Prospect challenges RPI-CPI switch in High Court


Prospect challenges RPI-CPI switch in High Court

Prospect members from the private and public sectors will be outside the High Court tomorrow (Tuesday 25 October) at 9.45am to mark the launch of a joint legal challenge to the government’s switch from the Retail Prices Index to the Consumer Prices Index for uprating pensions.

Joining colleagues from Prospect and other unions and pensioners’ organisations will be Dai Hudd, Deputy General Secretary of Prospect, the second largest civil service union.

He said: “The value of people’s pensions will be hit by up to 25% because of this change. That’s a cash cut of £15,000- £20,000 for the average civil service pensioner. Our judicial review is the only hope of blocking this move, which will save the government £6bn in 2014-15 alone.

“Prospect is taking this legal challenge because CPI is not a fair indicator of inflation for pensions uprating. CPI excludes housing costs like rent, mortgage payments and council tax, which affect pensioners like everyone else.

“The CPI is calculated in a way that assumes that customers will switch to cheaper brands of goods rather than measuring the increase in their cost. Because CPI is normally around 1.2% lower than RPI, the value of a pension will be cut up to 25% over an individual’s lifetime.”

Hudd added: “Although this action is predominantly being taken by public sector unions, we are also anxious to highlight that millions of private sector workers and pensioners will be affected by this change.”

Those with major employers like BT, BAE Systems and Babcock International have already been told their pensions will be uprated in line with CPI. Nationally private scheme members will lose around £73bn in benefits, according to the Department for Work and Pensions.

The other five claimants with Prospect are the FDA, GMB, Police Federation, National Association of Retired Police Officers and the Civil Service Pensioners’ Alliance. Protestors will assemble outside the Royal Courts of Justice in the Strand, London WC2A 2LL, at 9.45am.