Strike over pensions to go ahead

Hours after receiving details of the new offer from Chief Secretary to the Treasury Danny Alexander and Cabinet Office Minister Francis Maude, union leaders said they welcomed the proposed changes, but they were not enough to call off the planned walkout.

TUC general secretary Brendan Barber said there were still “major areas of concern” over the Government’s proposals to increase pension contributions.

A statement issued on behalf of the Public Services Liaison Group (PSLG) of unions said: “All the unions have indicated throughout this process their determination to reach a negotiated settlement on all these issues. That remains the position and unions will engage intensively in the coming weeks.

“But unless and until further real progress is made and acceptable offers are made within those negotiations, unions remain firmly committed to continuing their preparations for the planned day of action on November 30.”

Ministers had earlier maintained that the new offer would benefit employees in teaching, local government, the NHS and other parts of the public sector.

The Prime Minister told MPs that low and middle-income public sector workers will get more from their pensions under the Government’s proposed reforms.

David Cameron said public sector pensions would still be “far better” than many available to those working for private companies.

“Low and middle-income earners we’ll actually see getting more from their public sector pensions,” he said. “Everyone will keep what they have built up so far, anyone within 10 years of retirement will see no change in their pension arrangements.

“At the end of all this, people in the public sector will actually still get far, far better pensions than people in the private sector.”

The Treasury Chief Secretary said that the new offer involved an increase to the cost ceiling, so that future schemes will now be based on a pension to the value of 1/60th of average salary accruing for each year worked – an eight per cent increase on the previous offer.

Mr Alexander said he had also listened to the argument that those closest to retirement should not have to face any change at all, announcing that no-one within 10 years of retirement will see any change over when they can retire, nor any decrease in the amount of pension they receive.

“Anyone 10 years or less from retirement age on April 1, 2012 are assured that there will be no detriment to their retirement income,” he said.

“I fully understand that families across the country are feeling financial pressure right now. These are unprecedented and tough economic times.

“But reform is essential because the costs of public service pensions have risen dramatically over the last few decades. The bottom line is that we are all living longer.

“As a result, the costs of public service pensions have risen to £32 billion a year – an increase of a third over the last 10 years. We have to reform to ensure the costs of pensions are sustainable in the long term and to ensure costs and risks are fairly shared between employees and taxpayers.”

Mr Barber said he welcomed the movement in the Government’s position, but added that the change had come “rather late” in the negotiations, and warned there were still some “very damaging” proposals.

He also took issue with Government claims that no-one retiring in the next 10 years would be adversely affected.

Comment: Page 12.