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||Neutral Citation Number:  EWHC 3350 (QB)
||Case No: CO/6197/2013
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
||Royal Courts of Justice
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE ELIAS
MR JUSTICE BEAN
|| IN THE MATTER OF A CLAIM FOR JUDICIAL REVIEW
THE QUEEN ON THE APPLICATION OF JS AND OTHERS
||- and -
||THE SECRETARY OF STATE FOR WORK AND PENSIONS
- and -
CHILD POVERTY ACTION GROUP
- and -
SHELTER CHILDREN'S LEGAL SERVICE
Mr Ian Wise QC, Ms Caoilfhionn Gallagher and Ms Sarah Steinhardt
(instructed by Hopkin Murray Beskine) for the Claimants
Mr James Eadie QC, Ms Karen Steyn and Mr Simon Pritchard
(instructed by The Treasury Solicitor for the Defendant
Mr Richard Drabble QC, Mr Tim Buley and Ms Zoe Leventhal
(instructed by Herbert Smith Freehills LLP) for the Child Poverty Action Group
Mr Jonathan Manning (instructed by Freshfields Bruckhaus Deringer LLP) for the Shelter Children's Legal Service
Hearing dates: 2-4 October 2013
HTML VERSION OF JUDGMENT
Crown Copyright ©
Lord Justice Elias :
This is the judgment of the court.
- The Welfare Reform Act 2012 has as its objective the reform of welfare benefits. The aim is not only to reduce the cost of these benefits - currently the welfare budget is larger than for health, education and defence taken together but also to bring about a change in the culture by incentivising people to work, thereby reducing what the Government believes is the debilitating effect of long term dependency on benefits. In addition the Government believes that the Act strikes a fairer balance between the interests of tax paying working households and those on benefits.
- The Act received Royal Assent on 8th March in 2012. Among the major reforms which it introduces is the "benefit cap", so called because it sets a cap to the amount of welfare benefits a recipient may receive. Section 96 of the Act introduces the concept of a "relevant amount" of prescribed welfare benefits: this constitutes the cap. Where a single person or couple's total entitlement to such benefits exceeds the relevant amount, their entitlement is reduced by the amount of the excess (section 96(2)).
- The broad principles for determining the "relevant amount" are laid down in the primary legislation (sub-sections 96(6) to (8)). However, the precise manner of its calculation and the amount actually determined are to be specified in regulations (subsections 96(4) and (5)). Regulations may also provide for exceptions to the application of the cap (subsection 96(4)(b)).
- Sub-sections 96(6) to (8) are as follows:
"(6) The amount specified under subsection (5) [the "relevant amount"] is to be determined by reference to estimated average earnings.
(7) In this section "estimated average earnings" means the amount which, in the opinion of the Secretary of State, represents at any time the average weekly earnings of a working household in Great Britain after deductions in respect of tax and national insurance contributions.
(8) The Secretary of State may estimate such earnings in such manner as the Secretary of State thinks fit."
In fixing the relevant amount, therefore, the Secretary of State has to focus on the net average earnings of a working household, but he has a broad discretion how to determine that figure. He may also determine different caps for different cases: section 97(1).
- However, when determining the amount, if any, by which the benefits exceed the cap, the scheme does not in all cases have to take account of all benefits received by a beneficiary, for two reasons. First, the cap only applies to "any prescribed benefit, allowance, payment or credit" (section 96(10)) so if a benefit is not specified, it will not count in calculating the total benefits received for the purposes of imposing the cap. Moreover, section 96(11) specifies in terms that state pension and retirement pension cannot be prescribed as relevant welfare benefits. Second, section 96(4)(c) provides for exceptions to be made to the application of the cap; welfare beneficiaries falling within the exceptions are taken outside the scheme altogether.
- By sub-sections 97(3) and (4) Parliament provided that the statutory instrument containing the first regulations under section 96 could only be made when a draft had been laid before, and approved by resolution of, each House of Parliament (the affirmative resolution procedure). Subsequent regulations were to be subject to annulment in pursuance to a resolution of either House (the negative resolution procedure). The first regulations under s96 were the Benefit Cap (Housing Benefit Regulations 2012) ("the 2012 Regulations"). These were made on 29 November 2012 after the draft had been approved by affirmative resolutions of each House. The draft regulations were accompanied by an impact assessment and an equality impact assessment ("EIA").
- The 2012 Regulations insert a new Part 8A into the Housing Benefit Regulations 2006. They fix the "relevant amount" under section 96(2) at £350 per week for a single claimant (that is to say one who is not a member of a couple and has no children living with him or her) and £500 per week for all others. The latter figure represents a gross salary of some £35,000 and a net salary, after deduction of tax and national insurance, of around £26,000.
- There is a list in regulation 75G of the benefits which are deemed to be welfare benefits for the purposes of the cap. It includes child benefit, child tax credit and housing benefit, all benefits to which those in work are in principle entitled. The mechanism for giving effect to the cap is by deducting the excess of benefits over the "relevant amount" from the housing benefit: see regulation 75D.
- Exceptions to the application of the cap are found in regulations. Regulation 75E provides for the most significant exception: it disapplies the benefit cap to working households. The regulation does not in terms say this but it is the result of specifying that the cap does not apply where the claimant or the claimant's partner is entitled to working tax credit. They become so entitled, and therefore exempt from the benefit cap, by working 16 hours per week if a single parent or a disabled person; and 24 hours per week if a couple with children (providing at least one of them works for 16 hours). In addition the provision also exempts those who have who have recently been in work by granting A 39 week period of grace from the last day on which the benefits claimant, or their partner, was employed or engaged in work.
- Regulation 75F has the effect that where a person in the household is in receipt of certain specified benefits, the benefit cap will have no application. The exempt benefits specified are: employment and support allowance which includes a support component; industrial injuries benefit; an attendance allowance; a war pension; disability living allowance; a personal independence payment; and an armed forces independence payment. A subsequent amendment to the regulations has also provided that for certain accommodation described as "exempt accommodation" the housing benefit paid should count as nil when determining the benefits received. Some women's refuges which take in women fleeing domestic violence fall into that category.
- The benefit cap was brought into force in April 2013 in four London boroughs and more widely later in the year. It was obvious from the outset that the introduction of the cap would have severe and immediate consequences for claimants who had been receiving substantially in excess of the relevant amount. The Government sought to mitigate the difficulties by providing additional funds to local authorities to make discretionary housing payments (DHPs) as a transitional measure in hard cases. As the claimants' evidence points out, the budget for DHPs is cash limited for each year. Local authorities have the power to supplement the amount up to a certain limit but currently budgetary pressures are such that only a few (some 14% we were told) have chosen to do so.
