The headline here, as has been widely tweeted/flashed etc, is that the challenge to the bedroom tax contained in Regulation B13, Housing Benefit Regulations (both generically and specifically in relation to households with a disabled person) was unsuccessful in the Divisional Court, R (MA) Secretary of State for Work and Pensions  EWHC 2213, but the Court came close to granting injunctive relief against the Secretary of State to make regulations bringing Burnip/Gorry into effect, as opposed to relying simply on a Circular. The DWP had argued that they were entitled to rely on guidance by way of Circular “pending a decision on whether and at what point in time to introduce regulations” (Laws LJ’s emphasis). On that point, rarely have I read such strong words as appear in Laws LJ’s judgment at -. That is an ouch moment for the DWP which, I bet, will not be widely reported, so let me headline the quote here: “The Secretary of State has no business considering whether to introduce regulations to conform HB provision with the judgment in Gorry. He is obliged to do so.” The only thing which stopped injunctive relief was that their drafting was “under consideration” after 14 months (!).
As for the rest of it, we are left with a quandary: how can a challenge to the bedroom rules in the PRS be successful on the basis of Article 14, Sch 1, Human Rights Act 1998 (Burnip), but not the similar rules in relation to the social sector (MA)? More specifically, why was the discretionary housing payments system regarded by the Court in Burnip as insufficient to justify the policy in relation to the PRS but regarded as sufficiently robust in relation to the social sector? These questions and more are likely to be canvassed in the planned appeal.
The judgment in MA contains a wealth of information about the decision-making process that lead to the bedroom tax policy and its exclusions, as well as the significance ascribed to DHP. The principal point for the Divisional Court which emerges from that process is that, although consideration was given to exempting accommodation which had been specially adapted, such a definition “would not be workable. … It would either be too broad brush or leave out many other, equally deserving cases” (). Park that thought for the moment.
It had to be clear that there was Article 14 discrimination, if for no other reason that to hold otherwise would be entirely contrary to Burnip. The question canvassed by Laws LJ (who gave the only reasoned judgment, with which Cranston J agreed) was which category of discrimination it fell into. There are three categories: direct, indirect, and Thlimmenos discrimination (a failure to treat differently persons whose situations are significantly different). The point of this somewhat arcane distinction is that the process of justification is different for each:
Where the discrimination is direct – where a rule, practice or policy prescribes different treatment for persons in like situations – it is the rule itself that must be justified: the difference in treatment. Where the discrimination is indirect – where a single rule has disparate impact on one group as opposed to another – it is the disparate impact that has to be justified. With Thlimmenos discrimination, what must be justified is the failure to make a different rule for those adversely affected.
Despite Martin Westgate’s argument that the bedroom tax involves direct discrimination, Laws LJ regarded it as being Thlimmenos discrimination. This was not a point taken in Burnip (in which Maurice Kay LJ rather fudged the question, regarding those Regs as creating indirect and/or Thlimmenos discrimination. Laws LJ says that there is a close alliance between the two types, but his citation of Elias LJ’s judgment in AM(Somalia) (esp at -) rather undermines that “close alliance”. True, they are both based on the single principle of consistency, as Laws LJ points out, but the point is that the process of justification is different. As Elias LJ put it, with Thlimmenos discrimination, “it is accepted that the rule itself may serve a legitimate function and be capable of justification in most circumstances but it is contended that a different rule should be adopted for the claimant and those in a similar situation, specifically ameliorating the effect resulting from their special features or characteristics”.
The point made for the Secretary of State was that the claimants’ could not make out Thlimmenos discrimination because of the difficulties in defining which HB claimants are unable to share a bedroom due the nature and extent of their disabilities. Laws LJ rightly used the “so what?” position in his judgment, in fairly robust terms (at -). As he put it:
But the law’s response, even in the context of national economic strategy, must not be to consign the many disabled people who will suffer real difficulty to the outcomes of an unfettered political discretion. …
Now here, in my judgment, there is no precise class of persons – those who need extra bedroom space by reason of disability – which can be identified in practical and objective terms and sufficiently differentiated from other groups equally in need of extra space but for other reasons. But the common law would not for that reason absolve the Secretary of State from the duty to consider and take account of the effects of his prospective policy on the disabled. So also Article 14 is not disapplied. The case remains one where the policy has markedly disparate effects between groups of persons, even if the groups have no sharp edges. Because they have no sharp edges, it is a case in which, in Lord Nicholls’ words, “the position is not so clear”; but not one where Article 14 does not apply at all. What Article 14 gives in those circumstances is an obligation upon the Secretary of State “to see that the means chosen to achieve [his] aim is appropriate and not disproportionate in its adverse impact”.
