Ministers confirm pension changes amid union fury

17 Jun 11
The government has confirmed it intends to implement the public sector pension changes proposed by Lord Hutton earlier this year.

By Richard Johnstone | 17 June 2011

The government has confirmed it intends to implement the public sector pension changes proposed by Lord Hutton earlier this year.

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Chief Secretary to the Treasury Danny Alexander this afternoon outlined the government’s position in a speech to the Institute for Public Policy Research think-tank. He said that the public sector pension age must rise to match the state pension age, meaning it will hit 65 in 2015 and 66 in 2020.

‘It is absolutely wrong to pretend that public servants can be insulated from the pressures that everyone else are facing. It is unjustifiable that other taxpayers should work longer and pay more tax so public service workers can retire earlier and get more than them,’ he said.

‘It is the employees who are benefiting from longer life and generous pensions, but it is the taxpayer who is picking up the tab.’

He said Hutton’s proposals were not ‘wanton destruction’ of public sector pensions, but fair and affordable.

The speech has been criticised by unions, who say that the move is ‘deeply inflammatory’, particularly as negotiations over the Hutton proposals are ongoing.

Alexander also confirmed the move away from final salary schemes to those based on career average earnings, another key recommendation Hutton made when his independent Public Service Pensions Commission reported in March.

He also criticised the ‘minority of unions who seem hell bent on premature strike action before discussions are even complete’.

Alexander said: ‘To justify strike action, they are misrepresenting the government’s position and feeding their members scare stories.

‘I say to members of those unions, a strike now might be in the union boss’s interests, it is not in yours. Don’t let them sacrifice your pension for their political platform.’

Two teaching unions, the National Union of Teachers and the Association of Teachers and Lecturers, along with the PCS, the civil service union, have voted to strike on June 30.

The last planned meeting between the unions and the government over the framework for the changes is on June 28, but Alexander has said that more meetings could be scheduled.

Trades Union Congress general secretary Brendan Barber said that the speech was ‘a clumsy mix of announcements apparently designed to pre-empt the talks, coupled with crude threats’.

He added: ‘I have found over many years that if you are seriously trying to build trust to settle a difficult dispute, you should talk honestly and openly inside the negotiating room and exercise self-restraint outside. This speech has dealt a serious blow to union confidence in the government’s good faith in these talks.’

PCS general secretary Mark Serwotkasaid Alexander’s comments ‘prove we were right when we described the talks with the government as a farce’.

He added: ‘We have been heavily criticised by the government for balloting for industrial action while talks are ongoing and yet Danny Alexander now appears to be admitting that ministers are not planning to change their minds.’

The FDA, the union for senior civil servants, said there was ‘fury’ at the announcement, and the Unite union accused the government of ‘gunboat diplomacy’.

Unite’s assistant general secretary, Gail Cartmail, said issues such as pension contribution increases, which Alexander is expected to say will be capped for those earning less than £18,000, had ‘never been raised in the talks’.

In addition to the announced strikes, the 28,000 strong National Association of Head Teachers has today confirmed that it plans to ballot members on strike action to take place in autumn.

General secretary Russell Hobby said that the teaching profession was ‘under attack’ and faced ‘a refusal to negotiate from the government’.

’In planning the timing of this ballot, we feel that we have created a proper window for negotiations to continue and, hopefully, prevent the need for action,’ he added.

Britain’s biggest public sector union, Unison, said earlier this week it is ‘going down the road’ to industrial action if the talks are unsuccessful.

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