Officials and supporters from the unions lobbied outside court buildings. Photo credit: PCS/Stefano Cagnoni


Lawyers representing public sector unions have accused the Government of changing the way annual pension increases are calculated for public sector workers in an unlawful bid to cut the budget deficit.

Around 100 pension fund members gathered under union banners outside the Royal Courts of Justice in London to protest as the unions launched a mass challenge to the decision to use the consumer price index (CPI), instead of the traditionally higher retail price index (RPI), to take account of rises in the cost of living.

Union leaders describe the change as “a cynical, multi-million pound raid on pensioners”.

The Treasury argues that the CPI is already used by the Bank of England to calculate UK inflation targets.  However, two QCs acting for the unions and individual workers argued that the switch is unfair to millions of public sector workers and goes back on promises to keep the RPI.  The say the cumulative impact of the change could be to reduce the value of benefits to pension scheme members b y around 15% on average and also substantially reduce lump sum payments on retirement.

Michael Beloff QC told the 3 judges a major Government policy was under challenge. Mr Beloff and fellow QC Nigel Giffin are representing tens of thousands of public sector workers belonging to a variety of pension schemes, including those for police, teachers, firefighters, NHS staff and the civil service.

The challenge is being made by two groups of unions. One consists of the Fire Brigades’ Union, teachers’ union NASUWT, Prison Officers Association, Public and Commercial Services union, UNISON and Unite. The other comprises Prospect, the FDA, GMB, the Police Federation, National Association of Retired Police Officers and the Civil Service Pensioners’ Alliance.

The judges agreed to allow the National Union of Teachers, Association of Principal Fire Officers and National Federation of Occupational Pensioners to join the legal challenge.

Unite general secretary, Len McCluskey said: “vested interests are trying to create a wedge between public and private sector workers, when in reality they have common cause on this. We know that some private sector employers are already attempting to move to the lower inflation index citing the government’s example. In reality this government wants us all to work for longer and for less.”

UNISON general secretary Dave Prentis said: “this flawed measure of inflation (CPI) does not even include housing costs – a major expenditure for many retired people. Instead of clobbering pensioners and people on benefits, the government should impose a tiny tax on financial transactions that would raise billions.”

UNISON is currently balloting hundreds of thousands of members across more than 9,000 employers for strike action against the government’s proposals.  The result of the ballot is due next week.

In court Lord Justice Elias, sitting with Mr Justice McCombe and Mr Justice Sales, said the judges themselves – as civil servants – were also affected by the changes.

Lord Justice Elias asked whether any party objected to them presiding over the three-day application for judicial review. There were no objections.

The hearing is scheduled to last three days.

There are full details of preparations for the public sector workers’ strike on 30th November on our dedicated page here:

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