England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		2nd July 2008

Ouseley J :

1. This is the second in what promises to be a longer line of cases challenging the lawfulness of the Terms and Conditions of Service and the pension arrangements of the Gurkha soldier retired from the British Army. These Claimants are all retired Gurkhas with long service who complain that the new pension transfer arrangements enacted in 2007 are irrational, and discriminate against them by comparison with other Gurkhas on the grounds of age, contrary to their rights under Article 14 ECHR and Article 1 of Protocol 1 to the ECHR.
2. Gurkhas have been soldiers of renown in the armed forces of the Crown for nearly 200 years, mostly in the British Indian Army. On the independence of India, a Tripartite Agreement was reached between the UK, India and Nepal over the future of Gurkhas serving in the British Indian Army. 6 regiments stayed in the Indian Army and 4 regiments transferred to the British Army forming the Brigade of Gurkhas, and a significant part of the Army's infantry capability. It is recruited exclusively from Nepalese citizens who remain citizens of Nepal throughout their military service. Historically, it was based in the Far East, and from 1991 to 1997 in Hong Kong. The process of handing Hong Kong back to China led to the gradual withdrawal of Gurkhas from Hong Kong to a home base now in the UK. That process was completed on 1st July 1997, although one battalion continues to be stationed in Brunei. That date of 1st July 1997 is pivotal to the arguments here.
3. The Terms and Conditions of Service ("TACOS") under which Gurkhas served differed from those of the rest of the British Army, reflecting their Nepalese citizenship, continuing links with Nepal as desired by the Nepalese Government, and the expectation that they would retire in Nepal. Their pay was set by reference to Indian Army pay, and was significantly lower than the rest of the British Army pay. As from 1st July 1997, Gurkhas received what was called the Universal Addition ("UA") which, save for periods of service in Nepal, meant that they received pay at a rate equivalent to that of their comrades in the rest of the British Army. The UA was non-pensionable. Gurkha pensions however under the Gurkha Pension Scheme ("GPS") established by Royal Warrant in 1949 continued to differ markedly from the Armed Forces Pension Scheme ("AFPS") both before and after AFPS 1975 was replaced by AFPS 2005.
4. In Purja v Ministry of Defence [2003] EWHC 445 (Admin) Sullivan J held, on the application of 7 retired British Army Gurkhas, that the differences in pension and in certain components of pay when on service in Nepal did not give rise to any discrimination contrary to Article 14 ECHR. Sullivan J also held that the differences between Gurkha TACOS and rest of the British Army TACOS over the availability of Married Accompanied Service ("MAS") did not give rise to such discrimination either. But he had reservations about aspects of that which led to a full review of MAS by the MoD. His judgment was upheld in the Court of Appeal in October 2003, [2003] EWCA Civ 1345, [2004] 1WLR 289. It was plain from the terms in which the appeal was dismissed that the justification for the differences in pay and pension was becoming increasingly problematic. The Gurkha TACOS and GPS were designed to maintain the links between Gurkhas and Nepal and therefore were suitable for soldiers recruited in and discharged in Nepal, who lived in Nepal after retirement, having been based in the Far East rather than in the UK for their service career. The move to a home base in the UK, and the UA, was changing the service life of the British Army Gurkha, and of those family members who accompanied them now to the UK.
5. With effect from 25th October 2004, and of crucial importance to the claim here, the Immigration Rules ("IR") HC 395 in respect of HM Forces were changed so that Gurkhas who had served at least 4 years in the British Army and who had been discharged in Nepal on or after 1st July 1997 were enabled, subject to certain procedural requirements, to apply for Indefinite Leave to Enter or Remain ("ILE/R") as the case might be, in the UK; paragraphs 276E to 276K, ("HMFIR"). Although the grant of ILE/R is expressed as a discretionary power exercisable by the Secretary of State for the Home Department, in practice it has been granted to those applying. This in its train created the probability that the wife and children of a Gurkha with ILE/R would also obtain leave in line with that granted to the Gurkha. The HMFIR change was on its terms retrospective. About 90% of the 2230 eligible Gurkhas discharged after 1st July 1997 have taken advantage of that provision, along with their qualifying dependants.
6. In January 2005, the Secretary of State for Defence announced a review of the Gurkha TACOS. Mr Hoon said:

"As the House will be aware, our policy is to keep the Brigade of Gurkhas' terms and conditions of service under review, to ensure that they are fair and that any differences from the wider Army are reasonable and justifiable. We are also aware of our historic relationship and understandings with the Governments of Nepal and India, which have enabled Gurkhas to serve in the British Army since 1947.

Gurkha soldiers have spent an increasing proportion of their time in UK since withdrawal from Hong Kong in 1997, and successive amendments to the conditions under which they serve have recognised their changing role, status and personal aspirations. The most recent of these was their inclusion in the new HM forces immigration rule, which took effect from 25 October 2004. This has potentially far-reaching effects on the way we recruit and manage the brigade and care for its serving members, families and veterans. In addition, some public criticism and unease continues about the remaining differences between Gurkhas' terms and conditions and those of the wider Army. We are, therefore, anxious to ensure that such differences are absolutely justifiable as well as fully understood and accepted by our Gurkha soldiers and want to ensure that the MOD's position, both legally and morally, is beyond reproach.

I have therefore directed that the MOD should carry out a wide-ranging review of all Gurkha terms and conditions of service. This will be an extensive piece of work and we will endeavour to take account of the views of all those with a legitimate interest. This new review will build on earlier findings, including work to date on the review of Gurkha married accompanied service (MAS), but its scope will be much wider and it is aiming to complete in late autumn 2005."

7. Before publication of the results of that review, the results were announced of the earlier review into the differences between British Gurkhas and the rest of the British Army in the availability of Married Accompanied Service, an increasingly troublesome issue as the Brigade of Gurkhas was now based in the UK. With effect from 1^st April 2006 MAS was allowed to those who had served 3 years in the Brigade, so that serving Gurkhas were entitled to be joined in the UK by wives and children. At this stage I note that with effect from 6^th April 2005, the AFPS 1975 had been closed to new entrants and had been replaced by the AFPS 2005.
8. In December 2006, the MoD published the results of the wider TACOS review. The context of the Review was the new Immigration Rules and the changes to MAS which:

"changed the traditional assumption that British Gurkhas would retire in Nepal, and pointed to a future in which Gurkhas could be expected increasingly to regard the UK, rather than Nepal, as their family base. In addition it was clear that the remaining differences between Gurkha terms and conditions of service and those applied to the rest of the Army were increasingly open to legal challenge"

9. Its overall conclusions were:

"The Review Team concluded that, the affordability issues notwithstanding, the major differences in Gurkha terms and conditions of service could no longer be justified on legal or moral grounds and recommended that they be modernised by bringing them largely into line with those available to the wider Army. However the Review Team also concluded that some differences should be retained on the grounds of maintaining the Brigade's military capability and to satisfy the Government of Nepal."

