Tate and Lyle Sugars Ltd v Secretary of State for Energy and Climate Change & Anor

When a public body undertakes an early statutory review of a subsidy banding decision, the error triggering the review does not ordinarily confine the decision-maker to correcting historic data. The normal approach is to reassess the matter using all material circumstances prevailing at the time of review. Fairness can require historic correction in an exceptional abuse-of-power case, but governmental error alone does not do so. Where subsidy is calculated for a technology rather than an individual claimant, the wider public interest includes avoiding both under-subsidy, which may deter investment, and over-subsidy, which may create an unjustified windfall. Current information may be used even if other technologies remain under earlier assessments. The appeal was dismissed.

Tate and Lyle operated a combined heat and power station co-firing biomass and fossil fuel. Under the Renewables Obligations Order 2009, the Secretary of State assessed the technology at 1 ROC/MWh. After discovering an error in the cost calculations, he conducted an early review under Article 33(3)(e), using updated costs and electricity revenues, but retained the existing band.

Moses LJ dismissed the judicial review application. The appeal concerned whether the error confined the review to correcting historic cost information, and whether using current information unfairly discriminated against the appellant or constituted an abuse of power.

Lord Justice Elias delivered the judgment, with Lord Justices Aikens and Longmore agreeing. The appeal was unanimously dismissed.

1. Statutory framework and purpose. Section 32D(4) of the Electricity Act 1989, substituted by section 37 of the Energy Act 2008, required the Minister to have regard to costs, income and wider matters when setting renewable-energy bands. Article 33(3)(e) of the Renewables Obligations Order 2009 permitted an early review where relevant generation costs differed significantly from those previously considered.
2. Scope of review. The purpose of the early review was to assess as carefully as possible the appropriate band for the technology and provide the subsidy required to support investment, and no more. The fact that an error triggered the review did not restrict the Secretary of State to correcting that error or require the use of historic information. The ordinary rule, reflected in Zeqiri [2002] UKHL 3, was that reconsideration should take account of material circumstances prevailing at the time.
3. Fairness and public interest. The exceptional circumstances in Rashid v Secretary of State [2005] EWCA Civ 744, characterised in R (AM) v Secretary of State for the Home Office [2009] EWCA Civ 833 as going beyond mere caseworker error and amounting to abuse of power, were not present. The subsidy was directed to a technology, not an individual claimant. Fairness therefore had to be assessed with regard to the wider public interest, including the risk of discouraging investment through under-subsidy and the risk of an unjustified windfall through over-subsidy.
4. Discrimination and discretion. The use of current information for one technology was not, by itself, unjustified discrimination merely because other technologies had not yet been reviewed. The Secretary of State was entitled to proceed on that basis, although the court did not decide that it was invariably required. A different approach might have been appropriate if the error had been corrected promptly, and the public interest might in some circumstances require a full review.
5. State aid. It was unnecessary to decide whether correcting the costs figure while retaining historic revenue figures would infringe Article 107 TFEU. Elias LJ expressed doubt that it necessarily would, observing that the possible improper subsidy became apparent only after the up-to-date review.

The appeal was dismissed.

1. Court of Appeal (Civil Division) dismissed the appeal on 3 June 2011.
2. Administrative Court, Queen’s Bench Division Moses LJ dismissed Tate and Lyle’s judicial review application. No separate citation for that decision was stated in the judgment.