Price Inflation – Which Index?

The Government has switched from the Retail Prices Index (RPI) to the Consumer Prices Index (CPI) for calculating revaluation and pension increases for public services schemes. Various trade unions challenged the switch. Judgment in the judicial review proceedings was given by the High Court in December 2011.¹

This article considers two issues: (1) Is the High Court's dismissal of the union claims the end of the road for the union challenge? (2) If not, what are the implications for private sector schemes?

End of the road?

The trade union challenge was on four grounds namely:

1. The obligation under the public services scheme legislation is to calculate the increase in prices directly; the CPI does not (it was claimed) achieve this as CPI makes significant use of the 'geometric' method as opposed to the 'arithmetic' method of calculating increases;