The infrastructure lucky dip



As it’s reported the government is going to push forward with its promised reform of judicial review, Daniel Moylan shows how the unpredictable process creates costs, risks and uncertainties for taxpayer and businesses alike, threatening to slow our post-COVID economic recovery.

When we need to, we can build a hospital in a fortnight. But when the courts get involved it can take us five years to get nowhere.

On 27th February, the Court of Appeal ruled that the government’s Airports National Policy Statement (ANPS) was of no effect unless the Secretary of State reviewed it to correct a procedural flaw. With that blow, the judges killed the third runway at Heathrow stone dead. (The pandemic merely furnished the coffin.) They also severely damaged the prospects of future private sector investment in infrastructure, rendered the Planning Act 2008 a highly risky, possibly unusable, route to obtaining development consent, and, most importantly, illustrated why our current system of judicial review is unfit for purpose and needs to be put on a statutory basis so that the judicial lucky dip faced by promoters is brought within rational bounds.

And they did all this while po-facedly boasting that the real-world consequences of their decision were beneath their consideration.

This is the dire state to which public policy making has fallen in the UK, all because of a system of law that has sprung up from almost nowhere in the last half-century and which has flourished beyond statutory control.

I have campaigned against Heathrow expansion since 2003. But it is possible to welcome the effect of the judgment while recognising its wide and damaging implications for our country’s future.

Heathrow’s desire to expand was supported by the Labour government of Tony Blair and Gordon Brown and initially opposed by the Conservative/LibDem coalition in power from 2010. But the forces inside HM Treasury that have long envisaged a third runway kept Heathrow on the back-burner until George Osborne had been won back to his officials’ orthodoxy and an Airports Commission was established under Sir Howard Davies with a firm expectation that it would recommend a third runway. This recommendation was duly delivered in 2015.

Heathrow is a private company. It would not normally spend its shareholders’ money on promoting a project that required Government consent unless encouraged by the Government to think that consent would be forthcoming. This encouragement they now once more had.

Heathrow’s proposal for a third runway was to be pursued under the Planning Act 2008, a piece of legislation designed to “speed up” the planning process for major infrastructure projects. For a project to proceed under the Act, the earliest step is for the Government, after consultation, to produce a “National Policy Statement” supportive of the development and setting constraints it must comply with – and to seek approval of the NPS by the House of Commons. With that endorsement it is “designated” by the Secretary of State and forms the planning policy on which the next stage is based: the submission by the promoter of a draft Development Consent Order (DCO) (in effect, a detailed planning application) which, with due public consultation at all stages, eventually falls to be determined by the Secretary of State on the recommendation of Planning Inspectors.

From the date the Airports Commission produced its final report recommending a third runway at Heathrow (July 2015) it took the Government three years to produce the ANPS and this was approved by the Commons shortly afterwards by 415 votes to 119. That was late in June 2018. This inordinate delay was not because of idleness at Chris Grayling’s Department for Transport, but because of the many rounds of consultation and the careful steps needed to make the decision-making process proof against judicial review. Remember, the Government’s official guidance to the civil service on how to do this is forbiddingly called The Judge over your Shoulder (JOYS for short). Every step a civil servant takes is accompanied by an invisible Supreme Court Justice, so the work’s sub-title (“a guide to good decision making”) is naturally a polite fiction.

After the Commons vote, sundry affected local authorities, including the Mayor of London, and environmental groups, together and severally brought applications for judicial review of the ANPS. Those that were allowed to proceed were “rolled up” into a single hearing and the outcome was the rejection by the High Court of all claims. That was in May 2019. The parties appealed and a hearing before the Court of Appeal ensued.

By 27th February, 2020 (some twenty months after the Secretary of State “designated” the ANPS, nearly five whole years after the Airports Commission reported), the Court of Appeal was ready to deliver its judgement.

It should be noted first of all that this is not one of those cases where the Court of Appeal feels obliged to correct an errant or foolish lower court. Far from it: the Appeal Court is highly complimentary about the High Court, calling its judgement a “tour de force”. The Appeal Court judges list no fewer than 17 points of law they are called on to consider, all of which had been considered and rejected by the High Court. They principally concern the EU Habitats Directive, the EU Strategic Environmental Assessment Directive and the Government’s commitments on climate change. For page after page (there are 285 paragraphs in the judgement) Sir Keith Lindblom, Sir Rabinder Singh and Sir Charles Haddon-Cave trundle through the seventeen points, delicately rolling them around the mouth before, with predictable regularity, spitting them out and agreeing with the court of first instance.

But, while the Government has to win all points, the objectors only have to win once and so we come eventually to a morsel which sticks in the judges’ teeth. It is a very nice point, worth elaborating.

The Planning Act 2008 requires (in Section 5) that a National Policy Statement must give reasons for the policy set out in the statement and these reasons must (in particular) include an explanation of how the policy set out in the statement takes account of government policy relating to the mitigation of, and adaptation to, climate change. Note the words “take account”: the Secretary of State is not required to do anything in particular beyond that. But it is clear that he must “take account”. What, it turns out, is far less clear is what counts as a “government policy”. In particular, is the Paris Climate Agreement a government policy or not?

