High Court rules that Self-Employment Income Support Scheme does not unlawfully discriminate against women who have taken leave relating to maternity or pregnancy

The Motherhood Plan & Anor, R (On the Application Of) v & Anor [2021] EWHC 309 (Admin)

In a new judgment, the High Court has ruled that the Self-Employment Income Support Scheme (the Scheme) does not unlawfully discriminate against women who have taken leave relating to maternity or pregnancy.

In The Motherhood Plan & Anor, R (On the Application Of) v & Anor [2021] EWHC 309 (Admin) (17 February 2021), the second claimant was a self-employed energy analyst with three young children who had taken maternity leave of 39 weeks after the birth of her second child in 2017 and her third in 2018. As a result of that, her business income reduced significantly in the tax years 2017/2018, and 2018/2019. The second claimant was supported by the first claimant - a registered charity which aims to end discrimination faced by pregnant women and mothers known as 'Pregnant then Screwed'.

The second claimant applied for support from the Scheme, which was introduced as part of the government's response to the Covid-19 pandemic, and which paid self-employed people adversely affected by Covid-19 a taxable grant worth 80 per cent of their average monthly profits over the last three years, up to £2,500 a month. While she was awarded £1,119 per month based on the Scheme's formula, taking account of her trading profits for the three relevant accounting years during which she had been in business on a self-employed basis - £2,400 in 2016/2017 (the year in which she commenced her business, so reflecting only part of a year's work), £8,600 in 2017/2018 (during which she took maternity leave) and £5,781 in 2018/2019 (during which she again took maternity leave) - she argued that, if she had not been on maternity leave but had been able to continue to earn at her usual rates, she would have received around £3,996 per month.

As a result, the claimants issued legal proceedings challenging the Scheme on two main grounds - 

• it unlawfully discriminates against self-employed women who have taken a period of leave relating to maternity or pregnancy in the three preceding tax years, contrary to Article 14 read with Article 1 of Protocol 1 of the European Convention on Human Rights - either on the basis of 'conventional' indirect discrimination or discrimination of the Thlimmenos type (discrimination that arises where the State fails to take measures to recognise that persons in significantly different situations ought to be treated differently); and
• the defendant breached the Public Sector Equality Duty (PSED) in section 149 of the Equality Act 2010.

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Mrs Justice Whipple first considers indirect discrimination and refers to R (Adiatu) v HM Treasury [2020] EWHC 1554 (Admin) which found that the rate of statutory sick pay was not discriminatory as it was paid in the same way and at the same rate to everyone regardless of their protected characteristics. Applying this principle to the claimants' case, she finds - 

'In this case, too, the disadvantage is not caused by the Scheme itself; rather it is a disadvantage which flows from an absence of or reduction in a person's income in the past; for the group of women represented by the claimants, it is the consequence of a self-employed woman being unable to earn while on maternity leave. I accept the point made in the defendant's evidence and by submission on behalf of the defendant, that there may be many reasons why a self-employed person is unable to work. This is not to draw comparisons between the different reasons; it is simply to recognise the fact that for self-employed people, absence from work is likely to translate into lower earnings.' (paragraph 62)

Moving on to the question of Thlimmenos discrimination, Mrs Justice Whipple also rejects the claimants' argument that women who have recently been on maternity leave, who are thus in a unique situation, must be afforded different treatment to reflect the fact that they have lost out on self-employed earnings in the relevant tax years - 

'First, accepting for present purposes that pregnancy and maternity are unique situations for which no comparator exists and in relation to which special protections are warranted, they are circumstances which for the second claimant and the group she represents exist in the past. The effect of the claimants' argument would be to demand redress by means of the Scheme in relation to a unique situation in the past... I was shown no authority to support the proposition that uniqueness, or difference, in the past is a basis on which to require different treatment in the present, such that failure to accord that different treatment in the present amounts to unlawful discrimination.

Secondly, ... the disadvantage identified by the claimants follows from the fact - for that is what it is - that they earned less in past years. I fail to see how that state of affairs requires them to be compensated through the benefits system now, by receiving a higher level of benefit. This is the Adiatu point: the disadvantage is not caused by the measure but rather it exists independently of the measure. I do not accept that the Scheme's failure to take account of and rectify historic disadvantage amounts to discrimination.' (paragraphs 66 and 67)

Although therefore concluding that there has been no discrimination, Mrs Justice Whipple goes on to consider justification in case she is wrong. The defendant relied on five justifications - 

• purpose of the Scheme - to provide support for self-employed people whose businesses were adversely affected by the pandemic;
• policy delivery - any alterations to the design would have introduced complexity which in turn would have led to cost and delay;
• risk of fraud - there was a necessary trade-off between simplicity (and speed) on the one hand, and protecting against fraud on the other;
• perverse effects - it was not possible to arrive at a solution to the claimants' problems which did not itself create a range of hard cases and anomalies falling on the wrong side of the line; and
• value for money - simplicity kept implementation costs down and enabled swift payments to be made.

Mrs Justice Whipple finds -

'Whether the various justifications are taken separately or in combination, the defendant's decisions were reasonable ones, especially when judged in context. The Scheme was a macro-economic policy involving substantial public expenditure to mitigate the effects of a global pandemic. The Government had a wide margin of appreciation. The design of the Scheme, specifically in the way the payments were calculated by reference to average trading profits, was not manifestly without reasonable foundation.' (paragraph 85)

Finally, addressing the PSED, Mrs Justice Whipple considers seven separate Ministerial submissions for the Chancellor of the Exchequer prepared by civil servants in relation to the Scheme and concludes - 

'In my judgment, the general equality implications as well as the particular position of mothers who had recently taken maternity leave were considered by the defendant, prior to the First Direction. These matters were raised generally in the ministerial submission of 24 March 2020, and expressly in the submissions of 2 April 2020 and 22 April 2020. Although the Scheme had been announced before those submissions, the whole point of those submissions was to focus on the detailed implementation of the Scheme; work was underway to perfect the detail and it was not too late to adjust or carve out an exception, if that is what the Chancellor had wanted to do. I am satisfied that the Chancellor had the specific issue well in focus and that the regard he had to it was proper and conscientious.' (paragraph 88)

Accordingly, Mrs Justice Whipple dismisses the application for judicial review.