The Church of England: Britain's State Church
The Church of Privilege
"I accept Your Majesty as the sole source of ecclesiastical, spiritual and temporal power."
The oath of loyalty sworn by Church of England bishops
The Funding of the Faithful
The Church's privileged status has allowed it to accumulate great wealth. In 2016 its land, property and stock market assets were worth £7.9bn. They generated £231m of the Church's income that year.
In contrast the Catholic Church in England and Wales, which has an almost equal number of church attendees (869,221), makes do with a revenue that amounts to only 25% of the Anglican.
In 2016 the return on the Church's investments, managed by 35 in-house investment professionals, was 17.1 per cent. That put it in what the Financial Times called "the top ranks of the world's best-performing endownment funds". The global equities portfolio made a 32.9 per cent return for the Church in 2016.
Thirty-two per cent of the money in the fund has at times been invested in property, much more than similar funds. The income pays for some pensions and missionary work, and is also used to support poorer dioceses. In 2016 the £231m it contributed paid for 15 per cent of these costs.
Karl Marx, Das Kapital
The investment fund has its origins in money accrued by hereditary head of state Henry VIII, which was given to the Anglicans in 1704 by the then head of state. In 1818 Parliament gave the Church £1m of the people's money. As a share of gross domestic product that is equivalent to a £4bn today.
The year in which the state church benefited so highly from state generosity was the year in which the Representation of the People Act continued the disenfranchisement of women under 30. Six years later another £500,000 was given.
The Church has also benefited from bequests of land and buildings from wealthy benefactors. Today it is given tax breaks on major repairs to its buildings as well as grants from the Historic Buildings and Monuments Commission for England (English Heritage) and the national lottery.
As a result the state church is one of Britain's biggest landowners, with 112,000 acres. This is mostly farmland but includes the Hyde Park Estate in London where the Royal Lancaster Hotel is one of its properties, as well as property in Kingston upon Thames, Throgmorton Street in the City of London and West Drayton.
Regional Church organisations own more land. The Diocese of Oxford has 6,000 acres in its portfolio. Its investment funds totaled £46m in 2015.
The Church does not file centralised accounts so we do not know land is owned nation-wide.
However, in 2005 the Church compiled illustrative figures that suggest that its annual revenue the previous year was £1bn. Forty seven per cent was from voluntary giving. The rest was broken down as follows:
- Investments 22%
- Trading and fees 14%
- Grants 9%
- Fund-raising 4%
- Land sales 3%
Godly Assets
In 2009 the Financial Times reported that the Church's two biggest reported share holdings were in oil companies Royal Dutch Shell and BP. It also held shares in BG Group, BHP Bilton, Anglo-American, Exxon-Mobile, Rio Tinto, Chevron, Petrobas and Eni.
Although Church officials have strongly criticised short-selling and debt trading it has invested its own funds in ways that facilitate such practices. In 2008 the Financial Times reported that the church had invested £13m in Man Group, the biggest hedge fund manager. The previous year it also sold a £135m mortgage portfolio, despite condemnation by church archbishop Rowan Williams of those who trade debts for profit.
In 2012 the Financial Times reported that the state church had benefited from diversification into hedge funds, private equity and Scottish and American forests. The investment in forests was giving the Anglicans an annual return of as much as 18%. The report said it had recently doubled its investment in hedge funnds
This same year it started lending non-British and American stock through global financial services firm JPMorgan Chase.
- Equities 62%
- Alternative securities 1%
- Bonds and cash 5%
- Urban property 16%
- Rural let land 6%
- Strategic land 3%
- Global indirect property holdings 7%
The church's pension board has invested in an Auriel Capital hedge fund intended to profit from currency trading, including the short selling of currencies. The Financial Times characterised this as "a practice that could be described as shorting entire countries".
Church Commissioner Andreas Wittam-Smith was reported to have responded to criticism of these practices that the church's ethical advisory group had approved the lending of stock that could be used for short-selling. Andrew Brown, secretary to the church commissioners said that the church invested in Man Group shares, not its products. He claimed that the church's stocks had not been used in short-selling against “financially vulnerable institutions in the US and UK”. The church also says that none of the managers it uses sell short. The policy of the church pension board is not to lend out stock.
Archbishop Williams has supported a ban on short-selling. Another archbishop, John Sentamu, described traders who benefit from falling prices as “bank robbers and asset strippers”.
In 2009 the Anglicans joined a number of charitable foundations in making representations to the House of Lords select committee on the European Union. According to the Financial Times their letter expressed "serious concerns" about EU plans to regulate hedge funds. It said that "maximising the returns on our investment portfolios is an essential part of delivering our foundations’ missions."
Cash Before Christian Principle
The state church likes to make its money in small as well as big ways, and it shows few moral scruples about how it does it.In 2010 the state church that likes to lecture citizens on their moral failings and the evils of capitalism walked away from a £40m property investment in New York City when the plan to profit from gentrification fell apart.
The Church of England put £40m into a $5.4bn highly debt-leveraged deal to buy the Stuyvesant Town Peter Copper Village apartments on Manhattan's East River. The purchase was led by Tishman Speyer, a property company, and the BlackRock asset management group. The plan was to increase rents to levels unaffordable by the long-term tenants in order to take the apartment upmarket and profitable.
The Church's plan came unstuck when the New York supreme court ruled that rent increases on 3,000 “rent-stabilisied” apartments were illegal. Tenants were to get back $200m excess rents that were increased by as much as 30 per cent. They had complained that their electricity supply became unreliable, communal washing machines did not work properly and their rubbish was not picked up.
The bursting of the property bubble had made things worse for the speculators. The market price of the complex had fallen to $1.8bn. When they found that the expected profits were not to be had the investors, including the Church of England, handed back the keys to their bankers and walked away, leaving the tenants to fend for themselves.
4 The case for disestablishment.
5 Who's for and who's against.
6 An alternative way: the American way.
7 The road to privilege - a short history of the Church of England.
1 A Church in bed with the state.
2 The Church and enslavement.
3 The funding of the faithful.