BT Pension Scheme Trustees Limited & Ors (R on the application of) v UK Statistics Authority & Anor

The claimants, large defined-benefit pension scheme trustees, challenged the UK Statistics Authority's decision to bring the methods and data sources of the CPIH into the RPI (the "RPI decision") and related decisions by the Chancellor (timing and compensation). Key legal issues were (i) whether the RPI decision was ultra vires the UKSA's duty in s.21(1) of the Statistics and Registration Service Act 2007, (ii) whether the UKSA and the Chancellor unlawfully failed to have regard to obviously material considerations including effects on legacy users and the Public Sector Equality Duty, and (iii) whether the UKSA was obliged to consult on the principle of the change at a formative stage.

The court held that s.21(1) and related provisions permit the UKSA to make even fundamental changes to the RPI, including adopting methods and sources from an existing index, provided the altered series remains an officially published retail prices index; the RPI decision was therefore intra vires. The UKSA was correctly confined to "statistical matters" in exercising its functions under the Act and was not required to resolve or weigh the wider policy consequences of altering a statistic used in private and public contracts. The Chancellor lawfully considered and rejected compensation and lawfully withheld consent to any implementation before 2030. The consultation challenged was within the UKSA's statutory remit and the claim was also time-barred on the consultation point. Finally, on the private law issue the court declared that the cessation clause in post-2005 gilts is not triggered by the UKSA's alignment of RPI with CPIH implemented in or after 2030.

Background and parties: The claimants were five defined-benefit pension scheme trustees whose pension liabilities and asset-hedging strategies are linked to the United Kingdom General Index of Retail Prices (the RPI). The first defendant was the UK Statistics Authority (UKSA) and the second defendant the Chancellor of the Exchequer. The UKSA had decided to address recognised methodological flaws in the RPI by bringing in the methodology and data sources of the Consumer Prices Index including owner occupiers’ housing costs (the CPIH). The Chancellor withheld consent to implementation before 2030 and declined to offer compensation.

Nature of the claim and relief sought: Judicial review was sought of (i) the UKSA's decision to align the RPI with CPIH (the RPI decision), (ii) the UKSA's approach to the Public Sector Equality Duty and material considerations, (iii) alleged failures to consult properly, and (iv) the Chancellor's timing and non-compensation decisions. The claimants also sought a private law declaration about whether the cessation clause in gilts issued from 2005 would be triggered if the RPI were aligned with CPIH in or after 2030.

Issues framed by the court:

• Whether the RPI decision was intra vires s.21(1) of the Statistics and Registration Service Act 2007.
• Whether the UKSA and the Chancellor unlawfully failed to have regard to material considerations and to the Public Sector Equality Duty.
• Whether the UKSA and/or the Chancellor had an obligation to consult on the principle of the change at a formative stage and whether any consultation that took place was lawful and sufficient.
• Whether the cessation clause in post-2005 gilts is triggered by the implementation of the RPI decision in or after 2030.

Court's reasoning and conclusions: The court found (i) the SRSA 2007 entrusted the UKSA with broad powers to compile, maintain and, where necessary, fundamentally change the RPI; Parliament did not fetter the Authority by preserving particular historical features (for example the "wedge" between indices) and s.21 must be read with the UKSA's statutory objective in s.7 to promote quality and good practice in official statistics; (ii) it was lawful for the UKSA to adopt methods and data sources from an established alternative index (CPIH) to remedy well-evidenced methodological defects, and that step did not amount to abolition of the RPI for the purposes of s.21; (iii) the UKSA was confined to "statistical matters" in deciding how the RPI should be compiled and was not required to resolve wider policy questions (such as the redistributional effects on particular groups) that arise from others' use of the RPI; (iv) the Chancellor properly considered the compensation point and the Public Sector Equality Duty and reasonably concluded not to offer compensation; (v) the consultation carried out addressed the technical implementation and timing issues within the statutory remit and the claim that a wider consultation on the principle was required failed on the merits and was, in any event, brought out of time; and (vi) on the contractual issue the cessation clause only operates if the RPI "ceases to be published"; aligning the RPI with CPIH so that the series continues to be compiled and published does not trigger the clause. The application for judicial review was dismissed and the requested declaration about the cessation clause was made in favour of the defendants.

The claim is dismissed. The court held that (1) the UK Statistics Authority was acting within its powers under s.21(1) of the Statistics and Registration Service Act 2007 in deciding to import CPIH methodology and data into the RPI (the decision was not ultra vires); (2) the UKSA was properly confined to statistical considerations in exercising its statutory functions under s.7 and was not required to weigh wider policy consequences for legacy users; (3) the Chancellor lawfully withheld consent to implementation before 2030 and lawfully declined to pay compensation after considering the material including equality impacts; (4) the consultation undertaken was within scope and the challenge to its breadth was out of time; and (5) as a matter of contract construction the cessation clause in post-2005 gilts is not triggered by implementation of the RPI decision in or after 2030 because the RPI does not "cease to be published".