The church in the crunch

Following huge losses during the financial crisis, the Church of England should return to the Christ

No-one is immune from the global economic crunch. That includes the Church of England, which has £5 billion tied up in assets, pensions and buildings. When the archbishops of Canterbury and York started to sermonise on short-term greed and the failures of market, they were embarrassed to discover that the Church had been playing the system in pretty much the same way as everyone else.

Initially, things looked good. Due to its share holdings, England’s Established Church gained hugely from rising oil, gold and copper prices, driven at least in part by speculators. In 2006-7 the Church Commissioners, accountable to parliament, set up a currency-hedging programme, in effect short-selling sterling to guard against rises in other currencies. The C of E invested £13 million in Man Group, the largest listed hedge fund manager. It also has a stock lending programme through JP Morgan Chase and has traded debts, in spite of the Archbishop of Canterbury's criticism of doing so exclusively for profit. The Church sold a £135 million mortgage portfolio last year.

Then things went pear-shaped. A week ago the Man Group was down 30 per cent in early trading after its profits slumped, potentially wiping £4 million off the value of the Church's holdings. The Commissioners have announced an average return on investments of almost 10 per cent a year over the last ten years. But most of these are in property and equities, which have taken a hammering as markets have fallen; so future prospects are not rosy. Exposure in banking (HSBC, TSB, RBS, and HSBOS, which has fallen a staggering 90 per cent) and mining (in defiance of ethical advice) is also costing the C of E dear.

It doesn’t have to be this way. The founder of Christianity once pointed out that “where your treasure is, there is your heart also”. Now is the right time for the Church of England to completely re-examine its asset and investment policies and to put its money where its message is. Given the performance of more ethical funds, that would also be a prudent move.

Many church groups are involved in alternative economic practices – co-ops, credit unions, ethical investment, fairer trade, local exchange schemes, micro credit, small loans for development, initiatives for monetary reform and more. Christianity, Judaism and Islam all have a history of critiquing usury, unjust profit from interest, and Jews and Muslims have set up non-interest based lending institutions.

Globally, churches have an opportunity to use their assets in new and creative ways, for economic change driven by human need rather than by greed. What is needed is the will. The earliest Christian communities were founded on principles of seeking to use material wealth for the common good, striving for equality and giving priority to the poorest. Today’s churches struggle to be so Christian, it seems. But as neo-liberal ideology quakes before stark reality, the wages of economic spin are proving deadly rather than ‘realistic’.

Simon Barrow is co-director of the religion and society think tank Ekklesia. He is author of ‘An economy worth believing in’.

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Cabinet audit: what does the appointment of Andrea Leadsom as Environment Secretary mean for policy?

The political and policy-based implications of the new Secretary of State for Environment, Food and Rural Affairs.

A little over a week into Andrea Leadsom’s new role as Secretary of State for Environment, Food and Rural Affairs (Defra), and senior industry figures are already questioning her credentials. A growing list of campaigners have called for her resignation, and even the Cabinet Office implied that her department's responsibilities will be downgraded.

So far, so bad.

The appointment would appear to be something of a consolation prize, coming just days after Leadsom pulled out of the Conservative leadership race and allowed Theresa May to enter No 10 unopposed.

Yet while Leadsom may have been able to twist the truth on her CV in the City, no amount of tampering will improve the agriculture-related side to her record: one barely exists. In fact, recent statements made on the subject have only added to her reputation for vacuous opinion: “It would make so much more sense if those with the big fields do the sheep, and those with the hill farms do the butterflies,” she told an audience assembled for a referendum debate. No matter the livelihoods of thousands of the UK’s hilltop sheep farmers, then? No need for butterflies outside of national parks?

Normally such a lack of experience is unsurprising. The department has gained a reputation as something of a ministerial backwater; a useful place to send problematic colleagues for some sobering time-out.

But these are not normal times.

As Brexit negotiations unfold, Defra will be central to establishing new, domestic policies for UK food and farming; sectors worth around £108bn to the economy and responsible for employing one in eight of the population.

In this context, Leadsom’s appointment seems, at best, a misguided attempt to make the architects of Brexit either live up to their promises or be seen to fail in the attempt.

At worst, May might actually think she is a good fit for the job. Leadsom’s one, water-tight credential – her commitment to opposing restraints on industry – certainly has its upsides for a Prime Minister in need of an alternative to the EU’s Common Agricultural Policy (CAP); a policy responsible for around 40 per cent the entire EU budget.

Why not leave such a daunting task in the hands of someone with an instinct for “abolishing” subsidies  thus freeing up money to spend elsewhere?

As with most things to do with the EU, CAP has some major cons and some equally compelling pros. Take the fact that 80 per cent of CAP aid is paid out to the richest 25 per cent of farmers (most of whom are either landed gentry or vast, industrialised, mega-farmers). But then offset this against the provision of vital lifelines for some of the UK’s most conscientious, local and insecure of food producers.

The NFU told the New Statesman that there are many issues in need of urgent attention; from an improved Basic Payment Scheme, to guarantees for agri-environment funding, and a commitment to the 25-year TB eradication strategy. But that they also hope, above all, “that Mrs Leadsom will champion British food and farming. Our industry has a great story to tell”.

The construction of a new domestic agricultural policy is a once-in-a-generation opportunity for Britain to truly decide where its priorities for food and environment lie, as well as to which kind of farmers (as well as which countries) it wants to delegate their delivery.

In the context of so much uncertainty and such great opportunity, Leadsom has a tough job ahead of her. And no amount of “speaking as a mother” will change that.

India Bourke is the New Statesman's editorial assistant.