Agreement in principle to make big changes to public sector pensions has been reached with a majority of trade unions, the Chief Secretary to the Treasury has told Parliament.
After 10 months of negotiations and following the UK’s largest industrial dispute in a generation, Danny Alexander said that 26 out of the 28 negotiating unions had accepted an outline agreement to adopt new pension schemes from 2015 in a move that would save the Coalition Government tens of billions of pounds.
“These heads of agreement deliver the Government’s key objectives in full and do so with no new money since our November offer,” he told MPs.
But a number of unions refuted his claims. The Public and Commercial Services union – the civil service’s largest – told the BBC that it had definitely not signed up to any outline agreements and renewed its threat of further strike action.
The second biggest, Prospect, indicated that it would continue to "seek improvements" on the Government’s offer, before putting it to its 34,000 members, although it had agreed not to take any further industrial action while discussions were still ongoing.
Chris Keates, general secretary of the National Association of Schoolmasters and Union of Women Teachers, also attested that it had “not signed the heads of agreement document and has reserved its position,” while the Welsh speakers teaching union, UCAC, and Sally Hunt, general secretary of the University and College Union, took a similar stance.
“We have requested further documentation and clarification on a number of aspects of the proposals,” she said.
But some confusion also arose after the GMB said it was reconsidering its position on the proposals for the local government pension scheme, on which a deal was thought to have been all but settled.
Final position
Brian Strutton, the union’s national officer, said the change came about in light of "new conditions", which are thought to comprise a limit on employers’ contributions, laid down in a letter by Communities Secretary, Eric Pickles. Alexander said that the missive had been sent in error and had now been withdrawn.
But the GMB, Unison and Unite unions said that, due to confusion over the letter, they were suspending their agreement and were seeking an urgent meeting with the Government.
A spokesman from the Department for Communities and Local Government, said it planned to issue a new letter, however, and was confident that the situation would be resolved. "We are in discussion with the unions to resolve any misunderstanding and reassure them that our intentions have not changed. It would seem the unions have read more into the letter than we intended. We are not imposing any new conditions," he said.
Alexander told the House of Commons, meanwhile, that the deal struck was the Government’s “final position” and the unions that supported it had agreed not to call any more strikes – although he acknowledged that the draft agreements would still be subject to more detailed negotiation as well as approval by union members.
The arrangement meant that increased contributions would be phased in over three years, although further rises would be reviewed in light of what happened during the first 12 months in case there were high drop-out rates among employees who felt they were unable to pay more.
All pension schemes would change to become career average- rather than final salary-based ones by 2015, however, with pension ages rising in line with the state pension age.
Although the Government has made concessions such as improving the rate at which employees build up their pension entitlement, Ministers are insisting that they have not budged on the key issues.
An initial deal that was signed yesterday by unions representing local government workers, most health staff and some teaching and civil service unions still needs to be ratified by union executives, however.
