Supreme Court holds ‘two-child’ tax credit limit compatible with ECHR rights



Lord Reed
Lord Reed

The UK Supreme Court has held that the “two-child limit” used in calculating part of child tax credit payments is compatible with Articles 8, 12, and 14 of the ECHR after an appeal was brought by two adults and eight children against decisions of the Secretary of State for Work and Pensions.

The anonymous adult appellants, SC and CB, argued that the policy was intended to discourage women from having more than two children and thus violated their right to respect for private and family life, as well as the rights to found a family and to be protected from discrimination. The cases were test cases brought with the support of the Child Poverty Action Group, previously rejected by the High Court and the Court of Appeal.

The appeal was heard by a seven-judge bench led by the President of the Supreme Court, Lord Reed, and the Deputy President, Lord Hodge. With them sat Lady Black, Lord Lloyd-Jones, Lord Kitchin, Lord Sales, and Lord Stephens. The appellants’ legal team was headed by Richard Drabble QC, and the respondents’ by Sir James Eadie QC.

Affected reproductive choices

Under sections 9(3A) and (3B) of the Tax Credits Act 2002, one of the three elements used to calculate the amount payable to an applicant for child tax credit, the “individual element”, took no account of third or subsequent children born on or after 6 April 2017 unless one of a number of exceptions applied.

The limitation was announced by the UK government in July 2015 as one of several measures intended to fulfil commitments made by the Conservative Party in that year’s UK General Election. At that time, the minister in charge of the relevant bill stated that he believed the legislation was compatible with Convention rights.

The youngest child of each adult appellant was born after the cut-off date and thus was not included in child tax credit calculations. In their evidence, both spoke to being more or less able to make ends meet, but that it was not easy, and they were unable to do certain things that their children’s friends were able to, such as having birthday parties at commercial venues.

Counsel for the appellants submitted that the limitation was well-known and intended to affect women’s reproductive choices, and that this was incompatible with respect for their dignity and may lead to the consideration of abortions where otherwise that option would not be considered. Further, when taken together with Article 8 and with Article 1 Protocol 1 of the Convention, the limit led to discrimination against women and between households with two or fewer children and those with more.

Ordinary fact of life

The sole judgment, with which the other six judges agreed, was given by Lord Reed. Addressing the Article 8 arguments, he said: “In the present case, there is nothing in the legislation itself which indicates an intention to interfere with the reproductive choices of recipients of child tax credit. Nor is there the slightest indication in the other material before the court that their reproduction rate was regarded as a problem which needed to be addressed.”

He continued: “It is an ordinary fact of life that couples take decisions about the size of their families in the knowledge that their income will not automatically increase as the number of their children increases. Article 8 does not oblige the state to alter that situation by ensuring that parents are provided with additional income for every additional child that they may choose to have.”

Briefly addressing the Article 12 argument, which was not developed further before the court, he added: “According to the case law of the European court, that article only protects the right to found a family within marriage. Neither claimant has any intention of marrying, or founding a family with, the father of her youngest child (or, so far as appears from the evidence, anyone else). Even if they had such an intention, article 12 has been held not to impose a positive obligation on the state to provide the material means which would enable them to found a family.”

Turning to the arguments on discrimination, Lord Reed explained: “Although the legislation is couched in neutral terms, statistically it affects more women than men. That is accepted on behalf of the Secretary of State. On that basis, it is argued that there is indirect discrimination.”

He added: “A relevant difference in treatment has [also] been established in relation to the treatment of children living in households containing more than two children, as compared with children living in households containing one or two children. The remaining question is whether the difference in treatment is justifiable.”

Intense political controversy

On that question, Lord Reed went on to say: “There were two related ‘mischiefs’ or problems which prompted the introduction of the legislation. The first was an excessively high level of public spending on welfare benefits, resulting in a large fiscal deficit. Addressing this was a major priority of the Government’s macro-economic policy at the time, and had been a manifesto commitment at the 2015 General Election.”

He continued: “There is clearly a rational connection between the objectives pursued by the legislation and Parliament’s decision to limit entitlement to the individual element of child tax credit to the amount payable in respect of two children. It is not in dispute that the measure, by imposing that limitation, will achieve savings in public expenditure, and thus contribute to reducing the fiscal deficit.”

Lord Reed concluded: “The assessment of proportionality ultimately resolves itself into the question as to whether Parliament made the right judgment. That was at the time, and remains, a question of intense political controversy. It cannot be answered by any process of legal reasoning. There are no legal standards by which a court can decide where the balance should be struck between the interests of children and their parents in receiving support from the state, on the one hand, and the interests of the community as a whole in placing responsibility for the care of children upon their parents, on the other. The answer to such a question can only be determined, in a Parliamentary democracy, through a political process which can take account of the values and views of all sections of society.”

For these reasons, the appeal was refused.

© Scottish Legal News Ltd 2021



Other judgments by Lord Reed