I posted here about the decision of Stewart J in R (Rotherham Metropolitan Borough Council) v Secretary of State for Business, Innovation and Skills. The case concerns a challenge to the lawfulness of UK Government allocations of EU funds to different parts of the UK, the essential argument being that the basis upon which such allocations were made failed to treat like regions alike and unlike regions differently. The Supreme Court ( UKSC 6) has now given judgment, holding, by a 4-3 majority, that the Government’s decisions were lawful. The factual background and judgments are summarised very well in the Court’s press summary, and I will not attempt a further summary of my own. Rather, I simply draw attention to three significant aspects of the judgment. In doing so, I focus on the judgment of Lord Sumption (with which Lord Hodge and Lord Clarke agreed; Lord Neuberger, with whom Lord Clarke also agreed, was the other member of the majority), consider its relationship in certain aspects with other judgments.
The first aspect of Lord Sumption’s judgment that warrants comment concerns his approach to the intensity of review. He placed great emphasis on the fact that
the Secretary of State’s allocation is a discretionary decision of a kind which the courts have traditionally been particularly reluctant to disturb. There is no “right” answer prescribed by the EU Treaty or the 2013 Regulation to the question how EU Structural Funds should be distributed within a Member State. There is not even any clear principle on which this should be done. Instead, the Secretary of State was required to make a complex evaluation of a wide range of overlapping criteria, all of which involved difficult and sometimes technical judgments about matters of social and economic policy.
Against this background, Lord Sumption aligned himself with the following extra-judicial remarks of Lord Hoffmann (“The Separation of Powers” (2002) 7 JR 137):
[T]here are certain areas in which, although the decision is formally justiciable because it involves the interpretation of statute or the common law, the outcome is likely to have an important impact upon public expenditure. The allocation of public expenditure – whether we should spend more or less on defence, health, education, police and so forth, whether at a national or local level – is very much a matter for democratic decision. Furthermore, a court deciding a case which will affect one form of public expenditure – for example, impose a burden of expenditure upon education authorities – has no way of being able to decide whether such expenditure should or should not have a prior claim over other forms of expenditure. It may consider that, viewed in isolation, it is fair and reasonable that children in schools should receive certain benefits or financial compensation for not having received other benefits. But because it can only view the matter in isolation, it has no way of knowing whether this means that other people dependent upon social security, police protection and so on will have to make sacrifices because there is less money for them. The only people who can make such decisions are the democratically elected bodies who are in charge of the budget as a whole. This means that even when a case appears to involve no more than the construction of a statute or interpretation of a common law rule, the courts are very circumspect about giving an answer which would materially affect the distribution of public expenditure.
Such an approach, if accepted, clearly counsels in favour of deference, although it is worth noting that the precise basis on which deference is, according to this analysis, due is unclear, since Lord Hoffmann to some extent conflates institutional concerns deriving from the polycentric nature of decisions involving the allocation of public funds with concerns as to the democratic legitimacy of judicial second-guessing of such decisions. In his judgment in Rotherham, Lord Neuberger distinguished more clearly between these two potential bases for deference. He endorsed deference on institutional grounds:
The importance of according proper respect to the primary decision-making function of the executive is particularly significant in relation to a high level financial decision such as that under consideration in the present case. That is because it is a decision which the executive is much better equipped to assess than the judiciary, as (i) it involves an allocation of money, a vital and relatively scarce resource, (ii) it could engage a number of different and competing political, economic and social factors, and (iii) it could result in a large number of possible outcomes, none of which would be safe from some telling criticisms or complaints.
But Lord Neuberger was more cautious about readily conceding to arguments in favour of deference on democratic grounds:
I agree with the thrust of what Lord Sumption says on this aspect in his paras 22-23, but, although there is obvious force in the passage which he quotes from Lord Hoffmann’s speech, I think the issue is susceptible to somewhat more subtle and discriminating analysis than might be inferred from reading that passage. To say that the “allocation of public expenditure … is very much a matter for democratic decision” takes matters very little further at least in connection with a decision made by the executive. The fact that the legislature assigns such a decision to the executive does not alter the fact that it is the executive’s decision and not that of the legislature. In any event, the legislature will obviously have intended the rule of law to apply, so that such a decision, as with any executive decision, must be susceptible to judicial oversight.
Nevertheless, Lord Neuberger was certainly not endorsing an unthinkingly activist stance:
The line between judicial over-activism and judicial timidity is sometimes a little hard to tread with confidence, but it is worth remembering that, while judicial bravery and independence are essential, the rule of law is not served by judges failing to accord appropriate respect to the primary policy-making and decision-making powers of the executive.
Two other aspects of Lord Sumption’s judgment are also worth drawing attention to more briefly. First, he noted that counsel had based arguments about the equal treatment of different regions on EU law, in which equality is regarded as a general principle. However, echoing, to some extent, other judgments of the Supreme Court that increasingly emphasise the common law as a repository of fundamental rights and values, Lord Sumption said:
The general principle of equality in EU law is that comparable situations are not to be treated differently or different situations comparably without objective justification. This is not a principle special to the jurisprudence of the European Union. It is fundamental to any rational system of law, and has been part of English public law since at least the end of the nineteenth century.
Lord Sumption went on to endorse Lord Hoffmann’s approach in Matadeen v Pointu  1 AC 98, in which he said:
Is it of the essence of democracy that there should be a general justiciable principle of equality? … Their Lordships do not doubt that such a principle is one of the building blocks of democracy and necessarily permeates any emocratic constitution. Indeed, their Lordships would go further and say that treating like cases alike and unlike cases differently is a general axiom of rational behaviour. It is, for example, frequently invoked by the courts in proceedings for judicial review as a ground for holding some administrative act to have been irrational.
Such a conception of equality as a value whose infringement may call for rational justification is consistent with the sort of approach to Wednesbury review advocated by Paul Daly (“Wednesbury’s reason and structure”  PL 238).
Third, Lord Sumption cautioned against over-reliance on proportionality. Echoing Stewart J’s judgment in Rotherham, Lord Sumption observed that:
The appellants advance an alternative case based on proportionality, which I can deal with quite shortly, for I agree with the Court of Appeal that it adds nothing to the case based on alleged discrimination. The appellants say that the effect of the Secretary of State’s decision was to impose upon them a disproportionate burden. The problem about this submission is that it fails to answer the question: disproportionate to what? Proportionality is a test for assessing the lawfulness of a decision-maker’s choice between some legal norm and a competing public interest. Baldly stated, the principle is that where the act of a public authority derogates from some legal standard in pursuit of a recognised but inconsistent public interest, the question arises whether the derogation is worth it. In this case the only legal standard by which the treatment of Merseyside and South Yorkshire can be regarded s disproportionately onerous to them is provided by the terms of the 2013 Regulation and the principle of equality. The two regions have no entitlement to support from the Structural Funds except what they can derive from these two sources. If the Secretary of State’s decisions are consistent with both, as I consider them to have been, their treatment cannot be regarded as disproportionate.
Lord Sumption is surely correct in this regard; proportionality has its place, but it is not a panacea.