R v Secretary of State for the Environment, ex parte Nottinghamshire County Council
| Jurisdiction | UK Non-devolved |
| Judge | Lord Scarman,Lord Roskill,Lord Bridge of Harwich,Lord Templeman,Lord Griffiths |
| Judgment Date | 12 December 1985 |
| Judgment citation (vLex) | [1985] UKHL J1212-2 |
| Date | 12 December 1985 |
| Court | House of Lords |
[1985] UKHL J1212-2
Lord Scarman
Lord Roskill
Lord Bridge of Harwich
Lord Templeman
Lord Griffiths
House of Lords
My Lords,
In December 1984 the Secretary of State for the Environment laid before the House of Commons the Rate Support Grant Report (England) for the year 1985–86. In due course the report was approved by resolution of the House. The Secretary of State included in the report (additionally to the matters which he was required by law to specify therein) expenditure guidance to local authorities for that year.
He was empowered to issue guidance by section 59 of the Local Government, Planning and Land Act 1980 ("the Act") as amended by the Local Government Finance Act 1982 and he would have power to enforce the guidance by the mechanism of a multiplier if he reported to and obtained the approval of the House of Commons: section 59(1)(4)(5)(6) and section 60(6)(7)(8). It is this guidance which the respondent authorities, the Nottinghamshire County Council ("Nottingham") and the City of Bradford Metropolitan Council ("Bradford"), challenge as unlawful. They make two submissions.
First, they submit that the guidance does not comply with subsection (11A) of section 59 of the Act in that it was not "framed by reference to principles applicable to all local authorities." This submission was rejected by the trial judge (Kennedy J.) but accepted on appeal by the Court of Appeal (Lawton, Slade and Dillon L.JJ.). In his speech to your Lordships my noble and learned friend, Lord Bridge of Harwich, considers the Act as amended, and advances his reasons for holding that on the true construction of the subsection the Secretary of State's guidance was framed by reference to principles applicable to all authorities. I agree with him. Accordingly, I confine my speech to the respondents' second submission to which I now turn.
Their second submission is that, even if the guidance complies with the words of the statute, it offends a principle of public law in that the burden which the guidance imposes on some authorities, including Nottingham and Bradford, is so disproportionately disadvantageous when compared with its effect upon others that it is a perversely unreasonable exercise of the power conferred by the statute upon the Secretary of State. The respondents rely on what has become known to lawyers as the " Wednesbury principles" — by which is meant the judgment of Lord Greene M.R. in Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation [1948] 1 K.B. 223, 229.
Neither the trial judge nor the Court of Appeal accepted the second submission. But much has been made of it in the courts below and in your Lordships' House. The respondents' case is that the guidance is grossly unfair, some authorities doing disproportionately well and others being hit undeservedly hard. Your Lordships have been taken through the detail and have been invited to hold that no reasonable Secretary of State could have intended consequences so disproportionate in their impact as between different local authorities. The House is invited in its judicial capacity to infer from these consequences that the Secretary of State must have abused the power conferred upon him by the Act.
The submission raises an important question as to the limits of judicial review. We are in the field of public financial administration and we are being asked to review the exercise by the Secretary of State of an administrative discretion which inevitably requires a political judgment on his part and which cannot lead to action by him against a local authority unless that action is first approved by the House of Commons.
The Secretary of State's guidance which is challenged was included in the Rate Support Grant Report for 1985–86 which was laid before and approved by the House of Commons: no payment of grant, and no reduction in the amount of grant by the Secretary applying a multiplier pursuant to section 59 of the Act, can be made unless covered by the report or by a supplementary report and approved by the House of Commons. I am not surprised that the trial judge and Court of Appeal declined to intervene.