- The two items most likely to trigger the operation of the cap is housing benefit, the other being the number of children in the family. Housing benefit reflects (but does not necessarily meet in full) the cost of housing, whether social or private. Accordingly, the cap will bear most heavily on those in receipt of benefit who live in areas where rental costs are high. In practical terms, therefore, this means that those who live in London or in the centre of other big cities where rents tend to be high will be most likely to be affected. It is a striking feature of the scheme - and lies at the heart of this application - that the cap applies equally to a childless couple in an area with cheap and plentiful social housing as it does to a lone parent mother of several children in inner London compelled to rent on the private market. But the aim of the scheme is in part to encourage those subject to the cap back to work; alternatively, to move to different areas of the country where rents are cheaper and housing benefit correspondingly less. The evidence from Shelter highlights the problems with the latter option such as the fact that many local authorities will give lower priority to those without a link to the area, the absence of available accommodation in many areas, and the fact that where housing is available and cheap, this is because the area is generally deprived and is likely to suffer from high unemployment. Indeed, it was because of these problems that Shelter suggested that housing benefit should be excluded from the benefits taken into account when calculating the cap. But the Government did not accept that proposal; and the Secretary of State considers that Shelter has exaggerated the difficulties of moving to new areas.
- There are six claimants in these proceedings. They comprise the mother and youngest child of three families, each a single parent family. The claimants submit that because of their particular circumstances they will suffer harsh consequences as a result of the cap and they contend that many other lone parents will be similarly affected. We briefly set out the circumstances of each family recognising, as we do, that a summary description of their difficulties does not adequately communicate the depths of the very real day to day anxiety and distress which they must feel.
- MG is a single mother living in the London Borough of Hammersmith and Fulham, having separated from her husband in 2008. She has four children living with her, all boys. The youngest, JG, was born in September 2012. The oldest was born in December 1997 and is thus almost 16. A fifth child, a 12 year old girl, lives nearby with her father and paternal grandmother. The children, except for JS, are at local schools and doing well.
- MG is Roma, who fled Poland 16 years ago and was granted refugee status in the UK. She is a devout Roman Catholic and states in her evidence that she believes contraception to be against the will of God.
- The property in which MG and her four sons live is a three bedroom flat on the fourth floor of a block of flats. The landlord is a housing association. At the time of issue of these proceedings the rent was £523.50 per week which was paid in full by the housing benefit department of the local authority direct to the landlord. MG also received £47.10 child benefit, £71 income support and £162.65 child tax credit. Her total weekly income from benefits prior to the application of the cap thus stood at £804.25, more than £300 per week in excess of the cap.
- The evidence filed on behalf of MG states that her present accommodation is described as temporary. She has no real prospects of attaining social housing from the local authority since it is their policy to give priority to working applicants. She cannot work because her youngest child is only 12 months old and in any event MG is illiterate. She cannot afford private rented accommodation. She and her sons could not move to a smaller property: as it is the boys sleep two to a room, and even a two bedroom property in Hammersmith and Fulham would cost far too much.
- In July 2013 negotiations conducted on her behalf with her landlord resulted in a reduction in her weekly rent to £395.50. The effect of the cap was therefore to leave her with only £104.50 per week for all other expenditure. In September 2013 the local authority granted her a DHP for a period of 13 weeks of £228.59, being the shortfall between the rent (£395.50) and the housing benefit still payable after application of the cap (£147.71) less a deduction of £19.20 per week. For the time being, therefore, her weekly household income after payment of rent is £333.09; but when the DHP expires, if she remains in the present property and has not obtained work for 16 hours per week or more, it will go down to £104.50.
- NS is also a single mother. She lives in the London Borough of Haringey. She has three children, all girls. The youngest, MS, was born in June 2010. The older girls were born in September 2001 and February 2003 respectively.
- The evidence filed on behalf of NS states that she has been subjected to repeated incidents of sexual abuse and domestic violence by her former husband. She left the former matrimonial home on 27th December 2012 with her daughters and went first to the home of a relative, then to distant and very unsuitable emergency accommodation. She is now back in the former matrimonial home, having obtained an occupation order from the Family Court against her husband in March 2013.
- Her home is a two bedroom flat rented from a private landlord. She would be assessed as requiring a three bedroom flat given that she has three daughters, but would prefer to stay in her present flat but that would increase the rent payable, and for that and other reasons she does not want to move. The rent is £270 per week, paid directly by the housing benefit office to the landlord. The total of this housing benefit and her income support, child benefit and child tax credit payments was £550.44 per week. The application of the cap reduced this by almost exactly £50 per week. NS speaks some English but it is limited. She has not had a job before. She cannot work because she has her three year old daughter to look after. Her solicitor points out that if NS were living with her husband he would receive working tax credit and the cap would not apply. However, no-one suggests that returning to her husband is a practical proposition in NS's case. She has made an application for a DHP which is pending.
- SG is a single parent mother living in the Stamford Hill area of the London Borough of Hackney. She has six children, three of them living with her. The youngest, a boy, was born in January 2010. She also has two daughters born in February 2005 and October 2006 who live with her. In addition she has three children aged between 12 and 17. The oldest, M, is a ward of court in foster care in Hackney. Her 12 year old son may return to live with her; he is at present with his father in Belgium, and SG is applying to the family court in Belgium for an order under The Hague Convention that he should be returned to England.
- The evidence filed on behalf of SG states that she left her husband in 2011. There was an unhappy history including allegations of physical and sexual abuse made against the father by M.
- The property in which SG lives is a two bedroom flat rented from a private landlord. The boy shares a room with his mother, the other bedroom is for the two girls. Her total benefits prior to the application of the cap were £585.40 per week. At the time of the filing of her witness statement her landlord was about to increase the rent. If any of her older children return she would be entitled to an increase in child benefit and child tax credit but would not in fact receive any additional money since the increase would immediately be offset against her housing benefit. She would thus have to feed and clothe an extra child or two children without additional funds.
- SG did secure part time work for 16 hours per week and became entitled to working tax credit. At the time proceedings were instituted in this case she was no longer employed but was entitled to a 39 week grace period before application of the benefit cap by virtue of regulation 75E. This will expire on 29 November 2013. An application for DHPs is pending.
- SG is an orthodox Jew. It is important to her to live in the Stamford Hill area for a number of reasons. The children, who are of school age, attend a local Jewish school. SG also wishes to be close to M's foster home. Kosher food is readily available in shops in Stamford Hill. Finally, she has a support network of family and friends in the area.
- In the case of each of these claimants, therefore, there are powerful reasons why the suggested ways of mitigating the effects of the cap are not appropriate. The sums are simply too great to bring finances under control by prudent housekeeping; they are for various reasons not in a position to work; and they have educational and/or cultural and support reasons why they do not want to move any distance from their current homes.
Grounds of claim and history of the case
- The claim was issued on 22nd May 2013. It set out four grounds of challenge to the benefit cap set in the 2012 Regulations:-
1) Failure by the Secretary of State to comply with his Public Sector Equality Duty imposed by Section 149 of the Equality Act 2010;
2) Discrimination on various grounds contrary to Article 14 of the ECHR taken with Article 8 and/or Article 1 of Protocol 1 (A1P1);
3) Breach of the claimants' rights under Article 8 of the ECHR and/or the defendant's obligations under the United Nations Convention on the Rights of the Child ("UNCRC") to ensure that the best interests of children are a primary consideration "in all actions concerning children", including those taken by legislative bodies;
4) Irrationality and/or unreasonableness at common law. The contention here is that the Secretary of State acted irrationally or unreasonably in failing to obtain relevant information about the impact of the scheme on single parents escaping domestic violence; and on those in temporary accommodation. In addition it is submitted that it is irrational to seek to create incentives for single parents with children under five to work when it is clear that in most cases they are simply not in a position to do so.
