Appeal court backs Tory pension axe

The three-judge panel upheld the High Court's decision last December to allow Work and Pensions Secretary Iain Duncan Smith to switch from the usually higher RPI inflation rate to CPI when calculating pension and some benefit payouts.

Unions say the change, which takes effect next month, will wipe up a quarter of the value off a typical pension.

They had argued the switch was illegal because ministers were using it to reduce the budget deficit.

But Lords Neuberger, Kay and Sullivan rejected the unions' appeal and told them to pay the government's costs.

"The government clearly believed that the state of the national economy was grave and that any savings which could properly be made should be made," Lord Neuberger, Britain's second-highest judge, said.

He added that the government was able to change the inflation rate used regardless of the economic situation so long as it acted "rationally."

The unions - including FDA, Prospect, the Civil Service Pensioners Alliance, GMB, NUT, Fire Brigades Union, NASUWT, PCS, POA, Unite, Unison and the Staff Side of the Police Negotiating Board - are mulling their next step.

Prospect deputy general secretary Dai Hudd said: "The implications of this decision go beyond our members in the Civil Service and public sector, reaching out to members in the private sector.

"At the same time they have endured a two-year pay freeze followed immediately by a two-year 1 per cent pay cap and plans to introduce regional pay.

"There seems to be no let-up from this government in its attacks on ordinary people's standard of living."

louise@peoples-press.com