10. Although many aspects of service were reviewed, crucial to this case is what was said about pensions. Chapter 10 of the Report said that pension arrangements, together with the length of service provisions of the Brigade of Gurkhas, represented the most significant differences between the Gurkha TACOS and the rest of the British Army TACOS: these were "complex and unprecedented" but the changes (to which I have referred above) made "radical reconsideration inevitable". The previous assumption of retirement in Nepal, which was the general basis for the decision in Purja that these differences had been lawful, had been replaced by an entitlement to live in the UK after retirement and to obtain employment.
11. The GPS provided Gurkhas with an immediate pension at equivalent Indian Army rates, after 15 years service, with an associated lump sum. 15 years was the maximum engagement up to and including Corporal. Gurkhas would be only in their 30s after a full 15 year engagement. The pension was payable for life. WO1 and above were the only ranks who could normally serve up to 22 years. The pension level was low compared to UK rates but provided an income equivalent to a good salary in Nepal. It was reviewed according to Indian Army pension reviews but protected at inflation rates in Nepal. The Gurkhas could still work as well. There was no form of "preserved pension" for the handful who left without completing 15 years service. The AFPS by contrast was based on the UK TACOS which allowed for 22 years service. However, after only 2 years service, a pension, called a "preserved pension", was payable on reaching retirement age, 60 under AFPS 1975, becoming 65 in the AFPS 2005. The AFPS 1975 paid an Immediate Pension after 22 years, and the AFPS 2005 an Early Departure Payment after 18 years, subject to having reached the qualifying age of 40.
12. The quite elaborate consultation process with the Gurkhas about changes to pension arrangements led to a clear view that they preferred the AFPS 2005, although for some the GPS had particular advantages. How rights under the GPS were transferred to the AFPS was a particular issue and is what this case is about. There was little desire among the Gurkhas to retain the GPS for the future with the changed retirement and MAS provisions, although it had traditionally provided financial security for the retiring Gurkhas often from age 33 for the rest of their lives. The AFPS would provide only a resettlement grant until the retiring Gurkha reached the qualifying age for his preserved pension, 60 or 65. The problems were exacerbated by the differing lengths of usual maximum service, 15 as opposed to 22 years. The pension provisions are rather more complex than I have described but not in a way which is of any real importance here.
13. The discussion in the report ended:

"On balance, then, the GPS was clearly more suitable than AFPS to support the "life-cycle" of the great majority of Gurkhas up until July 1997. However, UK basing for BG and HMFIR changed the previously valid assumption of retirement in Nepal. For a Gurkha retiring to a second career in UK, the GPS profile is clearly wrong, paying sums too small to be useful at a time when he does not need them and an inadequate pension at retirement age. As the life profile of the typical Gurkha approaches that of his UK/Commonwealth counterpart, there can be little to be said in favour of providing them with such different pension benefit profiles"

14. It concluded:

"Pensions have proved to be an extremely complex area. The GPS has evolved since 1948 to meet the changing needs of BG as and when they were recognised. It remained, until recently, decidedly more "fit for purpose" than AFPS but the rules are complicated and arcane. It has been maintained largely on a piecemeal basis and (with scarce exceptions such as its arrangements for Gurkha DE officers) on the assumption that Gurkha and UK TACOS would never have to converge. Whilst the Review Team's vision for the future of Gurkha pensions is now clear and summarised in the following recommendations, there is no doubt that their development and implementation will reveal a myriad of transitional anomalies that will need time and substantial and skilled staff resources to resolve."

