CIS/4320/2002

Decision

1. This appeal by the claimant does not succeed. I confirm the decision of the Whittington House Appeal Tribunal of 2nd August 2002 made under reference U/45/164/2002/00556. So far as concerns the issue before me this is to the effect that the claimant is entitled to housing costs as part of her income support in respect of the mortgage on her home, but to an amount appropriate for a mortgage limited to £100,000.
 
Background and Procedure

2. I held an oral hearing of this appeal on 1st August 2003. The claimant was represented by her solicitor, Ms Goldman. The Secretary of State was represented by Mr Cooper. I am grateful to both of them for their assistance. At the end of the hearing I gave Ms Goldman a month in which to make further submissions in relation to Article 14 of the European Convention on Human Rights. No such submissions were received and I now proceed to my decision.

3. The basic facts in this case are not disputed. The claimant is a woman who was born on 3rd February 1954. She was married and living with her husband and 5 dependent and 2 non-dependent children in a house in the London Borough of Ealing. The claimant and her husband had purchased the house, with the help of a mortgage, for £155,000 in 1998. They also took 2 home improvement loans which were used, amongst other things, to build an extension. On 6th December 2000 the claimant separated from her husband, who moved out of the matrimonial home, leaving the claimant there with the children. The claimant’s husband made no payments towards the mortgage. 

4. On 19th February 2001 the claimant made a claim for income support as a lone parent. It took some time for this claim to be processed and on 16th November 2001 the Secretary of State awarded income support from the date of claim. At that time the claimant’s entitlement to income support did not include housing costs, which were not payable during a qualifying period (which is not in issue in this case). A new award was made on 7th January 2002, effective from 13th November 2001 (after the end of the qualifying period). The total income support awarded was £288.49 per week (in addition to child benefit of £56.90 per week). By this time the outstanding mortgage was over £196,200 and the interest payments alone were about £1003 per month (equivalent to about £231 per week). However, the Secretary of State only allowed housing costs to be paid on the basis that the mortgage was £100,000. After taking account of assumed contributions by the non-dependent children of £14.80 per week, this left housing costs of £113.09 per week, which the Secretary of State paid directly to the mortgage lender. This was only about half of the amount that was owed each month in respect of interest payments.

5. On 28th January 2002 the claimant appealed to the tribunal against the decision of the Secretary of State. On 2nd August 2002 the tribunal confirmed the decision of the Secretary of State and the chairman of the tribunal refused the claimant leave to appeal to the Commissioner against the decision of the tribunal. The claimant attended the tribunal hearing together with her solicitor. There is no reference in either the record of proceedings or the tribunal’s full statement to questions relating to the Human Rights Act 1998. The claimant now appeals by my leave granted on 12th May 2003, following an oral hearing of the application on 19th February 2003 (at which the claimant was also represented by Ms Goldman but at which the Secretary of State was not represented) and following receipt of a copy of an opinion dated 14th April 2003 from Mr Jan Luba QC.

The Legal Provisions

6. The amount of income support to which a claimant is entitled is calculated by reference to the applicable amount mentioned in section 124(1)(b) and section 124(4) of the Social Security Contributions and Benefits Act 1992. Section 135(1) of the Act provides:

135(1) The applicable amount, in relation to any income-related benefit, shall be such amount or the aggregate of such amounts as may be prescribed in relation to that benefit.

7. Regulation 17 of the Income Support (General) Regulations 1987 lists the items which are to be aggregated to make up the applicable amount. Regulation 17(e) lists:

17(e) any amounts determined in accordance with Schedule 3 (housing costs) which may be applicable to him in respect of mortgage interest payments or such other housing costs as are prescribed in that Schedule.

