M was given power to make grants to people investing in industry, under statute, and adopted an internal policy of not giving grants for single items costing less than £25. P had invested in many gas canisters each costing £20, but with the total cost coming to £4m. M denied P an investment because of the policy. HL held that M had absolute discretion and there was no statutory guidance as to how the grants ought to be awarded. Nothing in the statute prevented the application of such policies. The only limitations on the board were that it couldn’t act in bad faith nor exercised so unreasonably so that there couldn’t be said to have been an actual exercise of discretion.
Lord Reid: There may be cases where the authority ought to listen to reasonable arguments urging a change of policy. It mustn’t refuse to listen at all. The authority must listen to anyone with something “new” to say, but doesn’t have to consider arguments that it has dealt with before. He doubted whether there was a difference between a policy and a rule.
Viscount Dilhorne: Authorities shouldn’t be discouraged from making strict, publicised policies as these will prevent applicants from spending money on fruitless applications.