15. The report recommended, put shortly, that serving and retired members of the Brigade of Gurkhas should be enabled to transfer from the GPS to either AFPS 1975 or 2005, depending on when they enlisted. Those who were already in the GPS and wished to remain in it could do so but it would be closed with effect from April 2006, in effect for the 2006 recruit intake which attested in December of that year.
16. The transfer options were put to the Gurkhas for their individual decision, with the aid of illustrations and advice in what was known as the Gurkha Offer to Transfer or the GOTT, which was announced by Mr Twigg, Parliamentary Under Secretary of State at the MoD in March 2007. The decision to make the offer in the terms in which it was made is the subject of these proceedings.
17. The GOTT reflected the recommendations of the Review Report. It applied to all Gurkhas who retired or were serving on or after 1st July 1997. Those who wished to stay in the GPS for the advantages which it offered them could do so. They could transfer to the AFPS on this basis: their accrued pension based on service in the Brigade of Gurkhas after 1st July 1997 would transfer into the AFPS scheme on a Year for Year credit. This would have the effect of raising their accrued pension benefits, bringing their pot into line with what the rest of the British Army had accrued for that period, as if they had been members of the AFPS from 1^st July 1997. 100% of the value in the GPS was elevated to 100% of the value of that same year in the AFPS, although it was not of that same value actuarially. Service in the GPS was given a broadly equivalent value to that which would have been earned had the soldier been in the AFPS on the same rate of pay as the rest of the British Army from 1st July 1997. In rough effect the UA, whereby the Gurkhas received pay at the same rate on service outside Nepal as the rest of the British Army, but which had not been pensionable for Gurkhas, now became pensionable pay retrospectively.
18. For the years of service before 1st July 1997, the value of the Gurkha Pension rights would be valued actuarially and the whole of that value would be transferred in to the AFPS, as a pension credit. However, for those years before 1st July 1997, as the total value of a year's pension in the GPS at Gurkha pensionable pay, was rather less than the total value of a year's pension in the AFPS at the then rest of the British Army pensionable rates of pay, 100% of its value in the GPS would be considerably less than 100% of the same year in the AFPS for the rest of the British Army. Depending on rank, the value of a year's service in the GPS, and thus of the amount credited in the AFPS, would be equivalent to 23% to 36% of the value of a year's service in the AFPS by a soldier of equivalent rank in the rest of the British Army. The higher the equivalent rank the greater the actuarial difference in the percentage which the value transferred across would provide.
19. In fact, for certain ranks in service, Staff Sergeant and below, who joined on or after 1^st January 1993, their years up to 1st July 1997 were also transferred on the Year for Year basis.
20. The transition from the GPS to the AFPS for those opting to transfer who were already in receipt of a pension under the GPS would not deprive them of their existing GPS pension, which would already be in payment. Very few would have been in a position to claim either the Immediate Pension after 22 years under the AFPS 1975 or the Early Departure Payments after 18 years under the 2005 AFPS, because they would not have had enough years of service. Transfer to the relevant AFPS would occur at 60 or 65, when they would receive the preserved pension. However, because they would have been in receipt of the GPS pension from normally about age 33, the capital value of the pension pot at retirement age would be reduced by the payments received under the GPS up to that date. This could mean that there would be no increase in pension at retirement age under the AFPS. But by comparison a soldier retired from the rest of the British Army might have been in receipt of nothing for what could be as long as 27 years during the whole of which a Gurkha could have been in receipt of pension under the GPS.
21. The GOTT was given statutory effect in the Armed Forces (Gurkha Pension) Order 2007 SI 2007/2608 in force on 1^st October 2007. It includes the actuarial percentages of the value in the AFPS of transfer from the GPS for the years not transferred on a Year for Year basis, for different ranks. Those years, transferred on the basis of actuarial valuation, are at the heart of this case. Although proceedings were started before that Order was made, and no amendment had been made to challenge that Order, Mr Davies QC for the Claimants sought to challenge that Order as he had to, and I grant permission to do so. Mr Singh QC for the MoD did not object, although making submissions as to the additional difficulties in the Claimants' way which that challenge would pose.
22. The decision date for serving Gurkhas was 30^th September 2007, the day before the Order came into force. There appears to have been a clear consultation and information process for the Gurkhas as to what the best option for them individually would be. The MoD's evidence was that all 3400 serving Gurkhas made a positive election and nearly all chose the AFPS; only 10 stayed in the GPS. 90% were eligible for transfer to the AFPS 1975. Of the 2230 eligible retired Gurkhas, 73% made a positive election, with most choosing AFPS 1975, as that was the scheme for which they were eligible. Only 65 made a positive choice to stay in the GPS. If no positive election were made, the retired Gurkhas would stay in the GPS.
23. The position of the 3 Claimants here is as follows: Mr Shrestha enlisted in 1987 and after 20 years was discharged as a Staff Sergeant in March 2007. He opted for the AFPS 05 and the value of his 10.5 GPS years service before 1st July 1997 was transferred to the AFPS at either 26% of 29% of the AFPS value. As Mr Davies puts it, a little tendentiously perhaps, that treated 4 years of actual Gurkha service as equivalent to 1 year's service by the rest of the British Army or 1 year's service by a Gurkha after 1st July 1997. Mr Purja, a Rifleman throughout, enlisted in 1989 and was discharged in December 2006. He opted for AFPS 1975. His 8 years GPS service before 1st July 1997 were transferred at 40% of the AFPS value. Mr Gurung served 20 years as a Rifleman before discharge in January 2007. He made no positive option and so stayed in the GPS. Had he opted for the AFPS, his 10.5 years before 1st July 1997 would also have been transferred at 36%. 70% of Gurkhas retire as Riflemen or Lance Corporals.
