Cheap Fares and the Rule of Law

The English judiciary does not often produce national cult figures, and less often still two at a time. There are many wise and learned men – and even a woman or two – on the judicial bench, but only Lords Denning and Scarman have become darlings of the media in the 1980s – praised for their plain speech, their courage, their humanity, their championship of the underdog, and their implacable opposition to bureaucratic arrogance. So perhaps it was predictable that there would be howls of anguish when both these tribunes of the people struck down the Greater London Council’s splendid new scheme for cheap fares on London’s buses and underground trains. Had it only been their supporting brethren in the Court of Appeal and the House of Lords who had done such an illiberal thing, no one would have been much surprised: judges, after all, are cautious men, and everyone expects them to be among nature’s conservatives. But what rankled was that it should have been Lord Denning who delivered the leading judgment in his court, and Lord Scarman almost the longest of the five speeches in his, both roundly condemning the scheme as illegal.

The thing that most outraged the critics – and especially the GLC’s leader, Mr Ken Livingstone – was that London’s electors were promised this scheme at the hustings, and duly voted into power the party that put it forward. So the Labour councillors saw it as part of their bargain with the voters, which they were bound – at least in honour – to put into effect once their promise had been accepted. Had they been MPs or ministers rather than councillors, they might have had a point: Parliament and government are sovereign, and if they both want to do something which might please the people but which the law forbids, all they need do is change the law. But local authorities are not quite as grand as that – not even the gigantic GLC. Lord Wilberforce put his finger on it when he said in his judgment that the GLC, ‘though a powerful body, with an electorate larger and a budget more considerable than those of many nation states, is the creation of statute and only has powers given to it by statute ... It makes no difference on the question of legality ... whether the impugned action was or was not submitted to or approved by the relevant electorate: that cannot confer validity upon ultra vires action.’ That, more than any of the detail, was the nub of the case, to which Lord Diplock added a timely reminder: ‘A council member once elected is not the delegate of those who voted in his favour only: he is the representative of all the electors in his ward.’

Test it this way: suppose the Greater London electorate had voted the National Front into power, on a promise that they would run all the blacks out of town. Would one want to see the manifesto doctrine – suspect at the best of times, even in national elections for a sovereign Parliament – applied in such a case so as to enable a majority in the GLC to keep its bargain with its voters, even if the law of the land required the Council not to discriminate on grounds of colour? Not that any of the judges went off into such speculative flights of fancy. Their task was to consider the several statutes which created the GLC and the London Transport Executive, conferred powers on them and regulated their mutual relationship, all in the light of previous decisions of other courts about what such statutory words could mean, how far they might be stretched, and what were the legal constraints on all public bodies created by Parliament and empowered to raise and spend money on the public’s behalf. At the end of it all, the short point was this: could the GLC lawfully tell the LTE to run its business at a deliberate loss for the benefit of London’s travellers, and make London’s ratepayers pay not only for that loss (£69 million) but for the additional £50 million which the GLC was then bound to lose in Central Government grants, in their turn coming out of the pockets of all British taxpayers?

All the eight appellate judges involved said ‘No’ to that, essentially on two grounds. First, when they had wrestled for long enough with what Lord Diplock called the ‘sometimes opaque and elliptical language’ of the statutes, they were all forced to the conclusion that this simply could not be stretched to give the GLC power to order the LTE to operate at a deliberate and chronic loss. But even if it could, there was a second problem. It has long been the law that local authorities owe a duty to their ratepayers – as they must, as a correlative of the power to tax them. That duty is a ‘fiduciary’ one – that is, the kind of duty a trustee owes to his beneficiaries. In the present case, that meant holding a fair balance between the travellers who would benefit from the scheme and the ratepayers who would be forced to pay for it. Now those two groups proved to be substantially different in their composition. Only quite a small proportion of those who travel on London’s public transport system pay rates in London: indeed, only 40 per cent of the GLC electors are London ratepayers, and they contribute only 38 per cent of the total rate income. The other 62 per cent comes from businesses, who have no votes at all. As Lord Dip-lock said, the House of Lords was not concerned with the wisdom, or indeed the fairness, of the scheme, but only with its legality. And whatever one might think of the wisdom or fairness of robbing Peter to pay Paul to that extent, even if the GLC had power to do it under the statute, most of the judges held that it would still have been illegal because the exercise of the power would have been a breach of its trust vis-à-vis its impotent ratepayers. Lord Scarman rolled the two arguments together: to construe the statutory language so as to give the GLC the power it had sought to exercise would, he said, ‘make mincemeat of the fiduciary duty owed to the ratepayers’.

