WIREDGOV

Today seven unions are mounting a legal challenge, on behalf of millions of public sector workers, over what inflation index is used to increase their pensions.

An appeal hearing is starting at the Royal Courts of Justice to challenge the switch to using the consumer price index (CPI) instead of the traditionally-higher retail price index (RPI) for the annual increase in public sector pensions.

There will be a protest in support of the judicial review outside the Royal Courts of Justice, Strand, London WC2A 2LL, from 8.30am to 10am.

The government claims CPI is the more appropriate index, but the unions have always contended the change was a deficit reduction measure. The move - which was imposed in April last year - was announced by chancellor George Osborne in the June 2010 budget, without any consultation or negotiation.

At an earlier hearing three High Court judges agreed with the unions that deficit reduction was the motivation for the switch, two of them said the secretary of state for work and pensions was within his rights to take into account public finances. Because one judge dissented and backed the union case an appeal was lodged.

It is estimated that the change will cost public sector workers about £15,000 over an average retirement. The switch has also been applied to many private sector pensions, wiping an estimated £75 billion off their value.

PCS general secretary Mark Serwotka said: "The switch from RPI to CPI is an example of how this government wants public servants, pensioners and people entitled to benefits to pay the heaviest price for the recession. For new entrants to the civil service it means an immediate cut in their pensions, ripping up an agreement we reached just a few years ago.

"As well as challenging this in court, we are continuing to mount the widest, most coordinated industrial action we can to force the government to think again and show how out of touch millionaire ministers are with the lives and concerns of the rest of us."

Unite general secretary Len McCluskey said: "The change in how pensions are calculated is an attack on all workers. It represents a 15% increase in pension contributions for public sector workers, coming on top of wage freezes and spiralling cost of living, but make no mistake, where the public sector leads, the private sector will follow.

"Private sector employers are already attempting to move to the lower inflation index citing the government's example.  It is a scandal that across the economy, workers who have done the right thing and saved for their retirements are now looking at a much-reduced pension income."

The seven unions involved are the Communication Workers' Union, Fire Brigades' Union, teachers' union NASUWT, Prison Officers' Association, Public and Commercial Services union, Unison and Unite.