8. Paragraph 11(4) of Schedule 3 provides:

11(4) Where for the time being, or in a case where more than one loan is to be taken into account, the aggregate of those loans exceeds the appropriate amount specified in sub-paragraph (5). Then the amount of the loan or, as the case may be, the aggregate of those loans, 

These limitations were first introduced into the regulations in 1993 by SI 1679 of 1993. Initially, and with effect from 2nd August 1993, the specified appropriate amount was £150,000. This was reduced to £125,000 with effect from 11th April 1994 and was further reduced to £100,000 with effect from 10th April 1995. I refer to these provisions as “the mortgage cap”. It is well known, and not disputed in this case, that it was government policy to limit the amount of a mortgage that could be met from means tested benefits. The mortgage cap has remained at £100,000 since 10th April 1995. That limit was in force when the mortgages/loans in the present case were taken out in 1998.

The Concept of Irrationality

9. Mr Luba’s main argument is that the £100,000 mortgage cap is unfair and irrational and ought not to be applied. Technically this is a ground for arguing that the part of the regulations specifying the limit is ultra vires (beyond the powers conferred by the statute). In this decision I use the terms “irrational” and “unreasonable” interchangeably.

10. There is no doubt that, generally, the Commissioner has power to find a regulation to be ultra vires (as clarified by the House of Lords in The Chief Adjudication Officer  -v- Foster [1993] AC 754). As early as 1898, in Kruse -v- Johnson [1898] 2 QB 91, a specially constituted Divisional Court of 7 senior judges considered the circumstances in which the court could hold that a local authority by-law was void for unreasonableness. Lord Russell of Killowen, the Lord Chief Justice (with whom all but one member of the court agreed) said,

“… when the court is called upon to consider the by-laws of public representative bodies, … such by-laws ought to be supported if possible … I do not mean to say that that there may not be cases in which it would be the duty of the Court to condemn by-laws … as invalid because unreasonable. But unreasonable in what sense? If, for instance they were found to be partial and unequal in their operation as between different classes; if they were manifestly unjust; if they disclosed bad faith; if they involved such oppressive or gratuitous interference interference with the rights of those subject to them as could find no justification in the minds of reasonable men (sic) the Court might well say “Parliament never intended to give authority to make such rules; they are unreasonable and ultra vires”. But it is in this sense and this sense only, as I conceive, that the question of unreasonableness can properly be regarded. A by-law is not unreasonable merely because particular judges may think that it goes further than is prudent or necessary or convenient, or because it is not accompanied by a qualification or an exception which some judges may think ought to be there”

11. More recently, in the House of Lords decision in CCSU -v- Minister for the Civil Service [1983] 3 All ER 935 at 950, in the context of judicial review of administrative action by a government minister (in this case the Prime Minister), Lord Diplock said of the concept of irrationality or unreasonableness,

“It applies to a decision which is so outrageous in its defiance of logic or of accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at it”. 

12. It is clear from the decisions of the Court of Appeal in O’Connor -v- The Chief Adjudication Officer  and The Secretary of State for Social Security (3rd March 1999 reported as R(IS) 7/99) and Owen -v- The Chief Adjudication Officer  (24th April 1999 reported as R(IS) 8/99) that the same principles apply to the validity of a Statutory Instrument dealing with social security which has been put to Parliament by a Minister and approved by Parliament. 

13. Although the case has not been put on this basis, there have been suggestions recently that the concept of unreasonableness or irrationality should give way to the concept of proportionality, which could be seen as providing a less protective jurisprudence in relation to government actions. I deal further with this below. 

Mr Luba’s Grounds

14. Mr Luba argued that the mortgage cap is irrational because it applies nationally without respecting regional variations in housing costs, it applies across all categories of claimant irrespective of whether the claimant is luxuriously accommodated or grossly overcrowded and recognises no distinction between those who have expensive accommodation in poor areas and those who have poor accommodation in expensive areas. “It thus represents a blunt instrument for the control of social security expenditure” but it was never intended that it should produce homelessness for modestly accommodated benefit claimants.

