[2023] UKUT 193 (AAC)

The Secretary of State’s skeleton argument submits that the reasonable steps that fall to be considered:

“are those relevant to the individual’s capacity to obtain a loan, such as ill health, eligibility or other practical impediments to the acquisition of such finance”,

and her original response suggests “an extraneous event for which the applicant was not responsible, for example error on the part of the person administering the application” as an example of another practical impediment.

I agree that, since the amendment of regulation 57A of the Former Regulations with effect from 1 August 1999, a claimant who is ineligible for a student loan has to rely on being unable to acquire it by taking reasonable steps if he is to avoid having a notional loan taken into account.

I cannot, however, agree that regulation 64(3) applies to questions of a claimant’s “capacity”. It is concerned with people who have sufficient capacity to qualify for a place on a course of full-time education. Such people will inevitably also have sufficient capacity to complete a student loan application.

The other examples suggested by the Secretary of State relate to matters that are likely to be temporary.

It would normally be reasonable for a student who could not in practice make a loan application because of physical or mental ill-health to take the reasonable step of obtaining help to do so.

A student who is denied a loan because of an error by a person administering the application is effectively in the same position as someone who is ineligible except to the extent that he is able to take reasonable steps to correct the error.

Similar considerations are likely to apply whenever a person who is eligible for a student loan faces a practical impediment to obtaining it. The very fact of his eligibility makes it likely that, by taking reasonable steps, the impediment can be overcome.

If that is so, the loan will still be given for the whole of the academic year. And when that happens the local authority will be required by regulation 64(2) to take it into account as income from the beginning of the academic year and adjust the claimant’s entitlement to housing benefit accordingly, potentially generating an overpayment.

The effect of the Secretary of State’s construction is therefore that—except in cases of ineligibility—regulation 64(3) provides a period of grace for students who are likely to acquire a student loan eventually.

The claimant would accept that, in the examples given by the Secretary of State, the student could not acquire a loan by taking reasonable steps. The real question between the parties is whether other matters personal to a claimant can also be taken account.

The claimant submits that all the claimant’s personal circumstances are potentially relevant.

By contrast the Secretary of State submits that, as a matter of principle, regulation 64(3) does not permit a decision-maker or tribunal to take account of an individual’s personal objection to, or disagreement with, a substantive requirement when deciding whether reasonable steps have been taken to comply with that requirement. In this case, it is said, the requirement reflects a wider national education policy, approved by parliament, that support for students should take the form of a repayable loan. The effect, it is said, of the claimant’s preferred construction is to establish a form of maintenance grant for those Muslims who share his beliefs in place of the national student loan scheme.

The focus on the alleged “requirement” to apply for a student loan echoes the Secretary of State’s response, which began with the submission that the regulations impose what is (in effect) a statutory duty (or obligation) upon a housing benefit claimant to take reasonable steps to apply for a student loan before the potential income from that loan is discounted for the purposes of calculating entitlement to such benefit.

If that were the case, the Secretary of State’s submission would be correct. A claimant under the jobseeker’s allowance scheme that was in force at the time I am considering could not argue that his personal disinclination to work should be taken into account when considering whether he had taken reasonable steps to find a job. But that is because jobseeker’s allowance claimants were under a positive duty actively to seek employment as condition of entitlement to the that benefit.

However, this case is not like that. I reject the Secretary of State’s submission, and all her subsequent submissions that depend upon the existence of a supposed duty or requirement to apply for a loan.

Regulation 64(3) does not impose any duty or requirement on the claimant, and he is therefore not in breach of any duty or requirement: he has omitted to apply for a student loan, not failed to do so. Regulation 64(3) merely specifies the consequences of that omission.

To elaborate, an example of a requirement can be found in the case of Mr Thlimmenos (see paragraph 171 below) who was obliged to serve in the Greek armed forces on pain of criminal liability. Regulation 46 does not take that, or any similar, form. It does not state that students “must”, or are “required”, or are under a “duty”, to do anything (even though other provisions of the Regulations do impose requirements on claimants). It sets out the circumstances in which a student loan is to be taken into account as income in the calculation of housing benefit and the manner in which it is to be taken into account.

For similar reasons, I do not find the submissions about reasonable steps at paragraph 6 of Mr Waite’s skeleton argument persuasive. The senior managers in paragraph 6(b) and the local authorities in paragraph 6(c) are under positive duties to take reasonable steps whereas the claimant is not under a duty to apply for a student loan. Paragraph 6(a) provides employers with a statutory reasonable steps defence to vicarious liability. The circumstances in which that defence is potentially applicable are wide and I can envisage cases in which the beliefs of the employers might be relevant to what is reasonable.

