Alexander's warning raises union anger

(PA)

Talks aimed at averting a wave of strikes in the autumn were on a knife-edge last night after the Government repeated its warning that most public sector workers would have to work longer and pay more towards their retirement.

Union leaders reacted angrily as Danny Alexander, the Chief Secretary to the Treasury, argued that there was no alternative to prevent the cost of state sector pensions soaring out of control.

They protested that his "inflammatory" intervention had effectively pre-empted delicate negotiations over changes to the pension arrangements of nurses, doctors, teachers, civil servants and town hall workers.

Tensions rose ahead of planned strikes by 750,000 union members on 30 June, with wider industrial action looking increasingly likely later in the year. The National Association of Head Teachers said yesterday it would ballot members on whether to strike over changes to their pension packages.

In a separate dispute, London Underground workers will walk out for six hours tomorrow evening in protest over the dismissal of a driver.

Mr Alexander confirmed plans to raise the pension entitlement age for state sector staff to 66 by 2020 and to increase the pension contributions of most workers. He said he wanted to build the "trust and confidence" of unions and added that it was premature to call strike action.

The Liberal Democrat minister pointed to plans to exempt staff earning less than £15,000 a year from the higher contributions – and maintained that public sector workers would still have more generous pensions than most employees in private companies.

Following his speech in central London, Mr Alexander was challenged by GMB negotiator Brian Strutton, who accused him of "almost scuppering" the negotiations.

He said plans which had been presented to the unions as "discussion points" were now being put forward as formal proposals that the Government was determined to implement. Mr Alexander replied: "We are committed to the discussions that we are having. There is a great deal to discuss."

Downing Street also stressed that the minister had set out "proposals" and was committed to discussing the detail of them.

The Treasury had hoped that advance reports of Mr Alexander's speech yesterday would focus on plans to protect the lowest-paid from the pain. Instead most media reports focused on moves to increase contributions by 3.2 per cent by 2014, proposals that unions said had not been put to them.

The TUC General Secretary, Brendan Barber, said: "At such a critical time in complex negotiations this is a deeply inflammatory public intervention with a clumsy mix of announcements apparently designed to pre-empt the talks."

Christine Blower, the general secretary of the National Union of Teachers, which will strike on 30 June, said: "What the Government is really doing is levying money from public sector pensioners, and those who pay into public sector pensions, in order to deal with the deficit."