ON APPEAL FROM THE HIGH COURT OF JUSTICE
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE LEGGATT
LADY JUSTICE NICOLA DAVIES
| THE QUEEN on the application of
SC and 3 children
CB and 5 children
|- and -
|THE SECRETARY OF STATE FOR WORK AND PENSIONS
THE LORDS COMMISSIONERS OF HM TREASURY
THE COMMISSIONERS FOR HM REVENUE AND CUSTOMS
- and -
EQUALITY AND HUMAN RIGHTS COMMISSION INTERVENTION
James Eadie QC and Galina Ward (instructed by the Government Legal Department) for the Respondents
Helen Mountfield QC and Raj Desai (instructed by the Equality and Human Rights Commission) for the Intervener
Hearing dates: 19 and 20 December 2018
Crown Copyright ©
Lord Justice Leggatt:
Child tax credit
"Previously, people in work (or otherwise liable to pay income tax) might claim the children's tax credit to set off against their income. This was administered by tax authorities. People out of work (or otherwise claiming means-tested benefits) might claim additions to their income support or income-based jobseeker's allowance to meet their children's needs. This was administered by the benefits authorities. Under the new system, a single tax credit is payable in respect of each child, irrespective of whether the claimant is in or out of work, and is administered by Her Majesty's Revenue and Customs. Child tax credit is like income support and jobseeker's allowance, in that it is a benefit rather than a disregard and it is means-tested, so that the higher one's income the less the benefit, until eventually it tapers out altogether. But in several other respects it is like a tax allowance."
The relevant legislative provisions
"(3A) Subsection (3B) applies in the case of a person or persons entitled to child tax credit where the person is, or either or both of them is or are, responsible for a child or qualifying young person born on or after 6 April 2017.
(3B) The prescribed manner of determination in relation to the person or persons must not include an individual element of child tax credit in respect of the child or qualifying young person unless
(a) he is (or they are) claiming the individual element of child tax credit for no more than one other child or qualifying young person, or
(b) a prescribed exception applies."
(i) Multiple births (apart from one child in that birth) regulation 10;
(ii) Adoption (where the adopted child was, or would otherwise be, in local authority care) regulation 11;
(iii) Non-parental caring arrangements (where the claimant is a friend or family carer responsible for a child or where a child is born to a child aged under 16 for whom the claimant is responsible) regulation 12; and
(iv) Non-consensual conception (including where the child was conceived in the context of a controlling or coercive relationship) regulation 13.
The individual claimants
The policy reasons for the measure
"The Budget will also reform tax credits to make them fairer and more affordable. On top of child benefit for every child, an out of work family of 5 children can currently claim over £14,000 a year in tax credits alone. The government believes that those in receipt of tax credits should face the same financial choices about having children as those supporting themselves solely through work.
The Budget will therefore limit support provided to families through tax credits to 2 children so that any subsequent children born after April 2017 will not be eligible for further support."
"The government has made clear its objective of tackling the deficit and rebalancing the welfare state. Welfare expenditure is a significant driver of public spending and the government is committed to delivering a more sustainable welfare system, including the changes to tax credits, to put the system on a more sustainable footing.
The current benefits structure, adjusting automatically to family size, removes the need for families supported by benefits to consider whether they can afford to support additional children. This is not fair to families who are not eligible for state support or to the taxpayer."
"The changes are part of the wider reforms to the welfare system aimed to bring about savings on the UK's welfare spend and reduce the economic deficit. Taking into account the wide margin of appreciation for the State's administration of social security benefits, the policy is based on a number of political, economic and social considerations. These include a desire to ensure families in receipt of benefits are encouraged to make the same financial decisions as families supporting themselves solely through work, to ensure fairness for the taxpayer and to secure the economic recovery of the country."
