Government making pensions agreement 'difficult', says TUC

9 Sep 11
Trades Union Congress general secretary Brendan Barber has admitted that he cannot predict whether it will be possible for the unions to strike a deal with the government on changes to public sector pensions.

By Mark Smulian | 9 September 2011

Trades Union Congress general secretary Brendan Barber has admitted that he cannot predict whether it will be possible for the unions to strike a deal with the government on changes to public sector pensions.

Brendan Barber addresses public sector workers over pension changes in June. He said today that the government has been acting ‘unilaterally’ in negotiations. Photo: PA

Speaking ahead of the TUC’s annual congress, which runs from September 12-14, Barber said: ‘I just do not know if we will be able to reach agreement. The government stance is not filling me with optimism.

‘I hope we can reach a fair and reasonable settlement, but the government is making that extraordinarily difficult to reach.’

The government is attempting to introduce the changes to public sector pensions recommended by the Independent Public Service Pensions Commission, chaired by former Work and Pensions Secretary Lord Hutton.

These include the replacement of final salary pensions by career average ones, and linking the pension age in most schemes to the state pension age.

The proposals led to industrial actions by some trade unions in June, and have prompted threats of action by civil servants this week, with the Public and Commercial Services union the latest to plan for action in the autumn.

Barber said industrial action was a matter for each union, but pointed out that the FDA and Prospect unions – neither noted for militancy – had said they would consider industrial action.

‘The TUC’s role is to encourage unions that work alongside each other to take a coordinated approach,’ he said.

Barber said pessimistic signs from the government included what he called ‘a major increase in pension contributions being announced unilaterally’, and the switch in the inflation link for pensions from the retail prices index to the lower consumer prices index.

He added unions had had talks with the government on September 8 about the cost ceilings the Treasury would impose on the negotiators dealing with each pension scheme.

Barber said the government would fail to ‘pit public sector workers against the private sector’, by portraying the former as enjoying gold-plated pensions paid for by the latter.

‘Do people really think that if they impoverish the public sector pension schemes even more it will produce an environment in which pensions increase in the private sector?’ he asked.

Barber’s comments come as a new report by the Centre for Policy Studies think tank argues that public sector unions are winning the war over pension reform.

The £100 billion Negotiations report, by Conservative party adviser Michael Johnson argues that even full adoption of Hutton’s recommendations on pensions ‘would not be sustainable [and] in a few years’ time a future government would have to embark on a second round of arduous reform’, because taxpayers could still not afford the cost of the pensions.

Johnson said pensions would remain unaffordable as ‘the pensions of public sector workers [are] at least double those of similarly skilled former private sector workers’.

He called instead for an immediate move to a state pension of £140 a week for all so that ‘the coalition could claim to have addressed the unions’ legitimate concerns over pensioner poverty’.

The government could then negotiate a route to a wholly defined contribution based framework for public pensions.

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