NHS move fails to ease pensions row

The public sector pensions dispute remained deadlocked tonight despite a move by the Government to improve arrangements for more than half a million NHS workers.

Health Secretary Andrew Lansley said that under "improved" proposals, 530,000 staff will not need to pay any more into their pensions next year because the threshold for freezing pension contributions will be raised from £15,000 to £26,557 for 2012/13.

The change will protect lower-paid staff in the health service, with increased contributions distributed among higher earners, said the Government.

Unions accused ministers of trying to "mislead" workers and criticised the timing of the announcement ahead of fresh negotiations which were held today.

Unison's head of health Christina McAnea said: "The proposed increase in pension contributions will still hit more than half of all NHS staff who are already struggling to cope with the pay freeze and rising inflation."

Unite said thousands of middle-income NHS workers will be subject to a "smash and grab" raid by the Treasury under the latest proposals, which the GMB said were not enough to settle the pensions row.

The announcement followed last week's strike by up to two million public sector workers, which closed schools, courts and jobcentres and disrupted hospitals and driving tests.

Talks on the local government pension scheme are due to be held next week, while the Public and Commercial Services union claimed that many areas had been "ruled out" of discussions covering civil servants.

Mr Lansley said: "Having listened to staff and stakeholders, we have improved our proposals so that an extra 530,000 NHS staff will not pay any more into their pensions next year.

"Public service pensions will remain among the very best available, providing a guaranteed pension level for all employees - today very few private sector employers still offer this. But people are living longer and pensions are costing taxpayers more and more every year.

"These changes alone will not be enough to ensure that NHS pensions are affordable in the long term.

"We are continuing to discuss wider changes to pensions with trades unions and hope to reach an agreement by the end of the year. But we are clear that people will also keep whatever they have already earned.

"We will honour in full benefits earned through years of service - which means little, if any, change for those close to retirement."

Proposals for pension contributions in 2013/14 and 2014/15 would be subject to further discussions with the unions.

Ms McAnea said: "The one-year delay before making the lower-paid contribute more is cold comfort. Having an increase looming large when the cost of everyday essentials like food and heating is rising so fast is a nightmare for cash-strapped families.

"With pay frozen until 2013 and limited to 1% a year until 2015, we estimate that the value of nurses', paramedics' and other NHS workers' pay will have plummeted 16% by the time the cap ends.

"I am beginning to question if Government ministers are serious about reaching a deal."

Unite assistant general-secretary Gail Cartmail said: "These are tawdry divide-and-rule tactics designed to set one set of dedicated hard-working NHS workers against another.

"Once again, the Government is attempting to mislead the workforce and the public about the true impact of their proposals.

"The harsh reality of what the Government is pushing today is that middle-earners - the squeezed middle of health visitors, speech and language therapists, biomedical scientists and pharmacists - will be the ones paying for these increased contributions in this smash and grab raid."

Royal College of Nursing general-secretary Peter Carter said: "This is yet another divisive and provocative move by the Government and means that more than two-thirds of nurses will now face further increased pensions contributions.

"The truth is, these increased contributions will not go into the NHS pension scheme, but will go to the Treasury to help pay off deficits that nurses and healthcare assistants have had no part in creating."

Rehana Azam, national officer of the GMB union, said: "This movement in NHS pensions is not enough to settle the pensions dispute. This is merely moving round the furniture and does not represent any change in Government policy to unfairly tax public sector workers who are saving for their retirement."

Mark Serwotka, leader of the Public and Commercial Services union, said: "Ministers continually claim negotiations are ongoing, but this is sheer hypocrisy because it is clear that across all the sectors the rules have been so firmly set that an agreement would be impossible.

"We will continue to go to all meetings, but we are not interested in talking to officials about how to share the pain, and we need ministers to stop carping from the sidelines and to come back to the table with a serious willingness to discuss the key areas of concerns for millions of public servants."

PA