Author: [1997] UKSSCSC CIS_14141_1996 (02 April 1997)
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Commissioner's File: CIS 14141/96 
Mr Commissioner Mesher
2 April 1997 

SOCIAL SECURITY CONTRIBUTIONS AND BENEFITS ACT 1992 
SOCIAL SECURITY ADMINISTRATION ACT 1992
APPEAL FROM DECISION OF SOCIAL SECURITY APPEAL TRIBUNAL ON A QUESTION OF LAW 

DECISION OF THE SOCIAL SECURITY COMMISSIONER

Claim for: Income Support
Appeal Tribunal: Huddersfield SSAT 

[ORAL HEARING] 

1. The claimant's appeal is allowed as a matter of law, but without any change 
in the practical outcome. The decision of the Huddersfield social security 
appeal tribunal dated 23 January 1996 is erroneous in point of law, for the 
reason given below, and I set it aside. It is expedient for me to substitute my 
decision for that of the appeal tribunal without making any fresh or further 
findings of fact (Social Security Administration Act 1992, section 23(7)(a)(i)). 
My decision is that the decision under which the claimant was entitled to income 
support immediately before 26 April 1995 falls to be reviewed on the ground of 
relevant change of circumstances (Social Security Administration Act 1992, 
section 25(1)(b)), but that in relation to the period from 26 April 1995 to 1 
October 1995 the existing decision is not to be revised on review so as to 
include housing costs in respect of interest on the loan taken out on 26 April 
1995 in the claimant's applicable amount. 
2. This is one of four appeals with essentially identical facts which were heard 
together before me. In all of the cases the claimants were owner-occupiers of 
their homes free of any mortgage and had been in receipt of income support 
without any housing costs for loan interest. After 2 May 1994 they took out 
loans to pay for essential repairs and improvements to their homes arranged 
through the Anchor Housing Association and asked for the interest on the loans 
to be met as housing costs. That was refused by the adjudication officer, 
applying paragraph 5A of Schedule 3 to the Income Support (General) Regulations 
1987 ("paragraph 5A"), which was inserted with effect from 2 May 1994 and 
remained in force until the wholesale replacement of Schedule 3 on 2 October 
1995. The refusal was confirmed by the appeal tribunal in all four cases. 
3. At the oral hearing, the claimant was represented by Mr Bruce Moore, the 
company secretary and solicitor to Anchor Trust, accompanied by Mr Geoffrey 
Ferres, welfare rights development officer of Anchor Housing Association, who 
had represented the claimants below. The adjudication officer was represented by 
Mr Leo Scoon of the Office of the Solicitor to the Department of Social 
Security. I am grateful to both representatives for their clear and concise 
submissions. 
4. The case turns on the proper effect and meaning of paragraph 5A. For ease of 
reference I have attached to this decision as appendix A a copy of the 
regulations which inserted paragraph 5A, as made by the Secretary of State for 
Social Security and laid before Parliament (the Income Support (General) 
Amendment Regulations 1994). I have also attached as Appendix B a copy of the 
draft regulations as referred to the Social Security Advisory Committee ("SSAC") 
by the Secretary of State in October 1993. The draft regulations, together with 
SSAC's report on the proposal to make the regulations and the Secretary of 
State's statement under section 174(2) of the Social Security Administration Act 
1992 were published as Cm 2537. 
The adjudication officer's decision 
5. The view taken by the adjudication officer when making the adverse decision 
was straightforward, and turned on the precise words of sub-paragraphs (1), (3) 
and (5) of paragraph 5A. It was briefly as follows. Sub-paragraph (1) applies 
where a liability to pay loan interest is first incurred after 2 May 1994 and, 
as the claimant was entitled to income support when the liability was incurred, 
would prevent the entire loan interest being met as a housing cost. 
Sub-paragraph (3) modifies the operation of sub-paragraph (1), but only where 
before the incurring of the "new liability" for loan interest there was a 
housing cost applicable for loan interest (the "former liability"). In all four 
cases, there was no such former liability, so that sub-paragraph (3) had no 
application. Sub-paragraph (5) on loans for repairs and improvements only 
operates as an exception to sub-paragraph (3), in contrast to sub-paragraphs (6) 
to (11). Thus, as sub-paragraph (3) had no application, neither did 
sub-paragraph (5). It was accepted by the adjudication officer that the loan 
made to the claimant met the conditions of paragraph 8(3) of Schedule 3, with 
the modification required for the purpose of paragraph 5A(5) (see the report of 
the review visit on page 1P and the appeal tribunal's acceptance on page 54). 
