Treasury ends pension talks

THE GOVERNMENT has raised the pressure on public sector unions by drafting new laws on pensions before the outcome of talks has become clear.

Danny Alexander, chief secretary to the Treasury, yesterday said he was already preparing legislation to be introduced in 2012.

Union leaders and members will study the details of coalition proposals and are expected to respond early next year. Alexander took a tougher approach, however, when he appeared to close the door on further major amendments to the deal.

“The negotiations... are now concluded. This is the government’s final position. Us and the unions agree that this is the best position that we can reach through negotiations.”

Alexander had earlier eased fears of another public sector strike, following a walkout by up to 2m workers last month, when he told the House of Commons: “Heads of agreement have now been established with most unions in the local government, health, civil service and teachers schemes.”

He said 26 out of 28 unions had signed up in principle to a deal on new schemes to come in from 2015 but some had reserved their position on some of the details.

The Public and Commercial Services Union (PCS), which represents civil servants, rejected a deal outright. Britain’s fifth largest union said it was not right for the government to force public sector workers to pay for economic difficulties they did not cause.

Hopes of a truce on the local government pension scheme – which had been considered closed – were thrown into confusion, however, as unions GMB, Unison and Unite suspended their agreement when local government secretary Eric Pickles appeared to demand new conditions. Alexander later said Pickles’ letter was a mistake, and negotiators were last night trying to repair relations.

Last night the Treasury said “heads of agreement” have been reached with the NHS Pension Scheme, the Principal Civil Service Pension Scheme, the Teachers’ Pension Scheme and the Local Government Pensions Scheme based on the improved offer of 2 November.

The coalition is keen to show it has resisted strikers’ demand and last night cabinet office Francis Maude said no new money was offered to the unions as a result of the action and the adjustments made to the government’s proposals in response to union demands were “cost neutral”.

The agreements deliver on the recommendations contained in the report by former Labour minister Lord Hutton. The Treasury said public service pensions would “remain amongst the very best available” with more work on the details due soon.

Unions say the changes will force people to work longer before they retire and pay more for pensions that will be worth less.