24. Although there are some distinct features about each of these cases, including the unusual length of service and their medical discharge, the complaint which they make is a simple one and would in principle be applicable to all those who had years of service transferred in to the AFPS on a less than Year for Year basis. For those post 1st July 1997 years, 100% of the GPS value, albeit only 36% of the AFPS value, was transferred as 100% of the AFPS; that is the effect of the Year for Year transfer. The Claimants contended, and it is at the heart of the case, that that should have been the basis of transfer for all their years of service, including those before 1st July 1997 or 1^st October 1993. If all the years of service had been transferred on a Year for Year basis, and not just the years after 1st July 1997, or 1st October 1993 in certain cases, their individual pension pot would have been larger on reaching 60 or 65. In general terms, the MoD accepts that that would enlargen the pension pot at retirement, although it cautions against the assumption that that would always increase the pension payable at 60 or 65, because of the effect of the deduction from the retirement pension pot of the amount already received by way of Immediate Pension from age 33 under the GPS. It also accepted that Mr Gurung, who made no positive election, is also entitled to raise the same issue on the grounds that, had the transfer terms been improved in the way in which the Claimants contend, he might have made a positive election to transfer to an AFPS.
25. Before turning to the submissions, I point out what this case is not about. It is not about wider terms and conditions of service; it is exclusively related to pensions. It is not contended that the option of transfer to the AFPS was itself irrational, nor that it was wrong to permit the GPS to remain on foot for those already in it who chose to remain in it, nor that it was wrong for the GPS to cease with the 2006 intake. This case does not relate to those who retired earlier than 1st July 1997, and the challenge which they make will arise in another case. There is obviously no challenge to the rationality of the provision of a Year for Year transfer after 1st July 1997. It is not contended in this case that the decision is unfair by reference to a comparison between Gurkhas and the rest of the British Army. There is no challenge to the actuarial valuation itself, as reflecting the difference in the values of the GPS and the AFPS pension pots. It was not suggested by the MoD that the actuarial percentage transfer value had been devised to avoid the Gurkhas being advantaged by receipt of an Immediate Pension under the GPS and then transferring to the AFPS; that possibility was dealt with by the other mechanism to which I have referred.
26. The rationality challenge and the Article 14 challenge are based solely on the transfer value of the years of service before 1st July 1997, or 1^st October 1993 in certain cases. The Article 14 challenge relates solely to the effect which the differences in transfer value creates between groups of Gurkhas based, it is said, on age and in reality on their individual length of service at particular dates.
27. Indeed, the scope of the issues narrowed further during argument because it became plain that the Claimants do not contend that some specific date earlier than 1st July 1997 or 1^st October 2003 should have been chosen as the date for transfer values to change, or that material considerations were ignored which could but might not necessarily lead to a more favourable result. Their case is starkly that the choice of any generally applicable date or dates before which Year for Year transfer would not take place would be irrational. The only rational solution to the problem which the MoD faced was the transfer of all pension only on the Year for Year and hence enhanced basis, without reference to the actuarial value of the accrued pension pot under the GPS. Mr Davies also submitted that it would not have been rational or otherwise lawful, in view of the stated aims of the review and the other legal challenges which it would have created, for the MoD to have transferred all the GPS pension only at actuarial value. Whilst Mr Singh did not concede as much expressly, I am inclined to think that Mr Davies has quite a strong point, which it is not necessary to decide because that is in reality not an option which either party would pursue.
28. Rationality first. The broad components of Mr Davies's argument are as follows. The decision in Purja was based on the assumption that Gurkhas would retire in Nepal. The adequacy and fairness of the pension, pay and other arrangements, save perhaps as to the full extent of MAS, was based on or affected by that expectation and the associated retention of links with Nepal during and after service. That assumption ceased to be applicable when after 1st July 1997, the UK became the Brigade of Gurkhas' home base; the HMFIR change in 2004 fundamentally altered the expectation of where a Gurkha would retire and do so with his family, and the MAS changes reinforced the prospect that the family too would have put down roots in the UK with the serving Gurkha. The pension under the GPS was suitable for retirement in Nepal but was not fit for retirement in the UK, or to enable a Gurkha to take advantage of his new prospects, entitlement as Mr Davies saw it, of ILE/R. The aim was to equalise benefits as between retiring Gurkhas and those retiring from the rest of the British Army, because they would almost all retire in the UK, where a pension based on the cost of living in Nepal would be far below what was required. The Review recognised that change was necessary, the GPS was not fit for that purpose; Government policy was that the new Gurkha TACOS and pension had to be legally and morally absolutely justifiable.
29. The Government had accepted the necessity for Year for Year transfer for that purpose. A start date of 1st July 1997 for transfer at that value, which eliminated certain years from Year for Year transfer, was irrational in the light the aims of the policy. That date, while of importance to the operation of the Brigade of Gurkhas, could not be relied on for these purposes, because it bore no rational relevance to the aim of enabling Gurkhas to retire to the UK on the same basis that the rest of the British Army was entitled to. If the standard of living in Nepal was the justification for the GPS, and the GPS was no longer fit for those retiring after 1st July 1997, the relevant cost or standard of living was that in the UK. The pension should be adjusted to enable those retiring after 1st July 1997 to do so on the UK cost of living basis, just as their counterparts in the rest of the British Army were able to do. That required all pension years to transfer on a Year for Year basis. To incorporate an element of valuation based on the GPS would be to incorporate an element which was admittedly unfit for purpose, and to do so without any rationale, or contrary to the very rationale behind the change. It could well defeat the aim of allowing Gurkhas to retire to the UK. It drew a distinction which was irrelevant for these purposes between those who had substantial service before 1st July 1997 and those whose service was substantially after that date, making the years of service before that date of substantially less value. One aim had been to do away with the GPS, and to allow it this half-life through the transfer at actuarial value for some years was inconsistent with the aims behind the changes.
30. In support of this Mr Davies referred to Purja, the statement of the Secretary of State for Defence announcing the review in January 2005 and to the parts of the review report which I have already set out. I should note additionally the following from the report.