The practical result was that if the claimant had had some existing loan 
interest being met as a housing cost, regulation 5A(5) would have allowed the 
extra cost of the interest on the repairs and improvement loan to be met. But as 
she did not have any existing loan interest the cost of the interest on the 
repairs and improvement loan could not be met. 
The argument for the claimant 
6. The argument made on behalf of the claimant to the appeal tribunal to avoid 
that result (rejected by the appeal tribunal) was essentially the same as that 
made to me by Mr Moore. The argument is for what might be called a super-literal 
construction, supported by evidence about the intention of the Secretary of 
State when making the amending regulations. 
7. The argument picks up on an ambiguity in sub-paragraphs (1) and (3) of 
paragraph 5A suggested by the editor of the 1994 edition of Mesher and 
Wood,CPAG's Income-related benefits: the legislation at page 234. Briefly, it is 
as follows. Sub-paragraph (1) does not expressly say that it applies where the 
relevant housing costs are first incurred after 2 May 1994. It applies where the 
costs "were incurred" after 2 May 1994. Housing costs are relevant to the 
calculation of the claimant's weekly applicable amount under regulation 17(1) of 
the Income Support Regulations and generally refer to the amounts which a 
claimant is liable to pay week by week. Therefore, sub-paragraph (1) could be 
said to apply, for instance, to the liability to pay interest in weeks falling 
after 2 May 1994 on a loan taken out well before 2 May 1994 and when the 
claimant was not entitled to income support. On that basis, there would be 
little or no point in the reference to the relevant period and the definition in 
sub-paragraph (2) including linking periods. There would also be a strange 
effect on sub-paragraph (3). In every case where there was a liability to meet 
loan interest in more than one week, there would be a former liability, in the 
first week, and a new liability, in the second week. That, said Mr Moore, would 
alleviate the apparent effect of sub-paragraph (1) in applying paragraph 5A to 
loans taken out before 2 May 1994. If the claimant had been receiving income 
support immediately before 2 May 1994 there would be a former liability, in the 
last week before 2 May 1994, and a new liability, in the next week, of exactly 
the same amount, so that the amount of the former liability could continue to be 
met. In addition, it would allow the interest on the claimants' loans for 
repairs and improvements to be met in the second week of liability to make 
payment. In relation to that second week there would be a former liability -the 
housing cost in the first week - to which the new liability in the second week 
was equal, so that the whole of the cost could be met. Mr Moore recognised 
though, that if that were right, the exclusion of any housing cost under 
regulation 5A could last only for one week and that sub-paragraph (3)(b) would 
be deprived of any practical application. 
8. The recognition that the interpretation suggested above has bizarre and 
absurd results is then used in this way. Mr Moore agrees with the comment on 
page 234 of the 1994 edition of Mesher and Wood that such results "could no 
doubt be avoided by a purposive interpretation of para. 5A as a whole". But, he 
says, if a purposive approach has to be taken to make sense of paragraph 5A, the 
true and full purpose should be looked at. He then refers to the Secretary of 
State's statement in Cm 2537 as showing the intention that interest on loans for 
essential repairs and improvements should be taken completely outside the 
operation of paragraph 5A. In addition he refers to two other sources. One is 
the initial guidance to adjudication officers from Central Adjudication Services 
in Memo AOG Vol 3/67 dated May 1994 (pages 66 to 70 of the papers before me), 
where it was said that loans taken out for any of the designated repair and 
improvement purposes should not be restricted under paragraph 5A. The second is 
the explanatory memorandum sent by the Secretary of State to SSAC with the draft 
Income Support (Housing Costs) Regulations 1995, which Mr Moore says gives no 
indication of any change in the law from the position under paragraph 5A in 
taking loans for repairs and improvements out of the equivalent provision in the 
new Schedule 3. Thus, he says, a proper purposive interpretation must be one 
which gives effect to that intention and allows the claimants' housing costs to 
be met. If that cannot be done, he says that it is wrong to apply any purposive 
interpretation and the strict literal interpretation must be applied. That again 
allows the claimants to succeed. 
