Ecclesiastical Offices (Terms of Service) Measure — Motion

– in the House of Lords at 2:50 pm on 2 April 2009.

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Moved By The Lord Bishop of Chelmsford

That this House do direct that, in accordance with the Church of England Assembly (Powers) Act 1919, the Ecclesiastical Offices (Terms of Service) Measure be presented to Her Majesty for the Royal Assent.

Photo of The Bishop of Chelmsford The Bishop of Chelmsford Bishop 2:51, 2 April 2009

My Lords, the measure before you represents a very significant development in the life of the Church of England. It puts in place a legislative framework to enable the introduction of new terms and conditions of service for clergy and stipendiary lay ministers. Its object is to equip and support those who are called to the ministry, and the people whom they serve, by establishing fair and clearly stated terms of service that will deliver the security that is needed for the ministry to flourish, while also providing a proper measure of accountability.

The measure has been six years in preparation. It was begun in response to the Government's consultation on the rights and employment status of atypical workers. The proposals have been through the synodical process and have been found expedient by the Ecclesiastical Committee.

Why is this legislation needed? The church recognises that the evolution of patterns of ministry over many centuries has created the potential for inequitable differences of treatment. Clergy in the Church of England are officeholders, not employees. In the past, the great majority of clergy held freehold office as incumbents of a benefice that gave them tenure for life, ownership of the church building and parsonage house, and an income from tithes, glebe land and parish endowments. Although the freehold has been greatly modified over the years, those who hold it still enjoy very high security. However, times have changed. Clergy with a freehold are now in the minority. Other clergy, including many with full responsibility for parishes, are licensed to their offices by the bishop, and their security of tenure is very limited, since the bishop has the power to revoke their licences, either summarily or on reasonable notice.

Extending the freehold tool, even if that were practical, is not the answer. The church needs common terms of service that will give clergy a fair measure of security while ensuring a proper balance of rights and responsibilities. This measure addresses the need for change by making provision for new conditions of service that will be known as "common tenure". The intention is that these conditions should apply eventually to clergy and stipendiary lay ministers across the board, from the Archbishop of Canterbury to the person just starting out in ministry.

Common tenure seeks above all to promote justice and fairness. For the first time, it gives clergy the great majority of rights enjoyed by employees, including the right to a stipend and to annual leave. At the same time, it preserves and protects their status as officeholders, which reflects the way in which their ministry is best exercised. Clergy enjoy a large measure of autonomy in the way they work, which gives them the freedom to respond flexibly to the various demands of daily ministry. The church recognises that as a good thing, as do the clergy. When they were consulted, the great majority wished to retain their officeholder status rather than become employees.

With a view to enhancing the security of clergy who do not enjoy the freehold, the measure removes the bishop's power to terminate a licence summarily, and closely defines the circumstances in which an office can be terminated. There is provision for limited-term appointments only in a few cases, such as training posts and appointments subject to sponsoring funding. Furthermore, the right to compensation where an office is abolished through pastoral reorganisation, which presently applies to certain freeholders, will be extended under common tenure to all officeholders.

These changes are all directed at providing a proper and common level of security for the clergy. Provision is also made under the measure to ensure that clergy are properly accountable both to their congregations and to the wider church. To that end, it provides for regular development reviews and continuing education to ensure that clergy are effectively supported and equipped in their ministry. At the same time, accountability will be strengthened through the introduction of a capability procedure, which enables bishops to address, through a fair and transparent process, the problems that arise when clergy fail, for whatever reason, to perform their duties to an acceptable standard. This procedure is designed to be supportive, and to give clergy the time, training and resources that they need to improve. If in the last resort an officeholder is removed under this procedure, he or she will have the right to bring a claim of unfair dismissal to an employment tribunal.

That is what the measure seeks to achieve, by laying down basic principles and providing for the making of regulations to set out the detail of common tenure. The regulations will make provisions for matters such as written particulars of office, and entitlement to stipend and leave, including time off for public duties and sickness. Draft regulations have already been considered by the General Synod and, should the measure find approval in this House, they will be further debated in the synod later this year. In their final form, they will be subject to parliamentary scrutiny as a statutory instrument.

Before I close, I should mention briefly some things that the measure does not do. First, it is not intended to, and will not, undermine the historic independence of the clergy. That is why the church has not sought to make clergy employees. Secondly, the measure does not compel existing freeholders to change their conditions of service—with the exception of the two archbishops, who have already agreed to transfer to common tenure. All other freeholders will be able to choose not to opt in to the new system until such time as they take up a new post.

