Church Funds Investment Measure
Debate between Lord Bishop of Chichester and Baroness Butler-Sloss
The Lord Bishop of Chichester
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The legislation authorising these pooled investment funds—the Church Funds Investment Measure 1958—is out of date and prevents those funds being regulated funds.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.
Baroness Butler-Sloss (CB)
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.