Shaping one of the most significant welfare reforms in 70 years

The Court of Appeal has rejected appeals against the dismissal of claims for a judicial review of the so-called benefit cap (R (on the application of SG & Ors) v The Secretary of State for Work and Pensions and (1) Child Poverty Action Group (2) Shelter Children’s Legal Services (Interveners) [2014] EWCA Civ 156).Its judgment affirms the lawfulness of one of the government’s most controversial welfare reforms. The cap, now operating nationally, limits a claimant’s benefits entitlement to an amount equivalent to the average net weekly earnings of a working household in Britain, presently £26,000 annually. It is fixed accordingly at £350 per week for single, childless claimants and £500 per week for others.

Last November, the High Court dismissed claims for a judicial review of the cap, ruling that it was not “manifestly without reasonable foundation” and that its adverse impact on various groups, women in particular,
was justified.

Four of the original six claimants appealed arguing that the cap:

• discriminated unlawfully against women generally, or women who were the victims of domestic violence, in breach of article 14 and article 1 of the first protocol (A1P1) to the European Convention on Human Rights (ECHR);
• infringed article 3(1) of the United Nations Convention on the Rights of the Child (UNCRC);
• discriminated unlawfully against families, in breach of articles 14 and 8 ECHR; and
• was unlawful on grounds of irrationality.

The court rejected these appeals. It was common ground that the cap engaged A1P1 and had a disproportionately adverse impact on women. The court also accepted that it was capable of engaging article 8 ECHR and that the cap’s impact was not justified.

Legitimate aims

The cap served three aims in particular: to introduce greater fairness in the welfare system between benefit claimants and taxpayers in employment; to make financial savings and, more broadly, make the system more affordable by reducing long-term benefit dependency; and to increase incentives to work. These were legitimate and while the aim of saving money was, alone, incapable of justifying the cap’s impact on particular groups, it was capable of doing so when taken with the government’s other aims.

Both the Welfare Reform
Bill and the regulations implementing the cap – the Benefit Cap (Housing Benefit) Regulations 2012 (2012 regulations) – had been debated and approved by both Houses of Parliament. In the circumstances, harsh though its effects may be, it could not be said the cap was manifestly without reasonable foundation.

The fundamental problem with the appellants’ fourth ground of appeal was that article 8 of the ECHR did not confer on the appellants a right to a home. Neither did their circumstances come close to the threshold at which article 8 might impose a positive financial obligation on the state. The court considered the argument that the appellants’ family life would not continue to be premature and unduly pessimistic. So the appeal on human rights grounds failed.

As for the UNCRC, article 3 required that the secretary of state treat the children’s best interests as a primary consideration. Plainly, he had.

The court gave relatively short shrift to the fifth ground of appeal. Parliament had debated the Welfare Reform Bill at length before it received Royal Assent; so too the 2012 regulations, which had been approved by affirmative resolution. It could not be said that the Secretary of State had failed to inform himself sufficiently of the difficulties faced by those fleeing domestic violence or those living in temporary accommodation. His decision to introduce the cap was not, therefore, irrational.

It is anticipated the appellants will petition the Supreme Court to consider the cap and its policy rationale further. Potentially, a second appeal raises issues fundamental to the cap’s efficacy and to the rights enshrined in article 8 of the ECHR.

More prosaically, county courts will continue to face the invidious task of determining whether tenants affected by the cap should remain in possession of accommodation they can no longer afford or instead become the charge of the local housing authority.

And those authorities are tasked with reconciling
their duty to the homeless
with the relative expense of accommodation in their area. SJ

Dean Underwood is a barrister at Hardwicke Chambers

www.hardwicke.co.uk