15. He pointed out that at the time of the introduction of the original cap, the proposed provisions had been referred to the Social Security Advisory Committee. The Committee’s Report is published, together with the Secretary of State’s Statement of Response, as Cm 2272 (July 1993). Appendix 2 (cited below as “app 2”) contains the original Note to the Committee from the (then) Department of Social Security. The Department had told the Advisory Committee that the policy intention was to provide a reasonable level of protection for the homes of people who need to claim income support (app 2 para 6) but that there was a level of provision “beyond which a scheme designed to provide basic assistance for the poorest members of society and funded by general taxation cannot reasonably be expected to go even temporarily” (para 10). It was only ever expected that a small proportion of those claimants receiving help with housing costs would be affected  - fewer than 1 in 200 (app 2 para 11). It is said that the Department also advised the Committee that it intended to review the limit annually and to take account of house price movements (para 15 of the Report). However, I can find no reference to this last point in either the Note from the Department or the Statement of Response.

16. The explicit policy intention was to encourage insurance by new borrowers, but it was acknowledged by the Committee that there could be a problem for deserted partners left with children, since insurance against this eventuality would not be obtainable (para 25 of the Report).

17. In a more general report in 1995 (Cm 2905) this latter point was considered in some detail and in the Statement of Response to that Report (para 7) the Secretary of State indicated that some kind of “easement” would be introduced for this situation.

18. Mr Luba pointed out that in fact there had been no annual review (or there was no evidence that these had taken place), that no “easement” had been introduced, and that the effect of house price inflation has been to bring the cap down below the level of the mortgage loan “for a very modest family home” in many parts of the country, particularly in South East England. There was a very real risk of homelessness, which was neither intended nor fair nor rational. The social and economic consequences of default and repossession (the need for expensive temporary accommodation and then subsidised social housing and housing benefit) “grossly outweigh” the cost of realistic support.

19. In fact, on the question of “easement”, it seems to me that a careful reading shows that the Secretary of State was referring to the situation during the waiting period of a claim when a mortgage had been taken out after 1st October 1995. It did not refer to the idea of a cap or the level at which it was set.

The Context of Other Provisions

20. At the hearing Ms Goldman referred to other provisions in Schedule 3 to the 1987 regulations. For example, paragraph 13 deals with excessive housing costs. Pragraphs 13(1)(b) and 13(3) limit the amount of housing costs (subject to exceptions) to that needed to obtain suitable alternative accommodation where “the immediate area in which the dwelling occupied as the home is located is more expensive than other areas in which suitable alternative accommodation exists”. Paragraph 16 limits housing costs in respect of loans for repairs and improvements to those taken out for specified purposes. She suggested that an overall cap of £100,000 makes nonsense of those and other restrictive provisions and that because of those other provisions an overall limit was not necessary to control excessive housing costs. If anything, I think that these points undermine the argument. These are national provisions and there are areas where suitable accommodation is still available (for small families or households, perhaps) for less than £100,000. In such cases, it is possible to be incurring excessive housing costs while still below the £100,000 cap. The provisions taken together show that some regard is in fact had to the discrepant price of property in different areas.

21. Ms Goldman also compared the provisions for income support housing costs to those for housing benefit in the rented sector, where it was possible, on a discretionary basis, to pay more than the local reference limit. She suggested that it was irrational to have in place 2 such disparate schemes to assist those who cannot afford their own housing costs. I do not find this to be irrational at all. Those who are in receipt of income support housing costs are, in addition to having a roof over their heads, acquiring a capital asset. I put this to Ms Goldman, who pointed out that income support housing costs paid only the interest and not the capital. That is correct, but the whole basis of the irrationality argument is that there is a disproportionate amount of house price inflation. In those circumstances, the time will often come when it makes sense to sell the property and buy a smaller and/or less expensive property or make other arrangements. That is not usually an option available to tenants of rented property.

The Housing Statistics and Unreasonableness of the £100,000 Limit

22. At first, Ms Goldman seemed to be arguing that the limit on housing costs became irrational over time. She produced tables of Housing Statistics from the Office of the Deputy Prime Minister. Mr Cooper did not object to my receiving this new factual evidence and relying on the accuracy of the Tables. The most relevant statistics are those that show that the average purchase price for all types of dwellings in 1995 (when the £100,000 limit was introduced) was £68,409 in England and £89,102 in London. The national averages were, of course, lower, property being on average less expensive in Scotland, Wales and Northern Ireland than in England. The average mortgage would have been significantly lower than the average purchase price. Thus, even in 1995 (and property prices had been rising steadily) it could not really be said that a cap of £100,000 was unreasonable (in the sense that I am considering), even in London. (Speculating without evidence, if the average mortgage was 90% of the purchase price, then the £100,000 limit was the London average mortgage plus 24.7%).

