Public-sector unions are to press ahead with plans for co-ordinated strike action on 30 November despite an improved offer on pension reform from the Government.
Under the revised proposals, announced yesterday, public-sector pensions would be worth 8 per cent more than under the Government's original offer. Ministers also announced that the changes would not affect workers due to retire within the next 10 years – a key demand of the unions.
But there was no concession on the plan to link pension rises to the less generous Consumer Price Index rather than the Retail Price Index. Nor was there any movement on Treasury proposals to increase public-sector pension contributions by around 3 per cent from next year at a time of public-sector pay freezes.
Unions were also warned by the Cabinet Secretary Francis Maude that the new deal was conditional on a full agreement being reached and could be removed from the table altogether if the unions walk away from the talks. "This is about as far as we are prepared to go," said one government source.
Outlining the changes in the House of Commons, Danny Alexander, Chief Secretary to the Treasury, said the new offer involved an increase to the cost ceiling, so that future schemes would be based on a pension to the value of 1/60th of average salary accruing for each year worked – compared to 1/65th under the previous offer.
He would not say how much the concession would cost – but added that in the long term the reform package would still save the taxpayer billions a year. "I understand that families across the country are feeling financial pressure right now. But reform is essential because the costs of public-service pensions have risen dramatically. We are all living longer. As a result, the costs of public service [which used to account] for just under 1 per cent of GDP in 1970, account for around 2 per cent of GDP today."
He added that, under the latest proposals, with increased contributions and an increased retirement age, a teacher with a lifetime in public service and a salary at retirement of £37,800 would receive £25,200 a year pension, rather than the £19,100 currently. A nurse earning £34,200 would receive an annual pension of £22,800 under the reforms, compared to £17,300.
He said: "To earn the equivalent pension in the private sector, the teacher would need a pension pot of around £675,000, the nurse a pot of £600,000. Both would require an annual contribution of around a third of their salary."
But, hours after receiving details of the new offer at a private meeting, union leaders said that, while they welcomed the concessions, they were not enough to call off the planned walkout. The TUC's general secretary Brendan Barber said there were still "major areas of concern". He took issue with government claims that nobody retiring in the next 10 years would be adversely affected and said there was "manipulation" of figures.
Unison will announce the result of its ballot of over a million workers tomorrow and other unions will follow suit in the coming weeks, raising the prospect of disruption in schools, courts, hospitals, councils and other services.
The Public Services Liaison Group of unions said: "All the unions have indicated throughout this process their determination to reach a negotiated settlement... But, unless further real progress and acceptable offers are made, unions remain firmly committed to continuing their preparations for the planned day of action."
Public accounts: Now, where did we put those 127 laptops?
The Ministry of Justice is meant to be in charge of ensuring crime does not pay. But some of the people who work in Kenneth Clarke's department appear to have other ideas.
The ministry has admitted that an astonishing array of hi-tech equipment has gone missing since May 2010. It includes 127 laptops or hard drives, 71 BlackBerrys and "293 other items of IT equipment".
The Justice minister, Jonathan Djanogly, revealed details of the crime spree in his own offices in a Commons written answer. And the total haul could well be higher: he admitted he did not know how many mobile phones had also been lost or stolen over the last 18 months.
Mr Djanogly insisted there was no cause for alarm, explaining that all the laptops and BlackBerrys were encrypted and protected with a "complex password" while missing BlackBerrys are also blocked remotely. But Gareth Thomas, the shadow Cabinet Office minister, who obtained details of the losses, accused the ministry of complacency.
"Whether it is carelessness or theft, Ken Clarke needs to get a grip on his department to prevent this shocking abuse of public money," Mr Thomas said.Reuse content