"British Gurkha service has always been based on the assumption of retirement in Nepal where the economic and social conditions resemble those of India much more than those of UK. The GPS was therefore more closely suited to their needs than the wider British Armed Forces Pension Schemes that assumed retirement, more often than not to a second career, in UK. And as they were members of an overseas-based force with no expectation of retirement in the UK, there was no logical reason for the Gurkhas' pension scheme to allow for UK conditions."

"Significant events affecting the logic of GPS were the completion of the Gurkhas' move from Hong Kong to UK on 1^st July 1997, and the introduction of the new HMFIR in October 2004 (applied retrospectively to Gurkhas who retired on or after 1^st July 1997). The Gurkhas became a UK-based force in 1997, and acquired the right to apply for settlement in UK after their service. They could then take up a second career and/or live here in retirement if they wished"

"Pension rates are low by UK standards (typically £1.2K per annum for a Corporal with 15 years service), but compare well with published salary rates in Nepal."

31. Mr Davies illustrated his propositions by reference to the evidence of Mr Flitton, the witness for the MoD. The almost total take up of the AFPS showed the inadequacy of the GPS, and that the AFPS was preferred. There was an almost unanimous desire to take advantage of the HMFIR changes to reside in the UK, with family. But it was possible for someone on the GPS to switch to the AFPS and still have no increase in pension at age 60 or 65; so he submitted an admittedly inadequate GPS scheme remained better than what replaced it. The replacement therefore required the transfer of all years of service as Year for Year, which could lead to more being left in the pot at the 60/65 retiring age. Mr Davies pointed to the Answer to a Frequently Asked Question in the document produced for retired Gurkhas to help them decide whether to transfer, in which, on the basis of the actuarial transfer of value for pre 1st July 1997 years, it said that most would be unlikely to find any value in the transfer from the GPS to the AFPS, because of the payment to Gurkhas of an immediate pension on retirement aged 33 or so after 15 years service.
32. The Government had not put forward the extra cost of transferring all years on a Year for Year basis, £170m approximately, as a reason for not adopting it, and in so far as it sought to do so through the evidence of Mr Flitton, little weight should be given to that reasoning after the event. The undoubted policy of not improving public sector pensions with retrospective effect was not to the point because that is exactly what the Government had accepted was necessary here.
33. I do not accept these submissions. Mr Davies primarily seeks to use the logic of the review, its basis, conclusions and the changes to show that it has been internally illogical in stopping where it did in relation to the transfer of years to the AFPS on a Year for Year basis. GOTT, he said, had failed to meet its first objectives. This is where his argument first falls down. It fails to recognise the basis of the GOTT. I accept the general background to the review as summarised in the report and that changes were necessary to the pension arrangements for Gurkhas, as set out in the review report. Although ILE/R is not strictly a right, it is clear that the combination of change from a Hong Kong base to a base in the UK, the HMFIR change which also affected qualifying dependents, and changes to MAS would all strengthen ties to the UK, and weaken those to Nepal, important though it was that ties of citizenship and other ties remain.
34. Fundamentally, the aim of GOTT was to reflect the changes in home base and in the HMFIR which, as from 1st July 1997, had altered the previous assumption about where a Gurkha would retire and, reinforced by the MAS changes, had made the continuing differences between their TACOS and those of the rest of the British Army unjustifiable. Changes to pension arrangements had to be made.
35. The retention of the GPS for those who wanted to remain in it is unchallenged. The decision to close the GPS to new entrants after 2005 is unchallenged. The option of transferring from GPS to an AFPS is unchallenged. Transitional arrangements were required for those already in the GPS who might wish to transfer. Provision had to be made for the Gurkha who retired after 1st July 1997 under the GPS and was already in receipt of that pension but who still wished to transfer to the AFPS. The question was how the pension pot in the GPS should be transferred: at actuarial value or at a Year for Year value or a mixture of the two. The fact that the terms of service before 1st July 1997, and the pension arrangements, were fit for the previous assumption, as Purja held, obviously creates a problem for those whose years of service spanned that date. The first option would undervalue the years of service after 1st July 1997 by reference to the actual pay received with the UA, and by comparison with the value earned in their pension pots by the rest of the British Army to whom, after that date, the same retirement assumptions now could be applied. The second, although not itself irrational, would give to the transferring Gurkha an enhancement to his pension not just by reference to its value but also by reference to assumptions inapplicable before 1st July 1997 when the pension or deferred pay was earned. The third, which was adopted, reflected the differences in the assumptions which underlay the pay and pension arrangements before and after 1^st July 1997.
36. While it is perfectly true that the dual transfer system means that the years before 1st July 1997 are valued at less than those of the rest of the British Army before that date, Mr Davies recognised that he could not really challenge that directly. In effect Purja had held that the differences in pay on which they were based were objectively justified. This challenge is based solely on the distinction drawn between Gurkhas in terms of the value of their years of service before and after 1st July 1997. Purja must in large measure remain good as an answer to that distinction as well. The UA, paid after July 1997, reflected the service conditions shared with the rest of the British Army in being UK based, but the expectation of retirement to Nepal meant the UA was not pensionable. A distinction within the Brigade between pay and pension before and after 1st July 1997 reflects the point at which the Brigade of Gurkhas became UK based, and the retirement date after which ILE/R became an option. The longer the service after 1997, the greater the personal connection with the UK and the corresponding loosening of the ties with Nepal, the greater the number of years transferred on a Year for Year basis. The converse is also the case: the greater the number of years served before 1997, the greater the ties with Nepal. Although in fact the percentage of retired Gurkhas coming to the UK after retirement between 1997 and 2004 is very high indeed, that does not mean that the pension transfer provision is irrational in not making it financially easier for them to do so. The system is a rough reflection of the degree of the ties with either country in which retirement could be enjoyed. The Year for Year transfer of all pension rights of those retiring after 1st July 1997 would create a sharp distinction between those Gurkhas who retired before and after that date in respect of years of service before that date. I am not concerned with whether all Gurkhas, whenever retiring, should be able to have all GPS transferred on a Year for Year basis to AFPS.
37. It was not the aim of the policy positively to provide an amount of pension which would enable Gurkhas to retire in the UK, in the way Mr Davies suggested. He said that that aim could be found in the fact of the HMFIR change, and the cost of living in the UK compared to Nepal, which had made the GPS no longer fit for purpose. But that is wrong. The HMFIR created an option for Gurkhas to retire after 4 year's service to the UK. They do not lose their Nepalese citizenship on doing so and can return there at any age if they wish. That does not mean that there was an obligation or intention to provide a pension which would enable retirement to take place to the UK, still less to do so in any way which avoided the need to find another source of income.
