Chancel Repairs

Earl of Lytton Excerpts

Thursday 15th January 2015 Grand Committee

[The Earl of Lytton (CB)]

My Lords, I, too, welcome this debate and thank the noble Lord, Lord Avebury, for the opportunity. In rising to support him, I declare an interest as a chartered surveyor, as an occasional provider of quinquennial surveys on ecclesiastical property and as a valuer—not in the matter of professional involvement with CRL but rather the implications for valuation and the philosophy of this ancient impost more generally.

In every consideration of property valuation the question of risk looms large and often has a disproportionate effect on net present value. Typically, that is reflected in a discount rate or the rate of accumulation applied in a valuation. This is not just theoretical science but reflects the real world of human response to risk and reward over extended timescales and observed over centuries. CRL affects land value because of how the liability is transmitted and how it attaches to owners.

There is one thing more potent in valuation than a perceived liability and that is a liability that cannot be quantified. To counter it often requires the adoption of a worst case scenario. CRL, to quote Donald Rumsfeld, is full of “known unknowns” and here are some of them. First, whether it applies at all is far from obvious. The basis of liability—is it keeping a chancel windproof and watertight, or is it something more elaborate?—has been the subject of a more recent decision. What is the resultant amount of the liability and its calculation? Is it shared or individual—joint or several, to use the technical term? The timing of its imposition and the inability to defer or amortise regardless of impact is significant. The reliability of safeguards such as insurance and the implications for professionals, which have been raised by the Law Society, are certainly uppermost in my mind as a professional myself. There is the difficulty of buying out the liability—or compounding, to use the correct term—at a fair sum and at a time of one’s choosing. There is the absence of a right of appeal against either the impost or the quantum. There is the potential for expensive delay at critical moments, with consequential market-value effects, and it can be a severe impediment to transactions. Unfortunately, as the noble Baroness, Lady Wilcox, mentioned, the Land Registration Act 2002 has not resolved the issue; it has simply put a large part of it into the long grass.

Liability falling on wealthy landowners may be one thing but when it falls on unsuspecting householders, reluctantly deemed by the PCC to be the most amenable of various possible pockets, that is clearly something else. The selectively capricious manner of its imposition hugely adds to the risk and to the disproportionate resultant contagion. It can destabilise family finances, destroy livelihoods and wreck lives, as we have heard. The ability to pay matters not one jot. I cannot prove this but I suspect that CRL has the potential to destroy more third party property value than it confers in benefit in terms of chancel repair.

I am no great moralist, but if CRL were in the hands of private landowners, such non-recourse powers would have long since been outlawed as contrary to the public interest. I was raised in the Roman Catholic faith. I know very well that desirable ends of maintaining places of worship exist but they do not necessarily justify capricious or inequitable means of financing them. Part of the problem is that although there is a perception of the great wealth of the established church, administered under the auspices of the Church Commissioners, this does not inure for the benefit of parochial church councils, which are legally obliged to shoulder the funding of church repairs from their own resources and congregations. Although the real estate, if I can term it that, belongs to the diocese and is administered centrally, it is the parochial church council that has the unfortunate business at the sharp end of imposing CRL. This is a fairly invidious state of affairs. Clever financial minds—I do not single out the Church of England for this; far from it—have segregated asset from parish burden, and this is part of the issue.

Like the noble Lord, Lord Avebury, I ponder the message that this sends out. It seems to me that there is a consensus that CRL should be abolished, and I hope the Government will get on with it.