[2023] UKUT 193 (AAC)

Given my decision on the construction of regulation 64, it is unnecessary for me to decide whether, if the regulation had the effect for which the Secretary of State contends, that would amount to unlawful indirect discrimination. However, as I am again differing from CH/4429/2006 on this point, I should briefly explain why.

I have referred above to the decision of the European Court of Human Rights in Thlimmenos v Greece (2001) 31 E.H.R.R. 15. This was the first case in which it was recognised that unlawful discrimination was not confined to treating people who are in an analogous situation differently but could in some cases extend to treating people who were not in analogous positions the same.

Mr Thlimmenos was a Jehovah’s Witness whose religious beliefs prohibited him from serving in the armed forces of Greece. He was convicted by a military tribunal of insubordination for having refused to wear military uniform at a time of general mobilisation, and sentenced to four years imprisonment of which he served two years and a day. Subsequently, he applied to become a chartered accountant but was refused appointment to the Greek Institute of Chartered Accountants on the ground that he had been convicted of a felony.

At paragraph 44 of its judgment, the Court stated:

“The Court has so far considered that the right under Article 14 not to be discriminated against in the enjoyment of the rights guaranteed under the Convention is violated when States treat differently persons in analogous situations without providing an objective and reasonable justification …. However, the Court considers that this is not the only facet of the prohibition of discrimination in Article 14. The right not to be discriminated against in the enjoyment of the rights guaranteed under the Convention is also violated when States without an objective and reasonable justification fail to treat differently persons whose situations are significantly different.” (my emphasis)

Applying that principle, the Court stated (at paragraph 47 of its judgment) that:

“… as a matter of principle, States have a legitimate interest to exclude some offenders from the profession of chartered accountant. However, … unlike other convictions for serious criminal offences, a conviction for refusing on religious or philosophical grounds to wear the military uniform cannot imply any dishonesty or moral turpitude likely to undermine the offender's ability to exercise this profession. Excluding the applicant on the ground that he was an unfit person was not, therefore, justified.”

and that therefore the exclusion of Mr Thlimmenos from the profession of chartered accountancy did not pursue a legitimate aim and was a violation of his rights under Article 14 of the Convention, taken together with Article 9.

By contrast, it was concluded in CH/4429/2006 that the Convention Rights of the claimant in that case had not been infringed. The Commissioner gave the following reasons for that conclusion:

“19.

The regulation requires that everyone should be treated in the same way whether they apply for a loan or not. For the reasons I have attempted to explain, I do not consider that the claimant has made out a case that she and her partner should be treated differently from others or that their situation is significantly different from that of others. See paragraph 44 of [Thilimmenos]. The claimant may say that that is all very well but other persons, who object to taking out a student loan, could take one out of they wanted to. She and her partner, on the other hand, are prevented from doing so by their religious principles. However, those principles are simply one amongst many perfectly understandable motives for not taking out a loan. I see no reason why, because they hold them, they should be placed in a favourable position.

20.

They are being treated in exactly the same way whether they take out a loan do not. They are treated in the same way as everyone else. There is no discrimination and therefore no breach of Article 14. It follows that I must dismiss the appeal.”

I find that unpersuasive. It is no defence to an allegation of Thilimmenos discrimination that the alleged discriminator treats everyone the same. On the contrary, treating people the same when they should be treated differently is the very essence of Thilimmenos discrimination: to treat people equally, it is sometimes necessary to treat them differently.

Further, I cannot agree the matter should be approached on the basis that a sincere religious objection is “simply one amongst many perfectly understandable motives for not taking out a loan” and that therefore the position of the claimants in CH/4429/2006 and this case "is not significantly different from that of others”. Such an approach fails to attach weight to the facts that freedom of religion is guaranteed by Article 9 of the European Convention on Human Rights and that religion is a protected characteristic under Article 14. The same is not true of a desire not to be saddled with a lot of debt on leaving university.

In this case, the Secretary of State has conceded that her interpretation of regulation 64 would involve indirect discrimination against the claimant. I accept that concession and—subject to the issue of justification—would have held that the claimant was a victim of Thlimmenos discrimination.

I would not, however, have held that such discrimination was unlawful. Rather, I would have accepted the Secretary of State’s submission that it was justified on the basis that it pursued a legitimate aim and was not manifestly without reasonable foundation.

I stress again that this part of my decision is dealing with what I would have decided if (contrary to what I have actually decided) I had accepted the Secretary of State’s construction. For the reasons I have given, and except in the case of eligibility, that construction limits “reasonable steps” to matters that are essentially temporary and allows a claimant a period of grace during which those matters can be resolved. Apart from that period of grace, the meaning of the regulation would be the same as that of the former regulation 57A, namely that students are to be treated as possessing as income any student loan for which they would have been eligible had they applied.

Such a regulation would pursue the policy that education funding should come out of the education budget, not the social security budget. That is clearly a legitimate aim. To hold the contrary would amount to saying that the government is not entitled to set budgets. It is therefore irrelevant that it has been decided that funding via the education budget should in most cases be made by way of loans, rather than of grants. That is a decision about the allocation of funds between competing priorities and is quintessentially a matter that falls to be decided by those who have been democratically elected.

It may be arguable that the rules of the student loan scheme are themselves indirectly discriminatory on the grounds of religion. However, as Mr Waite rightly submits, that question is not before me, and I have no jurisdiction to adjudicate on it.

In the context of the housing benefit scheme as it applies to full-time students, most claimants are excluded from entitlement by regulation 56(1). The exceptions in regulation 56(2) (see paragraph 47 above) relate to categories of claimant who are potentially more vulnerable than other students and who may have needs that are not taken into account when their eligibility for a student loan is calculated. If the Secretary of State’s construction were correct, regulation 64 would have the effect that housing benefit would take into account such needs (e.g., through the disability premium) to the extent that they were not already covered by the loan, but that maintenance requirements that are common to all students would be met either from the education budget through a student loan or from the student’s own resources.

Such a rule would not be directly discriminatory, and it is impossible to say that it would be manifestly without reasonable foundation. Any indirect discrimination to which it gave rise would therefore be justified.

In other words, the Secretary of State has power to make a regulation that has the effect for which she contends, and such a regulation would not be unlawfully discriminatory irrespective of any disparate impact it might have on those whose religious beliefs do not permit them to pay interest.

However, the claimant’s appeal succeeds because, correctly interpreted, the regulation that the Secretary of State has actually made does not have that effect.