In Secretary of State for Work & Pensions v Carmichael, the Government argued that the First-tier Tribunal could not intervene when housing benefit was reduced under ECHR-incompatible regulations. The Upper Tribunal disagreed. In doing so, it was on strong constitutional ground.
The so-called “bedroom tax” — which causes housing benefit to be reduced when someone is occupying a house or flat that is judged to have too many bedrooms for their needs — has been the subject of considerable political controversy as well as judicial attention. The latest case to be decided on this issue is Secretary of State for Work and Pensions v Carmichael  UKUT 174 (AAC). Mrs Carmichael suffered from spina bifida, hydrocephalus, double incontinence, inability to weight bear and recurring pressure sores. It was therefore not feasible for her to share a bed, or a bedroom, with her husband. Nevertheless, the Carmichaels were judged not to require a two-bedroom flat, and their housing benefit was accordingly reduced under the “bedroom tax”. These circumstances gave rise to a breach of the Carmichaels’ rights under Articles 8 and 14 of the ECHR: R (Carmichael) v Secretary of State for Work and Pensions  UKSC 58.
The decision to reduce the Carmichaels’ housing benefit was taken under Housing Benefit Regulations 2006, which were made under the Social Security Contributions and Benefits Act 1992. When the case was before it, the First-tier Tribunal (“FTT”) sought to read into the Regulations a proviso such that the requirement to reduce housing benefit would not apply in circumstances such as the Carmichaels’. However, as the Administrative Appeals Chamber of the Upper Tribunal (“UT”) noted: “It was correctly common ground before us that that interpretative process was not open to the Tribunal, since it went beyond any interpretative reading permitted by section 3(1) [of the Human Rights Act 1998 (‘HRA’)].” The UT was thus presented with a dilemma. The Regulations stipulated that people like the Carmichaels should have their housing benefit reduced; but doing what the Regulations prescribed would result in a breach of Convention rights. In such circumstances, what should the FTT have done — and what should the UT now do?
The answer to that question said James Eadie QC, counsel for the Secretary of State, was that the tribunals should — and could — do nothing at all. In a passage from his skeleton argument that the UT quoted in its judgment, Eadie argued thet unless and until the Regulations were amended, they had to be applied by the tribunals:
The Secretary of State’s position is the jurisdiction of statutory tribunals does not extend this far. The tribunals, which are creatures of statute, have no inherent powers. Nor are they provided with such a power by the Human Rights Act 1998 (“HRA”). The tribunals are required to apply the legislation enacted by the legislature. If, in a case such as Carmichael, legislation is found to lead to a Convention violation, the decision and method of remedying that violation is one for the legislature only. Such an outcome respects ordinary and established constitutional boundaries as identified in a series of House of Lords and Supreme Court decisions.
It is certainly right that the FTT and the UT are statutory creations, and therefore have only those powers that legislation confers upon them. But when first constitutional principles are properly applied, that uncontroversial starting-point does not, as the Secretary of State maintained, yield the counterintuitive conclusion that tribunals must apply legislation irrespective of whether it is valid and legally effective. The true question, therefore, is not whether the FTT had some sort of special power to override or disapply the Regulations to the extent of their Convention-incompatibility; rather, the question is whether the Regulations were valid and legally effective so as to authorise the local authority to make Convention-incompatible deductions.
The answer to that question must be “no”. The fact that the Regulations on their face require Convention-incompatible deductions from housing benefit is irrelevant if the Regulations do not legally authorise such deductions. And whether they supply such authorisation can be resolved only by considering their legal pedigree. As already mentioned, the Regulations were made under the Social Security Contributions and Benefits Act 1992 — specifically, s 130A thereof. That Act — like all legislation — must, so far as is possible, be read compatibly with Convention rights, thanks to s 3 of the HRA. As a result, in the absence of clear provision to the contrary — of which there is none — s 130A does not authorise the making of Regulations requiring public authorities to act incompatibly with Convention rights.
The upshot is that, to the extent that the Regulations appear to sanction Convention-incompatible conduct by the relevant public authority, the regulations are ultra vires. This does not mean that the regulations are globally ultra vires: it means that they are legally ineffective when it comes to authorising Convention-incompatible conduct, because the maker of the Regulations was never in the first place empowered by the Act to authorise such conduct. The Regulations therefore do not authorise the relevant public authority to act in a Convention-incompatible way. From this it follows that when the local authority in Carmichael made the deduction from housing benefit that the Regulations appeared to require, it was acting ultra vires, because the Regulations upon which it relied as legal authority for the making of the deductions did not in law extend to authorising Convention-incompatible deductions.
Does the FTT have the power to intervene in such circumstances? The UT concluded that it did, and thus ordered that the Carmichaels’ housing benefit entitlement be recalculated without the making of the unlawful deduction. The UT was right to adopt this approach. A public authority that acts ultra vires (whether by operation of the HRA or otherwise) acts unlawfully. And the FTT has jurisdiction to determine whether a relevant public authority has acted unlawfully. There is therefore no need (as the Secretary of State contended) to show that the FTT has any special authority to intervene in circumstances such as those that arose in Carmichael. Rather, such intervention falls within the FTT’s core statutory role of determining whether public authorities have acted lawfully and, if they have not, substituting for unlawful decisions lawful ones. The UT was therefore quite right to decide that although the FTT had decided the case on an incorrect basis (by seeking to interpret the Regulations compatibly with the Convention) the outcome of the FTT’s judgment — that the Carmichaels should not suffer the unlawful deduction — was legally defensible.
Yet, for the Secretary of State, James Eadie QC contended that such intervention was profoundly constitutional objectionable, as the UT observed in its judgment:
Mr Eadie placed great emphasis on the proper constitutional division of responsibilities, namely that where an incompatibility has been identified in social legislation of this type the Secretary of State should have the opportunity to consider how to reshape the statutory scheme and then put his proposals to Parliament. It was constitutionally impermissible for a decision-maker or tribunal to “create an entitlement on different conditions to that set out in the legislative scheme”. Were it so, the result would be “a patchwork of benefit provision, whereby the regulations enacted by the legislature are no more than a starting point from which individual decision-makers can then create new and novel entitlements to payment to meet the facts of any given case, free from legislative scrutiny”.
It is plainly the case that when a tribunal (or court) is faced with Regulations that are either straightforwardly invalid or which do not extend as far as anticipated by the regulation-maker, there will sometimes be a mess that needs to be cleared up. But the fact that it might, as a matter of constitutional policy, be better for legislators to clear up the mess does not defeat the argument of constitutional principle that courts and tribunals should apply secondary legislation only to the extent that such legislation is valid and legally effective. The UT was right to recognise this in Carmichael. In doing so, it drew support from the judgment of Lord Wilson in Mathieson v Secretary of State for Work and Pensions  UKSC 47. But such Supreme Court authority was just the icing on the cake for the UT. For its conclusion rests not on mere judicial precedent, but on first constitutional principles. Those principles insist that public bodies must act according to law, and that courts and tribunals must evaluate such bodies’ conduct by reference to what the law actually is — rather than by reference to secondary legislation that Ministers attempted, but lacked the authority, to enact.