HL Deb 10 December 2002 vol 642 cc171-3

6.56 p.m.

The Lord Bishop of Guildford 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 makes provision in essentially two main areas: the first relating to various powers of the Church of England Pensions Board and the second relating to a particular power of the Church Commissioners.

As regards the position of the pensions board, the Measure, first, amends its powers in relation to certain charitable funds that it has previously held on statutory trust for the benefit of its pensioners and their dependants. It does so by winding up those funds and transferring them to the general purposes fund established by the board in 1975. The Measure then gives that fund charitable purposes, which embrace all the former purposes of the funds added to it. The result of that will be to enhance the flexibility that the board enjoys to make discretionary charitable provision for its pensioners and others, as well as reducing administrative costs.

The Measure also widens the board's powers in relation to the provision of retirement housing for those who have served in the stipendiary ministry. Previously, where a couple housed by the board divorced after retirement, the board has been able to continue to house only its pensioner, not the pensioner's former spouse. The Measure gives it power to do so, enabling the board to be even-handed between them.

Those changes in relation to the powers of the Church of England Pensions Board—and another technical change clarifying responsibility for the costs of accruing pension rights in certain circumstances—are addressed in Clauses 1 to 4 of the Measure. The remaining clause, Clause 5, extends the lifespan of one of the powers of the Church Commissioners which was granted to them in 1997.

If your Lordships dig deep into your memories, you may recall that the pensions Measure 1997 significantly altered the arrangements for the funding of clergy pensions. In particular, it limited the commissioners' pension liabilities to those arising from service before the end of 1997 and created a new and separate funded scheme into which dioceses—through funds raised from parishes—could pay clergy pension contributions in respect of service from the beginning of 1998. In support of those arrangements, it gave the commissioners power—but only until the end of 2004—both to give financial assistance to diocesan boards of finance and others in taking on the cost of paying those pension contributions and to spend capital in meeting their own pre-1998 pension liabilities.

It is the last of those powers that the Measure will alter by extending for a further period of seven years—from 1st January 2005—the commissioners' power to spend capital to pay their pre-1998 clergy pension liabilities. The reason for seeking that extension is that, because of the need to fund these liabilities, the commissioners' expenditure is likely to exceed their income by at least £30 million per annum for the foreseeable future. Without the continuation of the power to resort to capital to meet those liabilities, the commissioners would need to make substantial cuts in their discretionary expenditure or re-align their investment portfolio to generate higher income. Either course of action would damage the Church's long-term interests.

Your Lordships will be aware that there was one aspect of the Measure that initially gave cause for concern to the Ecclesiastical Committee. The difficulty that the committee identified in the form that the Measure originally took was that, in addition to providing for an initial extension of the power for seven years up to 2011, it provided for an indefinite number of further extensions after 2011, to be secured by a statutory instrument made by the General Synod and subject to annulment in Parliament. The Ecclesiastical Committee considered that to be inappropriate, taking the view that any further extension ought to be achieved not by statutory instrument but by means of a Measure.

I am glad to be able to reassure your Lordships that that point of concern has now, of course, been resolved. In the light of the views expressed by the Ecclesiastical Committee, the Measure was re-introduced to General Synod and amended by omitting the power to obtain further such extensions. As a result, further extensions of the commissioners' power will have to be achieved by Measure, as the Ecclesiastical Committee thought that they should be. The Church was willing to amend the Measure in that way because it did not consider any question of principle to be involved. Had the Church known the views of parliamentarians in that respect—which it did not—at the time when the Measure was being drafted, proper account would have been taken of them.

The Measure, in the form in which it is before your Lordships' House, has accordingly been found expedient by the Ecclesiastical Committee. I hope that your Lordships will now feel able to approve the Measure. 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 Guildford.)

Lord Newby

My Lords, unlike the previous Measure, this Measure has significant implications for the Church of England. The cost of fulfilling its obligations to clergy pensioners is such that half the capital assets of the commissioners are likely to be spent over the next 60 years in settlement of those obligations. It will have a major impact on the funding of the Church and on the scope of the commissioners.

The Church has an obligation to provide for its pensioners. I should add that my wife is not covered by the Measure, so I have no personal interest in it. It is an example of the Church leading, in the sense that it is accepting and living up to its obligation, even though that may be painful. Many companies might benefit from considering that example. We support the Measure.

The Lord Bishop of Guildford

My Lords, I thank the noble Lord for those remarks.

I shall add one thing. As the Church Commissioners' capital is used for past pension service, so a new fund is being built up, so the total impact on the Church's total resources is not quite as it might appear.

On Question, Motion agreed to.