Police challenge Government downgrading of pensions
For immediate release - 15 April 2011
The Government's decision to effectively downgrade the value of public sector pensions is to be challenged by the police and five other organisations representing workers in the public sector .
The Staff Side of the Police Negotiating Board, which represents all UK police officers, is to launch a judicial review on Monday 18th April challenging a decision by the Secretary of State for Work and Pensions and the Treasury to change the way public sector pensions are uprated. This comes at a time when the police are already feeling the financial squeeze and impact of government cuts.
The purpose of the annual pensions up-rating is to ensure that pension pots do not lose value as the general level of prices increases. Until now pensions and some state benefits have been up-rated using the Retail Price Index (RPI). The Government's decision to switch to the Consumer Price Index (CPI), announced in the June 2010 Budget statement effectively down-rates public sector pensions.
The difference and impact on pensions is considerable. An up-rating of only 3.1% using the CPI, compared to a potential rise of 4.6% according to the RPI - and the CPI is predicted to lag some 0.8 - 1.5% behind the RPI for the next five years to 2016, having a cumulative downward impact on public sector pensions.
The challenge is that CPI involves measuring how consumers react to price rises (by buying cheaper goods in place of more expensive ones) , while the statutory test focuses only on price rises themselves.
The Judicial Review is being brought by the Staff Side of the Police Negotiating Board, The National Association of Retired Police Officers, GMB, FDA, Prospect, The Civil Service Pensioners Alliance.
Speaking for the police parties involved, Paul McKeever, Chairman of the Staff Side of the Police Negotiating Board, says:
"When the Government wants to increase taxes, it uses RPI, but when it has to pay pensions it uses CPI; what is sauce for the goose is sauce for the gander. In the space of a few weeks this government has published reports that seek to take money and allowances from police officers as well as the prospect of increased contributions and having to work longer to qualify for a police pension. On top of that they are effectively picking the pockets of police officers through this change. We will challenge this robustly and through application for judicial review will seek to expose the government's underhand approach and right this wrong."
If successful, the claim will impact on all public sector workers and pensioners ( not only those from the civil service and police, but also the armed forces, the NHS and local government) , as well as a number of state benefits ( previously uplifted by RPI , and now CPI).
The claimants are represented by Edward Cooper at Russell Jones & Walker, instructing Michael Beloff QC and Martin Westgate QC.