To use previous grade distributions like this, is essentially using an algorithm. Schools were told not to do it.
Most will have unofficially looked at past distributions of grades and then been more generous this year, but kept in mind previous distributions....because to be ridiculously generous could attract attention and scrutiny of their results.
It is not acceptable to justify an individual grade this year, with ref to past distributions. If your child’s work was X grade, they should have been given that, no matter how many others did or didn’t perform at that level.
Do you have it in writing that they gave this as a reason?
It is really difficult to understand how grades were reached and the overall is meant to be a holistic judgement rather than each piece counts for x% or they are averaged. However a grade needs to be evidenced consistently, so performing at the higher level in one piece isn’t good enough.
I would query with the school whether grades weee allocated based on past performance of school. They are unlikely to formally say yes to this, as schools were told not to do this and it calls into question all their grades and not just your DC. But if they do, it could be grounds for appeal.
You can ask which work was used as evidence. The thing is, as there were no grade boundaries this year, it is difficult for parents or students to be able say ‘that was a grade 8 piece’ but if all the work submitted was very high percentages and if I’m previous years much or all of it would have been higher grades, there could be a case if alongside having wrongly used previous years’ distributions.
Talking to them further can only help - if only in understanding further why the grade was given and coming to terms with it.
Best wishes deciding what to do.