38. The pension available immediately even after 15 year's service would not permit retirement to the UK without any form of further income. An illustration provided by Mr Flitton showed a Gurkha Rifleman with 15 years service followed by receipt immediately of pension under the GPS, receiving £1416 at 60, and still no better off were all his years to have transferred on a Year for Year basis, because of the amount taken under the GPS before 60. This is just an illustration and examples more favourable to the Claimants could be found, but the amount involved even on the Claimants' case bears no relation to the amount required to live on. Nor would the preserved pension of the rest of the British Army after 15 years, when it came to payment at 60, have yielded more than £3358. As Mr Singh pointed out, the very high numbers of those who retired before 2004 but after 1997 and who took advantage of the HMFIR change to come to the UK on the AFPS, showed that they had not regarded that as affording them a sum of money so small as, in effect, to take away with one hand what had been given with the other. The HMFIR change also operated to benefit those discharged after only 4 years service. That cannot logically be connected simply with enabling retirement in the expectation of a pension which would support retirement.
39. "Retirement" and "pension", in this context, can convey a quite misleading picture. Retirement at 33 does not equate to dotage, or the merited relaxation of older age. The sums payable under the AFP Schemes reflected by contrast the difficulty of finding further employment and, under the AFPS 2005, assistance in so doing.
40. The aim of the GOTT was not to allow the Gurkha to retire in the UK on an Immediate Pension at 33 years old free from further labour, nor to allow other servicemen now to do so under the AFPS. Nor was it to require retired or serving Gurkhas to forego the Immediate Pension to which their TACOS had entitled them, in order that at age 60 or 65 they would receive the preserved pension under the AFPS which is all that 15 years' service would have entitled them to.
41. A problem could exist in the contrast between the retiring Gurkha and the soldier retiring from the rest of the British Army if pensions were equalised at 60 or 65 for Gurkhas who retired under the GPS and the rest of the British Army. The Gurkha pension was payable immediately and all those Gurkhas who retired before GOTT were in receipt of the Immediate Pension under the GPS. That would not have been the position for the soldier retiring from the rest of the British Army after 15 years service. No Immediate Pension was payable under AFPS 75 until the conclusion of 22 years' service, and the Early Departure Payment, for the purposes of resettlement, payable under the AFPS 2005 was distinctly less. It was not said that the advantageous position of the Gurkha retiring in Nepal aged 33 should have been reproduced under the AFPS here. As the Gurkha TACOS approximated more closely to the TACOS of the rest of the British Army, it was inevitable that the Gurkha in receipt of the Gurkha pension would have deductions made from the pension pot to reflect what he had received under the GPS. That means that there may be no improvement left. But that does not reflect any residual disadvantage to the Gurkha, but rather the earlier advantage that he will have received compared to the rest of the British Army. Although under the scheme as the Claimants say it should be, there might be something left in the pot more frequently at age 60/65 for the Gurkha already in receipt of an Immediate Pension under the GPS, that could not routinely approximate to what a retired soldier from the rest of the British Army would receive at that age without the Gurkha in fact receiving more than his comrade.
42. It was not the aim of the policy either to end the GPS in quite the stark way Mr Davies put forward: it closed for the 2006 intake and beyond, because along with other changes to Gurkha TACOS and in the changed circumstances to which I have referred, it was no longer fit for purpose. But for those who had been members of it, it could still have value especially if the holder decided to retire in or return to Nepal, after taking a second job perhaps for many years in the UK. The actuarial valuation of the deductions from the AFPS pot for the early receipt of the Gurkha's Immediate Pension from age 33-36 could mean that there was nothing to be gained by choosing the AFPS. The lawfulness of that deduction was not challenged. It was not unlawful to keep the GPS in being.
43. Next, it is important to remember that for the years after 1997 there is in substance an enhancement to the pension package which reflects where the Brigade of Gurkhas was based and the changes to the ILR/E. It turned non-pensionable UA in effect into pensionable pay. It may well be that that reflects a change which was necessary rather than just generous. However, there is nothing about that which means that all years transferred then have to follow suit. I see no objection in principle to the years before that being transferred at their existing value. There is no internal contradiction in the GOTT, or a giving with one hand but a taking away with another. The asserted basis for that is the misconception that the aim of the pension transfer provision was to enable Gurkhas to "retire" in the UK, at some unstated age.
44. Mr Davies submits that the GPS has been acknowledged not to be fit for purpose and therefore to continue its effect through transfer of some years at actuarial value is to cut across the very purpose or aims of the review. I do not accept that. The GPS is not fit for those whose service is wholly based in the UK. The transition from one form of pension, which was and would continue to be fit for a Brigade always based in the Far East, to another which was not, may permit of a number of permutations. But one that reflects the years before and after that change in home base does not seem irrational. The difference is not such that the one form of transition would permit "retirement" to the UK, whereas the other would not. The difference as between Gurkhas or as between the years served by the same Gurkha reflects where he was when he served those years and the expectations which he then had. None of those have been disappointed: no GPS right has been removed nor has the ability to retire in Nepal. What is complained of is that the option of retiring to the UK, to work or not to work, had not been sufficiently supported or put more aptly, is in part affected by the cost of living in Nepal. It is of course true that the transfer at actuarial value would contain that component but that reflects the circumstances when it was earned. I cannot see that the option of retiring to the UK means that it should be or necessarily must be regarded by the MoD as inadequate by reference to the MoD aims in the review.
45. I do not accept the argument that the £170m or so extra costs should be regarded as irrelevant to the decision-making process. There are passages in the report where cost was part of the analysis in general, as one would expect. There is no specific reference in the Pensions Chapter to the cost of an alternative manner of transfer of past years. The financial analysis in Chapter 13 of the report does not consider the cost of the change the Claimants want to the valuation of the pre 1997 years of service, but it would support Mr Singh's general submission that cost was part of the overall consideration. I would accept that, in the absence of evidence to the contrary, it should be assumed that cost, especially of the order of £170m, would have been part implicitly of the appraisal of the steps to be taken.
46. Moreover, Chapter 1, the overview, says in paragraphs 13 and 14 which deal with costs and affordability :