23. Of course, the price of housing continued to rise. In 1998, when the claimant and her husband purchased the property in question, the average purchase price for all types of dwellings was £89,714 in England and £123,921 in London. Had they thought to check, of course, they would have discovered that in the event of needing to claim a means tested benefit, all they would get by way of housing costs would be interest on about two thirds of their purchase price. By 2001 (the latest year covered by the tables) the average purchase price for all types of dwellings was £120,665 in England and £188,342 in London.

24. If the £100,000 cap was not unreasonable when it was introduced, then (and I accept Mr Cooper’s argument on this point) I do not see how it could become unreasonable. 

So What Might Have Been Unreasonable?

25. What might be said be unreasonable include:

(a)	the failure by the Secretary of State to table provisions updating the cap in line with house price inflation or, in the context of that inflation, the problems being created for single parents and abandoned partners

(b)	the original lack of flexibility of the £100,000 cap, especially in relation to single parents

(c)	the original lack of any provision for situations where one partner has abandoned the other

(d)	the failure of the original provision to include arrangements for inflation related uprating
 
(e)	having any limit at all.

26. The remedy in respect of (a) would be an application for judicial review and not an appeal to the Commissioner; there is nothing that I can do about that failure. Points (b) and, to a lesser extent, point (c) come up against the same problem that I have already identified – that when it was introduced the £100,000 cap allowed sufficient room for manoeuvre to take most special or unusual situations into account, while focussing on achieving the policy objectives that I have discussed above.

27. During the hearing, Ms Goldman was forced back on arguing (e). Coupled with this argument was a recognition that this was the only approach that could give a remedy for unreasonableness at my hands. If I were to accept that the £100,000 cap is unreasonable, then logically I could only strike it out (or disapply it) or change it. I am not sure that the ultra vires doctrine would allow me to change it, but in any event, it is not at all clear on what basis I could substitute a new figure. Mr Cooper argued that to strike out the cap would “be to put in place a wholly different regime from that which was intended”.

The Secretary of State’s Argument

28. Mr Cooper reminded me that at issue was the legality of the provision and not the 
wisdom of adopting the policy behind it. The Secretary of State had to take account of 
the interests of taxpayers as well as claimants. The government’s view was that:

	“the limits it has chosen reflect a suitable balance between the interests of taxpayers and those of mortgage holders and lenders. The provision of help up to the limit will ensure that some payment to the lender can be maintained even by people who have not made alternative arrangements”.
(Cm 2272 app 2 para 12.)

29. It was always intended to reduce the cap in stages and in fact, contrary to what the Committee stated that it understood, there was never any intention to index link the cap or to vary it geographically. This latter point is clear from the Committee’s 1993 Report (paras 11 to 15). In fact, the staged reduction in the cap shows that the intention was to proceed in the opposite direction.

30. Mr Cooper argued that mechanism of reference to the Committee helps to guard against unreasonableness and pointed out that paragraph 34 of the 1993 Report stated that:

“On the proposals themselves, we have sympathy with the Secretary of State’s views that that there is a need to have a reasonable limit beyond which income support should not be expected to provide help”.

My Conclusions on Unreasonableness

31. As Lord Justice Mummery pointed out in R(IS) 8/99:

“The fact that [a] regulation produces a hard case or an anomaly does not necessarily make it irrational …It has to be shown that no reasonable Secretary of State, properly directing himself, could make such a regulation …”.

32. For the reasons explained above (and discussed below in relation to proportionality) I conclude that the policy of limiting the contribution made out of the public purse to the housing costs of claimant repaying a mortgage was reasonable and rational, that the legal provisions embodying this policy aim were reasonable and rational and proportional to that aim, and that (in so far as I have jurisdiction to so decide) the failure to provide for inflation linked uprating or to make special provisions for special cases did and does not detract from those conclusions.

