Six public sector unions will today begin a High Court challenge of the Government’s decision to link pension payments to the consumer prices index, rather than the retail prices index.
The six unions involved in the judicial review are the Fire Brigades’ Union, teachers’ union NASUWT, the Prison Officers Association, the Public and Commercial Services union, Unison and Unite.
In the June 2010 Budget, Chancellor George Osborne announced the decision to switch the measure for pension inflation to the consumer prices index, which on average tends to be lower than the RPI.
The move, which took effect from April this year, has also been applied to some private sector schemes which do not have RPI-linked pension increases hard-wired into their rules.
The unions argue that the change was not permitted under social security legislation and “reneges on assurances given by successive Governments that RPI would apply”.
PCS general secretary Mark Serwotka says: “For new entrants to the civil service the switch from RPI to CPI will mean an immediate cut in their pensions, ripping up an agreement we reached just a few years ago.”
Unite general secretary Len McCluskey says: “Our legal challenge against the coalition Government is hugely significant for workers in both the public and private sectors.”
Policymakers are also facing calls to provide concessions to private sector employees affected by the switch to CPI.
An early day motion urging the Government to postpone the shift to CPI until the Royal Statistical Society and the UK Statistics Authority have carried out a review of whether the measure is appropriate for pensions has so far been signed by 135 MPs.