My Lords, I think that the courts below were absolutely right to decline the invitation to intervene. I can understand that there may well arise a justiciable issue as to the true construction of the words of the statute and that, if the Secretary of State has issued guidance which fails to comply with the requirement of subsection (11A) of section 59 the Act of 1980 the guidance can be quashed. But I cannot accept that it is constitutionally appropriate, save in very exceptional circumstances, for the courts to intervene on the ground of "unreasonableness" to quash guidance framed by the Secretary of State and by necessary implication approved by the House of Commons, the guidance being concerned with the limits of public expenditure by local authorities and the incidence of the tax burden as between taxpayers and ratepayers. Unless and until a statute provides otherwise, or it is established that the Secretary of State has abused his power, these are matters of political judgment for him and for the House of Commons. They are not for the judges or your Lordships' House in its judicial capacity.
For myself, I refuse in this case to examine the detail of the guidance or its consequences. My reasons are these. Such an examination by a court would be justified only if a prima facie case were to be shown for holding that the Secretary of State had acted in bad faith, or for an improper motive, or that the consequences of his guidance were so absurd that he must have taken leave of his senses. The evidence comes nowhere near establishing any of these propositions. Nobody in the case has ever suggested bad faith on the part of the Secretary of State. Nobody suggests, nor could it be suggested in the light of the evidence as to the matters he considered before reaching his decision, that he had acted for an improper motive. Nobody now suggests that the Secretary of State failed to consult local authorities in the manner required by statute. It is plain that the timetable, to which the Secretary of State in the preparation of the guidance was required by statute and compelled by circumstance to adhere, involved him necessarily in framing guidance on the basis of the past spending record of authorities. It is recognised that the Secretary of State and his advisers were well aware that there would be inequalities in the distribution of the burden between local authorities but believed that the guidance upon which he decided would by discouraging the high spending and encouraging the low spending authorities be the best course of action in the circumstances. And, as my noble and learned friend Lord Bridge of Harwich demonstrates, it was guidance which complied with the terms of the statute. This view of the language of the statute has inevitably a significant bearing upon the conclusion of "unreasonableness" in the Wednesbury sense. If, as your Lordships are holding, the guidance was based on principles applicable to all authorities, the principles would have to be either a pattern of perversity or an absurdity of such proportions that the guidance could not have been framed by a bona fide exercise of political judgment on the part of the Secretary of State. And it would be necessary to find as a fact that the House of Commons had been misled: for their approval was necessary and was obtained to the action that he proposed to take to implement the guidance.
In my judgment, therefore, the courts below acted with constitutional propriety in rejecting the so-called " Wednesbury unreasonableness" argument in this case. The trial judge, Kennedy J., rightly reminded himself of an observation made by Lord Diplock in Secretary of State for Education and Science v. Tameside Metropolitan Borough Council [1977] A.C. 1014, 1064:
"The very concept of administrative discretion involves a right to choose between more than one possible course of action upon which there is room for reasonable people to hold differing opinions as to which is to be preferred."
And he concluded, after giving more attention to the detailed arguments as to the financial consequences of the guidance than they were strictly entitled to receive:
"In my judgment, although the Secretary of State could, of course, have set different guidance which would perhaps not have caused the applicant authorities to complain, it cannot be said that the approach which he has adopted was unreasonable in the Wednesbury sense."
The Court of Appeal adopted the same approach. After referring to section 59(6)( cc) of the Act of 1980 which requires the Secretary of State, when deciding what guidance to issue, to do what he thinks necessary having regard to general economic conditions, Lawton L.J. observed with constitutional propriety:
"Parliament has left him to decide what he thinks necessary. He has to make a political and economic judgment. He may make a sound one or a bad one. This court might have been able to make a better one than he made; but we must remind ourselves that Parliament, no doubt for good reason, has not entrusted guidance to us."
The other members of the court had no doubt that no case was made out that the [Secretary of State] had acted with Wednesbury unreasonableness or perversity.
" Wednesbury principles" is a convenient legal "shorthand" used by lawyers to refer to the classical review by Lord Greene M.R. in the Wednesbury case of the circumstances in which the courts will intervene to quash as being illegal the exercise of an administrative...
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