- The claimants sought a final hearing and judgment before the end of July 2013. That did not prove possible. Collins J considered the claim to be arguable but he had not at that stage seen an Acknowledgement of Service and he recognised that the defendant might want to challenge arguability. So he granted permission but not to come into effect if the Secretary of State wished to contend that the case was not arguable.
- By his Acknowledgment of Service dated 29th May 2013 the defendant Secretary of State did indeed indicate that he intended to challenge the grant of permission. Accordingly the case before us is now a rolled up hearing; we have to decide whether to give permission and, if we do, to determine the substantive merits of the case.
- One of the reasons for challenging the grant of permission was that the claims were out of time. Given the importance of these regulations and the potential for other test cases to be selected in respect of which the argument could not be sustained, it was never an attractive argument for the Secretary of State to advance and it was sensibly not pursued in oral argument.
- The claimants also, in the light of the evidence adduced by the Secretary of State in this case, wisely abandoned one of their arguments, namely the ground relating to the public sector equality duty. They continue to pursue the other three grounds.
- We should state at the outset that we are satisfied that the grounds certainly raise seriously arguable points and we grant permission.
- By subsequent orders made in the course of the proceedings, both the CPAG and Shelter were given permission to intervene, making both written and oral submissions, and it was agreed that neither body would be liable for costs in any event. Mr Richard Drabble QC for CPAG joined Mr Ian Wise QC for the claimants in challenging the regulations in various respects; Mr Jonathan Manning for Shelter gave us factual information about housing issues and housing benefit. Ranged against them was Mr Eadie QC, for the Secretary of State. We are grateful to both interveners and all counsel for their valuable assistance.
The nature of the Claimants' case
- There was, and is, no challenge to the primary legislation, in other words no application for a declaration that section 96 of the 2012 Act is incompatible with the ECHR. As Mr Eadie submitted, it follows from this that there could be no challenge to the principle of a cap; nor to the fixing of one "relevant amount" for single claimants and another for all others subject to exceptions made in the regulations; nor to the fixing of each "relevant amount" by reference to estimated average net household earnings rather than by reference to estimated average net household income inclusive of benefits, since earnings is the very word adopted by Parliament. Mr Drabble described the contrast of benefit income with a worker's earnings as a comparison of apples and pears. But it is the comparison which the statute requires.
- The challenge was, therefore, to the regulations and in particular the inclusion of child benefit, child tax credit and housing benefit in the list of prescribed benefits contained in regulation 75G; or alternatively the failure to include large families, especially lone parents with several children at home, among the exceptions to the cap.
- Before engaging with the specific grounds of challenge, we make observations on certain issues which, whilst relevant to the issues in the case, are not central to the arguments and can, in our view, be better dealt with at this stage.
Parliamentary procedure and the status of the Regulations
- The Regulations were approved by Parliament by affirmative resolution in each House. Whilst it is common ground that this is of itself no bar to judicial review, it is an important feature of the case which we must bear firmly in mind. In Bank Mellat v HM Treasury  3 WLR 179 at 239 Lord Sumption JSC said this:
"when a statutory instrument has been reviewed by Parliament, respect for Parliament's constitutional function calls for considerable caution before the courts will hold it to be unlawful on some ground (such as irrationality) which is within the ambit of Parliament's review. This applies with special force to legislative instruments founded on considerations of general policy".
- In Preddy v Bull  1 WLR 2514 and Black v Wilkinson  1 WLR 2489, both cases concerned with the Equality Act (Sexual Orientation) Regulations 2007, the Court of Appeal made similar observations, emphasising that the courts should respect the recent and closely considered judgment of a democratic assembly.
- Mr Wise pointed out that the 2012 Regulations had not been debated on the floor of the House of Commons (being approved on a division without debate); and that, as with all statutory instruments, the House could only accept or reject the regulations, with no opportunity for amendment. Indeed the Joint Committee on Human Rights observed that the affirmative resolution procedure presented only a limited opportunity for Parliamentary scrutiny. But that does not undermine the force of Lord Sumption's observation; and in the present case this point is in any event rather formalistic. The Welfare Reform Bill itself had been debated at length in both Houses. When the Public Bill Committee in the House of Commons considered clause 93 (which became section 96 of the Act) the very issues which have been raised before us were explored for example whether child benefit or housing benefit should be excluded from the cap so as to mitigate the effect on large families. Whilst this parliamentary history is not a conclusive answer to the claimants' arguments - and Mr Eadie did not submit that it is - it is an important consideration. As Lord Bingham of Cornhill observed in R (Countryside Alliance) v A-G  AC 719 at  "the democratic process is liable to be subverted if, on a question of moral and political judgment, opponents of the Act achieve through the courts what they could not achieve in Parliament". The same applies to questions of economic and political judgment.
Relationship to other legislation
- Mr Eadie emphasised that it was important to bear in mind that this legislation had to be seen in the context of other policy developments which will be likely to impact upon the application of the cap by mitigating the consequences for welfare beneficiaries. For example the government has adopted policies which are designed to make it more difficult for fathers to evade their legal obligation financially to support their families. Plainly if fathers contribute more to the family income, that will certainly relieve the burden on lone mothers and in some exceptional cases might even negate completely the effect of the cap. We accept that in so far as such policies have been specifically identified, they are not wholly irrelevant when assessing the likely effects of the benefit cap. But given that the impact of these policies is far from clear, and indeed is in large part a matter of speculation, in our view they can have only marginal weight.
The best interests of the children
- An argument which featured quite prominently in Mr Wise's submissions on justification, both in relation to Article 14 and Article 8 identified in the was that the Secretary of State failed properly to have proper regard to the interests of children.
- The United Nations Convention on the Rights of the Child ("UNCRC"), to which the UK is a party, provides by Article 3(1) that:
"in all actions concerning children, whether undertaken by public or private social welfare institutions, courts of law, administrative authorities or legislative bodies, the best interests of the child shall be a primary consideration".
- In ZH (Tanzania) v SSHD  UKSC 4;  2 AC 166 para. 25 Baroness Hale of Richmond said that:
"it is clear from the recent jurisprudence that the Strasbourg court will expect national authorities to apply Article 3.1 of the UNCRC and treat the best interests of a child as a 'primary consideration'. Of course, despite the looseness with which these terms are sometimes used, "a primary consideration" is not the same as "the primary consideration", still less as "the paramount consideration"."