"There is also a one off cost of £90-120M in respect of establishing Gurkhas prior service back to 1997 within the Armed Forces Pension Scheme (AFPS).

In terms of affordability, the Government has accepted that MOD has very little choice but to accept the financial consequences of these changes."

47. I find it quite difficult to suppose that the MoD was aware of that figure of the costs of going back to 1997 and entirely unaware of and indifferent to the costs of improving the Gurkhas' position as now contended for. It is especially difficult in the light of the passage in Chapter 2, paragraph 11, which says that the most pressing pension issue was the value at which years of service would be transferred, with Gurkhas expressing a clear preference for all years to be transferred on a Year for Year basis. Mr Flitton says that the sum had been calculated before the GOTT was made, and albeit by obvious implication, that it was a factor taken into account in deciding to reject their preference. I do not therefore accept Mr Davies's submission that that was a new factor drawn upon after the event to supplement the reasoning of the MoD. I do not need to deal with Mr Singh's further riposte that the jurisprudential basis for a rationality challenge permits what was irrational on the actual reasoning to be sustained by subsequent reasoning which had not been adopted.
48. Mr Davies also put weight in this context on the passage in the report which I have set out above to the effect that the MoD had very little choice but to accept the financial consequences of the changes. He said that that showed that costs were not an issue. The passage does not show that at all. It shows that costs were a concern but that the legal and moral obligations which led to the acceptance of those costs which were accepted, completely overrode the cost considerations they created. It was a value judgment rather than an expression of indifference to costs. It is clear that the MoD did not accept that further costs fell into that overriding category. If legal obligations alone had sufficed to override costs, Mr Davies' submission on other aspects of rationality, if right, would also be overriding in that same way. To the extent that it was moral obligations rather than legal obligations which overrode cost considerations, it is difficult to see that a Court could hold that the overriding moral obligations were more extensive than the Government realised, and were therefore converted into legal obligations.
49. There is force in Mr Davies' point that the MoD cannot simply rely on the accepted policy of not making retrospective improvements to public sector pensions given that that is what it has done. But that does not mean that to put a stop date on the retrospectivity is itself irrational. In for a penny, in for a pound is not a principle of public finance or of legal or moral logic. The extra expenditure on the Year for Year transfer is not negated because it has not been applied to all years of service, nor does the avowed purpose of the GOTT become ineffective without it. The purpose was clearly to bring the Gurkha pension provision into line with the rest of the British Army for the future, and to make provision for the past in a way which reflected those circumstances which over time necessitated a complete change. In that respect the date of 1st July 1997 could properly be seen as pivotal for enhancing pension purposes.
50. There is force in Mr Singh's submission that whether and where a line is to be drawn in public expenditure cases, and in many other aspects of public law, will involve judgment, and to some, a degree of arbitrariness where very alike cases or years fall just one side of a line rather than on the other. But that is inherent in drawing any line; hence Mr Davies's argument that no line should have been drawn at all in this transfer process. The transfer process itself however only applies to those who retired after 1st July 1997, as does the HMFIR change. That could be said, and may be it will be said, to have a certain arbitrariness in its turn by those who retired just before that date. But I see nothing irrational in drawing the line as the GOTT does, for the purpose which I am examining.
51. The date of 1st July 1997 as the date from which transfer at Year for Year would start and an actuarial valuation would end, however has a rational and clear connection with the problem to be solved and with the chosen solution to it. The changes in the home base of the Brigade of Gurkhas, in the HMFIR changes and hence in the expected place of retirement have a strong connection with that date. And it is the expected place of retirement which in turn underlies the challenge in this case. I reject the submission that there is no rational connection between the date and the purposes of the review.
52. Other distinctions could be more arbitrary: for example if Year for Year transfer applied only to those who joined after 1st July 1997 but not at all to those who served before and after that date, or only to those who had years of service before and after 1st July 1997 and to all their years of service, but not at all to those whose service was wholly before 1st July 1997. The change to an actuarial valuation on that date, but subject to the adjustment I shall come to, translates those years of service before the change of base for all Gurkhas on the same basis whenever they retired, and gives them the same transfer benefit. So those who retired before 1st July 1997 do not see their later comrades receive a significant extra for the years of service before 1st July 1997 when they were serving on the same assumptions as to retirement. Mr Davies' submissions, if accepted, would only create the basis for a different and stronger irrationality argument.
53. Mr Davies also submitted that the MoD itself could not regard 1st July 1997 as a pivotal date in view of the number of serving Gurkhas whose pensions would also be transferred on a Year for Year basis for the years 1^st October 1993 to 1st July 1997. In reality the actuarial value transfer only applies to serving officers for the period 1^st October 1993 to 1st July 1997, and to anyone who joined before 1st October 1993; i.e. the 1993 intake and earlier. It applies to all retired Gurkhas which includes all the Claimants in this action. The purpose of that adjustment was to deal with an unfairness which could arise in which those who enlisted in the 1994 intake and later, but before the GOTT, might be in a trap. They might be unable to serve the full 22 or 18 years necessary to qualify for an IP or EDP under the AFPS to which they transferred, because they could find themselves compulsorily discharged after 15 years under new terms of service at a newly introduced Manning Control Point. The additional years of Year for Year transfer may not be a perfect way of compensating for the actuarial valuation of that risk but was a reasonable enough method of compensation for it, as I understood what I was told about it. True, it means that 1st July 1997 has no universal application regardless of the facts or circumstances, but I do not see the solution to that particular transitional problem to new TACOS as showing that there is no rational connection between 1^st July 1997 and the changes in the GOTT. True it is that that adjustment brings another point of distinction between one year and another or between one man and another, but that is to remove anomaly between those who could reach 22 years, because they were in the 1993 intake or earlier and did not face this problem, and those who could not and so did face it. It may not be a perfect solution but it does not create or underline any irrationality as Mr Davies contends.
54. For present purposes, I accept that flawed logic, more readily shown than a decision which simply defies comprehension, may breach the principle of rationality. That principle also requires a rational connection between the problem to be solved or aim to be advanced and the means chosen to solve the problem or to advance the aim. The GOTT comes well within the range of responses available to a reasonable decision-maker. I also accept that where human rights are interfered with, the greater the scrutiny to which the reason for the interference will be subjected before the Court can be satisfied that the decision is reasonable, ie within the range of responses open to a reasonable decision maker. I shall deal with those rights later when I deal with the next head of arguments.
55. I also accept Mr Singh's more general submission that, as Sir Thomas Bingham MR said in Smith v MoD [1996] QB 517 at 556 A, the greater the policy content of a decision, the more remote the subject matter of a decision from ordinary judicial experience, the more hesitant the Court must be in holding a decision to be irrational. This is especially so in the context of the allocation of public resources, as he also said in R v Cambridgeshire Health Authority ex p B [1995] 1 WLR 989 at 905. This is I accept a case which does involve the allocation of resources, including how far an exception to the principle of non-retrospectivity in public sector pension improvements should go. But all that said, the decision seems to me quite rational without any special tests.
56. Mr Singh raises a yet more problematic point for Mr Davies in the light of his challenge to the Order itself, which embodied the very principles to which he objects. The challenge is not to the vires of the Order. True it is, accepts Mr Singh, that this action began at a time when there was no Order but there is one now and the Claimants do now need to challenge its lawfulness. They must therefore make good the challenge to the Order under the stricter principles that apply to such challenges especially where they concern the allocation of public funds. I accept that Mr Davies has to make good his case on that basis. Mr Singh rightly accepts that the decisions he relies on will not necessarily apply directly where there is a human rights challenge, but says that the effect of ECtHR jurisdiction is to bring about the same result.
57. Mr Singh relied on Nottinghamshire County Council v Secretary of State for the Environment [1986] 1 AC 240 which concerned the lawfulness of the Rate Support Grant Report laid before the House of Commons pursuant to the Local Government Planning and Land Act 1980. The report gave guidance as to local authority spending; exceeding the target limit could lead to a reduction in rate support block grant. Some local authorities complained that the targets had been set too low by reference to the general principles which were supposed to frame the report. Lord Scarman at p247C pointed out that the context was public financial administration and the exercise of a discretion by the Secretary of State for the Environment which inevitably involved a political judgment and any consequential action by him could only be taken with the approval of the House of Commons. He held that it would only be in exceptional circumstances that it would be constitutionally appropriate for the Courts to intervene on the ground of unreasonableness in such guidance, concerned as it was with the limits of public expenditure and the distribution of the tax burden between two groups. A prima facie case would have to be shown that the Secretary of State had acted in bad faith or for an improper motive, or that the consequences were so absurd that the Secretary of State must have taken leave of his senses. Although not identical, Mr Singh says that this case too involves decisions about public expenditure, and pensions policy.
58. Mr Davies riposted with R v Secretary of State for the Environment ex p London Borough of Hammersmith & Fulham [1991] 1 AC 521. This concerned the basis on which the Secretary of State for the Environment designated local authorities as overspending. It applied the Nottingham approach but he relied on what Lord Bridge said at p597E. Mr Davies contended that that showed that this more restricted approach was confined to such cases as involved the "formulation and implementation of national economic policy". This present case was not such a case, even though it had public expenditure implications. The MoD itself had said that it would have to accept the financial burden of the necessary changes.
59. In my judgment, once cost is accepted to be legally relevant to the question of how to deal with Gurkha pensions, it is not deniable that the cost of remedying the Claimants' complaint would require a significant sum from the defence or other budget to be set aside for the Gurkhas. It does not matter that the calculation underlying the £170m has not been explained. It was not suggested that the sum would not be of that order. It is in that context that the Courts should be very slow to hold that a discretion was irrationally exercised. That is the more so where there are related issues of public sector pension polices, where the Government would be entitled to be sure that the retrospectivity which it had allowed could be confined to that which was truly exceptional. This is all in the context of the Armed Forces TACOS, with the overlay of relations with Nepal over the Brigade of Gurkhas and its men, which led to the rejection of the possible option of the complete assimilation of the Brigade of Gurkhas into the British Army.
60. Whilst I do not see this as the paradigm of that type of economic policy case, because of the specific and comparatively small category of those affected, the less emphatic role that economic judgment over the public purse has played in the decisions and because the changes are partly to remedy what had become an unjust state of affairs, those words are still relevant. They show that the consideration of the human rights claim, which would often require a more intrusive analysis of the basis of the claimed justification, is likely to be satisfied on the same basis as or in step with what would satisfy rationality in public law.
61. The fact however that the Secretary of State's decision has now been expressed in a Statutory Instrument enacted by Parliament, albeit on the negative resolution procedure, reinforces the case that considerable caution is required before holding that the judgments embodied in the Order, which involved the balancing of a variety of considerations, economic and political, in solving a difficult problem, are unlawful.
62. This reinforces the view to which I would have come in relation to the GOTT alone anyway. The decision is rational.
63. I turn now to the human rights argument. Article 14 ECHR provides:

"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."

64. It is true, but decreasingly obvious in practice, that the ECHR contains no free-standing anti- discrimination provision and that it only bites on the exercise of Convention rights. The one relied on here is Article 1 of Protocol 1 to the ECHR. This says:

"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."

65. There has been much jurisprudence about how to approach the justification for any difference in treatment. It is sufficient for present purposes to adopt the single question posed by Lord Hoffman in R (Carson) v SSWP [2005] UKHL 37 2006 1 AC 173, at p186H: "is there enough of a real difference between X and Y to justify different treatment?" The decision as to whether the differences justify the different treatment will often be a matter for Parliament or the decision of an official, subject to judicial review with the relevant degree of intrusive scrutiny which the human rights subject matter demands.
66. Mr Davies said that the two groups which represented X and Y were: Gurkhas retiring after 1st July 1997 who had substantial service before that date and Gurkhas retiring after that date but who had no or almost no service before that date. The status which founded the discrimination was that of "Gurkhas with substantial years of service before 1st July 1997". This was discrimination on grounds of age or was age related because those who had substantial years of service before 1st July 1997 would be at least for the most part older than those whose service started later. The right under Article 1 Protocol 1, to the peaceful enjoyment of possessions, which was interfered with in a discriminatory manner was the right to a pension or the right to opt into a pension which was intended to meet the needs of someone retiring to the UK, or the right to an offer equivalent to that offered to other Gurkhas. Mr Davies did at one time suggest that the right to ILR/E was a right which had been interfered with, though not under Article 1 Protocol 1, but he rightly did not pursue that.
67. Mr Singh did not wish to contend before me that the decision on the GOTT and the Order could not fall within the scope of Article 1 Protocol 1, as interfering with private possessions, even though the GOTT did not affect any existing entitlement to the GPS, nor prevent any person retiring after 1st July 1997 choosing to transfer into the AFPS, nor penalise them for doing so, but merely provided, for those who chose to transfer, benefits which differed depending on how many years service had been concluded before 1^st July 1997, or 1st October 1993 as the case might be.
68. I understand why he took that line in view of the Grand Chamber ECtHR decision on admissibility, unusually, in Stec and Others v UK 65731/01 decided on 6th July 2005, after the House of Lords decision in Carson. This group of cases concerned age related sex discrimination in the statutory award of the lower retirement allowance in the place of reduced earnings allowance. The Grand Chamber held that to draw a distinction in the application of Article 1 Protocol 1 between contributory and non-contributory benefits, so that only the former came within its scope, was no longer appropriate. It went further and, in paragraph 51, held that because so many people were now dependent on a welfare system which entitled those eligible to receive those benefits, "where an individual has an assertable right under domestic law to a welfare benefit, the importance of that interest should also be reflected by holding Article 1 of Protocol 1 to be applicable." In paragraph 55 it said that where the complaint is that someone "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 …. Although Protocol No.1 does not include the right to receive a social security payment of any kind, if a State does decide to create a benefits scheme, it must do so in a manner which is compatible with Article 14."
69. The argument previously put forward by Mr Singh on the application of Article 1 Protocol 1 in Purja at paragraph 40 was to the effect that the Gurkhas were not being deprived of anything, but rather that they would be paid all that they were ever promised and had no legitimate expectation of more. Simon Brown LJ rejected that saying, in paragraph 42, that entitlement to a pension was part of the overall payment package under which they were engaged. He said that if as a result of objectionable discrimination on religious grounds one group were paid at a better rate than another, "could it seriously be doubted that this lesser rate would be regarded as a property right such as to engage the non-discriminatory requirements of Article 14?"
70. For present purposes the position appears to be that if a new contractual entitlement or welfare benefit is created, it becomes a property right within Article 1 Protocol 1 which all eligible persons are entitled to receive, and it is a deprivation of that property right if the eligibility grounds which preclude receipt are objectionable under Article 14, in the absence of sufficient objective justification. I shall adopt that approach. I do comment though that it seems to me to be saying that there is a right not to be discriminated against in the provision of new optional contractual benefits or new statutory welfare benefits. The dependant Article 14 right not to be discriminated against on objectionable grounds is built into the creation or existence of the right in the first place, because eligibility conditions both define the right and create the discrimination. That is very close to saying that there is a free-standing right not to be discriminated against which is not what Article 14 is about, rather as Lord Hoffman in Carson indicated at in paragraphs 11-12.
71. Mr Singh submits that there is no discrimination on the grounds of "other status". He accepts that age discrimination can involve a status, notably where it involves stereotypical assumptions about capability, but points out here that the real basis of the discrimination between the groups identified by Mr Davies is the number of years of service by a particular date, which has at best an indirect relationship to age. I find it difficult to see that the definition of the two groups identified by Mr Davies here could endow them with the attributes of "other status", unless the existence of that status is defined by reference to the impugned discrimination itself, or unless any points of difference suffice to give the different groups "other status".
72. The groups are not defined by age but by years of service at particular dates. There should be two dates in his definition of the groups because the date at which Year for Year transfer began varied according to the circumstances of a particular group anyway; the groups as formulated by Mr Davies require further adjustment to reflect the years after 1st October 1993. This complicates further the question of status and any age discrimination.
73. Be that as it may, and I do not need to resolve it, this is not a case of direct age discrimination between those two groups and was not argued to be such. Mr Davies contended that there was indirect age related discrimination. I bear in mind what Carnwath LJ said at para 17 in R (Esfandiari and Others) v SSWP [2006] EWCA Civ 282 about the need for caution in the application to Article 14 of the concept of indirect discrimination. Mr Davies submits that in such a case the question formulated by Lord Hoffman in Carson requires a degree of adjustment to reflect that fact. Is the measure employed disproportionately prejudicial to one group compared to the other? Is there enough of a difference between the two groups to justify the effect of the difference in treatment on the impugned ground? Mr Singh submits that the question is still: is there enough of a difference between the two groups to justify differential treatment? They amount to the same test to my mind. Proportionality and justification are obviously relevant to answering the question.
74. There may be differences of view about whether age is or can be a "suspect" ground for discrimination, requiring a more intense scrutiny, or whether "old age", which is not quite the same, can be. But the grounds of differentiation here, not wholly aptly characterised as those of age, are not suspect grounds. The grounds of difference do not arise because someone is above or below a particular age, but because the introduction of changes which are not directly age related are defined by dates, and years of service. The drawing of lines, by reference to dates, around schemes which help some but not others is an inevitable part of many legislative or policy changes; this is the more so where a past disadvantage or even wrong is being remedied retrospectively. Of course, this means that either the older or younger will be affected; the date itself will import an indirect differentiation on age grounds. But that is a weak starting point for an assertion of indirect discrimination on age grounds. In any event, if there is a rational basis for the selection of the date as at which the changes are made, that disposes of the Article 14 challenge.
75. I also accept what Mr Singh says about the ECtHR's approach to Article 14, where the decision is about social and economic policy, particularly those concerned with the equitable distribution of public resources: a generous margin of appreciation is allowed; see Lord Hoffman in R (Hooper) v Secretary of State for Work and Pensions [2005] UKHL 29, [2005] 1WLR 1681. Mr Singh referred to the ECtHR, admissibility decision in Neill and Others v UK (App 56721/00) 29 January 2002 which concerned claims by retired army officers that the calculation of widows' service pensions was discriminatory in breach of Article 14 and Article 1, Protocol 1 because of differences arising out of dates of marriage and retirement. The Court said:

"The Court observes that, in making provision for the future payment of service pensions to servicemen and to their widows, national authorities are in principle permitted to set conditions governing entitlement to such pensions and, in particular, to restrict such entitlement to those who are still in service at the time of introduction of the new provisions, and to fix the level of entitlement by reference to the period of service completed following introduction of the relevant provisions."

76. The application was ruled inadmissible. I accept that that supports his contentions.
77. I see no need to repeat here the reasons which I have given for regarding the decision in GOTT, and the Order which gave effect to it, as reasonable and lawful. They apply to this part of the claim as well and show that the dates chosen for the change to Year for Year transfer from actuarial valuation are reasonable, and that the difference which that creates is justified. A line was drawn; that was in itself reasonable, and the particular dates chosen for its drawing are reasonable too. The difference reflects not age in reality but the number of years of service based in the Far East or in the UK. If there was indirect discrimination on the grounds of age or "other status", it was justified and proportionate.
78. This claim is accordingly dismissed.