The Supreme Court held that legislation limiting tax credit to the first two children in a household is not unlawful discrimination contrary to Article 14 of the European Convention of Human Rights. The legislation was justified. This Supreme Court decision is important in clarifying (at least for the UK courts) various points on justification, including what discretion, or “margin of appreciation” the courts should allow to Parliament if the measure relates to economic or social strategy (tending to a wide margin of appreciation) but the discrimination is on a “suspect” ground such as sex or disability.
2021, Supreme Court. Full decision www.bailii.org/uk/cases/UKSC/2021/26.html
Parliament passed legislation limiting entitlement to payment of tax credit to (broadly) two children per family. The claim was that this breached Article 14 of the European Convention on Human Rights (ECHR).
Held: There was no breach of Article 14 because the legislation was justified.
Supreme Court decision
Some key points from the Supreme Court decision
- As regards how intensely or otherwise the court should assess justification, statements in cases such as discrimination being unjustified unless there are “very weighty reasons” for it (in the case of “suspect” grounds like sex or disability), or only if the discrimination was “manifestly without reasonable foundation”, should be seen as part of a nuanced approach with a range of factors which tend to heighten, or lower, the intensity of review in a particular case, and may pull in different directions. Below: Justification: Manifestly without reasonable foundation?
- Article 14 says the reason for the difference in treatment can be an “other status”. The court effectively said this is so wide that it is not normally an issue. “[T]he issue of ‘status’ is one which rarely troubles the European court…”. Below Identifiable characteristic or status.
- The best interests of the child were a relevant factor in assessing justification, but the court should not consider whether there was a breach of an international treaty (not incorporated into UK law) such as the UN Convention on the Rights of the Child. Below: Justification: How far is unincorporated international law relevant?
- If Parliament had considered an issue, the fact that it had done so could be relevant in assessing justification, but the adequacy or cogency of its consideration was not relevant: below Justification: Parliamentary materials.
The Supreme Court broke down the general approach of the European Court of Human Rights (ECtHR) to Article 14 (non-discrimination) of the European Convention, as stated for example in Carson v United Kingdom into four propositions :
- “The court has established in its case law that only differences in treatment based on an identifiable characteristic, or ‘status’, are capable of amounting to discrimination within the meaning of article 14.”
- “Moreover, in order for an issue to arise under article 14 there must be a difference in the treatment of persons in analogous, or relevantly similar, situations.”
- “Such a difference of treatment is discriminatory if it has no objective and reasonable justification; in other words, if it does not pursue a legitimate aim or if there is not a reasonable relationship of proportionality between the means employed and the aim sought to be realised.”
- “The contracting state enjoys a margin of appreciation in assessing whether and to what extent differences in otherwise similar situations justify a different treatment. The scope of this margin will vary according to the circumstances, the subject matter and the background.”
Within the “ambit’ of a Convention right
In addition, to fall within Article 14 the alleged discrimination must relate to a matter which falls within the “ambit” of one of the substantive articles of the Convention. However there need not be a breach of the substantive article. For example Article 8 (private and family life) may not impose a positive obligation on states to provide a particular welfare benefit, but if the state chooses to provide a particular welfare benefit to facilitate or contribute to family life, by supporting families with children, the welfare benefit is likely to fall within the ambit of Article 8 so that Article 14 applies. The child tax credit in this case did indeed fall within the ambit of Article 8. [39-41]
As regards discrimination against parents, but not children, the tax credit was also within the ambit of Article 1 of Protocol 1 (A1P1) on possession of property [42-43].
Types of discrimination
The Supreme Court set out three relevant types of discrimination that might arise under Article 14:
- Direct discrimination where there is “a difference in the treatment of persons in analogous, or relevantly similar, situations” 
- Thlimmenos discrimination, where “states without an objective and reasonable justification fail to treat differently persons whose situations are significantly different” .
- Indirect discrimination where a general policy or measure has disproportionately prejudicial effects on a particular group (notwithstanding that it is not specifically aimed at that group), if the policy or measure has no “objective and reasonable” justification, ie if it does not pursue a “legitimate aim” or if there is not a “reasonable relationship of proportionality” between the means employed and the aim sought to be realised” [49-53].
Identifiable characteristic or status
Article 14 expressly includes discrimination on grounds of sex. In this case there was indirect sex discrimination against mothers unless the measure was justified, because the limitation on tax credit statistically affected more women that men [46-54], given that about 90% of single parents were women [195ff].