Thirdly, the measure does not materially affect the position of patrons, who retain all their current rights in the appointment process. Nor does it make any change to the ownership of property. The original proposals stipulated that parsonage houses should be transferred to diocesan parsonage boards, but the synod resisted that. The measure does strengthen the position of other clergy who are provided with housing, apart from those with the freehold, giving them for the first time both the right to a reasonable standard of accommodation and the right to object to any proposal that the house that they occupy should be sold.

Finally, the measure will not impose an excessive financial burden on the church. Noble Lords will be glad to hear that the infrastructure for its implementation is already in place, and that most dioceses are already running ministerial development review schemes. Many have also appointed human resources advisers, and those that have not yet done so are co-operating to provide the most effective and efficient way of providing these services.

This measure is vital to the future health of the church. It is an opportunity to make a new covenant between people and their clergy that is fit for the 21st century and enshrines essential principles of fairness, clarity and collaboration.

I can be brief on the second measure because it is probably the shortest measure ever sent here by the General Synod. But it is important legislation even if it is extremely straightforward. Again, the measure has the overwhelming support of the church, and has been found expedient by the Ecclesiastical Committee and approved in the other place.

The measure seeks the renewal for a further seven years of the Church Commissioners' existing power to spend their capital for pension purposes. This power was conferred by Parliament on the Church Commissioners by the passing of the Church of England (Pensions) Measure in 1997. Parliament also supported the renewal of the power when it passed a similar measure in 2003. The existing power expires at the end of 2011 and the church seeks its further renewal until 2018.

The church proposed in 2003 that future renewals of the power might be achieved under the negative resolution procedure for statutory instruments. The Ecclesiastical Committee was not convinced by that proposal and the church quickly withdrew from the territory. We welcome the fact that Parliament continues to take an interest in the safeguarding of the church's historic assets and it has not sought to widen the scope of this measure. So the measure before the House today seeks nothing more and nothing less than a straight seven-year renewal of an existing power.

Perhaps I may now sketch in the background. In the mid-1990s, the church began to realise that the commissioners' asset base could not sustain their expenditure commitments. In order to bridge the gap between income and expenditure, they could have cut their expenditure or they could have adopted a different investment strategy which focused on generating short-term income. Neither option was particularly attractive. There had already been deep cuts in their ministry support in the early 1990s and the church was reluctant to see any further cuts. Chasing short-term income, on the other hand, would have come at the expense of long-term returns, ultimately reducing the commissioners' ministry support. That, too, was unattractive.

But there was a third way. The church and Parliament agreed that allowing the commissioners to spend capital for pension purposes would allow them to meet their pension liabilities and to sustain their other significant non-pension financial support for the church's ministry. This move has been absolutely crucial to the commissioners' investment performance. It has enabled them to rebalance their portfolio and has given them the flexibility to make the best long-term investment decisions.

The argument for renewing the power today is exactly the same as the argument for conferring the power in 1997. The commissioners' actuary suggests that if they are to meet their pension liabilities and achieve their objectives of increasing their various other forms of ministry support, their expenditure commitments will continue to exceed income for some time. So, unless they are to resort to one of the two options which church and Parliament were determined to avoid in the late 1990s—that is, cutting discretionary support or skewing their investment strategy—they will clearly need this power for a further seven years.

We should keep in mind at all times the very far horizon to which a body such as the commissioners must look. The commissioners' fund is not accruing any fresh pension liabilities and the time will come when their existing pension liabilities will cease and all pensions will be met from the newer funded scheme. Actively planning this transition is simply good financial management. Similarly, investing in assets which promise to produce a good return decades later is a sound strategy, but one which requires patience. This measure will help the commissioners to wait for such opportunities to come through. The legislation does not involve any compulsion to spend capital; we should see it as a vehicle for flexibility. As I said, in recent times the commissioners used that flexibility to invest more heavily in real assets rather than high-income-yielding assets but, equally, if they believe there are good reasons for investing more heavily in bonds and cash, the commissioners can do so.

Between 1 January 1998, when the power came into effect, and the end of 2007, the commissioners spent £405 million of capital but the value of their fund actually increased by £2.2 billion. The outperformance of their investments against the independent benchmark during this period meant £37 million per annum more for the church than average performance would have allowed. I offer that analysis to demonstrate the capital growth at which the commissioners' investment policy is aimed, not as a cunning way of ignoring the circumstances of 2008. The commissioners' audited 2008 figures are not yet available but it is true to say that, like any other fund at this moment, they have been affected by the market downturn. But this does not alter the argument for this measure.

Nothing in this measure can alter the fact that the value of the Church Commissioners' fund will go up and down with the markets but, crucially, it enables them to adopt a long-term investment and distribution policy which, in turn, gives them the best chance of maintaining their support for the church even during difficult economic times.