The construction of paragraph 5A
9. Mr Moore's argument is very ingenious. As will appear later, I think that it 
contains the material on which another argument for the claimants can be made, 
but as put forward by Mr Moore, it must be rejected. There are a number of flaws 
in the argument. For one thing, I am not convinced that the super-literal 
argument would in fact allow the claimants to succeed. In the second week after 
liability to pay interest arises I do not think that there would be a former 
liability within the meaning of paragraph 5A(3). For although there would have 
been a liability to pay the interest in the previous week, there would not have 
been a corresponding housing cost applicable to the claimant in that week, 
because for that week paragraph 5A would have prevented the housing cost being 
met. In my view a housing cost which cannot be met for a week is not applicable 
to the claimant for that week. But, more fundamentally, I do not think that the 
argument about the purposive construction works. I am afraid that the use of the 
phrase "purposive construction" in the commentary in Mesher and Wood may have 
been misleading. What is needed to avoid the bizarre and absurd consequences of 
a super-literal interpretation of paragraph 5A is not a purposive construction, 
but the ordinary application of the principle described by Lord Reid in Pinner v 
Everett [1969] 1 WLR 1266, at 1273: 
    "In determining the meaning of any word or phrase in a statute the first 
    question to ask always is what is the natural and ordinary meaning of that 
    word or phrase in its context in the statute? It is only when that meaning 
    leads to some result which cannot reasonably be supposed to have been the 
    intention of the legislature that it is proper to look for some other 
    possible meaning of the word or phrase."
10. Applying that principle, I am satisfied that the ordinary and natural 
meaning of paragraph 5A(1), in the context of the paragraph as a whole, is that 
it applies when the liability from which the relevant housing costs are derived 
was first incurred after 2 May 1994. That was Mr Scoon's submission, which I 
accept. I mention here only a couple of points. The first is that that meaning 
is consistent with the language of sub-paragraph (1) in its reference to not 
meeting costs, in the present and the future, "where those costs were incurred" 
after 2 May 1994. The use of the past tense would not be consistent with the 
approach on the basis that housing costs are incurred week by week. The second 
point is that sub-paragraph (1) should be given a meaning that allows all parts 
of sub-paragraphs (2) and (3) to be given a practical and effective application. 
The notion of a former liability remaining while a new additional liability is 
added and much of the definition of the "relevant period" only make sense if a 
housing cost is treated as incurred on the date on which the underlying 
liability was first incurred. 
11. Having rejected Mr Moore's main submission, I must go on to consider 
whether, in the light of the evidence he presented about the intention of the 
Secretary of State in framing paragraph 5A, any ambiguity of language should be 
construed in accordance with the intention to take loans for essential repairs 
and improvements outside the operation of paragraph 5A. I shall have to come 
back shortly to the nature of that evidence, but, in the light of my conclusion 
above, I find that there is no ambiguity of language in paragraph 5A that admits 
of such an alternative construction. That is so either under the principle of 
looking at the SSAC's report in order to identify the mischief which paragraph 
5A was intended to remedy (Black-Clawson International Ltd v PapierWerke 
Walhof-Ascheffenburg AG [1975] AC 591 and R(I) 11/81) or under the principle of 
looking at statements made to Parliament by the proposer of a statutory 
provision (Pepper v Hart [1993] AC 593) or under any principle allowing 
ambiguities to be resolved to avoid absurd results. The adverse consequences for 
the claimant in this case do not stem from any ambiguity of language, but from 
the way in which sub-paragraph (5) is embedded in the structure of paragraph 5A 
as a whole. It is unambiguous in having no independent operation of its own, but 
only spelling out in detail the exception made in sub-paragraph (3) where the 
conditions of sub-paragraph (3) would otherwise be met. That cannot be overcome 
by a process of construction.