Article 14 also includes discrimination on grounds of “other status”. The Supreme Court accepted that being a child member of a household containing more than two children could be regarded as a status within Article 14 [66-72], so the tax credit legislation might directly discriminate against such children. Indeed the Supreme Court commented that “other status” in Article 14 is so wide that it is not normally an issue:
71. .. I would add that the issue of “status” is one which rarely troubles the European court. In the context of article 14, “status” merely refers to the ground of the difference in treatment between one person and another. Since the court adopts a stricter approach to some grounds of differential treatment than others when considering the issue of justification, as explained below, it refers specifically in its judgments to certain grounds, such as sex, nationality and ethnic origin, which lead to its applying a strict standard of review. But in cases which are not concerned with so-called “suspect” grounds, it often makes no reference to status, but proceeds directly to a consideration of whether the persons in question are in relevantly similar situations, and whether the difference in treatment is justified. As it stated in Clift v United Kingdom, para 60, “the general purpose of article 14 is to ensure that where a state provides for rights falling within the ambit of the Convention which go beyond the minimum guarantees set out therein, those supplementary rights are applied fairly and consistently to all those within its jurisdiction unless a difference of treatment is objectively justified”. Consistently with that purpose, it added at para 61 that “while … there may be circumstances in which it is not appropriate to categorise an impugned difference of treatment as one made between groups of people, any exception to the protection offered by article 14 of the Convention should be narrowly construed.” Accordingly, cases where the court has found the “status” requirement not to be satisfied are few and far between.
“Status” could not be defined solely by the difference in treatment complained of: it must be possible to identify a ground for the difference in treatment in terms of a characteristic which was not merely a description of the difference in treatment itself. On the other hand, there was no reason to impose a requirement that the status should exist independently, in the sense of having social or legal importance for other purposes or in other contexts than the difference in treatment complained of. [69, 71]
Justification: How far is unincorporated international law relevant?
According to the statement of issues agreed between the parties, in relation to whether the discrimination was justified, the court had to decide “whether the UK’s obligations under the UNCRC have been breached in the present case, and if so whether in the circumstances the two child limit is compatible with Convention rights” . The UNCRC is the United Nations Convention on the Rights of the Child.
The Supreme Court held that it should not decide this issue . In summary, the best interests of the child (a factor derived from the UNCRC) were indeed a relevant consideration when considering justification under Article 14 in a matter concerning a child. However UK courts should not approach the question of justification by deciding whether the national authorities complied with their obligations under the UNCRC . This was an international treaty which, unlike the European Convention, has not been incorporated into UK law [76-79].
Justification: Manifestly without reasonable foundation?
According to the settled case law of the ECtHR in Strasbourg, the question whether there is an “objective and reasonable” justification for a difference in treatment is to be judged by whether it pursues a “legitimate aim” and there is a “reasonable relationship of proportionality” between the aim and the means employed to achieve it. However it is also well settled that states have “a margin of appreciation in assessing whether and to what extent differences in otherwise similar situations justify a different treatment” . As regards UK court decisions, where the ECtHR would allow a wide margin of appreciation to the legislature’s policy choice, the UK courts allow a correspondingly wide margin or “discretionary area of judgment” [143-146].
But how wide is this margin of appreciation? What are we to make of court decisions which on the one hand say the legislature’s policy choice in general measures of economic or social strategy (including welfare benefits) should be respected unless “manifestly without reasonable foundation”, but also say that “very weighty reasons” are required to justify a difference in treatment based on “suspect” grounds, including disability?
The Supreme Court said these should not be seen as mechanical rules, but that the ECtHR generally adopted a more nuanced, flexible approach:
99. … It is more useful to think of there being a range of factors which tend to heighten, or lower, the intensity of review. In any given case, a number of these factors may be present, possibly pulling in different directions, and the court has to take them all into account in order to make an overall assessment. The case law indicates, however, that some factors have greater weight than others.
So the different factors (they are not “tests” ) should not be seen as mutually exclusive but may apply together. The Supreme Court said it appeared from ECtHR case law “that in cases involving ‘suspect’ grounds in the field of welfare benefits and pensions, the determinative factor has generally been whether ‘very weighty reasons’ have been shown, but that the court has taken account of the wide margin generally applicable in that field when making that assessment” [130, also 123, 152]. If more than one factor is relevant in the circumstances of a particular case, then unless one factor is of overriding significance, the court must make a balanced overall assessment [116, more detail at 158]. The Supreme Court summarised the relevant factors as follows :
- “Suspect” grounds: This is a particularly important factor. If the difference of treatment is on certain grounds which are regarded as especially serious, then in principle a strict test of justification is called for [100-115]. The ECtHR has talked of “very weighty reasons” being required here. As well as sex and religion for example, these “suspect” grounds include disability [111-112]. An exception is point 4 below.
- Economic and social strategy: Another repeated principle, sometimes alongside a statement that “very weighty reasons” must be shown, is that a wide margin is usually allowed to the state when it comes to general measures of economic or social strategy. That has been said, for example, in relation to state provision of education, legal recognition of same-sex relationships, grant of residence permits, taxation, provision of social housing, state retirement pension . In some of these cases, the width of the margin of appreciation available in principle was reflected in the statement that the court “will generally respect the legislature’s policy choice unless it is ‘manifestly without reasonable foundation’” , often abbreviated as MWRF. The Supreme Court said MWRF is merely a way of describing a wide margin of appreciation . Rather than seeing it as a binary, mechanical test, which is either passed or not, a more flexible approach would give appropriate respect to the assessment of democratically accountable institutions while also taking appropriate account of such other factors as may be relevant . The Supreme Court made the point that even if there is no suspect ground and the margin of appreciation is wide, the final decision as to whether the measure complies with Article 14 rests with the court; MWRF does not mean the measure necessarily complies .
