• In the case of British Oxygen Co Ltd v Minister of Technology [1971] AC 610, the discretionary powers of ministers were explored in judicial review. It was found that in the context of unlimited discretion, the executive can implement policy decision as long as consideration is given for applications contradicting them.

Facts of British Oxygen Co Ltd v Minister of Technology [1971] AC 610

  • As the Industrial Development Act 1966, the respondent Minister of Technology was given the discretionary power of making grants to people investing in the industrial industry
  • The Minister made it a policy that reimbursement for products under £25 would not be allowed; this policy led to the rejection of British Oxygen Co’s application for grants of their gas cylinders costing £20 each but totalling £4m

Issues in British Oxygen Co Ltd v Minister of Technology [1971] AC 610

  • Were the single gas cylinders eligible for grants?
  • Did the £25 policy implemented by the Minister come within their discretionary powers awarded by the Act?

Held by the House of Lords

  • The appeal was dismissed by all of the Lords. The gas cylinders were plant; these could be approved by the Minister for storage within (3) however the Minister has absolute discretion as to the awarding of grants and there would not be statutory guidance to limit this power, but the executive should listen to contrary applications.

Lord Reid

In accordance with the Act concerned, Lord Reid found that there was nothing to stop the Minister’s given powers. However, he did mention exceptional situations:

  • “There are two general grounds on which the exercise of an unqualified discretion can be attacked. It must not be exercised in bad faith, and it must not be so unreasonably exercised as to show that there cannot have been any real or genuine exercise of the discretion. But, apart from that, if the Minister thinks that policy or good administration requires the operation of some limiting rule, I find nothing to stop him.” [624]

The executive should listen to opposing applications

  • “What the authority must not do is to refuse to listen at all. But a Ministry or large authority may have had to deal already with a multitude of similar applications and then they will almost certainly have evolved a policy so precise that it could well be called a rule. There can be no objection to that, provided the authority is always willing to listen to anyone with something new to say” [625]