CutStop news archive
Six trade unions, including Prospect, and pensioner organisations are today launching a legal challenge to the government's decision to link increases in pension benefits to the Consumer Prices Index. On behalf of more than 800,000 current members and pensioners, they will lodge an application for judicial review at the High Court.The six claimants are Prospect, the FDA, GMB, the Police Federation, the National Association of Retired Police Officers and the Civil Service Pensioners' Alliance.They are all seeking to block the switch from the Retail Prices Index to CPI imposed by order in Parliament which took effect this month.The effect of the switch is to lower the increase to public service pensions that would have taken place this month from 4.6% under RPI to 3.1% under CPI.Because CPI is on average 0.8-1.5% lower than RPI, over time the switch will save the Treasury £6 billion a year in uprating costs by 2014-15.Projections by the Independent Public Service Pensions Commission are that the CPI switch will cut the value of pension entitlement for existing pensioners by around 15%, and by even greater amounts for staff who are still in employment or who have a deferred pension.The application makes the case that CPI is not a fair indicator of inflation for pensions uprating since it excludes housing costs and uses a different formula to aggregate price increases to RPI.The Office for National Statistics is already reviewing CPI to establish whether it should be revised to include housing costs. And the Royal Statistical Society has risen to the Treasury indicating that: "We do not feel that it currently serves the purpose of being a sufficiently good measure of inflation as experienced by households to be used in uprating pensions and benefits or for use in wage negotiations.""This is not just a public sector issue," said Dai Hudd, Prospect Deputy General Secretary. "The Department for Work and Pensions estimates that the switch to CPI will affect 80% of defined benefit schemes in the private sector."We believe we must hold ministers to the commitments they gave on pension indexation before the last election. Otherwise, the government's mean trick will force hard-up pensioners to pay an unfair share of the cost of reducing the fiscal deficit."The issue was covered widely by the press at the weekend, with Radio 5 Live interviewing Dai Hudd. Others to pick up on the story were the Express, Guardian, Telegraph and Financial Times.John Amos, deputy general secretary of the Civil Service Pensioners' Alliance, described the CPI switch as 'daylight robbery.' He said that on the basis of predictions by the Office of Budget Responsibility, the change would rob existing pensioners of 8.5% of existing pensioners by 2017.
Using the retail prices index to set student loan repayments will cost graduates up to £5,000 more, the TUC has warned today. The government's refusal to change the interest rate on student loans from RPI to the consumer prices index - despite having already done so for state and public sector pensions, tax thresholds and key benefits - will leave students thousands of pounds deeper in debt.Prospect has welcomed the in-depth analysis by the TUC, published on its website. It shows that a graduate with a student loan of £25,000, and on the average graduate salary, will pay an extra £4,800 and take two years longer to pay off their student loan if the debt is uprated by RPI rather than CPI.The use of RPI will be even more costly for students yet to go to university, as the Education Bill currently going through parliament includes a clause allowing ministers to charge up to commercial loan rates (RPI plus 3%) for future student loans.Prospect deputy general secretary Dai Hudd welcomed the research, saying: "Prospect made the case to the government and TUC several months ago that RPI is not an appropriate measure for charging interest on student loans. It's unfair that students should be penalised in this way."Yet at the same time, where it pays out rather than receives the money, the government has switched to CPI on benefits, pensions and taxation."It will become more expensive for students to go to university, with tuition fees set to treble at the same time as the cost of loans increases."Dai Hudd will be giving an update on the union's campaigns against cuts and the student loans position at Prospect's Young Professionals Network conference on 19 April at Nottingham University. Members aged 30 and under who are interested in attending should email email@example.com
Prospect members at the Audit Commission have reacted incredulously after a junior minister failed to explain how the target figure of £50m in savings would be achieved in his evidence to a parliamentary hearing. The comments follow questioning from the Communities and Local Government Select Committee as part of its enquiry into the commission's abolition. When pressed for details of how the savings would be achieved, Housing Minister Grant Shapps failed to provide any figures saying the actual detail would be outlined in draft legislation. On behalf of 1,300 commission staff, Prospect negotiator Richard Hardy said: "This beggars belief. It has been eight months since the secretary of state announced the closure, without any consultation, and yet the department is still unable to provide evidence of the savings said to be driving this decision. "In its evidence to the consultation over the closure, Prospect not only repudiated the case for abolition, but presented examples of how the commission could maintain its core functions and still save £75m - more than the £50m the government claims can be saved through closure."Our members have been told repeatedly that the move is not driven by a desire to settle scores, but the lack of any detailed argument to back the government's financial claims makes that hard to swallow."Hardy added that the minister's accusation of meddling via the media had also grated with members given the amount of misinformation regarding claims over poor spending habits that followed the initial abolition announcement.
Following the success of the TUC's March for the Alternative against savage cuts in public services, the TUC has put together a list of suggested actions as a next step to help campaign for public services and against the cuts, from online actions to campaigns taking place in your neighbourhood. Details of activities, the aims of the campaign, links to anti-cuts groups around the country and a selection of pictures and videos can be seen in the TUC's dedicated website area.
Did you miss the rally in Hyde Park at the TUC's March for the Alternative on March 26? The TUC has now put videos of some of the speeches on its website. Those you can watch include:TUC general secretary Brendan BarberTUC president Michael Leahy Actor Sam West A 'Cuts are not the cure' video And don't forget to watch Prospect's own video of the march.