- The width of the margin of appreciation can be affected to a considerable extent by the existence, or absence, of common standards among the contracting states .
- Linked to that third point, a wide margin of appreciation is in principle available, even where there is differential treatment based on one of the “suspect” grounds, where the state is taking steps to eliminate a historical inequality over a transitional period in pace with changes in social attitudes. Similarly, in areas of evolving rights, where there is no established consensus, a wide margin has been allowed in the timing of legislative changes. [102-103, 115, 139]
- There may be a wide variety of other factors which bear on the width of the margin of appreciation in particular circumstances . This includes the impact of the measure on the best interests of children (above Justification: How far is unincorporated international law relevant?)
The claimants in this case argued that the ECtHR’s reasoning in JD and A v United Kingdom established a simple rule: complaints of discrimination on “suspect” grounds fall outside the scope of the wide margin and “manifestly without reasonable foundation” approach usually accorded in the field of welfare benefits, unless the case concerns “transitional measures” . The Supreme Court disagreed, on the basis this was inconsistent with other ECtHR decisions both before and after the JD decision.
Justification: Parliamentary materials
The Supreme Court discussed important limits on the extent to which the courts can consider Parliamentary material [173-178, based on principles in 164-172].
The Supreme Court held that in considering whether there is a reasonable justification under Article 14, it may be a relevant factor if it can be inferred that Parliament formed a judgment that the legislation was appropriate notwithstanding its potential impact upon interests protected by Convention rights, because of the respect which the court will accord to the view of the legislature . However:
- The courts should not consider the adequacy or cogency of Parliament’s consideration. A high level review of whether a topic was raised before Parliament, whether in debate or otherwise, should suffice . The Supreme Court discussed how Parliament does not derive its legitimacy because of the quality or transparency of its reasoning but because of its democratic credentials, and operates on a very different model from the courts in order to resolve differences of political opinion [168-71].
- The courts must not treat the absence or poverty of debate in Parliament as a reason supporting a finding of incompatibility .
Justification in the present case
In summary, the Supreme Court held the tax credit legislation was justified, so there was no breach of Article 14 of the European Convention:
Justification: Indirect sex discrimination against mothers
As regards the indirect sex discrimination claim (by mothers of larger families) in this case, sex was a “suspect” ground under ECtHR case law. The Supreme Court saw force in the United States Supreme Court’s approach that this meant stricter scrutiny would be required for direct discrimination, but not for the disproportionate impact of a measure designed to serve neutral ends. Despite this, the court followed the ECtHR approach that stricter scrutiny (“very weighty reasons”) was required even though it was indirect discrimination in the present case. 
The Supreme Court focused on the legitimate aim of reducing an excessively high level of public spending on welfare benefits, resulting in a large fiscal deficit. Expenditure on tax credits was a particular concern as it had more than trebled over the previous ten years or so. The Supreme Court said the differential impact on women was not a special feature of this measure – the impact on women was inherent in any general measure which limited expenditure on child-related benefits. Indeed even if Parliament had chosen to limit spending on benefits across the board rather than focusing on child tax credit, that approach would still have had a greater differential impact on women. The court rejected an argument that excluding single parents from the scope of the two child limitation would have been a solution. Given that the legitimate aims could not be achieved without a disproportionate impact on women, the only remaining question on proportionality was whether the impact on women outweighed the importance of achieving the aims. The Supreme Court saw no basis on which it could properly take a different view from that of Parliament, which had decided that the importance of the objectives justified the measure notwithstanding its greater impact on women. [190-199]
Justification: Discrimination against children in larger households
There remained the argument that the legislation directly discriminates against children living in households with more than two children, by comparison with children living in smaller households. Parliament’s aims were:
- to promote the economic well-being of the country by reducing excessive public expenditure on welfare benefits (see above), and
- to address what was regarded as an unfair and unreasonable aspect of the child tax credit system, namely that recipients were guaranteed a rise in income for every additional child they might choose to have, without limit. [200-201]
As to whether the legislation was a reasonably proportionate means of realising Parliament’s aims. the basis of the differential treatment (the number of children in a household) was not one of the grounds calling for “very weighty reasons” (above). Since the legislation was a general measure of social and economic strategy, involving an assessment of priorities in the context of the allocation of limited state resources, it followed that the courts should treat with the greatest respect Parliament’s assessment that the difference in treatment was justified. At the same time, since the measure affected children, the courts also had to bear in mind the significance of their best interests to the assessment of proportionality. 
The Supreme Court considered and rejected various arguments by the claimants. The court said that the assessment was one for Parliament. There were no legal standards by which a court could decide where the balance should be struck between (1) the interests of children and their parents in receiving support from the state, and (2) the interests of the community as a whole in placing responsibility for the care of children upon their parents. [204-209]
- Human Rights Act 1998/ European Convention
- What is ‘discrimination’ under Article 14 European Convention?>Justification – but not yet updated for this case.