Strike threat over civil servants' pensions

Ministers are preparing for a battle with their own officials over plans to force civil servants to dramatically increase their pension contributions, a Whitehall leak suggests.

The move is being proposed to help fill a £700bn hole in the pension fund for Britain's 570,000 civil servants, which would otherwise have to be plugged by taxpayers. In a letter leaked to The Sunday Times, the Cabinet Office minister Hilary Armstrong admitted the measure would be "deeply unpopular" with Whitehall unions and the Civil Service, and raised the possibility of strike action.

Union leaders are likely to accuse ministers of breaching an agreement reached last year with the then Work and Pensions Secretary, Alan Johnson, to protect the pension deal for existing employees.

Mark Serwotka, the general secretary of the Public and Commercial Services (PCS) union, said any attempt to go back on this would be met with a "very robust" response.

"What the Government has got to remember is that the average Civil Service pension is £4,800 a year," said Mr Serwotka. "What we are talking about are people who are on low pay, with low pensions."

Under last year's deal, newly employed civil servants would be expected to work until 65, as opposed to 60 for those already employed. Both groups would get the same pension of two-thirds of their salary.

Now, civil servants could be asked to pay thousands of pounds a year more into their pensions, to share with the Government the cost of covering the expected gap.

Ministers would promise to pay up to 20 per cent of officials' salaries into their pensions, but the remainder would have to be met out of civil servants' pay. For those earning £50,000 a year or more, that could mean an extra contribution of £2,000 to £3,000 a year.

In her letter to John Prescott, the Deputy Prime Minister, Ms Armstrong concedes: "I have no doubt that this measure will be deeply unpopular with the Civil Service trade unions... and I seek confirmation that we will all be prepared, if necessary, to stand firm."