§ Mr. Frank FieldTo ask the right hon. Member for Selby, as representing the Church Commissioners (1) what was the cost of capital losses incurred to purchase £12.9 million temporary income mentioned in the 1994 annual report;
(2) what was the total temporary income generated since the Commissioners began the practice of obtaining this income; and what effect this has had on the size of the capital base of the Commissioners' assets.
§ Mr. AlisonTemporary income refers to the accounting policy of recording interest on gilt edged securities on a receipts basis rather than on an accruals basis. The temporary income generated up to the end of 1994 was £56.7 million. As explained in appendix 12 of the Social Security Committee's recent report, in so far as the above amounts would otherwise have been treated as capital and retained, the fact that they have been recorded as income and distributed within the Church has led to capital being reduced by the same amount.
The Commissioners have repeatedly made it clear that the current level of income distribution as a percentage of their assets remains unsustainably high, despite a reduction to 6 per cent. in 1994. The generation of temporary income is but one element of an investment strategy which is required to produce the level of income needed to meet the Commissioners' current commitments to the financial support of the ministry. The Commissioners are reducing their expenditure and re-balancing their assets at a pace which is feasible for them and manageable for the Church.