- Mr Eadie submitted that Article 3(1) of UNCRC was an international instrument with no binding effect in English law. ZH was different because in that case section 55 of the Borders Citizenship and Immigration Act 2003 specifically provided that in the exercise of powers relating to immigration, asylum and nationality there was an express obligation to have regard to the welfare of children, and this justified reference to Article 3.1. However, that is not an answer because the Strasbourg court has ruled that in the exercise of Convention jurisprudence the court should always have regard to relevant international instruments: see for example Neulinger v Switzerland (2010) 28 BHRC 706, cited by Baroness Hale in ZH at para. 21.
- As Baroness Hale pointed out this does not, of course, mean that the court must treat the interests of the child as paramount or overriding. However, Mr Wise does submit that in accordance with the approach suggested by Baroness Hale in ZH at para. 26, asserted even more trenchantly by Lord Kerr in H(H) v Deputy Prosecutor of the Italian Republic  UKSC 25;  1 AC 338 at para 144, it was incumbent on the Secretary of State when carrying out the proportionality assessment first to determine the extent of any interference with the best interests of the children affected, and then to decide whether that interference was outweighed by other considerations. He submits that the Secretary of State did not approach matters in that structured way. Indeed, there was no evidence that he did; but in our view he was not obliged to do so. In H(H) Lord Judge CJ (para.125), Lord Mance (para.98) and Lord Wilson (para.153) all rejected the notion that there was any obligation for a decision maker to adopt this approach to the proportionality assessment. All that is necessary is to give appropriate weight to the interests of children as a primary consideration in the overall balancing exercise.
- The claimants and the CPAG further submitted that in adopting the cap, the best interests of children were not treated as a primary consideration. By including child benefit and child tax credit in the list of welfare benefits subject to the cap, the defendant necessarily damaged the well being of children in large families. In particular, the claimants drew attention to a report published by the Office of the Children's Commissioner on 11 January 2012, entitled "A Child's Rights Impact Assessment of the Welfare Reform Bill". This highlighted concerns over the impact of the proposed benefit cap on children, and predicted an increase in child poverty and child homelessness.
- An Impact Assessment was published alongside the Bill in February 2011 and updated in January and July 2012. It also identified the adverse impact which this policy would have on a number of children:
the cap is likely to affect where different family types will be able to live. Housing Benefit may no longer cover housing costs and some households may go into rent arrears. This will require expense and effort by landlords and the courts to evict and seek to recoup rent arrears. Some households are likely to present as homeless, and may as a result need to move into more expensive temporary accommodation, at a cost to the local authority.
Broadly this policy affects large families who are out of work, in the most part with three or more children, or households in high rent areas receiving large Housing Benefit payments.
7. On average households will lose around £93 per week. The median loss is around £66 per week; this is less because the mean is skewed by some households losing large amounts.
8. Around 40% of the losers will lose less than £50 per week. Around 25% will lose between £50 and £100 per week. Around 20% will lose between £100 and £150 per week. The remaining 15% will lose more than £150 per week.
10. Approximately 40% of households who are likely to be affected by the cap will consist of five or more children whilst over 80% will consist of 3 or more children. Fewer than 10% of households likely to be affected by the cap will have no children at all."
- In view of these documents (and others to similar effect), it cannot conceivably be said that there was any failure to appreciate the impact on children of this policy. Nor, in our view, can it be inferred from the mere fact that in certain circumstances children are adversely affected that their interests were not treated as a primary consideration. The policy is entirely consistent with those interests being given that status but outweighed by countervailing considerations. We consider below the question whether any interference was justified but it is pertinent to note that it was very much the government's contention and belief that an assessment of the interests of children should be far more nuanced and that a highly material factor was that the longer term shift in welfare culture which the cap was designed to achieve would positively benefit families, including children. In that context Mr Eadie relied upon the observation of the Parliamentary Joint Committee on Human Rights that the objective of reducing long-term benefit dependency and encouraging people into work is "potentially human rights-enhancing".
Homelessness and the effect of the cap
- A point of some potential significance in this case is the question whether those who cannot pay their rent because of the application of the cap would become homeless and whether, if they did, the local authority would remain obliged to house them. This is material to the impact of the cap on families in particular and thus has a particular bearing on the Article 8 argument. We were inundated with supplementary notes both during and after the hearing on this question. We do not wish to write a treatise on the subject and will simply summarise what seem to us to be the principal conclusions relevant to the issues in these claims.
- Part VII of the Housing Act 1996 concerns homelessness. The principal duties of local housing authorities (LHAs) arise from section 188 (providing interim accommodation during the course of an application) and section 193, which applies where the LHA "are satisfied that an applicant is homeless, eligible for assistance and has a priority need, and are not satisfied that he became homeless intentionally." Those defined by section 189(1) as having a priority need include applicants "with whom dependent children reside or might reasonably be expected to reside." The obligation is to secure accommodation which is suitable, whether in property in the district or elsewhere. There are detailed provisions under sections198-200 enabling LHAs to refer applicants with no local connection to another LHA for a district with which they do have a local connection, subject to certain exceptions in domestic violence cases.
- A critical question is whether someone who is made homeless or is threatened with homelessness as a result of the imposition of the cap can be said to have become homeless intentionally and therefore become ineligible to be housed. This of course is an important question not only for those already housed but also for those awaiting housing, or who are renting in the private sector. However, where someone is being housed in accordance with an authority's homelessness duties, the further question is whether property which the tenant cannot afford can be said to be suitable.
- This latter issue was considered by Geraldine Andrews QC (as she then was; now Andrews J) sitting as a Deputy High Court judge in R (Best) v Oxford City Council  EWHC 608 (Admin). She held that where a local authority owes an applicant a full housing duty, that duty is not discharged by the provision of accommodation which is unaffordable. The judge also held that where an applicant through his own fault fails to obtain a benefit to which he is entitled, the housing authority may be entitled to reach the view that he has made himself intentionally homeless. We agree. But it seems to us inconceivable that an applicant, whether already housed or seeking housing, could properly be regarded as intentionally homeless where the rent has become unaffordable simply through the application of the benefit cap. Moreover, it would no longer be reasonable to expect them to remain in the accommodation. There will of course be cases where the question arises whether the reduced income resulting from the application of the cap is the real reason for being made homeless, but that does not affect the principle.
- We recognise that the obligation to house may mean that the place offered may not be where the family would like to be. Moreover, an applicant is not entitled to more than a single offer of accommodation based on the judgment of the authority as to its suitability, challengeable only by means of seeking an internal review (s202) and then, on Wednesbury grounds, by way of an appeal on a point of law to the county court (s204). Mr Manning rightly submits that this process is not analogous to the kinds of decisions made by working people about whether they can afford to continue to live in their current location and if not where they should go. The bottom line, however, is that the local authority will retain an obligation to find some accommodation which the family can afford.
The grounds of challenge
- We turn to consider the grounds of challenge. The Article 8 argument figures in two contexts; it is related to the Article 14 discrimination claim, and is advanced as a ground for quashing the scheme in its own right. We will consider both aspects together since the same evidence is relied upon in relation to each of the two aspects.
- Article 14 provides that:
"The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status."
