Church of England

Church of England campaigns for the living wage, but insists its clergy must claim tax credits

This is a guest post by Harold Pinker (pseudonym) – a Tory-inclined clergyman in the Church of England who fears that his ministry would be impaired (ie his prospects for joining the ‘Talent Pool‘ would be blighted) if he were to write under his own name.

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The Tax Credit system, introduced in 2003, exists so that the State can top-up the income of the lowest paid workers. The rationale behind it was that it is better for people to be in work, even when that work may not pay the same as being on benefits. It rewards those who are prepared to work, without creating an additional cost for employers.

This sound piece of Conservative doctrine, when implemented by a Labour government, resulted in a system that, although well-meaning, was soon being abused by unscrupulous employers to pay their staff less. Employers well knew that the State would pick up the bill up to a pre-determined minimum salary, and therefore could pay workers less, knowing that low pay would now be subsidised by the taxpayer. The entire system now subsidises employers who are not prepared to pay their staff a sufficient amount.

Fear not, however. The Most Rev’d and Rt Hon Archbishop of York, John Sentamu, is on the case. He has repeatedly stated the case for a living wage, and has bravely made the case for those families dependent on benefits. On his website, the Archbishop says that “many low income households are still much worse off than in 2008, leaving them struggling to make ends meet and reliant on benefits to top up their incomes. For me these are hard-pressed families on poverty wages”.

But who are these “hard-pressed families” which are “reliant on benefits to top up their incomes”?

The national minimum stipend for clergy in England is currently £24,690. At such a level, a number of clergy are reliant on benefits to top-up their stipends. Indeed, a family with just one child, with one person earning the minimum stipend, could easily be eligible for Tax Credits. For clergy with larger families, the amount of Tax Credit income may well be greater than a stipend. Surely the Archbishop would be upset that many of his own clergy are “struggling to make ends meet”, and would want to ensure that the Church of England becomes one of those “responsible” employers of whom he is so fond.

Yesterday morning, the General Synod released its ‘Questions and Answers‘, amongst which was a question from the Rev’d Stephen Trott asking: “Since a number of clergy may be badly affected by the loss of income from tax credits in the near future, what plans are there to implement the Synod’s resolution of November 2002 to increase the national minimum stipend to a more realistic level over time so that no clergy need to rely on social security payments to supplement their income?”

The current Government is committed to reducing the amount of money used to subsidise low wages, and thus reduce Tax Credits. Although legislation has been stalled in the Lords, a reduction in Tax Credits is undoubtedly on the horizon. The Government position seems to be that those on lower wages should be paid more by their employers rather than by the State. If income is still insufficient to cover expenditure then employees will have to find better jobs – companies who pay less than is necessary will therefore begin to lose staff.

Clergy are particularly vulnerable to any changes to tax credit policy. Positions in the Church of England are all paid at about the same rate, and therefore moving job, or getting promotion, are not realistic options. Government changes to reduce the subsidisation of low wages and to encourage employees to find better-paid jobs will not have the intended effects on those who cannot change employer and where very few better-paid jobs are available.

What then was the answer from General Synod? How would the Church of England respond to the challenge of its own clergy being “hard-pressed families on poverty wages”?

Step forward the Right Rev’d David Walker, Bishop of Manchester and Chair of the Remuneration & Conditions of Service Committee. He replied:

The definition of a stipend in Generosity & Sacrifice, is payment ‘for exercise of office’ that ‘reflects the level of responsibility held’. The National Minimum Stipend cannot obviate the need for a spouse or a partner to work. We expect people to use welfare support where they are entitled.

These changes will affect clergy differently depending on circumstances such as family size, household income and disability status. To make a compensating adjustment to the National Minimum Stipend (NMS) would directly increase the starting level of pensions by the same proportions and would be a further cost to dioceses in future pensions.

Linking the NMS to a level that no clergy need draw on welfare benefits would not be directing dioceses’ financial resources to those of greatest needs. Bishops and dioceses already have the opportunity to pay grants and access funds through a range of clergy charities to deal with hardship.

In short – tough luck. The Church of England has decided that, whilst it is immoral for other employers to employ staff knowing that they will be reliant on benefits to make ends meet, it is entirely acceptable for her own clergy to be what John Sentamu referred to as “hard-pressed families on poverty wages”. The position of paying clergy insufficiently, leaving them reliant on welfare support and charitable hand-outs, is deeply incongruous with the Church of England’s own teaching on this matter and with the stated position of the Archbishop of York.

The Bishop of Manchester’s disingenuous statement that “Linking the NMS to a level that no clergy would need to draw on welfare benefits would not be directing dioceses’ financial resources to those of greatest needs” is factually correct, but it is not, I suggest, a solution that anyone is seriously countenancing. The solution is not to pay everyone in the Church at the amount that the most needy requires, but rather to ensure that none of our clergy is kept in a position where they are reliant on State subsidies in order to make ends meet. If this means that some clergy are paid more than others, then so be it – ‘distribute the proceeds to all, as any had need‘ (Acts 2:45). This is exactly the sort of solution that one might expected left-wing bishops such as David Walker and John Sentamu to support, but no: unfortunately the chance to criticise the Government over its Tax Credit policy has been too tempting.

The sad thing is that it will be parish clergy who are hardest hit by this ideological posturing, whereas the rest of the country will see bishops preaching one thing, while the Church does the opposite. Quite how we are supposed to encourage vocations in such a climate is beyond me.