Irrationality 
12. During the oral hearing, I suggested that the real force of Mr Moore's 
submissions might be to the effect that the provisions of paragraph 5A were 
Wednesbury unreasonable or irrational to the extent that they prevented the 
interest on new loans for essential repairs and improvements being met if the 
claimant had not previously had any housing costs for loan interest, but did not 
prevent the interest on such new loans being met if the claimant had previously 
had housing costs for loan interest. He had drawn a very striking contrast 
between the position of two categories of income support claimant. In both cases 
the claimants are owner-occupiers, possibly of long-standing, and require the 
same substantial repairs to be done to their homes, say for roof repairs to stop 
rain coming in. Both have no savings and a low current income, as shown by their 
entitlement to income support. But one category had no outstanding mortgage or 
loan when coming onto income support, whereas the other had an outstanding 
mortgage, the interest on which is currently being met as a housing cost. The 
effect of paragraph 5A is that claimants in the first category are unable to 
have the interest on the loan for the repairs met as a housing cost, whereas 
claimants in the second category are able to have it met. Mr Moore submitted 
that it would be bizarre, absurd and unjust to distinguish between equally 
deserving claimants in that way. And what made the effect even more perverse was 
that the category which came off worse was the one which had formerly been 
making the smaller demand on public funds, as no housing costs for loan interest 
had had to be met. Mr Scoon pointed out that in most amendments to regulations 
there will be groups who benefit (or at least do not lose) and groups who lose 
(or at least do not benefit) and that does not make the amendment irrational. He 
also suggested that the policy of paragraph 5A was to discourage the creation of 
new housing costs and that it might therefore make sense to distinguish between 
those claimants who were already relying on the inclusion of housing costs in 
their benefit calculation and those who were not. 
13. I should at this point refer to the evidence of the Secretary of State's 
intentions in the SSAC report referred to in paragraph 4 above. Mr Moore 
submitted that the intention was that there should be no restriction at all 
under paragraph 5A on meeting the interest on loans for essential repairs and 
improvements. However, he had been unable to obtain a full copy of Cm 2537 and 
produced only a copy of one page. Mr Scoon has now kindly supplied to me a full 
copy of Cm 2537 (as agreed at the oral hearing). 
14. The draft regulations submitted to the SSAC are set out in Appendix B to 
this decision. It will be seen that what was then sub-paragraph (4) of the 
proposed paragraph 5A, as well as spelling out the exception in sub-paragraph 
(3), had an independent operation in providing that the additional housing costs 
due to increases in interest rates might be met. In the Secretary of State's 
note to the SSAC about the proposal and in the Secretary of State's statement 
under section 174(2) of the Social Security Administration Act 1992, it was said 
that the amendment provided that income support "would not meet the additional 
interest on an increase in loan commitments where the cost is incurred while the 
borrower or one of their family is entitled to Income Support". It is plain from 
the scope of the proposal that the words "additional" and "increase" were there 
being used to include both a situation where the borrower has no existing loan 
commitments and the situation where there are existing loan commitments. That 
usage was followed by the SSAC in its report. 
15. The SSAC accepted that the principle behind the proposal was justified, but 
recommended that there should be clear safeguards by way of further exceptions 
(para 68). One area of concern related to major repairs and improvements. The 
SSAC said this in paragraphs 31 to 35: 
    "31. The amendment would except from the proposed restriction loans taken 
    out to pay a service charge imposed on a leaseholder by a freeholder to pay 
    for repairs and improvements to the property. However, interest on major 
    loans for repairs and improvements for most householders would no longer be 
    covered by income support, if taken out during the period of benefit 
    entitlement, unless the claimant was in the excepted disabled or `over 74' 
    category. Some Home Improvement Agencies, funded by the Department of the 
    Environment, are concerned about the effect on their pensioner and disabled 
    customers. Although most of these would probably be covered by the proposed 
    exceptions from the new restriction, nevertheless there remains concern 
    about the under 75s, and the problems of paying for repairs and improvements 
    must apply equally to all those receiving income support long term. ... 
    33. It seems essential to us to help people maintain the fabric of their 
    property, especially if a local authority has imposed a repairs notice 
    where, for example, a roof or a wall has become dangerous. In some cases 
    such help could prevent people from losing their homes and thereby possibly 
    incurring a different kind of public expenditure. ... 
    35. It is important to bear in mind that, in paragraph 8(3) of Schedule 3 to 
    the Income Support regulations, there is already a list of allowable repairs 
    and improvements, including such items as damp-proofing and the provision of 
    electrical lighting and sockets, with the additional discretion to allow any 
    item considered `reasonable' by the Adjudication Officer. However, the 
    Department has pointed out that this discretion has been used to allow 
    payment for interest on loans, for example, for new kitchens and extensions. 
