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.Reuse content