Pensions Row Moves To High Court - Sky News

Unions have claimed two million public sector workers joined walk-outs during Wednesday's national strike

6:23am UK, Friday December 02, 2011

Glen Oglaza, political correspondent

The unions' pensions fight with the Government has moved to the High Court just two days after the public sector strike.

They argue the Government changed the traditional way of calculating their annual pension increase without any consultation or negotiation, purely as a deficit reduction measure.

Later today the High Court will deliver its judgement on the legality of Chancellor George Osborne's decision to use the Consumer Price Index (CPI) rate of inflation to calculate annual increases in public sector pensions, instead of the higher RPI (Retail Price Index).

Unions say the proposed change is unfair because CPI is around 1.2% lower on average than RPI, and claim the loss to existing public sector pensioners will be around 15%, with the change already affecting staff currently paying into career average schemes.

:: More on the public sector strike on our dedicated mini-site

Members of Unison strike in Birmingham

The unions' case is that the move was not permitted under social security legislation, and that it reneged on assurances given by successive governments that RPI would apply.

A powerful group is lining up against the Government, including Unison, Unite, GMB, the Fire Brigades' Union, the teachers' union NASUWT, the Prison Officers Association, the PCS (Public and Commercial Services union), the Police Federation, National Association of Retired Police Officers and the Civil Service Pensioners' Alliance.

As talks continue between the Government and the unions to try to resolve the impasse over pensions in health, local government, education and the civil service, the unions are describing this move as another attack on existing and future pensioners who, they say, are being forced to pay for the financial crisis caused by the banks.

Although this action is predominantly being taken by public sector unions, who led a nationwide public sector strike on Wednesday, they are keen to point out that millions of private sector workers and pensioners could also be affected by the change.

Every year, the Secretary of State for Work and Pensions reviews benefit payments to determine whether they have kept up with general increases in prices in such manner as "he sees fit".

Public service pensions will continue to provide protection against inflation and will remain among the very best available.

Treasury spokesman

Those benefits are then up-rated by at least the same percentage as the increases in general prices.

The relevant pensions legislation requires the Treasury, in turn, to increase public service pensions by the same percentage as the annual increases to benefits.

A Treasury spokesman said: "Public service pensions will continue to provide protection against inflation and will remain among the very best available."

The Treasury says CPI is already used by the Bank of England to set its inflation target.