    This may be reasonable where the loan was taken out before the claimants 
    became entitled to income support. We do not believe that such payments 
    would be appropriate where the loan was taken out after the start of the 
    period of entitlement. A finite list of repairs and improvements should 
    therefore be added to the proposed regulations excluding such repairs and 
    improvements from the proposed restriction. We have identified and listed 
    below those items which we consider essential. The Department should 
    consider whether this list needs additions in the light of experience." 
I note at this point that there was no suggestion of any different consideration 
applying according to whether or not the claimant had a previous loan commitment 
before the loan for repairs or improvements was taken out. 
16. The SSAC's recommendation was as follows (para 36): 
    "36. We recommend that all income support recipients, not just those in the 
    `disabled' and 75 and over categories, should continue to be allowed payment 
    for the interest on additional loans for repairs and improvements necessary 
    to maintain the fabric of the dwelling occupied as the home and any of the 
    following measures undertaken with a view to improving its fitness for 
    occupation:-" 
Then followed a list of the first 10 categories allowed under paragraph 8(3) of 
Schedule 3, omitting the final "reasonable" category and adding two more 
specific categories relating to overcrowding due to an increase in the number of 
children in the household and to the provision of separate sleeping 
accommodation for children of different sexes aged 10 or over. 
17. The Secretary of State's response to that recommendation in the statement 
under section 174(2) of the Social Security Administration Act 1992 was, in 
relation to the first 10 categories and the second new category listed, "We 
accept these parts of this recommendation". In relation to the first new 
category recommended, relating to overcrowding from extra children, the response 
was: 
    "The purpose of Income Support help with mortgage interest is to help people 
    retain their existing reasonable accommodation. We believe that where that 
    accommodation is inadequate for their needs help is best focused through 
    Government housing policy which is administered by the Department of the 
    Environment in the form of home improvement grants and rehousing for 
    vulnerable groups. This is a more efficient way of addressing such problems 
    than using the benefits system, particularly when the help in question is 
    not available to people in work on low incomes. In addition, owner-occupiers 
    who do not receive Income Support have to plan for family size in relation 
    to their expected income and we see no reason why Income Support recipients 
    should be treated differently." 
It is also necessary to quote the response to another recommendation, that the 
exception applicable to people of 75 or over should be extended to people aged 
65 or over: 
    "The regulations allow those aged 75 or over, and disabled people of any age 
    to get help with loans that are taken out to make adaptation to an existing 
    property or acquire alternative accommodation if the need for the new loan 
    results from their special needs. We believe that this allows us to focus 
    help on those groups who need it most. It would be wrong for us to allow 
    Income Support to be used as a source of funding for alternative housing 
    generally. In addition, our acceptance of the Committee's recommendation 
    that loans for essential repairs and improvements will be exempt from the 
    regulations will make it easier for all elderly people to stay in their own 
    homes." 
I remind myself at this point that the Secretary of State's statement under 
section 174(2)(a) must "show ... the extent (if any) to which he has, in framing 
the regulations [laid before Parliament], given effect to the Committee's 
recommendations". 
18. The House of Lords in Foster v Chief Adjudication Officer [1993] AC 754 held 
that Social Security Commissioners may determine whether or not regulations are 
ultra vires where that question arises as part of a determination before them. 
Lord Bridge said, at page 765, that: 
    "if the Commissioners have jurisdiction to question the vires of secondary 
    legislation, the scope of that jurisdiction must, at least theoretically, 
    embrace a challenge on the ground of irrationality as well as illegality." 
He went on, after referring to Nottinghamshire County Council v Secretary of 
State for the Environment [1986] AC 240 and Edinburgh City District Council v 
Secretary of State for Scotland 1985 SC 261, to say, at page 766: 
    "This is not the occasion when it would be appropriate for your Lordships to 
    consider whether to go beyond the speech of Lord Scarman, unanimously agreed 
    to by the Appellate Committee, in the Nottinghamshire case, which leaves 
    room for possible exceptions in extreme cases from any absolute rule that 
    the courts may not condemn as irrational secondary legislation which has 
    been subject to Parliamentary scrutiny. But I have no doubt that the Social 
    Security Commissioners have good pragmatic reasons not to take it upon 
    themselves to identify any such exceptional case, but to leave that to the 
    higher courts, who, as Lord Jauncey pointed out, have never yet done so in a 
    reported case." 