- It is well established that the Article applies whenever the facts of the case fall within the ambit or general scope of any of the other Articles of the Convention; it is not necessary that the other Article should be violated. The jurisprudence on the concept of "other status" is not easy to rationalise, but it certainly covers discrimination based on personal characteristics. These might, however, include categorisations based on social categories e.g. belonging to a trade union: National Union of Belgian Police v Belgium (1975) 1 E.H.R.R. 578.
Categories of discrimination and relief
- The claimants originally put their case on discrimination in three ways. They allege direct discrimination (not pursued by the claimants), indirect discrimination, and so-called Thlimmenos discrimination, after the Strasbourg decision of the same name. We have no doubt that there is no direct discrimination in this case since all welfare beneficiaries were treated equally.
- Indirect discrimination is the kind of discrimination described in DH v Czech Republic (2008) 47 EHRR 3. The Court described it as the situation where (para. 175):
"a general policy or measure that has disproportionately prejudicial effects on a particular group may be considered discriminatory notwithstanding that it is not specifically aimed at that group".
However, in an appropriate case the discrimination may be justified.
- The third basis of an Article 14 claim is founded on what the ECtHR said in the leading case of Thlimmenos v Greece (2000) 31 EHRR 411:
"The right not to be discriminated against in the enjoyment of the rights guaranteed under the Convention is also violated when states without an objective and reasonable justification fail to treat differently persons whose situations are significantly different".
- There is an interesting question whether conceptually the two notions of indirect and Thlimmenos discrimination are the same or whether they are distinct, albeit closely related, concepts: see the discussion by Elias LJ in AM (Somalia) v Secretary of State  EWCA Civ 634 and the comments on those observations by Laws LJ in R (MA) v Secretary of State for Work and Pensions  EWHC Civ 2213, paras 39-46. What is plain, however, is that as Laws LJ noted in MA at paragraph 46, when fashioning the appropriate remedy for an unlawful act of Article 14 discrimination, the court has to have regard to the nature and extent of the alleged discrimination. In some cases the appropriate remedy will be to invalidate the rule or policy itself; in others typically where the Thlimmenos formulation best captures the discrimination in issue - it may simply require its modification to deal with exceptional cases while leaving the body of the rule or policy intact. So in this case, for example, there would be no justification, in our view, in striking down the whole policy if we were to find that it adversely impacted on the small group of women subject to domestic violence; an amendment of the policy to deal with the particular problems posed for that group would suffice. The position would be likely to be otherwise if the claimants were able to establish that the rule adversely and unjustifiably operated to the detriment of a significantly wider class of women as a group.
How is article 14 engaged?
- In this case there is no dispute that the rights of the adult claimants under A1P1 (the right to peaceful enjoyment of possessions) are affected by a reduction in the benefits paid to them. And although the child claimants have no A1P1 rights themselves, we agree with CPAG's submission that it would be artificial to treat them as strangers to the Article 14/A1P1 arguments. The benefits in each case are paid to the mother to enable her both to feed and house herself and to feed and house her children.
Article 8: interference with family life
- Mr Wise submits that Article 8 is also engaged at least in the sense that the policy to impose the cap falls within the ambit of that Article. Indeed, he goes further and submits that quite independently of Article 14, the adoption of the cap involves a breach of Article 8 because of its adverse impact on family life. The reduction in housing benefit threatens the ability of the families to remain in their present accommodation; it may make it necessary for them to move away from London and the support networks of their families and friends; and it might result in their being unable to remain together at all.
- The assertion that Article 8 is infringed is an ambitious submission, as the following words of Wilson LJ (as he then was) in R (TG) v Lambeth LBC  HLR 33, demonstrate:
"The European Court of Human Rights has never held that a failure of the state to provide financial or other support to a person represented a violation of Article 8".
- Moreover, in Chapman v UK (2001) 33 EHRR 18 the Strasbourg court itself had held that:
"Article 8 does not in terms recognise the right to be provided with a home. Nor does any of the jurisprudence of the Court acknowledge such a right. While it is clearly desirable that every human being should have a place where he or she can live in dignity and which he or she can call home, there are unfortunately in the Contracting States many persons who have no home. Whether the State provides funds to enable everyone to have a home is a matter for political, not judicial, decision."
- In Anufrijeva v Southwark LBC  QB 1124 the Court of Appeal held that it is unlikely that Article 8 would require an individual to be provided with welfare support when his predicament was not sufficiently severe to engage Article 3. They went on, however, to say that:
"Article 8 may more readily be engaged where a family unit is involved. Where the welfare of children is at stake, Article 8 may require the provision of welfare support in a manner which enables family life to continue."
- Mr Wise seizes on this line of argument. He submits that MG and her family in particular may be made destitute by the prospective reduction in the benefits paid to her. We do not underestimate the difficulties faced by MG as a single parent with no track record of employment and whose youngest child is barely 12 months old. But we accept Mr Eadie's response that it is a pessimistic and premature assumption to say that in any of the claimants' cases, even MG's, family life will not be "enabled to continue". MG has already secured a reduction in the rent payable to her landlord (which Mr Eadie suggests provides some evidence that the policy is succeeding). She is in receipt of a DHP and by the time that comes to an end she might be able to obtain work: even 16 hours per week would prevent the cap from applying. She might possibly be successful in obtaining child maintenance payments from her estranged husband. In the last resort, if she could not make ends meet in her current accommodation, and she and the children living with her were to become homeless or to be threatened with homelessness, the local authority would be under a duty to secure suitable accommodation for them.
- We accept that the circumstances fall well short of demonstrating a breach of Article 8 in MG's case, and the consequences in the other cases are, if anything, less severe. We would add that even if the cap gave rise to a breach in any particular case, that would not of itself invalidate the scheme; the particular circumstances would have to be typical of a class of case before it could be said that the scheme itself required amendment. Moreover, in our view the difficulty of describing or defining the class with any precision would itself be a factor which could be prayed in aid to justify the failure to provide an exception to the rule.
- We would be inclined to accept that the imposition of the cap does have a sufficient impact on the enjoyment of family life to bring it within the ambit or purview of Article 8, particularly given the relatively liberal way in which the Strasbourg Court applies that test. It can therefore trigger the Article 14 obligation. But in our opinion, in the circumstances of this case at least, Article 8 adds nothing to the argument based on A1P1. The test of justification would be the same, as the Court of Appeal considered that it was in similar circumstances in Swift v Secretary of State for Justice  EWCA Civ 193, paras 24-31.
Article 14: the grounds of discrimination
- The claimants' skeleton argument summarises their case on discrimination as follows:
"The benefit cap discriminates against (a) women (particularly lone parents and survivors of domestic violence, both categories which overwhelmingly consist of women) and (b) large families (which are more prevalent amongst certain racial and religious groups, including orthodox Jews, such as the SG family, and Catholic Roma such as the MG family). The claimant's claim that the cap discriminates on grounds of sex, race, religion and age, contrary to Article 14 ECHR taken together with Article 8 and/or Article 1, Protocol 1 ECHR ("A1P1"). "
- It is clear, and indeed conceded, that the benefit cap has a disproportionate adverse impact on women. This is because lone parents are disproportionately affected by the imposition of the cap, and 92% of lone parents who have children living with them are women. The Equality Impact Assessment accompanying the Bill estimated that 60% of benefit claimants affected by the cap would be single women, the great majority with children, but only 10% single men. (There appear to be no statistics on the proportion of single parents with children under five.) Moreover, single parents, especially those with very young children, are likely to find it most difficult to go out to work. We do not think that it makes any difference to the issues under Article 14 whether lone parenthood is treated as a personal characteristic amounting to an "other status". The disparate impact of the cap on women is not in doubt.