The Secretary of State also submits that a “step” is a positive action taken to achieve a particular result and that in the context of regulation 64(3) a decision not to acquire a loan cannot be a “step” towards acquiring it.

As I explain at paragraphs 93-94 above, I do not read the regulation in that way. In order to acquire the loan, a student must decide to apply for it and make the application. If it would not be reasonable for him to take those steps, then the loan is not one that “he could acquire … by taking reasonable steps to do so”.

What, then, does reasonableness require in the absence of a duty to bring about a particular result?

It has been said during these proceedings (not necessarily by the Secretary of State) that the test of reasonableness is an objective one. With respect, I do not find that helpful. What I think it means is that decisions about reasonableness concern themselves with what a person ought to have done or not done, rather than what he actually did or didn’t do, and that that judgment is not based on the subjective views and beliefs of that person.

However, there is a risk that the language of objectivity can obscure the facts that decisions about what ought to have happened embody value judgments and that the values are inevitably those of the decision maker. That is why, for example, circumstances can arise in which there are a range of conclusions at which decision-makers or tribunals can reasonably arrive.

Social security law is often concerned with marginalised members of the community. It is important to keep the normative nature of decisions about reasonableness in mind to minimise the potential for such decisions to become culturally influenced. The views of (for example) a white, professional, middle-aged, middle class, male member of the Church of England as to what is reasonable may not coincide with (for example) those of a young Muslim refugee.

Whether deliberately or not, social security law has historically minimised that risk by focussing on the circumstances of individual claimants. One does not ask in the abstract what would be reasonable or what “the reasonable man” would do. The question is always what it would have been reasonable for this particular claimant to have done in this particular case.

The best-known, but far from only, example of that is in the reported decision of a Tribunal of Commissioners in R(S) 2/63, That case involved whether a claimant had “good cause” for claiming sickness benefit late. The Commissioners held that “good cause” had the same meaning as “reasonable cause” and approved an earlier dictum from another Commissioner to the effect that the phrase meant:

“… some fact which, having regard to all the circumstances (including the claimant’s state of health and the information which he had received and that which he might have obtained) would probably have caused a reasonable person of his age and experience to act (or fail to act) as the claimant did.”

The claimant’s state of health and the information were factors of particular relevance in that case, but the decision is authority for the propositions that all the circumstances must be taken into account and that the enquiry as to reasonableness must be focussed on the claimant.

I can see no reason why I should interpret regulation 64(3) any differently. In this case, the relevant circumstance is the claimant’s religion rather than his state of health or state of knowledge. Nothing in regulation 64(3) says that religious or other strong conscientious beliefs must be disregarded when deciding what is reasonable. When social security law wishes to exclude religion as a factor to be taken into account in the assessment of reasonableness, it tends to say so: see, for example, regulation 9(7) of the Social Fund Maternity and Funeral Expenses (General) Regs 2005 as it relates to regulation 9(3)(d) and (e).

I therefore conclude that “reasonable steps” means steps that are reasonable in all the circumstances including all the personal characteristics of the individual who was eligible to have applied for the student loan. That includes strong conscientious religious or other objections to the payment of interest.

I would, however, add that all the circumstances includes the interests of the wider public as represented by the Secretary of State and that assessing reasonableness will need to give those interests weight (see paragraphs 190-191 below). Without being prescriptive, I suggest that an omission to acquire a loan that is based on purely financial considerations is unlikely to outweigh those interests.

That leaves the Secretary of State’s submission that such an interpretation gives rise to direct discrimination against those who do not share the claimant’s views.

I can explain my reasons for rejecting that submission briefly. The line drawn by my interpretation is not between Muslims and non-Muslims nor even between people who have conscientious objections to taking out a student loan and those who don’t. Rather it is between, on the one hand, any student whose personal circumstances as a whole are such that—for whatever reason—he cannot take reasonable steps to acquire a student loan and, on the other, all students who are not so circumstanced. Those two groups are not in analogous situations. The latter could reasonably acquire the loan that regulation 64(3) takes into account as their income. The former cannot.

Moreover, if I am wrong about that, any discrimination, whether direct or indirect, is saved by paragraph 1 of Schedule 22 to the Equality Act because it is required by an enactment, namely regulation 64(3) itself on what I have held to be its true construction.