How did the allegedly hapless Chris Grayling stumble over this? Did he take no legal advice? Did he recklessly assume that he just knew, as a Cabinet Minister, what government policy was? Not at all. It is clear from the arguments made on his behalf in court that the most detailed consideration was given by his legal advisers to the question whether the Paris Climate Agreement was a government policy. And the advice he received (which the High Court agreed with) was that it was not. Indeed, it seems his legal advisers went further and told him, JOYS in hand, that he was forbidden to take it into account precisely because it was not a government policy and, if he had the temerity to do so, he would lose a judicial review.

After all, his lawyers argued in court, the Paris Climate Agreement was an international accord that under the British system of law could have no force domestically unless translated into legislation, which had not been done. Moreover, it was an agreement that carefully eschewed imposing specific obligations on any of its signatories. “The World” might agree to meet certain targets, but the obligations falling on individual countries to take specific actions to that end were missing. It was an odd “policy” that had no content. And so forth.

But the Appeal Court judges did not agree. They found quotes from various Government Ministers saying that it was government policy to support the Paris Climate Accord. (We had signed it after all: what else could they say?) And, after much thought (or at least many words), they decided that it was a government policy after all and so should have been “taken account of”. It hadn’t been. So that was that: it was all up with the ANPS. It didn’t matter to the Court of Appeal that having this procedural flaw corrected might result in no change to the ANPS. Nor was it for them to consider the potential loss of investment, jobs and prosperity that were claimed for the project. All that mattered was the morsel stuck in their teeth.

What will happen next? Who knows? Heathrow has decided to appeal further, but only because the government, now led by an avowed opponent of the third runway, has declined to do so. The government could, of course, spend the next two years rectifying the ANPS, but it appears to have no inclination to do so. And who knows what the size and configuration of our airports should be in the light of COVID-19? The third runway is dead.

Now take yourself round to the Compass Centre in west London, Heathrow Airport’s corporate HQ. You have proceeded at every stage with the warm encouragement of ministers and officials You have spent large sums of money (some of it even your own) on developing the proposal. You have invested management time and kudos in the project’s success, perhaps distracting yourself from other things you might have done to build a better business. And now you fail, not through any action of your own, nor indeed through sloppiness or inattention or dishonesty or recklessness on the part of the government, but because of a difference of opinion between lawyers on a point that would have found a more appropriate forum in a college moot between second-year law students than in the Court of Appeal. And even if you had a government in power that was still wholly supportive, the best you could hope for was a further two-year delay while the DfT fixed the problem with the ANPS.

Why would you, or any other private business, be willing to go through that again, even if your project has been recognised as one of national significance by the government?

There is an alternative route that is more proof against judicial curve balls: to proceed by way of a Hybrid Act of Parliament. Crossrail and HS2 took this route. But it is nowadays very difficult to find time in Parliament for Hybrid Bills and MPs are increasingly reluctant to serve on the necessary committees. So Hybrid Bills are “rationed”. Is the Government keen to force the Commons to take on more of them? And even if it was, beyond the passage of the Hybrid Bill itself, the moment a Secretary of State exercises any of the powers granted him under it, the judges are back sitting on his shoulder.

Then there is the question of time. It took three years to designate the ANPS and nearly two more for it to fall over in the Court of Appeal. Precisely nothing has been achieved in those five years. With so many EU Directives in the mix, it would be easy to put all the blame on Europe. But actually we have done this to ourselves. After the Roskill Commission reported in January 1971 it took 30 months for the government to reject its findings, adopt another solution and then secure the passage of the Maplin Development Act. There was no Habitats Directive, no SEA Directive and the planning details in the Act consisted of a single map with a red line drawn on it in a rough quadrilateral. There was also in those days only the earliest buds of judicial review. Even if the approach taken in the 1970s would now be considered a touch cavalier, there must surely be a means of driving significant infrastructure projects forward that lies somewhere in the middle: sensitive to proper public policy concerns but not involving such utterly futile effort as is now expended.

It’s unclear at this stage how much the government’s infrastructure ambitions depend on private capital. But even if the whole of the funding is to come from the taxpayer, the delays consequent on the tangle into which our public decision-making has fallen present real obstacles to the delivery of the government’s manifesto and add huge costs that threaten to make many desirable projects unviable.

To get out of this mess, there are three broad areas that the government needs urgently to look at.

First, well in advance of 31st December, there needs to be a through review of the EU legislation that holds us up and that we can amend once we are free of the EU’s legal order. This should also extend to procurement legislation. And of course it is absolutely vital that David Frost and his team do not in the meantime give any commitment to Brussels that we shall bind ourselves not to do so.

Second, either Parliament has to accept that a great deal more of its time is going to be given to consideration of Hybrid Bills or the government must devise a genuinely streamlined decision- making process to replace the tortuous Planning Act 2008. (Key to this will be not letting government planners write the legislation, which is how Blair’s declared intention to “speed up” the planning process was frustrated.)

Third, we must now at last devise a way of putting judicial review on a statutory basis so that an element of predictability is inserted in the process. Judicial review needs to be a check on real abuse and unlawfulness by a government and it must cease to be the lottery it became in the Heathrow case. The democratic arm of the state is not the only one capable of exercising arbitrary power.

Daniel Moylan is a former Deputy Chairman of Transport for London. Follow him on twitter: @danielmgmoylan