George Pitcher

This article first appeared in Roar, the magazine of Lion Trust

Margaret Thatcher famously co-opted the teachings of Jesus Christ for her monetary policy. "No one would remember the Good Samaritan if he'd only had good intentions," she said. "He had to have money as well." Much the same might be said of the Church of England. Only extreme disciples of Richard Dawkins would claim that the Church's intentions are anything other than good. But it needs money to implement those intentions.

Sadly, the recent experience of the Church has resembled less that of the Good Samaritan and has looked rather more like the victim to whom he tends in the parable - mugged and left for dead. The casual secular observer will have noticed the litany of stories about financial crises in our "established" Church. Clergy stipends can't keep up with even modest levels of inflation and, when they retire, it looks as though the Church they have served over the years for modest incomes won't be able to meet even basic pension expectations.

Specific stories support the perception of an ecclesiastical mess of investment policies. The middle-classes prosper from the resale value of the ubiquitous "Old Rectory", while the Church missed out of the residential property booms of the 80s and 90s - indeed, estate agency Knight Frank claimed recently that former vicarages and rectories are cited as the ideal home by 80 per cent of country buyers, while the Church sold them between the booms.

Meanwhile, the C of E is vilified for being invested in Caterpillar, the bulldozer manufacturer whose vehicles are said to have leveled Palestinian homes in the Gaza Strip. And little examples of financial ineptitude pop up closer to home - some old bibles and manuscripts from the Diocese of Truro, which the Church sold only last year for £36,000, were recently sold on by antiquarian booksellers for upwards of £500,000.

All in all, the popular image of the luckless Church Commissioner is one of a bumbling cleric, whose pockets are as likely to contain broken biscuits as a working calculator. The truth - as ever with the truth - is somewhat different to expectations. During their short history the Commissioners have accommodated some of the sharpest asset-management minds around. But like all popular misconceptions there is a seed of truth in the image of incompetence - Church finances have been brought low by a toxic mixture of hubris, ill luck and management structures as arcane as church architecture.

The Church Commissioners were formed in 1948 - on 1st April, interestingly enough - by the merger of the Victorian and dusty Ecclesiastical Commissioners and Queen Anne's Bounty, which had been founded in 1704 to manage the assets confiscated over two centuries before by Henry VIII, the purpose being to sustain poor clergy. The Commissioners' starting bank balance was £1,146,946. Its early guiding lights set out to maximise income and this could only mean a switch from the guaranteed but relatively modest returns of gilt-edged bonds to equities. By the early 50s, the Church was invested in a startling variety of ordinary shares in industries from food and engineering to textiles and tobacco; in 1954, gross income from the General Fund had risen to £8.5m, a rise of £1.5m in six years.

The Commissioners called it "an embarrassment of riches" and their blushes weren't spared by the press - by 1961, the Daily Mail referred to "this miracle [which] has been brought about entirely by wise investment" and the Daily Herald a year later was putting Canterbury in the same category as property speculators Clore and Cotton, which apparently made Archbishop Michael Ramsay squirm (his embarrassment was compounded when, soon afterwards, the soft-porn magazine Parade quite wrongly accused the Church of being invested in street-loads of provincial brothels).

Whatever the Primate's discomfort, the Church was now a powerful player in the property markets and was reaping the dividends to do all materially that it needed to do. But, like the parable of the rich man who hoarded his harvest, the Church could not know what the future held. The first sign that years of plenty were ending came with the hikes in inflation in the 70s - in the year to April 1975, the retail prices index showed that the cost of living had risen by 21.7 per cent. Clergy stipends, modest as they were, started to become an issue - more accurately for the Church, it was "the cost of livings". But even as inflation raised the cost base, equities were still lining the coffers. In the financial year 1975-76, the Commissioners' portfolio rocketed from £58.4m to £246.6m, mostly on the back of equities. The Church began to diversify controversially abroad, into the United States in the early 80s and even became obliquely exposed, through its banking, to apartheid-riven South Africa.

Even as the almost biblical signs of impending doom darkened the sky - the prospect of women's ordination, for instance, threw up an estimated cost of £11m for male clergy who would quit in protest - an air of hubris among the Commissioners was maintained. After the stock market crash of 1987, one official wrote: "So far we have agreed to sell 154 flats for £23m - so much for Black Monday!" * The Commissioners' crash, when it came like an Old Testament judgment, was brutal. And, if there is a single most important lesson to be learned, it is not to allow policy-making functions to be separate from asset-management, as they were at the Commissioners.

With asset values plummeting and over-stretched on interest rates for its development borrowings, taken on to fund those US projects just before the crash, the Church began a fire-sale. In the second half of the 80s, its total assets had risen in value from under £2bn to over £3bn - by 1992, they were back to £2bn. The press, which had lauded the Commissioners' investment "miracle", now laid into their collapse. The Financial Times asked: "How did this august body, which ranks a number of distinguished City figures on its assets committee, get into such a mess?"

The Grim Reaper's scythe swung - among bishops' palaces and their fleets of cars, among the plethora of Victorian churches in urban areas and among those rambling old rectories across the country, whose drives would soon rumble to the sound of 4X4s and delivery vans. No one now recalls how wise the Commissioners were to make so much money, only how foolish they were to squander it.

But, in the Christian faith as elsewhere, there is always hope. It may be that what has emerged from the old Christendom model, in which the Church of England was a great post-empire organ of state, is something more authentic and of greater humility, more in touch with the realities of corporate life, increasingly staffed by clergy with secular jobs and more in touch with the Reformational principles that gave it birth. Let's hope so.

The Rev'd George Pitcher is Curate at St Bride's, Fleet Street, London.
*Quoted in the very best book on this subject: The Church of England in the Twentieth Century: The Church Commissioners and the Politics of Reform, 1948-1998, published by Boydell.