So, we come back to the question of justification. In Burnip, of course, the DHP was regarded as a sideshow at best, and the Court made some pretty caustic observations about the Secretary of State’s reliance on it. The question here, though, was whether the bedroom tax policy is “manifestly without reasonable foundation” because the bedroom tax involved a question of high policy – the Secretary of State relied on Humphreys v HMRC  1 WLR 1545, which, in turn, had applied Stec v UK (2006) 43 EHRR 1017 to argue for a different test depending on the ground of discrimination and the type of policy. Martin Westgate’s attempt to argue that the bedroom tax is not a matter of “high policy” was unsuccessful (at ). The state therefore had a wide margin of appreciation, particularly because of the nature of the discrimination.
We then have the DHP argument. Here, the court had submissions on behalf of Birmingham CC which addressed the inadequacy of DHP to meet the shortfall caused by the bedroom tax (as to which, see also @speyejoe’s recent blog on this about Liverpool). The key points made by Birmingham CC were that DHP could not make up the difference caused by the cap; insufficient funds had been made available to enable DHP to have the necessary impact; there will be a rise in numbers who qualify as homeless which may actually increase HB expenditure because of the use of temporary accommodation not subject to the tax (well, it will increase it, but this is the prosaic language of the court).
Now Laws LJ takes something of a queer turn, for he effectively aligns the public sector equality duty with proportionality at this point. As he puts it, “Both demand an informed and conscientious appreciation of the difficulties facing the persons or group adversely affected by the prospective measure. If that has been done, the PSED duty will have been fulfilled; and, most likely, a proportionate decision arrived at” (). In my view, it is this alignment that throws him off the scent. But, he is right that both require proper consideration to the discriminatory effects of the Regulation; if such consideration has been given, then the policy will only be struck down if it is manifestly without reasonable foundation (and, as you might sense, that will be a pretty high threshold).
Before considering how the court deals with this ground, there is an important discussion about the effects of UN Conventions, especially the Rights of Persons with Disabilities. This had been a significant background factor (at least) in Burnip. Here, Laws LJ makes a constitutional point about incorporation into UK law – the ECHR is part of UK law because it has been incorporated by Statuted; the UNCRPD has not been and is only relevant as an aid to statutory interpretation if the the relevant rule is unclear.
Kate Markus, for the EHRC as an intervener, argued that the Secretary of State had not complied with the public sector equality duty, and summarised six areas where due enquiry had not been made. That might have been a strategic error, because Laws LJ argued that they attempt to persuade the court into micro-managing the policy-making process (which is impermissible): “Ms Markus’ case on the facts, though she would certainly disavow it, looks very like a list objections to the policy under the guise of a litany of matters left unconsidered. That is all but an assault on the outcome – the terms of Regulation B13 – rather than the process” ().
As regards DHP, the Secretary of State submitted that “reasonable provision has been made and the Secretary of State is not obliged to provide for something akin to an indemnity against the needs of every affected disabled person” (), which can hardly be the most savoury justification of an SoS. The court, however, agreed:
In my judgment the [public sector equality duty] was fulfilled; and the effects of the HB cap were properly considered in terms of the discipline imposed by the requirement of proportionality. In those circumstances the refusal to exclude (some) disabled persons from the regime of B13, and the provision made and to be made by way of access to DHPs, will constitute a proportionate approach to the difficulties suffered by such persons in consequence of the policy unless it was manifestly without reasonable foundation.
And the policy was not without reasonable foundation. The fact that one could not identify with precision the class of person who need an extra bedroom by reason of disability was a powerful factor here (if not on whether there was discrimination). This is what distinguished Burnip:
In Burnip (or rather Gorry) the Court of Appeal was faced with a discrete group, exemplified by Mr Gorry’s daughters: families with children who could not share a bedroom by reason of their disabilities. The court concluded that such persons suffered unlawful discrimination by the application of the private sector provisions equivalent to B13. But I do not accept that that approach can be applied here, where there is no such discrete group. The Secretary of State had, of course, nevertheless to consider carefully what steps to take in relation to disabled persons, and others, who would or might face real difficulties arising out of the cap – even though they could not practically be defined as a class. His provision of extra funding for DHPs and advice and guidance on its use cannot be said to be a disproportionate approach to the difficulties which those persons faced.
So, this case is on its way to the Court of Appeal. Some brilliant minds are applying themselves to this significant aspect of policy, and I’d just like to h/t one of them Caoilfhionn Gallagher (who has been really helpful in my ongoing academic work on this policy).