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ENGLAND: Church of England stores up riches on Earth
by Patrick Collinson
The Guardian
April 27, 2006
The value of Church of England property and shares jumped by £800m last year to nearly £5bn - but the Archbishop of Canterbury's annual stipend went up by just 2.7% to £66,140.
The church commissioners' annual report reveals how it has emerged as one of the most successful money managers in Britain. In 2005 the total value of its investments rose by 19.1% - a better return than the vast majority of Britain's life and pension companies, and in the top 1% of pension fund managers.
Article continues Most of the money raised by the commissioners goes to pay the pensions of thousands of retired clergy. In 2005 it paid more than £100m towards clergy pensions, although this was only a small increase over 2004.
It also pays the stipends - in effect the annual salary - of bishops and deans at each cathedral in England.
The report reveals that the Archbishop of Canterbury's stipend in 2006/07 will be £66,170 (plus a pension contribution of £12,210), with the Archbishop of York on £55,800 and of London on £54,030. Diocesan bishops will have a stipend this year of just £35,340. The highest paid employee at the church commissioners last year picked up nearly £130,000.
The church's bumper investment returns in 2005 were boosted by the controversial £237m sale to property developers of the century-old Octavia Hill housing estates for more than 1,000 poor tenants in south London.
The issue became sensitive after above-inflation rent rises were imposed on tenants by the landlord who purchased several other London estates from the church last year. Residents, many of them health service workers, fear that further rent increases will force them out of their homes.
The church's investments in multinationals and other companies which make up the bulk of its share portfolio have also attracted controversy.
In February the Church of England's synod voted to divest church funds from companies profiting from Israel's occupation of Palestinian territory. The main target of protesters was its holding in Caterpillar, the US earth-moving equipment maker which supplied vehicles used by Israel to demolish Palestinian homes.
The church follows an ethical investment policy, banning holdings in arms, tobacco, gambling and alcohol stocks. The annual report reveals that its biggest shareholdings are in Shell (£137.4m), BP (£136.4m), HSBC (£112.3m), Vodafone (£92.3m) and GlaxoSmithKline (£92.3m).
It also has extensive shareholdings in mining stocks such as Rio Tinto (£32.6m) and BHP Billiton (£23.6m), which are rejected by other ethical funds, although largely for environmental rather than ethical reasons.
But fans of ethical investing can take few crumbs of comfort from the church's investment success in 2005. It admits in its report that its ethical stance meant that the return on its share portfolio was 0.7% less than if it had been invested in the full range of "sin" stocks other managers buy.
During the year the commissioners sold their own historic headquarters at 1 Millbank, next to College Green, where MPs are frequently interviewed for television. The sale fetched £65m; the buyer was the House of Lords. The church retains interests in shopping malls across Britain, including the Metro Centre in Gateshead.
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