That last point is important: we should not get so preoccupied with investment strategy that we forget the beneficiary. Generating superior returns matters only because it means increased proceeds for the church. So, despite the title of the measure, it is not the payment of clergy pensions that is at stake. Clergy pensions for which the commissioners are responsible—that is, those earned on service before 1997—will always be a first call on their fund. Clergy pensions will be paid regardless of our decision today. The point is that this legislation gives the commissioners the best chance of sustaining their other forms of support for the church in addition to the payment of clergy pensions. That means supporting bishops' and cathedrals' ministries, augmenting stipends, funding innovative parish projects which are targeted at the poorest areas of our country—I stand in a diocese which benefits hugely from this support—or exploiting new opportunities such as the creation of a Christian presence in new housing areas or employment areas. It may be a short measure, but it is important to our financial strategy.

Photo of Lord Lloyd of Berwick Lord Lloyd of Berwick Chair, Ecclesiastical Committee (Joint Committee), Chair, Ecclesiastical Committee (Joint Committee)

My Lords, I will say nothing on the second measure, important though I believe it to be. On the first measure, I will add only a few words because the right reverend Prelate has said everything that needs to be said in explaining the measure and why it is expedient.

In the past five years, many measures have come before us from the synod, but three have been of particular importance—the Clergy Discipline Measure in 2003, the Pastoral (Amendment) Measure in 2006 and now this measure in 2008-09. Of the three, this measure is the most important for the future of the Church of England. Therefore it needs our support for the reasons given by the right reverend Prelate.

On each of the occasions we have considered these reports, I have been extremely impressed by the thoroughness with which the synod does its business and with the great care it takes to reach unanimity where it can. Very often it achieves either unanimity or something very near it, and I sometimes think that Parliament might take a lesson from that book.

On this measure there is a feeling, which I share, in favour of retaining the clergy freehold. The Ecclesiastical Committee was well aware of that feeling, took it fully into account and, for the reasons which were given in the report, took the view that nevertheless this measure is the right way ahead for the Church of England. I think I need refer only to paragraph 13 of the report, in which we say it will,

"establish a clear, consistent and transparent framework for the terms of service of the clergy as a whole and will give many clergy, for the first time, substantial employment-type rights".

Finally, I apologise that the time chosen for the consideration of the synod turned out to be very inconvenient to certain Members of the House of Commons. I apologise for that. The timing was chosen after soundings had been taken; we tried to get a time that would suit everyone, but that proved not to be possible. I hope that that will not happen again. I support both Motions.

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Deputy Leader in the House of Lords, Spokesperson for Foreign and Commonwealth Affairs

My Lords, in welcoming this measure I shall say a little about the pensions measure. The clergy, like the university profession and, I suspect, like lawyers and judges, tend to live a long time. They have satisfying retirements, they still have interesting things to do and they survive. As a very occasional guide around Westminster Abbey I have had occasion to remark to visitors on the diet of the monks in the 15th century; they had a regime that did not leave a pensions problem, and perhaps part of the answer to the current one is to encourage more gluttony among the senior clergy.

The serious measure—the more serious of the two—is the important one on the freehold. On the Ecclesiastical Committee we had a long and, in many ways, rather nostalgic debate, which reminded me strongly on occasion of the Barchester novels, where abolishing the parson's freehold was felt to be a step towards the 20th century, clearly a step too far for some people.

I certainly felt that these measures were highly desirable. They improve the conditions under which clergy work, they make them more properly accountable, they give them more active support in difficult circumstances and they make it easier for the Church as a whole to deal considerately and effectively with those few difficult cases where relations break down among office-holders whose job it is to work together, and are thus a useful and helpful step forward. This is not of course a party measure but, as a member of the Ecclesiastical Committee, I welcome these measures.

Photo of Lord Judd Lord Judd Labour

My Lords, it is always good to follow the noble Lord, Lord Wallace of Saltaire. As I have already told him today, I often find myself in agreement with what he is saying. All I can say is that if my enthusiasm for his thoughts in this Chamber can be excelled, it is only by my enthusiasm for his singing, which was excellent in last night's Haydn Mass. I wish more of my noble friends could have been there to hear such a wonderful concert, but such is the business of the state that we must push things like Haydn to one side in order that votes can take place, and all the rest of it. I must plead guilty, with my good colleagues and Whips present, and say that I made the right choice last night; I could not make any other, since my wife was singing in the concert.

The case has been put in exemplary fashion by the right reverend Prelate the Bishop of Chelmsford. Having known him for many years, I am not surprised that he emphasised social justice; that has always been a central preoccupation of his ministry.

It is a privilege to serve on the Ecclesiastical Committee under the chairmanship of the noble and learned Lord, Lord Lloyd of Berwick, because he chairs it so well. His ability speaks for itself, but he brings such good humour, patience and irresistible firmness to our proceedings that we always reach good conclusions under his guidance. I am sure that this is the right step; it makes a great deal of sense.

