorship pension equal to two-thirds of the pension that their husband was receiving—or would have received—and also a lump sum of three times the previous year's national minimum stipend. Children under the age of 18 also receive a pension as of right. This is usually one-sixth of their late parent's entitlement. Discretionary help can be given, and is in cases of particular distress or difficulty.

I think it is worth pointing out that the provisions are in fact generous compared with many other schemes. It all feels very different from 1952, and I am relieved that I shall be retiring in the 1990s and not in the first half of this century.

Against that background I mention briefly a few of the changes which the Measure will effect. First, it will rationalise the pension arrangements for clergy, which includes deacons, deaconesses—of whom there are now relatively few—and licensed lay workers. Secondly, it makes many small but useful improvements to the scheme, making it clearer and easier to understand and administer. Thirdly, it implements enhancements which result from recent state legislation on occupational pension schemes. Fourthly, it enables changes of details in the pension and housing arrangements to be made by regulation rather than by Measure. Fifthly, it updates references to other legislation and el iminates points which are no longer relevant.

Your Lordships may have noted that there is one matter upon which the Ecclesiastical Committee reported with regret—to use its precise phrase. The Measure does not contain any provision for the former wives of members of the clergy whose marriages have been dissolved. Of course that is a well-known difficulty with almost all existing pension arrangements. The problem was also raised at the time when the Measure was passing through the General Synod. At that time the revision committee of the General Synod made two points.

First, it would be, it said, unsatisfactory for the committee to decide on a particular course without knowing what Parliament was likely to do. It was understood then, and is still understood, that this important matter—sometimes most distressing in its bearing on individuals affected by the break-up of their marriage—was the subject of an investigation by the Lord Chancellor's Department. I hope that I am not speaking out of order when I express the hope that we shall soon hear word of its progress.

Secondly, it was noted that under present legislation the pensions board already has the discretionary power to provide help with housing and also to make payments to dependants, who might include a former spouse in receipt of maintenance payments. Children under 18 are already covered by separate provision which operates regardless of the state of the marriage.

The report of the Ecclesiastical Committee contains careful notes on all the clauses of the Measure contained in the report of the General Synod Legislative Committee which is appended to that of the Ecclesiastical Committee. I believe that they show that the Measure will bring welcome improvements to a scheme which, in my judgment, is already good and whose provisions will now apply to almost everyone in stipendary, licensed or accredited ministry in the Church of England on an equal footing. I therefore commend the Measure to the House. I beg to move.

Moved, That this House do direct that, in accordance with the Church of England Assembly (Powers) Act 1919, the Measure be presented to Her Majesty for the Royal Assent.—(The Lord Bishop of Southwark.)

Lord Williams of Elvel

My Lords, the House will he grateful to the right reverend Prelate the Bishop of Southwark for introducing his Motion and explaining the Measure. I shall make two rather general comments about the Measure before proceeding to three more specific questions.

The first comment is that we are of course glad that there is a measure of rationalisation in clergy pension arrangements. But we note that it is a move from a partially funded pension scheme to a wholly unfunded pension scheme in the sense that the Church Commissioners are to be relied upon and are responsible for meeting their obligations under the Measure. However, in the case of some people such as church workers who had a church workers' pension fund for themselves, that was an obligation which was set up specifically for church workers and was funded by itself. That is a fairly minor comment.

Secondly, we note that the level of pensions which are to be paid to clergy—I do not wish to embarrass the right reverend Prelate—are most extraordinary by any standards. If your Lordships look at Schedule 1 of the Measure you will see that the Archbishops of Canterbury and York, after a lifetime of service, will receive a pension of £10,660 per annum; and that diocesan bishops will receive a pension of £7,995 per annum. I recognise that those who enter the service of God have to abjure the service of Mammon. Nevertheless, it seems to me, looking at the matter objectively, that those who have served a lifetime in offices in the Church of England and also offices in the established Church and who have a responsibility to the community at large should be entitled to pensions which are somewhat in excess of the figures that I have quoted from Schedule 1. However, I accept that that is not a point on which your Lordships' House can properly comment. It is a point perhaps to which the Church Commissioners should address themselves. I do not wish to put the right reverend Prelate in an embarrassing position by suggesting that his pension, which he will no doubt rightly deserve when he retires, will be inadequate.

The three specific points upon which I would ask the right reverend Prelate to comment are these. First, he mentioned in his introduction that at the moment there is no provision in the Measure for divorced wives of clergy; in other words, where a marriage, as he said, had been dissolved. What progress does he think we can make to resolve that especially difficult question? It was a matter, as he rightly said, which was discussed at some length and, if I may say so, with some feeling within the Ecclesiastical Committee when the Measure came before it. We should like to feel that the right reverend Prelate can assure us that the Lord Chancellor and the Lord Chancellor's Committee will be pushed a bit by the Church of England to ensure that some provision is made in that delicate area.

