Union to appeal after high court rules pensions shift lawful

By Alex Stevenson

Union officials are to continue their legal fight against the government's pensions reform, after the high court ruled the changes were lawful.

Judges found that the switch to the way pension increases are calculated, from retail price index (RPI) inflation to the lower consumer price index (RPI), was lawful.

Unions have argued the shift will cost pensioners around 15%. They flagged up the fact that one judge believed the government had acted unlawfully as a reason to "take heart" after their initial judicial review failed.

The high court also accepted their argument that the switch from RPI to CPI was motivated by a bid to cut the deficit, rather than work out the best way to measure the cost of living for pensioners.

"The union pledged at the outset to leave no stone unturned to protect the interests of teachers and will, therefore, seek to exhaust all possible legal remedies," Chris Keates, general secretary of the NASUWT teachers' union, said.

"Hardworking serving teachers and their retired colleagues who have given a lifetime of service to children and young people were looking for justice in the face of a government decision which overnight slashed the value of their pensions.

"They will clearly be disappointed that the high court has not found in their favour."

The gap between RPI and CPI inflation is set to widen from 1.2% to 1.4% each year, the Office for Budget Responsibility has predicted.

After 18 years of retirement pensioners in both private and public sector pension schemes will find their pensions will be 20p in the pound lower, the TUC said.

This switch was announced in the June 2010 emergency Budget and came into effect in April this year.

The government had claiming CPI was a fairer measure of inflation because it does not include housing costs such as mortgages and council tax.

TUC general secretary Brendan Barber argued: "This stealth cut to pensions blows another huge hole in the government's false claims that pensions are staying the same for public sector workers."