In our deliberations in the committee I observed that, of late, while we spend a good deal of our time discussing, as our chair has said in this debate, extremely well prepared considerations coming from committed members of the Synod, more and more we hear the language of running the Church as a business and the business disciplines and professional skills that are required. We need effectiveness in the life of the Church but it is not a business, and I wish that these analogies were not made. Even this debate itself and the scope of it are hard to reconcile with the life of the founders of our Church; I cannot really imagine them sitting around discussing pension arrangements or freeholds. We have moved a long way, and we have to be careful that in our business preoccupations we do not throw out the baby with the bathwater.

With regard to pensions, at a time when there is a great deal of anxiety in our society about principle, about ethics and the absence of such considerations, which has led us into the plight that we now face, if we have an established Church then it has a responsibility to be a leader in the whole concept of ethical and principled investment. It is not just that it matters for members of the Church; it should, by the very nature of an established Church, be an example to the nation as a whole. The commissioners, therefore, have a tremendous task in reconciling good management procedures with a commitment to principle.

On the question of tenure, I hold firmly to the view that while this is clearly the right and sensible step to take, whatever arrangements we have in this and other respects with the Church, we must retain the principle—I hope the right reverend Prelate will forgive my saying this as a mere layman—that the hierarchy is there as a service structure, not as a power structure. They are not directors of a company; they are there to serve the Church, society and the clergy. The arrangements that we have in place should be there to enable them to carry out that service, to which I believe the present Archbishop of Canterbury is deeply committed.

Photo of Baroness Wilcox Baroness Wilcox Shadow Minister, Energy and Climate Change

My Lords, I shall speak for these Benches on these two measures. I am a member of the Ecclesiastical Committee, and as such I have before me the two papers presented to the House so that noble Lords, too, may be aware of what was said in those deliberations. I am always sorry at times such as this that there are not more people here to debate and comment on these issues, because they are so important to the established Church of this country. We are fortunate that the Synod takes such time and trouble to make sure that, by the time these measures appear before us under the able chairmanship of the noble and learned Lord, Lord Lloyd of Berwick, they have discussed and voted on them over a long period. By the time we get them they are well and truly measures.

We have two measures to discuss today, the terms of service measure and the pensions measure. We had a long and difficult discussion because people wanted to listen to Prime Minister's Question Time, rather than decide on this. They thought that it was more important; I did not think so. I am very happy that those of us who were there took time to discuss it and that we found out, as we are bidden to do, whether the measure was expedient. That is all that we are bidden to do. We have already heard the right reverend Prelate the Bishop of Chelmsford describe exactly what this first measure is about. The noble and learned Lord, Lord Lloyd of Berwick, has spoken, as have others. Noble Lords do not need me to speak any more, but I will add that we on these Benches find this measure expedient.

I turn to the Church of England pensions measure. I chair three different pension schemes in three very different areas of work. I know how worrying all talk of pensions is at this time, particularly in the Church of England, where we do not exactly pay our clergy an enormous amount of money. The pension is so very important to them. We found the measure to be expedient in our committee. We have heard it described and it has been amended so that there is just to be a seven-year review. There is no point in my saying more, other than that it is a great privilege to serve in Parliament on this particular committee with my friend—as I think I may call him at this time—who is opposite. We take these matters very seriously. It is an enormous privilege to have an established Church of England. I am very proud to be here today, on behalf of these Benches, to say that we find this measure expedient.

Photo of The Bishop of Chelmsford The Bishop of Chelmsford Bishop

My Lords, I am grateful for all contributions. We on these Benches and in the Church of England are very grateful for the work that is done in the Ecclesiastical Committee and the careful attention that it pays to our measures as they come to Parliament. I agree with the noble and learned Lord, Lord Lloyd, about the significance of the first of these measures. I am reminded that in the 1840s serious legislative reforms of the Church took place, leading to clergy having to reside in their parishes and to other reforms of that sort. The Ecclesiastical Commission's aim in the Industrial Revolution was to fund new parishes as the population grew. The consequence of those measures was that between 1851 and 1908 the Church of England grew as a proportion of the population that worshipped. These measures are important for the capacity of the Church to fulfil its duty. I sense that the measures that the noble and learned Lord, Lord Lloyd, has mentioned this afternoon are of similar importance for the future life of the Church.

I assure my good friend, the noble Lord, Lord Judd, that I do not consider myself to be in the position of a managing director of a business. If I did, I would fail hopelessly. Micromanaging the clergy and parishes of the Diocese of Chelmsford would be an unwise thing even to countenance. Our task is to enable people to do what they are equipped and skilled to do. These measures, in different ways, will help us to do that slightly better. I ask the House to approve the Motions.

Motion agreed.