(i) Ensuring that spending on welfare is sustainable and fair to the taxpayer whilst protecting the most vulnerable;
(ii) Ensuring that people in receipt of benefits should face the same choices as those who support themselves solely through work and are not in receipt of income related benefits; and
(iii) Ensuring that the benefits system incentivises work and progression in work, recognising that work is the best route out of poverty.
The issues on this appeal
Articles 8 and 12
"in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others."
"The truth is that these various duties cast by Parliament upon the state to aid the personal development of a person who is or has been an adolescent in need are the creature of statute and enforceable on that basis. A failure to discharge the duties might lead to an infringement of that person's right under article 3; but otherwise the consequences of failure are likely to be as in this case they certainly are far too nebulous, far too speculative and, insofar as discernible, far too slight to lead to a conclusion that the failure infringes his right to respect for his private life under article 8. The duties are not manifestations of the state's obligation to satisfy the rights of its citizens under article 8; or, to put the same point in another way, a member state of the Council of Europe which failed to make analogous provisions would not thereby infringe the rights of its citizens thereunder."
"Prohibition of discrimination
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."
The test of ambit
"The prohibition of discrimination enshrined in Article 14 thus extends beyond the enjoyment of the rights and freedoms which the Convention and the Protocols thereto require each State to guarantee. It applies also to those additional rights, falling within the general scope of any Convention article, for which the State has voluntarily decided to provide."
"Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law. "
The ambit of A1P1
"In cases, such as the present, concerning a complaint under article 14 in conjunction with [A1P1] that the applicant has been denied all or part of a particular benefit on a discriminatory ground covered by article 14, the relevant test is whether, but for the condition of entitlement about which the applicant complains, he or she would have had a right, enforceable under domestic law, to receive the benefit in question "
The ambit of article 8
"There is no need for any adverse impact other than the denial of the benefit in question."
See also to similar effect Lord Hodge at para 68, citing R (Steinfeld) v Secretary of State for International Development  UKSC 32;  3 WLR 415, para 18; and Smith v Lancashire Teaching Hospitals NHS Foundation Trust  EWCA Civ 1916;  QB 804, para 55.
"The question whether there is a difference of treatment based on a personal or identifiable characteristic in any given case is a matter to be assessed taking into consideration all of the circumstances of the case and bearing in mind that the aim of the Convention is to guarantee not rights that are theoretical or illusory but rights that are practical and effective "
"The more peripheral or debatable any suggested personal characteristic is, the less likely it is to come within the most sensitive area where discrimination is particularly difficult to justify."
"There is no reason why a person may not be identified as having a particular status when the or an aim is to discriminate against him in some respect on the ground of that status."
Status in this case
The test of proportionality
"(1) whether the objective of the measure is sufficiently important to justify the limitation of a protected right, (2) whether the measure is rationally connected to the objective, (3) whether a less intrusive measure could have been used without unacceptably compromising the achievement of the objective, and (4) whether, balancing the severity of the measure's effects on the rights of the persons to whom it applies against the importance of the objective, to the extent that the measure will contribute to its achievement, the former outweighs the latter."
See Bank Mellat v HM Treasury (No 2)  UKSC 39;  AC 700, para 74 (Lord Reed). Put more shortly, the question at step four is whether the impact of the right's infringement is disproportionate to the likely benefit of the impugned measure: ibid. Another way of framing the same question is to ask whether a fair balance has been struck between the rights of the individual and the interests of the community: see the Bank Mellat case at para 20 (Lord Sumption).
The margin of appreciation
"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'." [citations omitted]
This statement has been reiterated in later cases: see e.g. Carson v United Kingdom (2010) 51 EHRR 13, para 61; Andrejeva v Latvia (2010) 51 EHRR 28, para 83; Fαbiαn v Hungary  ECHR 744, para 115.
"In applying the Convention rights which have been reproduced as part of domestic law by the Human Rights Act 1998, the concept of the margin of appreciation has, as such, no application. It is for the courts of the United Kingdom to decide how the area of judgment allowed by that margin should be distributed between the legislative, executive and judicial branches of government."