19. The Tribunal of Commissioners in CIS/391/1992 said in paragraph 45 of its 
decision that that jurisdiction ought to be exercised by Commissioners "only if 
a serious issue of irrationality arises and the question whether a regulation is 
invalid on that ground must be necessary for the determination of the issue 
which arises before them". When such circumstances arose, which was thought 
likely to be rarely, there would be a positive duty to rule on vires. I am quite 
satisfied that those conditions are met in the present case. Mr Scoon accepted 
that at the level of an individual Commissioner the approach of CIS/391/1992 has 
to be followed, although reserving for possible consideration by a higher court 
the question of the extent of the Commissioners' jurisdiction to rule that 
regulations are ultra vires on the ground of irrationality. In CIS/391/1992 the 
Tribunal of Commissioners found that the regulation in question was not 
irrational. It could not be said that it was wholly outside the intention of 
Parliament and that the Secretary of State had taken leave of his senses. I do 
not read that finding as detracting from the need, if a regulation were found to 
be irrational in that sense, to consider the conditions under which provisions 
which have been subject to Parliamentary approval may be impugned. I consider 
that the most authoritative statement of those limits is by Lord Scarman in the 
Nottinghamshire case. There he referred, at various points in his speech, to the 
necessity for a finding of fact that the House of Commons had been misled, to 
the Minister having deceived the House, or to there being bad faith or 
misconduct by the Minister. At [1986] AC 250 he said that: 
    "if a statute ... requires the House of Commons to approve a Minister's 
    decision before he can lawfully enforce it, and if the action proposed 
    complies with the terms of the statute ..., it is not for the judges to say 
    that the action has such unreasonable consequences that the guidance on 
    which the action is based and of which the House of Commons had notice was 
    perverse and must be set aside. For that is a question of policy for the 
    Minister and the Commons..." 
20. That is the general legal basis on which I approach the present case, which 
seems to me consistent with that adopted by the Commissioner in starred decision 
CIS/250/1991. There is no doubt that the making of the Income Support (General) 
Amendment Regulations 1994 complied with the terms of the Social Security 
Contributions and Benefits Act 1992, as section 135(1) gives the Secretary of 
State a wide power to prescribe the amounts to be included in the applicable 
amount. There was also a proper reference to and consultation of the SSAC, to 
comply with sections 172 and 174 of the Social Security Administration Act 1992 
(I do not think that any defect in the Secretary of State's statement under 
section 172(4) invalidated that process). However, as a serious issue has been 
raised about the irrationality of paragraph 5A, the determination of which is 
necessary in deciding the claimants' appeals, I must deal with that issue. I 
have not had any submissions on the issue on behalf of the Secretary of State. 
But since my conclusion is that the amending Regulations introducing paragraph 
5A are not irrational and ultra vires, that does not matter. 
21. I have found the argument for irrationality a strong one, but, after a great 
deal of thought, not quite strong enough. That is because of two main factors. 
The first is that I think that I must look initially at the terms of the 
regulations laid before Parliament and ask myself whether there is an 
irrationality there. When one looks at the process by which the draft 
regulations referred to the SSAC were turned into the regulations made by the 
Secretary of State and laid before Parliament, it is hard to discern a rational 
reason for the manner of implementation of the SSAC's recommendation. But that 
is not the precise point. The question I have to ask is whether any Secretary of 
State in his senses could deliberately make a regulation which prevented 
claimants with no previous housing costs for loan interest from receiving 
housing costs for new loans for essential repairs, while allowing such housing 
costs for claimants with previous housing costs for loan interest. The second 
factor stems from the specific warning from Lord Bridge in Foster and the 
general flavour of judicial opinion pointing to the extremity of the 
circumstances in which secondary legislation can be found to be irrational. I 
take the principle to be that a Social Security Commissioner should only find 
secondary legislation irrational, if able to do so at all, when the argument for 
irrationality is compelling. I find that the argument in the present cases falls 
short of that standard. I accept that the effect of paragraph 5A is unfair and 
absurd and even perverse in treating claimants with identical needs for housing 
costs differently. However, as a matter of language, the structure of paragraph 
5A is perfectly workable and logical. I do not think that the unfairness and 
absurdity of its results are sufficiently compelling that I should find that 
there is irrationality. 