The Human Rights Act 1998

33. In applying to me for leave to appeal Ms Goldman raised the relevance of the Human Rights Act 1998 and what is usually referred to as the European Convention on Human Rights (“the Convention”). The full legal reference given in section 21(1) of the 1998 Act is “the Convention for the Protection of Human Rights and Fundamental Freedoms, agreed by the Council of Europe at Rome on 4th November 1950”. The Human Rights Act 1998 came fully into force on 2nd October 2000. Amongst other matters, it provides for direct application of the Convention in UK domestic law. The main relevant provisions of the Act here are:

3(1) So far as it is possible to do so, primary legislation must be read and given effect in a way which is compatible with the Convention rights. 

6(1) It is unlawful for a public authority to act in a way which is incompatible with a Convention right.

6(3) In this section "public authority" includes –
(a)	a court or tribunal.

34. Although I can only interfere with the decision of the tribunal if it was made in error of law, in order for me to decide whether the tribunal acted in breach of its obligations under section 6(1), I have to consider whether there was any breach of the claimant’s rights under the Human Rights Act or the Convention. This necessarily involves consideration of relevant questions of fact.

Article 1 of the First Protocol

35. Ms Goldman initially argued there were possible breaches of Article 8 of the Convention (and, in response to an issue raised by me, possibly Article 1 of the First Protocol) in conjunction with Article 14 in terms of discrimination against larger families.

36. Article 1 of the First Protocol provides:

Every natural or legal person in 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 the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.

37. Mr Luba’s opinion did not refer to Article 1 of the First Protocol and at the hearing of the appeal Ms Goldman agreed that I no longer needed to consider the First Protocol. This is because on 17th June 2003 in Carson and Reynolds -v- The Secretary of State For Work and Pensions [2003] EWCA Civ 797; [2003] 3 All ER 577 the Court of Appeal confirmed that the First Protocol does not “bite” on payments of income support (see paragraphs 42 to 49 of that decision). This was despite the decision of the European Court of Human Rights in Gaygusuz - v- Austria (1997) 23 EHRR 364.

38. In Carson and Reynolds Lord Justice Laws did comment (paragraph 44) that:

“If a person fulfils the conditions set by domestic law for entitlement to benefit, he is as surely entitled to receive the benefit – in theory to sue for it – where the conditions have not required him to make prior contributions as where they have. The entitlement is a “possession” in both cases, or neither.”

However, he added that the term “possessions” bears an autonomous meaning for the purposes of the Convention and in the field of social security the European Court of Human Rights has drawn a line between contributory and non-contributory benefits (paragraph 45).

Articles 8 and 14

39. Article 8 of the Convention provides:

8.1 Everyone has the right to respect for his private and family life, his home and his correspondence.

8.2. There shall be no interference by a public authority with the exercise of this right except such as in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of rights or freedoms of others.  

40. Article 14 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.

41. Mr Luba suggested that there was a breach of Article 8 because the effect of the mortgage cap will be that the claimant and her children lose their home (presumably thereby also disrupting their family life,). She has no other means of making up the shortfall, and cannot sub-let or take in lodgers because the home is already overcrowded. She cannot in reality take paid work because of the ages of her children.

42. Mr Cooper argued that Article 8 does not impose any positive obligation to provide financial assistance to support a person’s family. Where there is a positive obligation to secure or further respect the home or family life, the State enjoys a wide margin of appreciation.

Proportionality

43. I would add here that, although the case was not argued on this basis, the application of the margin of appreciation is subject to the principles of proportionality. (As I indicate above, there have also been suggestions recently that the concept of unreasonableness or irrationality should give way to the concept of proportionality). This has been discussed by the Privy Council in the De Freitas Case [1999] 1 AC 69 and by the House of Lords in R-v-Secretary of State for the Home Department ex parte Daly [2001] 2 AC 532 and R-v-Director of Public Prosecutions ex parte Kibeline [2000] 2 AC 326. 