My second question relates to those who, for one reason or another, leave the ministry before they are entitled to a pension. As I understand it, and I hope that the right reverend Prelate will confirm my understanding, not only is there provision for deferred pension but there is also provision for transfer of the monetary value of the deferred pension to another scheme should that person, having left the ministry, decide to take another job and join another scheme.

My last question relates to what I would broadly refer to as personal pensions. Are clergy, and those who are covered by the Measure, entitled to take the advantage that others can take who belong to schemes of this nature and take out their own personal pension plans in addition to being members of the scheme, which is compulsory by virtue of the fact that they are clergy? Are they allowed to make additional voluntary contributions, if I may use the jargon which comes from the pension language? Are they allowed to make provision for themselves in one form or another which would be in addition to their rights under the scheme?

I should be most grateful if the right reverend Prelate could respond to the questions that I have asked and of which I have given him notice.

In general we, like the Ecclesiastical Committee, find the Measure sensible, but having said that, I come back to the point I made at the beginning, that, in any reasonable language, the type of pensions that the Church is offering to archbishops, bishops and clergy on retirement would not be acceptable in any business circles. The Church Commissioners would be well advised to bear that point in mind.

The Lord Bishop of Southwark

My Lords, perhaps I may respond to the questions and interesting comments of the noble Lord, Lord Williams. I believe that he was just making a general comment about the fact that the scheme is unfunded. However it is in capable hands—those of the Church Commissioners —and I do not believe that there is much anxiety within the ranks of the clergy about that fact. We are grateful for the considerable amount of help that they provide for the large number of pensioners that there now are.

On the level of pensions, I have first to make the obvious point, which I am sure that the noble Lord understands full well, that pensions relate to stipends. We do not have large stipends. There is a kind of uneasy compromise within the Church of England upon the matter of differentials. I am sure that your Lordships are aware of that point. There are churches which make no differentials. They live, as they would say, even closer to the Gospel standard than we

do.

Lord Williams of Elvel

My Lords, I am sorry to interrupt the right reverend Prelate. I understand that pensions are related to stipends. On the other hand, clergy of I believe all ranks, including vicars, rectors, suffragans, diocesan bishops and archbishops, enjoy what I would call substantial fringe benefits, to use the jargon, in their occupations; for example, houses, and, to a certain extent, board and lodging. It would be normal in my view to calculate a pension based not merely on the stipend but on the value of the benefits in kind that are received because they are part of the salary, if I may use business terms.

The Lord Bishop of Southwark

My Lords, I thank the noble Lord for explaining that point. I see the point. I see that if one were to take that higher figure one would have a case. I must say that it is a matter to which most of us have not given much thought. I think that one could get into a discussion which would include the fact that the ultimate sources both of the pension and the stipend are in part the Church Commissioners and in part the giving of the present day. There is a sense in which the more pensions are increased the less there is available for stipends. There is a balance to be struck which would be part of the debate which we would have to have.

We are a peculiar mixture. Perhaps I may make the obvious point that on moving from the diocese of Newcastle to the diocese of Southwark which, by most indices, is two-and-a-half times as large, I remain on exactly the same stipend. In the business world that would be thought unusual. One could expand the point in various other ways.

All I am saying is that when one enters the ordained ministry, one does not expect to be remunerated or pensioned at quite the same level as many of one's contemporaries who have gone into other occupations. There are other compensations on which I could expand another time. I thank the noble Lord for making the point; I am sure it will be noted in the proper places.

On the more specific issues raised, the noble Lord asked me what progress I thought could be made on the question of divorced wives. I took note that the Chancellor was questioned about that in the House in June. I am afraid that I cannot recall exactly his reply except that he indicated that the problem was difficult and that further consideration was being given to the matter. I hope that perhaps as a result of the exchange we have had it may be drawn to his attention once more that this is something on which there is a growing level of concern. It is not just within the Church but in many other parts of society. As I said in my speech, I hope it will not be too long before we hear about it.

Secondly, I was asked whether the pensions were portable. The noble Lord asked whether, if people leave the ordained ministry and go into other work, they can take their pensions with them. Are pensions transferable? The answer is yes, they are. Pensions are legally required to be so, although I think there is some slight technical problem in that people are not legally required to receive them. Notwithstanding that, in general we certainly accept that pensions are transferable both ways and we are glad to try to help people who come to us as well as people who leave us for secular occupations.

Finally, the noble Lord gave the answer for me. Yes, we are able to encourage clergy to make additional voluntary contributions. That is possible and it is done. However it is not possible to have a quite separate personal pension scheme. I believe there is a legal difference between the two which I am afraid I do not fully understand but I am aware that it exists. Additional voluntary contributions are possible. I think that deals with the points raised by the noble Lord. I commend the Measure to your Lordships.

On Question, Motion agreed to.

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