There cannot be any doubt that the judges were right about the law: they must have been, since in our system the law is what the Law Lords say it is. If we think that what they say makes a nonsense of the law, the remedy is to change the law, not to throw rotten eggs at the judges. So the real question is whether, in matters of public transport, we have got the right or the wrong law. Does this decision show that the powers conferred by statute on local authorities to fix fares do not go far enough? There is no simple answer to that: how one feels about it will depend on one’s political attitudes. If one believes in a free market in which no one gets anything for nothing, one will probably regard even the present powers as going too far: let public transport undertakings compete with each other for the public’s trade without interference or directions from officialdom, and let the consumers vote at the ticket machines. At the other extreme, if one believes that all essential public services should be owned, planned and provided by public authorities for the benefit of the people, there is a good case for free public transport for all, financed by the state, as in Moscow. And within that spectrum there are many points where one’s political orientation might bring one to rest.

But behind that question lurks another, more fundamental and in the long run much more important. That question is not what should be the GLC’s – or anybody else’s – policy on public transport, but who should decide that policy, and how. In a very real sense, that was what this case was about. The GLC said it should be the elected representatives of the London voters, deciding by a majority, and unfettered by any outside interference. The judges agreed that the decision was the councillors’, but insisted that they could take it only within the restraints imposed by the law, and that only the judges could ultimately decide whether they had. Which revives, yet again, the question that has exercised our courts for at least the last three centuries: what should be the role of the judges in overseeing the execution of public policy?

On at least one view of democracy, it is indefensible that appointed judges, with precious little experience of life outside the law courts, and accountable to no one, should have the power to overrule the democratic decisions of democratically-elected representatives of the people – just as it is indefensible that a few hundred peers sitting by the accidents of genetics and death, or prime ministerial whim, should have the power to delay (let alone to block) the measures put forward by the elected House of Commons. But that view of democracy is not only too narrow: it is fallacious and potentially pernicious. If the will of the people, as expressed by its elected representatives, is unrestrictedly sovereign, then one cannot condemn even the Nuremberg laws of 1936 – or a law enacted by some future right-wing Parliament which outlaws the Labour Party and makes it a criminal offence to express socialist views. Majority rule is only one aspect of democracy: tolerance, and respect for the interests of minorities in a plural society, are at least as important. Since majorities cannot always be relied on to respect those interests, there must be laws which ensure that they will. And it is the persistence of those laws, imposing constraints even on the sovereign will of the people’s elected representatives, regardless of which political party happens to be in power at any time, which is what we mean today by the Rule of Law.

Seen in that light, the role of the judges takes on a rather different complexion. They may not be politically accountable in the sense that they can be thrown out of office if they make themselves unpopular enough with the electorate. But they are accountable to the law itself: indeed their single function is to apply that law, regardless of whether they agree with it – ‘without fear or favour, affection or ill-will’, as the judicial oath has it. Of course some of them will be better at this than others; even judges are human, and occasionally the odd one fails to hide some personal prejudice. But at least that is what they are charged, sworn – and paid – to do, and an immense amount of effort and expertise goes into trying to ensure that they will do it as well, and as rigorously, as is possible in an imperfect world. It is easy to caricature them as remote, cerebral, unrealistic, bourgeois and reactionary. But the caricature is as wrong as it is facile. If one believes in the Rule of Law, then one must have utterly independent lawyers to apply it, and that means that those lawyers must not be accountable to any power-holder – even the sovereign people – but only to the law itself.

In the time of Lord Coke, the judges claimed the power to strike down even an Act of Parliament if it infringed the Rule of Law as it was then perceived. But that claim did not survive the 17th century, and today the judges, too, accept the absolute sovereignty of Parliament – to such a point that even if an English statute violates the UK’s obligations under international human rights law, our judges must uphold it and the violation can only be established if the victim takes his case to the European Commission of Human Rights at Strasbourg. But matters are different when a Secretary of State seeks to exercise arbitrary authority under an Act of Parliament: in a series of cases since the last war, the judges have re-established their jurisdiction to review his decision, and declare it unlawful if he exceeds his powers, or exercises them without regard to all the factors which the law requires him to take into account. And what goes for the Secretary of State goes with even greater force for a body like the GLC, whose very existence depends on statute, and which has no powers except those that the statute has given it.

Lacking a written constitution, or any modern Bill of Rights, or the incorporation into our domestic law of our international human rights obligations, the Rule of Law as administered by independent judges remains the most important bulwark against arbitrary rule. Few Londoners who will now have to pay twice as much to travel by public transport will be grateful to the judges. But in fact they have ample cause to be, and their extra fare money may be a better bargain than they realise.