High Court rules index switch for pensions is lawful

The High Court has rejected a claim by public sector unions that the government’s decision to switch from the retail prices index (RPI) to the consumer prices index (CPI) for future pension increases was unlawful.

The judicial hearing began on 25 October 2011 to challenge the switch, which was announced by Chancellor George Osborne in the June 2010 budget.

Six unions – the Fire Brigades’ Union, National Association of Schoolmasters Union of Women Teachers (NASUWT), Prison Officers Association, Public and Commercial Services (PCS) union, Unison and Unite – will challenge the High Court ruling, which comes two days after the 30 November strike that challenged changes to public sector pension schemes.

The unions are arguing that the switch from RPI to CPI is not permitted under social security legislation. However, two of the three judges backed the government, despite all three judges agreeing that the decision for the switch was motivated by deficit reduction.

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