- Mr Wise sought to argue that the cap also impacts particularly harshly on victims of domestic violence who are also overwhelmingly female and, he says, also fall into the category of "some other status." He submits that their treatment constitutes a form of Thlimmenos discrimination and that they should be subject to specific protection.
- One particular difficulty they face is that the Housing Benefit Regulations 2006 provide that housing benefit can be paid temporarily on two homes where a claimant is fleeing violence, while steps are taken to exclude the abuser and protect the claimant on her return to the property. Such dual payments would be liable to be caught by the cap. The government is, however, alive to the problem. The 2012 Regulations attempt to meet it by providing that housing benefit which pays the rent for a claimant in "exempt accommodation" is to be ignored; and the intention was to cover women's refuges. Lord Freud, the Parliamentary Under-Secretary who introduced the regulations, conceded in a letter in April 2013 that the definition of exempt accommodation has been too narrowly drawn and that some bona fide refuges are not within it (although there is a dispute about how many). The intention is to widen the exemption and consideration is being given to doing that. It may be that if this issue is not satisfactorily resolved a future claimant will seek to challenge by way of judicial review the inclusion of rent payable for her refuge accommodation in the benefit cap. But none of these claimants falls within that category. It is therefore unnecessary to decide in this case whether being a victim of domestic violence is an "other status" within Article 14. We will only observe that the answer is not obvious, not least because in an area of law where bright line rules are inevitable, there may be very real problems of definition.
Impact on large families
- As CPAG pithily observe, the imposition of a fixed limit on benefits not responsive to family size is an innovation. Plainly the benefit cap has a particular impact on large families. But family size is not mentioned in Article 14, and we doubt whether being a member of a large family - a vague concept in itself - can qualify as a personal characteristic which amounts to some "other status" within the Article.
- As to race and religion, the submission is that given the adverse effect on large families, this must constitute indirect discrimination against certain ethnic minorities and certain religious groups because it is common knowledge that, for example, Catholics tend to have larger families. We have some reservations about simply relying on a generalised assertion of that nature without any statistical supporting evidence at all. But again, we do not need to explore this issue further for whilst these would provide additional grounds why the scheme would require justification, they do not materially add to the justification burden which the Secretary of State accepts he has to discharge in any event.
- This is a critical issue in relation to the Article 14 submission. What must be justified is the difference in treatment; the policy must pursue a legitimate aim and there must be a reasonable relationship of proportionality between the means employed and the aim sought to be realised. However, in a State benefit case of this nature, the margin of appreciation given to the State itself is very broad. The relevant test was set down by the Grand Chamber of the Strasbourg court in Stec v United Kingdom (2006) 43 EHRR 1017 and it has been applied in many subsequent cases. The strict justification test normally applicable to sex discrimination cases gives way to a much less stringent test, namely whether, in view of the discriminatory effects, the measure is "manifestly without reasonable foundation." This is so in respect of all such cases irrespective of the particular ground of discrimination in issue. These principles were confirmed by Baroness Hale in Humphreys v Revenue and Customs Commissioners  UKSC 18;  1 WLR 1545 (in a judgment with which all the Supreme Court Justices agreed):
"15 The proper approach to justification in cases involving discrimination in state benefits is to be found in the Grand Chamber's decision in Stec v United Kingdom (2006) 43 EHRR 1017. The benefits in question were additional benefits for people who had to stop work because of injury at work or occupational disease. They were entitled to an earnings related benefit known as reduced earnings allowance. But on reaching the state pension age, they either continued to receive reduced earnings allowance at a frozen rate or received instead a retirement allowance which reflected their reduced pension entitlement rather than reduced earnings. Women suffered this reduction in benefits earlier than men because they reached state pension age at 60 whereas men reached it at 65.
16 The court repeated the well known general principle that
"A difference of treatment is, however, discriminatory if it has no objective and reasonable justification; in other words, if it does not pursue a legitimate aim or if there is not a reasonable relationship of proportionality between the means employed and the aim sought to be realised" (para 51).
"The scope of this margin will vary according to the circumstances, the subject matter and the background. As a general rule, very weighty reasons would have to be put forward before the court could regard a difference in treatment based exclusively on the ground of sex as compatible with the Convention. On the other hand, a wide margin is usually allowed to the state under the Convention when it comes to general measures of economic or social strategy. Because of their direct knowledge of their society and its needs, the national authorities are in principle better placed than the international judge to appreciate what is in the public interest on social or economic grounds, and the court will generally respect the legislature's policy choice unless it is 'manifestly without reasonable foundation'."
17. The Grand Chamber applied the Stec test again to social security benefits in Carson v United Kingdom (2010) 51 EHRRR 369, para 61
18. The same test was applied by Lord Neuberger of Abbotsbury (with whom Lord Hope of Craighead, Lord Walker of Gestingthorpe and Lord Rodger of Earlsferry agreed) in R (RJM) v Secretary of State for Work and Pensions  AC 311, which concerned the denial of income support disability premium to rough sleepers. Having quoted para 52 of the Stec case 43 EHRR 1017 he observed, at para 56, that this was "an area where the court should be very slow to substitute its view for that of the executive, especially as the discrimination is not on one of the express, or primary grounds". He went on to say that it was not possible to characterise the views taken by the executive as "unreasonable". He concluded, at para 57:
"The fact that there are grounds for criticising, or disagreeing with, these views does not mean that they must be rejected. Equally, the fact that the line may have been drawn imperfectly does not mean that the policy cannot be justified. Of course, there will come a point where the justification for a policy is so weak, or the line has been drawn in such an arbitrary position, that, even with the broad margin of appreciation accorded to the state, the court will conclude that the policy is unjustifiable."
19. Their Lordships all stressed that this was not a case of discrimination on one of the core or listed grounds and that this might make a difference. In R (Carson) v Secretary of State for Work and Pensions  1 AC 173 both Lord Hoffmann and Lord Walker drew a distinction between discrimination on grounds such as race and sex (sometimes referred to as "suspect") and discrimination on grounds such as place of residence and age, with which that case was concerned. But that was before the Grand Chamber's decision in the Stec case 43 EHRR 1017. It seems clear from Stec, however, that the normally strict test for justification of sex discrimination in the enjoyment of the Convention rights gives way to the "manifestly without reasonable foundation" test in the context of state benefits. The same principles were applied to the sex discrimination involved in denying widow's pensions to men in Runkee v United Kingdom  2 FCR 178, para 36. If they apply to the direct sex discrimination involved in the Stec and Runkee cases, they must, as the Court of Appeal observed, at para 50, apply a fortiori to the indirect sex discrimination with which we are concerned."