44. In Daly (a case about prisoners’ correspondence) Lord Steyn confirmed the approach of the Privy Council that there is a 3 stage test:

a)	is the legislative objective sufficiently important to justify limiting a fundamental right?
b)	are the measures designed to meet the legislative objective rationally connected to it?
c)	are the means used to impair the right or freedom no more than is necessary to accomplish the objective?

44. Assuming that the mortgage cap comes within Article 8, and in light of the background considered above in relation to unreasonableness, my answer to all of these questions in this case would be positive.

Is Article 8(1) Engaged?

45. In Carson and Reynolds Lord Justice Laws said:

“ 26. … it is in my judgment important to recognise that that on the Strasbourg learning [of the European Court of Human Rights] Article 8 does not require the State to provide a home … nor does it impose any positive obligation to provide financial assistance to support a person’s family life or to ensure that individuals may enjoy family life to the full or in any particular manner …

27. At the same time the European Court of Human Rights has accepted that there may be circumstances in which Article 8 imposes a positive obligation upon States to take steps to secure or to further respect for the home or family life. In this territory, however, States enjoys a wide margin of appreciation. … It is also true that in establishing a system or regime to comply with a Convention obligation, a State may include within the system elements that are not strictly required by the Convention itself … and where that is done the distribution of these supererogatory rights must comply with Article 14 … ”.

46. I am not persuaded that to oppose restricting the amount of mortgage interest payable to a deserted partner with children, who acquired the home with her former partner at a time when they could well afford to pay for it, is the same as saying that the State has a positive obligation under the Convention “to provide a home” (notwithstanding the comments of Mr Commissioner Turnbull in CIS/2276/2001). In any event, very recently (16th October 2003), the Court of Appeal has decided, in the Anufrijeva Case [2003] EWCA Civ 1406; Times Law Report 17th October 2003, that Article 8 is capable of imposing a positive obligation on a State to provide welfare support, although it could not be precise about the type of case in which such an obligation arose. 

47. In Carson and Reynolds Lord Justice Laws said:

“ 28. In the present case I am clear that the provision of … income support has not been made by the United Kingdom legislature and executive out of compliance with any actual or perceived obligation arising under Article 8. Such positive obligations may arise when there is a ‘direct and immediate link between the measures sought by an applicant and the latter’s private and/or family life’…. But they cannot in my judgment extend to include whole swathes of a State’s social security system without embracing that system within the general duty vouchsafed by Article 8. That, however, would be contrary to the learning to which I have referred in paragraph 26 [see above]”.

48. The meaning of that paragraph is unclear. I do not accept that domestic law has to have been made pursuant to an obligation arising under the Convention for provisions of the Convention to be engaged. Indeed, much of English law was developed not only before the passage of the Human Rights Act 1998 but even before the drafting of the Convention. That does not mean that the Convention protection is not engaged. I think the paragraph means that it cannot be assumed that every aspect of income support engages the protection of Article 8. I cannot read it as excluding the whole of income support from the ambit of Article 8. If, for example, the regulations were to provide that the mortgage cap is £100,000 except for people who were born in Norway, in which case it is limited to £80,000, I cannot believe that either the domestic courts or the European Court of Human Rights would refuse to intervene on the basis that Article 8 is not engaged.

49. In CH/1205/2003 the Commissioner held that the housing benefit scheme (although dependent on entitlement to means tested benefits such as income support) is a means by which the State shows respect for a claimant’s home and family life and comes within the ambit of Article 8. In CJSA/0232/2003, the Commissioner was prepared to accept “at least for the sake of argument” that the standard mortgage interest rate in the calculation of housing costs for means tested Jobseekers Allowance was within the ambit of Article 8. In CIS/4769/2001 the Secretary of State conceded for the purposes of the hearing that social fund funeral payments (entitlement to which depends on entitlement to a means tested benefit) were also within the ambit of Article 8, and in CIS/3280/2001 the Commissioner held that this was so (as did I in CIS/1722/2002).

50. I find that the specification of a maximum amount of mortgage or similar loan, in respect of which housing costs can be included in entitlement to income support to cover the interest, comes within the ambit of Article 8 of the Convention.

Was There a Breach of Article 8(1)?

