Sections

Treasury to take CPI case to Supreme Court, pensions group predicts

Related images

  • Treasury to take CPI case to Supreme Court, pensions group predicts

UK - A campaign group challenging the UK government on a "devastating" switch in pension indexation has said it had "no doubt" the Treasury would bring the case before the Supreme Court if it lost the current Court of Appeal hearing.

John Amos, deputy director general of the Civil Service Pensioners' Alliance (CSPA), predicted the Treasury would take the issue to the country's highest court if it lost the current appeals hearing, which concluded on Tuesday.

The organisation is disputing the legality of a switch from the retail prices index (RPI) to the consumer prices index (CPI) as a measure of indexation, arguing that it did not sufficiently protect retirees' income as required by law.

Speaking of this week's hearing, Amos told IPE: "In the court, you get down to how many angels can dance on the head of a pin, but our lawyers made a good stab at the case, and the judges, clearly, understood it all."

He also argued that Treasury lawyers had faced a "more critical" questioning than those representing the CSPA's interests.

The changes were announced by the current government in 2010, with the National Association of Pension Funds warning that it risked creating an investment mismatch due to an absence of CPI-linked gilts.

The government, meanwhile, argued that CPI reflected a pensioner's inflation exposure more accurately, as it excluded housing costs, while critics viewed it as a cost-cutting measure to bring down the expense of public sector pensions.

Amos insisted that CPI did not accurately measure general price movements, as the method of calculation assumed that if prices went up, the public would simply shift to more affordable products.

He also highlighted that the Royal Statistical Society has voiced concerns about the use of CPI for indexation purposes.

He said the government had approached the change from the wrong perspective, with lawyers from the CSPA arguing that the Treasury had "put the economic cart before the statutory horse".

"The way we have read all the evidence given by civil servants in witness statements, it is quite clear to us the Treasury made the decision to make the savings and then constructed the argument subsequently," he said.

Amos, however, did not doubt the government's resolve to see the change backed by court.

"I have no doubt that, if we win, the government will go to the Supreme Court," he said.

The CSPA's general secretary Mike Duggan previously insisted the switch would have a "devastating effect" on pensioners.

Several unions backed the unsuccessful court case when it was brought in the High Court last year, with Unison insisting last week that the switch "unfairly targeted" pensioners in an effort to pay off a government deficit they had not caused.

A House of Commons debate on the matter has been scheduled for next week, after an online petition exceeded the government-mandated 100,000 signature threshold.

Have your say

You must sign in to make a comment