Unions are to challenge a high court ruling that the government was entitled to switch the measure of inflation used to increase public sector pensions from RPI to CPI.
Six unions represented by Thompsons Solicitors – FBU, NASUWT, PCS, POA, UNISON and Unite – announced they would appeal against the decision. The NUT also said it would appeal, while Prospect and GMB said they were also considering appealing.
Unions argued in the High Court that the switch would devalue the pensions of millions of public sector workers, but their challenge was dismissed. A statement from the court read: “The use of RPI has in the past been merely current practice. Looked at objectively it could not properly be asserted therefore that any promise of its continued use had to be assumed”.
A spokesperson for Thomsons said: “While the high court’s split ruling is disappointing the unions are pleased that their main 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. We have instructions to lodge an appeal urgently on behalf of the unions.
“At a time when public sector employees are being forced to bear the burden of the financial crisis, the unions will not allow this unfair and, in our view, unlawful breach of the contracts of millions of workers to rest.”
NUT deputy general secretary Kevin Courtney told UnionNews: “The effect of the decision will be to reduce by 15% the value of an average pension for a teacher compared with RPI.”
He said for the tens of thousands of NUT members on strike on Wednesday, the ruling would not come as a major surprise.
“We would have welcomed support from the courts but we realise the struggle is on our hands really. This is something we’re going to have to settle through further campaigning and probably through further industrial action.”
Listen to the interview with Kevin Courtney on this week’s podcast: http://union-news.co.uk/2011/12/this-roar-this-is-what-a-damp-squib-actually-sounds-like-dave/
Later in the afternoon, the six unions issued a joint statement through their solicitors.
Prospect general secretary Paul Noon said: “This may be the proper technical application of the law as the court have seen it, but it does not represent justice for millions of pensioners and those robbed of earned entitlements by the RPI switch to CPI.”
GMB general secretary Paul Kenny said: “We’re disappointed but not shocked by this ruling. The judges have a dismal record of understanding and supporting collective rights.
“The Office for Budget Responsibility (OBR) estimate that the gap between CPI and RPI will be about 1.4% per year for years to come. As the gap is about double what it was assumed to be when the change was made it won’t take long to severely devalue the worth of pensions in payment for many millions of pensioners. This is even before the cuts the government want to make for the pensions of public sector workers are looked at. GMB will consult with other unions and consider whether an appeal is appropriate.”
TUC general secretary Brendan Barber said: “This is a disappointing judgement for pensioners and scheme members whether they draw a private, public or state second pension.
“But we take great heart that the court accepted the argument that the government did this to cut the deficit rather than carry out a proper consideration of the best way of measuring the cost of living for pensioners, even if only one judge said that it was unlawful.
“With the OBR now predicting that the long-term gap between CPI and RPI will be 1.4 per cent, pensioners in both private and public sector schemes will find that their pensions will be 20p in the pound lower after 18 years of retirement.
“Ministers keep saying that they are cutting public sector pensions for the benefit of private sector workers, but this move hits both, as well as those with a SERPS or state second pension.”