51. However, on the facts of the present case I am not persuaded that it can be said that the State (in the form of the Secretary of State) has actually breached Article 8 by failing to respect the claimant’s family life and home. Repossession is not inevitable and need never have become likely. If the claimant had sold or were to sell the house (and not wait for repossession), a lump sum would be raised. If the lump sum exceeded the capital limit, the claimant (even if unable to buy somewhere else) would be able to rent somewhere suitable until she needed to claim income support again, at which time she could also claim housing benefit. Her entitlement to child benefit would continue in any event. All that would be interfered with would be her right to acquire a capital asset probably more valuable in real terms than most people in this country would ever be able to afford to acquire.

52. I would also add, because the issue was opened up by Ms Goldman, that in addition to assumed contributions from the non-dependent children, at the time of the decision under appeal the claimant was receiving about £113.09 per week housing costs. The monthly equivalent is £490.06. Ms Goldman said that this would not even pay for equivalent rented accommodation near where the claimant now lives. That  may be so but it would certainly pay for such accommodation in parts of London that are at a similar distance from Central London and with adequate shops, schools and other facilities and an acceptable degree of safety.

Article 8(2) Justification

53. Had I decided that there was a breach of the rights protected by Article 8(1), it nevertheless seems to me that any such breach would have been justified in this case by reference to Article 8(2) and the economic well-being of the country and the protection of the rights of others.

54. Ms Goldman argued that the Secretary of State cannot rely on Article 8(2) by drawing a false distinction between claimants and taxpayers, because virtually everybody pays a great deal of tax, for example by having to pay VAT on goods and services. Neither could the Secretary of State rely on an economic argument since the State would incur similar costs through housing benefit and/or special arrangements for the children if the claimant and her family were rendered homeless.

55. I accept that most people pay tax by way of VAT and various other sales and transaction taxes. However, that also includes many other recipients of means-tested benefits and others on low incomes. Even liability to income tax bears more proportionately on people with lower incomes than it did 20 years ago (even if not than it did 5 years ago). The State must be entitled to organise redistribution of assets and transfer payments so as not to introduce further distortions into the housing markets, subsidise the poor by the even poorer, or (as I indicated above) allow claimants to acquire at public expense a more valuable capital asset than most people would ever be able to afford to acquire.

Article 14

56. On the face of it the mortgage cap does not discriminate on any of the grounds set out in Article 14. Apart from those subject to the waiting period in their income support claims, or those benefiting from transitional protection in relation to their rights under the old scheme of housing costs, whether the claimant is compared with persons in different circumstances or with persons with different personal characteristics, or with persons of a different status, the mortgage cap is £100,000.

Indirect Discrimination

57. That leaves the question of indirect discrimination. In this case it is argued on behalf of the claimant that the adverse effect on her and her children of the mortgage cap is greater than it would be for a smaller family, who could more easily find or have found accommodation or which they needed a mortgage of no more than £100,000 (or at least a smaller mortgage than that required by the claimant).

58. Along with the Commissioners who decided CIS/4769/2001 and CH/5215/2002 I find that there is no reason in principle why indirect discrimination should not come within the ambit of Article 14, although there does not appear to have been a successful claim of indirect discrimination under Article 14 in either the domestic courts or the European Court of Human Rights. However, in this case the claimant has not produced any statistical evidence or further argument to support this claim, notwithstanding the extended period that I allowed for her to do so after the conclusion of the oral hearing. (On these matters see Barber [2002] EWHC 1915.)

59. It seems to me that the answer here is really the same as the answer to the question of whether there is a breach of Article 8 itself. If necessary the claimant could rent somewhere and (subject to means) she would be entitled to housing benefit for accommodation appropriate to her family size, which would remedy any adverse effect arising from the mortgage cap.

Conclusion

60. This appeal fails because:

a)	the mortgage cap is not unreasonable or irrational and is not ultra vires
b)	the mortgage cap is within the ambit of Article 8 but
c)	there is no breach of Article 8(1), but 
d)	if there is such a breach, it is justified under Article 8(2)
e)	there is no breach of Article 14

H.Levenson
Commissioner 

12th November 2003