Brendan Barber, general secretary of the TUC, held private talks in Manchester this week with four senior ministers – including the Chancellor, George Osborne – in an attempt to avert next month's planned one-day strike, the biggest for a generation. Behind the scenes, Mr Osborne is coming under pressure from ministers to show more flexibility over cutting the bill for public-sector pensions.
Mr Barber met the ministers, who included the Liberal Democrat Chief Secretary to the Treasury, Danny Alexander, and the Tory Cabinet Office ministers Francis Maude and Oliver Letwin, for informal talks in the margins of the Conservative Party Conference in Manchester – in a move that could open the door to a deal. He is understood to have told them that, to resolve the dispute, they need to reassure the unions they are not trying to dismantle their pension schemes.
Mr Osborne has insisted that the reforms must go ahead to save £2.8bn a year by 2014-15 as part of his deficit-reduction strategy. But ministers, among them Mr Maude and Mr Letwin, believe the Treasury's hard line is reducing the prospects of successful negotiations between the Government and trade unions.
One Tory insider told The Independent: "There is still a chance we can make progress, but it will require the Treasury to show more flexibility than it has done so far." The Chancellor's allies deny he is a stumbling block. They insist he has made clear that, as long as the £2.8bn target is achieved, he is open to "different ways of cutting the cake" and say the Cabinet is united behind the Treasury's stance.
The next formal talks between union leaders and ministers will take place on 24 October. But time is running out to avert a "day of action" on 30 November, expected to cause widespread disruption. Thirteen unions representing more than two million employees are balloting their members on taking part and four others who stopped work for a day in June already have a mandate for action.
Mr Barber addressed a fringe meeting at the Tory conference on Tuesday night. He shared a platform with Mr Letwin, David Cameron's policy chief, and Mr Alexander.
The TUC chief also spoke informally to Mr Osborne and Mr Maude. He is understood to have warned that the unions remain bruised by the way changes to pensions were announced without any prior consultation.
The changes include an average 3.2 per cent rise in contributions from next April, raising pensions in line with the consumer prices index rather than the retail prices index, and demanding that people work longer before they can draw their pensions.
Mr Barber stressed that unions were committed to reaching an agreement, but urged ministers to table new proposals. One possible compromise involves how the pension changes are phased in. Mr Maude told The Independent's fringe meeting in Manchester: "We will be setting out the proposed costings for each of the [pension] schemes. There is a lot to discuss around the transitional arrangements."
Yesterday David Cameron told the Tory conference the unions had "every right to protest" but added: "Our population is ageing. Our public-sector pensions system is unaffordable."