Intensity of review
"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 R (SG and JS) v Secretary of State for Work and Pensions  UKSC 16;  1 WLR 1449, at para 95, Lord Reed (after citing this passage and other authorities) noted that, although the benefit cap scheme which was the subject of challenge in that case was not contained in the Bill debated in Parliament but in statutory regulations, nevertheless:
" the Government's proposals had been made clear, they were challenged by means of proposed amendments to the Bill, and they were the subject of full and intense democratic debate. That is an important consideration."
Plainly, the weight which should be attached to the democratic basis for the decision is even greater where the measure in question has not merely been considered and approved by Parliament but has been enacted by Parliament in primary legislation. Baroness Hale made this point in the SG and JS case, at para 159, when she said that the Supreme Court was there concerned with decisions of the government in working out details that were deliberately left by Parliament to be worked out in regulations rather than with the decisions of Parliament in passing the primary legislation.
"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."
By article 4, state parties have agreed to implement economic, social and cultural rights recognised in the convention "to the maximum extent of their available resources." Such rights include that recognised in article 26, which provides:
"1. States Parties shall recognize for every child the right to benefit from social security, including social insurance, and shall take the necessary measures to achieve the full realisation of this right in accordance with their national law.
2. The benefits should, where appropriate, be granted, taking into account the resources and the circumstances of the child and persons having responsibility for the maintenance of the child, as well as any other consideration relevant to an application for benefits made by or on behalf of the child."
The general relevance of international treaties
"The Court, in defining the meaning of terms and notions in the text of the Convention, can and must take into account elements of international law other than the Convention, the interpretation of such elements by competent organs, and the practice of European states reflecting their common values. The consensus emerging from specialised international instruments and from the practice of contracting states may constitute a relevant consideration for the Court when it interprets the provisions of the Convention in specific cases."
The Court went on to say, at para 86, that it is not necessary that the relevant international instruments should have been ratified by the state concerned but is sufficient that they "show, in a precise area, that there is common ground in modern societies".
"This approach involves a combined and harmonious application of the international instruments . Such consideration of international provisions should not result in conflict or opposition between the different treaties, provided that the Court is able to perform its task in full by interpreting and applying the Convention's provisions in a manner that renders its guarantees practical and effective."
"(1) The best interests of a child are an integral part of the proportionality assessment under article 8 of the Convention; (2) in making that assessment, the best interests of a child must be a primary consideration, although not always the only primary consideration; and the child's best interests do not of themselves have the status of the paramount consideration; (3) although the best interests of a child can be outweighed by the cumulative effect of other considerations, no other consideration can be treated as inherently more significant; (4) while different judges might approach the question of the best interests of a child in different ways, it is important to ask oneself the right questions in an orderly manner in order to avoid the risk that the best interests of a child might be undervalued when other important considerations were in play; (5) it is important to have a clear idea of a child's circumstances and of what is in a child's best interests before one asks oneself whether those interests are outweighed by the force of other considerations; (6) to that end there is no substitute for a careful examination of all relevant factors when the interests of a child are involved in an article 8 assessment; and (7) a child must not be blamed for matters for which he or she is not responsible, such as the conduct of a parent."
The benefit cap cases
"The fact that children are statistically more likely to be living with a single mother than with a single father is unrelated to the question whether the children's rights under article 3(1) of the UNCRC have been violated. There is no factual or legal relationship between the fact that the cap affects more women than men, on the one hand, and the (assumed) failure of the legislation to give primacy to the best interests of children, on the other. The conclusion that the cap is incompatible with the UNCRC rights of the children affected therefore tells one nothing about whether the fact that it affects more women than men is unjustifiable under article 14 of the Convention read with A1P1."
Lord Carnwath agreed with this reasoning at para 131, and Lord Hughes agreed with the whole of Lord Reed's judgment at para 134, whilst also giving further reasons for concluding, at para 146, that the "necessary connection between the Convention right under consideration and the international instrument is not present." Baroness Hale and Lord Kerr dissented on this issue and in the overall result on the basis that, when proper account was taken as in their view it needed to be of the best interests of the children affected by the cap, the disparate impact on women inherent in the measure could not be justified.
