National Grid risks strike to cut pension deficit

Shortfall of £1bn may be tackled by trebling contributions from thousands of employees

Furious union leaders have accused National Grid of "North Korean-style sabre rattling", as the operator of Britain's biggest electricity and gas transmission networks risks industrial action to tackle its debilitating pension deficit.

National Grid started informal briefings with shop stewards from the GMB union last week arguing that more than 5,600 workers might see the terms of their lucrative final-salary pension schemes changed in order to fund a deficit that was last calculated at over £1bn.

That deficit is expected to increase when a review of the £14bn gas and electricity schemes are completed this year. Relatively few workers are paying into schemes that are supporting 75,000 National Grid pensioners, as well as 35,000 deferred members who left the company before retirement age.

Unions believe National Grid is considering an option that would see their monthly contributions trebled, a move that, if formalised, could lead to strike action. Pensions have been one of the contentious issues faced by the coalition since it was formed.

In a letter to members, the GMB warned that National Grid wants scheme members to "accept detrimental changes" at a time when government reform to boost the state pension could also weaken the rights of those with final salary schemes.

Gary Smith, the GMB's national secretary for energy and utilities, said: "It's ludicrous to suggest that workers can afford to treble their contributions. We are not going to readily agree to further changes that hurt our members. We aren't going to wear the directors preaching austerity whilst they are stuffing their mouths with gold."

Mr Smith also called on the company's investors to "share in any pain". National Grid's chief executive, Steve Holliday, has announced that future dividends to shareholders will be at least in line with inflation, while the last interim payout was up 4 per cent on the previous year.

A source close to the company insisted that Thursday's meeting did not mark the start of negotiations, rather a briefing of the difficulties facing the pension schemes. Industrial companies have been hit by big deficits as they used to have far bigger workforces – and this is exaggerated if they were once nationalised, when benefits were typically generous.

A spokesman for National Grid said: "We need to review the costs of these schemes to ensure our schemes are affordable and sustainable for the future, and it is too early in that process to provide any more detail before we have the detailed discussions and agreement on a way forward with our employees."

National Grid stock is trading at more than 800p a share, which means that the group is worth nearly £30bn, 17 years after it first listed on the London Stock Exchange. The company owns the biggest gas networks in Britain and the most important electricity infrastructure in England and Wales. The other main recognised unions are Unite, Prospect, and Unison.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Customer Service Administrator

£13000 - £15000 per annum: Recruitment Genius: Are you passionate about custom...

Recruitment Genius: Dialler Administrator

£22000 - £25000 per annum: Recruitment Genius: Main purpose: Under the directi...

Ashdown Group: Contracts Manager - City of London

£35000 - £37000 per annum + benefits : Ashdown Group: Contracts Manager - City...

Guru Careers: Tax Manager / Accountant

£35 - £50k DOE: Guru Careers: A Tax Manager / Accountant (ACA / CA / CTA) is n...

Day In a Page

Blairites be warned, this could be the moment Labour turns into Syriza

Andrew Grice: Inside Westminster

Blairites be warned, this could be the moment Labour turns into Syriza
HMS Victory: The mystery of Britain's worst naval disaster is finally solved - 271 years later

The mystery of Britain's worst naval disaster is finally solved - 271 years later

Exclusive: David Keys reveals the research that finally explains why HMS Victory went down with the loss of 1,100 lives
Survivors of the Nagasaki atomic bomb attack: Japan must not abandon its post-war pacifism

'I saw people so injured you couldn't tell if they were dead or alive'

Nagasaki survivors on why Japan must not abandon its post-war pacifism
Jon Stewart: The voice of Democrats who felt Obama had failed to deliver on his 'Yes We Can' slogan, and the voter he tried hardest to keep onside

The voter Obama tried hardest to keep onside

Outgoing The Daily Show host, Jon Stewart, became the voice of Democrats who felt the President had failed to deliver on his ‘Yes We Can’ slogan. Tim Walker charts the ups and downs of their 10-year relationship on screen
RuPaul interview: The drag star on being inspired by Bowie, never fitting in, and saying the first thing that comes into your head

RuPaul interview

The drag star on being inspired by Bowie, never fitting in, and saying the first thing that comes into your head
Secrets of comedy couples: What's it like when both you and your partner are stand-ups?

Secrets of comedy couples

What's it like when both you and your partner are stand-ups?
Satya Nadella: As Windows 10 is launched can he return Microsoft to its former glory?

Satya Nadella: The man to clean up for Windows?

While Microsoft's founders spend their billions, the once-invincible tech company's new boss is trying to save it
The best swimwear for men: From trunks to shorts, make a splash this summer

The best swimwear for men

From trunks to shorts, make a splash this summer
Mark Hix recipes: Our chef tries his hand at a spot of summer foraging

Mark Hix goes summer foraging

 A dinner party doesn't have to mean a trip to the supermarket
Ashes 2015: With an audacious flourish, home hero Ian Bell ends all debate

With an audacious flourish, the home hero ends all debate

Ian Bell advances to Trent Bridge next week almost as undroppable as Alastair Cook and Joe Root, a cornerstone of England's new thinking, says Kevin Garside
Aaron Ramsey interview: Wales midfielder determined to be centre of attention for Arsenal this season

Aaron Ramsey interview

Wales midfielder determined to be centre of attention for Arsenal this season
Community Shield: Arsene Wenger needs to strike first blow in rivalry with Jose Mourinho

Community Shield gives Wenger chance to strike first blow in rivalry with Mourinho

As long as the Arsenal manager's run of games without a win over his Chelsea counterpart continues it will continue to dominate the narrative around the two men
The unlikely rise of AFC Bournemouth - and what it says about English life

Unlikely rise of AFC Bournemouth

Bournemouth’s elevation to football’s top tier is one of the most improbable of recent times. But it’s illustrative of deeper and wider changes in English life
A Very British Coup, part two: New novel in pipeline as Jeremy Corbyn's rise inspires sequel

A Very British Coup, part two

New novel in pipeline as Jeremy Corbyn's rise inspires sequel
Philae lander data show comets could have brought 'building blocks of life' to Earth

Philae lander data show comets could have brought 'building blocks of life' to Earth

Icy dust layer holds organic compounds similar to those found in living organisms