- At one stage in his submissions Mr Wise seemed to resile from accepting that this test applies. He suggested that it should be replaced by the "best interests of the child" test laid down in ZH. That is a misconception. For the reasons we have given we accept that the Secretary of State must have regard to the best interests of the children as a primary consideration; and he did. The question is whether, having regard to that fact and that some children will plainly be disadvantaged by the cap, the decision to impose the cap is manifestly without reasonable foundation.
- The claimants accept that in view of Stec they have to jump a high hurdle but emphasise that it is not insurmountable. That much was indeed made plain by Baroness Hale in Humphreys; even in cases of this kind, the policy should be subject to careful scrutiny and it may demonstrate that the policy lacks any reasonable basis. The claimants say that is the case here: the justification is inherently weak given the damaging impact of the policy. The CPAG agree but focus more on a submission that the rules operate in an arbitrary and unjust way which is unrelated to one of the key objectives of the scheme and is therefore incapable of justification. We will deal separately with these different formulations.
- The specific aims of the Government in introducing the cap have been identified in the witness statement of Robert Holmes, the lead Government official on the benefit cap policy:
"The Government's specific aims in introducing the benefit cap are to:
(1) introduce greater fairness in the welfare system between those receiving out-of-work benefits and tax payers in employment;
(2) make financial savings where the benefit cap applies (the most recent estimate is that applying the cap is expected to save £110 million in 2013/14 and £185 million in 2014/15) and, more broadly, help make the system more affordable by incentivising behaviours that reduce long-term dependency on benefits; and
(3) increase incentives to work."
- More specifically with respect to the fairness objective, he said this:
"The Government believes that linking the level of the cap directly to average earnings is the most transparent means of achieving its goal of increasing fairness between those out of work and receiving benefits and those tax-payers in work. The Government acknowledges that some households earning at the level of the average wage may have their income increased by in-work benefits such as Child Tax Credit or housing benefit. But calculating the level at which the benefits received by those who are not working by reference to in-work benefits would undermine the financial incentives the benefit cap provides for people to move into work. The benefit cap will only incentivise people on benefits to obtain work if it makes it more likely that a person's income will rise on entering work. Likewise, if the level of the benefit cap was based on the number of children in a household it would undermine the intention that there should be a clear upper limit to the amount of benefit families can receive."
- We deal first with the claimants' submissions. They advance a traditional proportionality attack. They contend that the scheme is manifestly not a legitimate way of achieving the objectives, particularly bearing in mind the discriminatory impact upon women - especially vulnerable single parents - and children. The larger families are hardest hit and they will often be lone parent families where it is particularly difficult for the mother to go out to work. Mr Wise makes a series of points which, he submits, taken together demonstrate both that there is real doubt whether the aims can be achieved at all, and that the means are disproportionate.
- Mr Wise stresses, amongst other matters, the following. First, there is real doubt whether the assumed savings will in fact be achieved at all; it depends on a series of speculative assumptions. Second, it is quite unrealistic to believe that these claimants can work - not only do they face the difficulty of appropriate child care arrangements for their younger children, but there are simply no jobs available. Third, to the extent that the cap is said to provide an incentive, there is already a sufficient incentive quite independently of the cap since each of these claimants would be materially better off if they could work and receive benefits. Finally, house prices are more than they can afford throughout Greater London, so they would have to move to another part of the country. However, it is unreasonable to expect them to move children given the disruption to school education and the fact that it would remove their support network. This is apart from the strong cultural links which SG and MG, as a Jewish and Roman Catholic mother respectively, have with their local communities. As to the possibility of making sufficient savings by more stringent housekeeping, that is absolutely impossible - indeed, wholly fanciful - given the sums of money involved.
- As we have said, the Secretary of State has recognised that the policy will bear particularly harshly on larger families and single parents. That is necessarily the case when current needs are no longer wholly being met by welfare benefits. But he submits that it is his considered view that the anticipated short term benefits will be achieved, and that certainly there will be some savings. In any event, in order to change the welfare culture which will inevitably result in long term savings, very serious steps have to be taken to remove disincentives to work and to encourage those on benefit back to work. Whilst it may be true that some of these claimants or similarly placed single parents may already have a sufficient incentive to work, that is not necessarily the case with all on benefits. Beneficiaries have to be forced if necessary to take difficult decisions either to cut their spending requirements, perhaps by moving to another place, or to increase their income by obtaining a job. Moving is certainly not a desirable outcome in many cases, but many people in work have to take similar unpalatable steps to secure sufficient family income, and there is every reason to suppose that these claimants and others similarly placed would be able to live far more cheaply elsewhere than they do in London. DHPs have been made available to help families in the short term. So, for example, they can be used to assist someone changing homes to cheaper accommodation to pay any deposit and the first weeks' rent. Nor is it the case that any of these families would be put on the street; the local authority would have a duty to house them in cheaper accommodation if they were otherwise destitute.
- The Secretary of State also points out that if the difficulties highlighted by the claimants were to be eliminated by removing from the cap the benefits which can be claimed by those at work (as CPAG have suggested fairness requires), the result would be, in effect, to make the cap irrelevant in almost all cases. It would bite in very few cases indeed and would to all intents and purposes involve the effective dismantling of the policy.
- We accept the submissions of the Secretary of State. We do not think that the scheme as drafted can possibly be said be "manifestly without reasonable foundation." The division of the resources of the state and more particularly the question to what extent state funds should be made available to those in need for one reason or another is par excellence a political question. Similarly, it is not for the court to engage in a debate whether the objectives can in principle be achieved or not. It is the considered view of the Secretary of State, supported by Parliament, that they can. They take the view that a change in welfare culture is critical in the longer term, and that the imposition of the cap is an important element of that objective.
- As we have said, the need for the court to tread with extreme caution in this area is reinforced in circumstances where Parliament has fully debated and considered many of the concerns now identified by the claimants, has chosen not to make the exceptions they seek, and has positively affirmed the regulations adopted.
- Accordingly, whilst recognising the genuine and very real hardship that these policies will cause for certain groups, particularly in the shorter term, we do not accept that the imposition of the cap can properly be described as manifestly without reasonable foundation. Moreover, the immediate hardships are in many cases alleviated by the DHPs. Whilst discretionary, temporary support of this nature manifestly does not eliminate the hardships, and cannot come near to providing justification for the policy, for the reasons given by Henderson J in Burnip v Birmingham City Council  EWCA Civ 629;  PTSR 117 para. 46, it is a factor which carries some weight in the proportionality exercise.
- We turn to a distinct argument advanced by Mr Drabble for the CPAG. CPAG's argument focuses on the fairness objective of the scheme. Mr Drabble submits that the policy must be capable of being described as fair if that objective is to be achieved, but it cannot properly be so characterised. The cap here is fixed in an entirely arbitrary way. It is wholly unrelated to need since the cap is the same irrespective of the number of children or housing costs; and it also fails to give effect to any other cogent concept of fairness. The principle that a person receiving benefit should not receive more than the average wage sounds a reasonable, and indeed a not ungenerous, principle. It suggests that the beneficiary will have to cope in the same way as any other family on a similar income. That is what the Government has been at pains to emphasise as a justification for the policy, but it is wholly misleading. The reason is that if someone is in work and receiving the average wage that is only a proportion of his income. He will in addition be entitled to a range of benefits, and in particular child benefit and housing benefit, which are payable to those in work and out of work alike.