22. As it is possible that these appeals might be taken further, I should deal 
with the other questions which would have arisen if I had decided in the 
claimants' favour on irrationality. I would have found the conditions laid down 
by Lord Scarman in the Nottinghamshire case to be met. On the view which I have 
taken about the construction of the new paragraph 5A in the amending regulations 
laid before Parliament, I conclude that the Secretary of State's statement under 
section 174(2) of the Social Security Administration Act 1992 was erroneous. In 
the light of the terms of the SSAC's report, the Secretary of State's statement 
was unequivocal in accepting that loans for repairs and improvements, as 
specially defined, should be taken out of the operation of paragraph 5A for all 
claimants. The use of the words "additional loans" in the relevant SSAC 
recommendation does not carry any suggestion of a limitation to situations where 
a claimant has an existing loan commitment (see paragraphs 14 and 15 above). Yet 
the inescapable construction of the regulations as laid before Parliament meant 
that the Secretary of State had not in framing the regulations actually given 
effect to the SSAC's recommendation as he stated that he had. There is no 
evidence to suggest any bad faith on the part of the Secretary of State or any 
intention to deceive or mislead Parliament. The most likely explanation is that 
there was a misunderstanding by his legal advisers of the structure of the new 
paragraph 5A, and of what needed to be done to the original draft in order to 
incorporate the SSAC recommendations which had been accepted. Nonetheless, the 
result was that Parliament was misled in a fundamental respect about the effect 
of the amending regulation. In those very unusual circumstances, I consider that 
the fact that no resolution was passed by Parliament to nullify the amending 
regulations would not have prevented me from finding that the regulations were 
irrational and ultra vires. 
23. If I had found there to be an invalidity in the failure of paragraph 5A(5) 
to extend its exception of loans for repairs or improvements (as specially 
defined) to claimants who had not previously had any housing costs for loan 
interest, I would have found that the invalid part could be severed from the 
rest of paragraph 5A under the test of "substantial severability" (Director of 
Public Prosecutions v Hutchinson [1990] 2 AC 783, applied by the Privy Council 
in Commissioner of Police v Davis [1993] 4 All ER 476). 
Conclusion
24. The result in the claimant's case is that there was no error in the legal 
basis adopted by the appeal tribunal for not allowing her the appropriate 
housing costs following the taking out of the loan on 26 April 1995. However, 
the appeal tribunal failed to take into account the position following the 
change in the law on the replacement of Schedule 3 with effect from 2 October 
1995 (see paragraphs 10 to 12 of the adjudication officer's submission dated 25 
July 1996). The period from 2 October 1995 down to the date of the appeal 
tribunal hearing was in issue on the appeal. For that reason, the appeal 
tribunal of 23 January 1996 erred in law and its decision must be set aside. I 
can substitute the correct decision in the light of the further action which has 
since been taken by the adjudication officer. That decision is set out in 
paragraph 1 above. 
25. On 20 February 1996, after the date of issue of the appeal tribunal's 
decision, the adjudication officer informed the claimant of a review and 
revision of her entitlement to income support to allow housing costs for the 
interest on the loan with effect from 2 October 1995, when the law changed under 
the new form of Schedule 3 (see page 65 of the papers). There is no question of 
that review being ineffective under the conditions of section 29 of the Social 
Security Administration Act 1992, because by that point the appeal against the 
adjudication officer's decision of 12 September 1995 had been disposed of. 
Accordingly the period now in issue before me ends on 1 October 1995. The taking 
out of the loan by the claimant on 26 April 1995 should be treated as a relevant 
change of circumstances justifying review of the current decision under which 
the claimant was entitled to income support prior to 26 April 1995. It does not 
matter in the present context that the precise date of that decision has not 
been identified. The decision on review must then be that, despite the change of 
circumstances, the existing decision is not to be revised for the period from 26 
April 1995 to 1 October 1995 to allow the interest on the loan to be met as a 
housing cost under paragraph 8 of Schedule 3. 
26. I was told at the oral hearing that applications for extra-statutory 
payments had been made in the cases of the claimants concerned in the four 
appeals before me and had been refused. I request the Secretary of State to 
reconsider that matter in the light of what is set out in this decision, and in 
particular of my conclusion that Parliament was misled by the Secretary of 
State's statement under section 174(2) of the Social Security Administration Act 
1992 in Cm 2537. 

(Signed)
J Mesher
Commissioner 
2 April 1997 

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