I’ve been really slow to write this up, for which many apologies, but I have just got bogged down in other things. The benefit cap JR got lost amongst that other stuff partly because it was almost predictable after MA that the Divisional Court would find a way to uphold it.
Actually, though, having read it again the other day for a different reason, the benefit cap challenge – R(JS) v SSWP  EWHC 3350 (QB) – was very clever (CPAG and Shelter were joined as interveners – CPAG’s arguments can be found here) and the appeal is to be heard pretty soon, having been expedited by Richards LJ. The Divisional Court challenge was to the SI which sets out the benefits taken into account in the cap, not the primary legislation itself. Unlike MA, the Claimants dropped their public sector equality duty challenge. So, the judgment only concerns the Art 14/Art1Prot1/Art 8 discrimination claims and a rather bold Wednesbury challenge. The actual facts of the three cases themselves are enough to make you weep at the thoughtless, insensitive, appallingly callous, effectively segregationist policy. They involve single female parents with multiple children, two of whom had left violent partners and one of whom is Roma and a devout Roman Catholic.
As the Divisional Court puts it, the benefit cap is most likely to hit large households which live in high-rent areas. “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”. Further, “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”. The basic point is that the eligible amount for housing benefit is reduced by the excess over either £350 or £500pw (for singles and others respectively). However, where a member of the household is entitled to (for example) working tax credit, then the benefit cap does not apply. The cap is a pretty crude mechanism for forcing cheap part-time labour.
The problem for the Claimants in this case, fairly obviously, was that such labour was not open to them. The DWP’s argument, in part, was that they are in the process of tightening up child support arrangements by absent parents, the usual DHP (ie discretionary housing payments) argument, but mainly that, even if there was discrimination, it did not reach the threshold required of “manifestly without reasonable justification”. Frankly, not much would reach that threshold, even more so when one appreciates that the jurisprudence on challenging Statutory Instruments suggests that the threshold is even higher for constitutional reasons, even when the SI itself had not been debated.
The court disposed of two arguments pretty quickly: the first was that the DWP had failed to take into account the best interests of the children, and the second whether the local authority would have to pick up households affected by the cap under Part 7, Housing Act 1996, as homeless persons. As regards the former, it was clear that they had done; and, as regards the latter, it was likely that the local authority would have to do so (even though the duty was not analagous to the kinds of decisions made by working people (as Shelter pointed out) and the household would probably be shunted many miles away.
We were not in Article 8 territory really here, but that did not matter because we were clearly in A1P1 territory and also, pretty clearly, the cap discriminates against women. The other grounds of discrimination were said to be race, religion and age in the grounds; arguments that it discriminated against those against whom domestic violence had been perpetrated and large families were neither here nor there, albeit interesting in the context of the breadth of “other status” in Art 14.
As regards justification, the DWP made clear that the policy has three aims: (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.
The submissions on justification, which were accepted, should be repeated because they are just so awful (basically, some people will suffer but that’s ok because the neo-liberal state will be saved):
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.
The really interesting stuff is later. It was argued by Richard Drabble for CPAG that the cap is fixed in an entirely arbitrary way, unrelated to need or to 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.
As the court accepted, it was unclear whether Parliament or anyone had quite appreciated the full impact of the in/out of work differential. But, as the DWP makes clear, that’s fine: “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.” Somehow the Divisional Court manages to find that the policy “in a general sense” strikes a fair balance between the in/out of work – “a broad political concept of fairness”, as the court puts it, perhaps with a sneer at the unfairness of it.
It will be interesting to see what the Court of Appeal makes of it.