- The effect therefore is that the cap will frequently create a dramatic and unjustified differential between those in benefit and those in work. In the case of MG, for example, assuming that she remains in the same house and ceases to become entitled to DHPs, she will be in receipt of a weekly income several hundreds of pounds less than if she earned the national average wage together with benefits. Even after allowing for child care costs, the difference would be very considerable. Indeed, what is even more striking is that she would still be significantly better off in work even if she were paid the minimum wage, because a considerable slice of her income would come from benefits.
- Accordingly, by depriving the claimants of benefits which are unrelated to work - by bringing them into the benefit cap when they need not have been prescribed as relevant benefits - the Secretary of State has not created the fair and equivalent situation which he claims to have done. It is simply not true that those on benefit but subject to the cap are having to take the same difficult decisions as those in work.
- Mr Drabble accepts that the primary legislation requires the cap to be fixed by reference to national average earnings because it in terms draws a comparison between benefit income on the other hand and earnings (not income) of those in work on the other. He says, however, that where one of the objectives of the scheme is to bring about fairness by requiring those on benefit to face similar hard decisions as those in work, the Secretary of State has to manipulate the benefits which are brought within the scheme to achieve that objective. He has failed to do that.
- This is a forceful and cogent submission. We are uncertain as to whether the full impact of the differential between the income available to those in receipt of benefits and those who are in work, at least in the more extreme cases which have been drawn to the court's attention, was ever fully appreciated by Parliament, or indeed anyone else. Mr Eadie concedes that statistics of this kind were not apparently brought to anyone's attention, not even by the CPAG, which has formulated the information specifically for this hearing. But there is no doubt that there was a full appreciation that the comparison between the income for those on benefit and earnings for those in work inevitably meant that the latter would receive more money than the former. To that extent it was always appreciated that there was no equivalence between a worker in receipt of the average wage and someone who received the same amount through benefits; the latter would always be worse off, at least to some extent. There will be particularly hard cases, and these claimants provide examples, but it must be remembered that they are not typical of the effect of the policy in the country as a whole. As Mr Eadie points out, that is inevitably the case when policy is cast in broad terms, and it is well established that "bright line" rules are necessarily to some degree arbitrary but that does not render them disproportionate. They are inevitable in an administrative scheme of this nature as Lord Bingham pointed out in Huang v Secretary of State for the Home Department  UKHL 11,  2 AC 167, para.6.
- Moreover, Parliament has chosen not to leave out of account child benefit or temporary accommodation. It is true, as Mr Drabble contends, that it does not follow that the Secretary of State was therefore obliged to include child benefit in the prescribed list, or to refuse to exempt temporary accommodation, but Parliament must be taken to have accepted that the Secretary of State should have considerable leeway to frame the final scheme as he thinks will best achieve the objectives. Indeed, we think that there is force in Mr Eadie's submission that if the Secretary of State had excluded housing benefit and child benefit which Mr Drabble submits would be necessary to achieve fairness, there is a real risk that he could be said to have failed to exercise his powers lawfully and to have produced an anaemic scheme which fails to give effect to Parliament's objectives.
- Mr Drabble makes a good case for submitting that there will be a number of cases under this policy where it is simply untrue to say those subject to the cap will face essentially the same problems as many in work. But we do not accept his thesis that this demolishes the fairness objective which is a central plank of the whole policy. First, whilst it is true that the fairness concept has sometimes been justified by relying on the notion that those on benefit should face difficult decisions of the kind facing those in work, that will often in fact be the case. Second, the concept of fairness described by Mr Holmes (see para. 80 above) recognises that there is no complete equivalence between the two precisely because of the impact of benefits on the income of those in work but that the other objectives of incentivisation and cost-saving justify adopting that principle. The Secretary of State is claiming no more than that the scheme in a general sense strikes what he considers to be a fair balance between the interests of working tax payers and those who, for one reason or another, cannot obtain work and rely on benefits. That may be described as a broad political concept of fairness; and in our view the scheme is consistent with it.
- No doubt many consider these exceptions to be too limited, and the cap to be too parsimonious. But that is ultimately a policy issue, and for the reasons we have given we do not think it can be said that the scheme is so manifestly unfair or disproportionate as to justify an interference by the courts.
- The final submission is that the decision of the Secretary of State is tainted by irrationality because he failed to gather sufficient information about the consequences of imposing a cap. In particular, it is said that the Minister failed to gather information in two specific areas: the problem of families fleeing domestic violence; and information about those living in temporary accommodation. The claimants rely upon the well known principle established in the case of Tameside MBC v Secretary of State for Education  AC 1014 that in certain circumstances a decision maker may be acting irrationally or unreasonably in making a decision without having first acquired the material necessary to enable a properly informed decision to be reached. This obligation treads similar ground to the public sector equality duty, which is no longer being pursued. Both insist on decision makers acquainting themselves with information sufficient to ensure that a properly informed decision can be reached with a full understanding of its consequences. There can be no doubt that in the circumstances of this case the Secretary of State was well acquainted with both the particular difficulties of those fleeing domestic violence and the problem of temporary accommodation. There was extensive consultation with affected groups which highlighted these problems and, as we have seen, an attempt (albeit not entirely successful) to structure the scheme so as not to disadvantage women subject to domestic violence. The applicants submit that the exemption is inadequate, but that is immaterial to the question whether the Government had properly informed itself of the problem.
- Similarly, active consideration was given to the possibility of exempting temporary accommodation, but the idea was rejected on the grounds that it would undermine the objectives of the scheme.
- It seems to us that in substance the submission is that the Secretary of State should have given greater weight to the significance of these features; and that if he had, he would have created special, or more effective, exemptions to deal with them. But weight is for the Secretary of State, and there is no challenge to the merits of the decision itself.
- A further submission is that it is irrational to impose the cap as a means of seeking to steer women back to work, when single parents with young families cannot meaningfully take advantage of that opportunity. In that context the claimants rely upon the fact that under the current rules someone can be in receipt of income support and, provided he or she is caring for a child under five, does not have to look for work.
- There is nothing intrinsically illogical in the Secretary of State deciding to adopt a different principle in relation to the benefit cap than has been adopted with respect to the payment of income support. It is true that this marks a change of policy, but that is a matter for the Secretary of State provided it is otherwise lawful. Moreover, whilst the policy will bear particularly harshly on lone parents with young children, it is not for the court to exercise its common law powers to interfere with Government decisions as to how it will allocate public funds, save very exceptionally where the method of allocation infringes some basic human right. In short, this common law challenge cannot succeed if, as we have found, the human rights challenge has failed.
- For all these various reasons, we would dismiss these applications.
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