CPI/RPI ruling appealed by unions

Unions have appealed the High Court judgement which ruled the government’s decision to uprate public sector pensions in line with CPI inflation was lawful.

Prospect, the FDA, GMB and National Union of Teachers, together with the Civil Service Pensioner's Alliance lodged the appeal on Thursday.

They are appealing on two of the four points which had been rejected - that the index was unsuitable because it did not protect purchasing power, and the government was wrong to take account of financial savings when choosing inflation measures.

In December the three judges rejected the first point unanimously and the second on a split decision (PP Online, 2 December, 2011).

Prospect general secretary Paul Noon said: "The CPI switch must be challenged as it would cut the income of our members in retirement, in both the public and private sectors, by up to a quarter. We remain committed to reaching an agreement that gives fair and sustainable pensions to all our members."

CSPA general secretary Mike Duggan said the group had strong grounds for appeal on both challenges.

"We believe they missed the central point of our argument
which was that the government cannot use CPI under current legislation because it takes substitution into account. If they want to switch to CPI that's fine, but they will have to change the law."

Another group of six unions - whose challenge to the switch was heard at the same time - have lodged an appeal based solely on the argument which was rejected by split decision.

Richard Arthur, head of trade union law at Thompsons Solicitors, which acted for the unions, said: "While the High Court's split ruling is disappointing, the unions central argument that the Chancellor was motivated by deficit reduction when he made the switch, was accepted. It is encouraging that one judge agreed that this was illegal."

Prospect head of communications Charles Harvey said the court could decide to hear both appeals together - as happened with the original challenge - and both groups would work together closely.

Lawyers had warned that the continuing uncertainty caused by a lengthy appeals process was a concern for private sector schemes, as many had already switched indexation measures in line with the legislation (PP Online, 8 December).