Pensions - Deal or No Deal?


Praise for the unions which have signed outline agreements. Patience with those who say they need to think some more. Condemnation for those who say that no deal is possible and hint of more industrial action to come.

That will be how Danny Alexander, chief secretary to the Treasury and chief pensions negotiator for the government, responds today to the progress made on reforming pension schemes.

He will tell MPs that what's on offer is "a fair deal for public sector workers, an affordable deal for taxpayers and a good deal for the country".

There is as yet no deal. There is the prospect of deals in certain parts of the public sector after a series of separate negotiations with different groups of unions.

All unions have signed an outline agreement in local government. All major unions have signed up in the NHS. Some teaching unions but not the big two - the NUT and NASUWT - have reached agreement.

The smaller civil service unions covering senior officials, managers, scientists and specialists - the FDA and Prospect - have signed an agreement but the quarter of a million strong PCS representing most civil servants has not.

The country's biggest union UNITE has small numbers of public sector workers but appears, at the moment, to be with PCS.

Even those unions who have signed up go so-called "heads of agreement" still have to sell any deal to their executives and members. They are saying - in effect - this is the best we can do with ministers who won't budge any further.

Those who went on strike have protested that they will have to work longer, pay more and get less. So, what has changed?

All public sector workers will still have to work longer. Their pension age will increase in line with the state pension.

Most public sector workers will have to pay more although the government have offered protection for the lowest paid.

Many public sector workers will get less. However, it's here that there have been the most intensive and detailed negotiations - the unions have secured faster accrual rates (the speed at which pensions build up), protection for those within ten years of retirement and a promise to maintain pensions even if workers are transferred to the private sector after privatisation or contracting out.

So, there will be no repeat of the mass strike action seen on 30 November, let alone the general strike called for by protesters outside the TUC last night.

However, the PCS may still ask its members to strike, causing disruption to government offices, job centres and border control. The big teaching unions could still walk away from negotiations and pursue industrial action.

Ministers' aim throughout has been to split union solidarity - today they believe they might just have succeeded.

Nick Robinson, Political editor Article written by Nick Robinson Nick Robinson Political editor

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  • rate this

    Comment number 1.

    Still a complete disconnect between the public sector and the private sector.

    Public sector still claiming victim status wheh they spent ten years being molly coddled by newlabour and the private sector still struggling with collapsing private sector pension values and lower average earnings.

    With whom would you sympathise? Difficult one... not.

  • rate this

    Comment number 2.

    If these agreements are affordable then it is time to move on, there's been too much anger across the public/private divide, all of it understandable but none of it constructive. Let's not forget that before Gordon Brown robbed the Private Sector pensions to help pay for a million extra public sector workers, the Public Sector was clearly a more lucrative place to work.

  • rate this

    Comment number 3.

    The public sector needs to start living in the real world.

    An aging population, a reduction in the size of the work force - even if they get the pensions they are asking for, they'll loose any increase in tax to pay for them!

    They are still copper-bottomed and cast iron, compared to the private sector's reliance on investment performance!

  • rate this

    Comment number 4.

    Ultimately all public sector pensions should be subject to same rules as private sector. All will need proper funds and the pensions financed solely by amounts in the funds. Then there can be proper openess about the amount employees and employers should contribute.

    Some public sector pensions have funds which are in surplus so would find it easy to cope

  • rate this

    Comment number 5.

    There has to be an upper limit on all pensions, especially the higher echelons of the public sector. A limit of 30000 at the moment should be imposed , rising with the cost of living. It is totally wrong that high ranking public sector workers and private sector executives who have enjoyed six figure salaries should then retire and still be paid an obscene amount while doing nothing.


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