"The fact that the children can make their own claim which can be characterised as discrimination with respect to the right to family life does not alter the fact that what is in issue remains in substance discrimination against this particular cohort of lone parents, focusing on the difficulties they face. The case falls within the ambit of the children's article 8 rights only because those rights are inextricably intertwined with those of their parents. That is particularly so in this case where the children are so young. It is not as if this cohort of children are necessarily affected by the imposition of the cap more than other children of parents living in workless households, and particularly other children under school age. Indeed, as I have indicated earlier, the precise consequence is likely to depend more on the number of children than on their ages. There is therefore no reason why the best interests of these children under the age of two should be materially different to the best interests of other children affected by the cap."
Reliance on the UNCRC in other article 14 cases
"A conclusion, reached without reference to international Conventions, that the Secretary of State has failed to establish justification for the difference in his treatment of those severely disabled children who are required to remain in hospital for a lengthy period would harmonise with a conclusion that his different treatment of them violates their rights under two international Conventions."
Lord Wilson did not, however, address, as he did not need to in that case, the precise relevance of the UNCRC and what should happen where a conclusion reached without reference to the UNCRC is not in "harmony" with a conclusion that there has been a breach of that convention.
"Given the direct link with children, there cannot be much doubt that the provision of widowed parent's allowance is an action concerning children. Article 26 [of the UNCRC] requires State parties to 'recognise for every child the right to benefit from social security, including social insurance ' Article 2 of the UNCRC requires state parties to 'respect and ensure the rights set forth in the present Convention to each child within their jurisdiction without discrimination of any kind, irrespective of the child's or his or her parent's birth or other status'. To like effect is article 10 of the International Covenant on Economic Social and Cultural Rights 1966. Denying children the benefit of social insurance simply because their parents were not married to one another is inconsistent with that obligation."
Relevance of the UNCRC in this case
Is the disparate impact on women justified?
"It is not for the court to rule that some other welfare provision, unspecified as beyond its responsibility, should be cut, or that [child tax credit] should not be cut, or should only be cut by reference to some equally unspecified criteria but not the number of children in the family. If the court makes decisions of that sort, however specific it is or is not about alternatives, it would make considerable incursions into the exclusive territory of Parliament or of the executive accountable to Parliament. The court is not concerned either with the effectiveness of the measure in reducing child poverty or increasing it. That is a political judgment."
Is the differential treatment of families with more than two children justified?
"Currently, the benefit system adjusts automatically to family size, but many families who are only in receipt of income from work would not see their budgets flex in the same way when they have more children."
In this sense, the imposition of the two child limit can be said to make the situations of families in receipt of child tax credit and families who are only in receipt of income from work more alike.
The child's interests
"The savings afforded to the government by reducing spending on welfare will allow the government to protect expenditure on education, childcare and health and the improvements to the overall economic situation will have a positive impact on children and their best interests."
This assertion, however, is directed to the interests of children at large. It does not address the distinct interests of the group of children to whom the two child limit applies.
"The third or fourth child does not make a choice to live. The third, fourth or fifth child is not to be blamed for their existence. The sixth child is not to have no shoes because of a reckless mother who cannot keep her legs crossed. It is not the sixth child's fault that he is the sixth child. Why should he starve? How will it make a difference?"
No direct answer to this argument was offered by any government representative during the debates. It is clear, however, that the government took the view that, even if imposing the two child limit is contrary as it seems to me that it plainly is contrary to the interests of the children who will be affected by it, that consideration was outweighed by the government's reasons for proposing the measure. By enacting the legislation, Parliament must be taken to have endorsed that view.
Conclusion on the issue of justification
Summary of conclusions
Lady Justice Nicola Davies:
Lord Justice Patten: