Talks to open on pension reform

Crunch talks aimed at heading off the threat of strikes by millions of public sector workers in the autumn will be held between union leaders and the government tomorrow, with one official saying the negotiations were "fraught with difficulties."

The meeting follows weeks of an increasingly bitter war of words between unions and government ministers over controversial plans to reform public sector pensions.

Unison leader Dave Prentis has warned that his union will ballot over a million workers for industrial action if the dispute is not resolved, predicting that walkouts in the autumn would be the biggest since the 1926 General Strike.

Tomorrow's talks have come too late to avert a strike on Thursday by up to 750,000 teachers, lecturers, civil servants and other public sector workers over job and pay cuts as well as pensions.

Union officials believe that Danny Alexander, the Chief Secretary to the Treasury, will be keen to take some of the heat out of the dispute after he sparked anger with a recent speech making it clear that the government was pressing ahead with plans to make public sector workers pay more into their pensions and work longer.

"There are signs that the Government wants to repair the damage so they will emphasise that the negotiations will continue into July, while clarifying what Mr Alexander said.

"But the negotiations are fraught with difficulties," said one union official ahead of the talks.

Kevin Courtney, deputy general secretary of the National Union of Teachers (NUT), and one of those representing teaching unions at tomorrow's meeting, said: "What we are looking for is some sign that the Government is prepared to move on the three central issues - paying more, working longer and getting less."

Cabinet Office minister Francis Maude, said: "From the outset the Government has said that these talks on pensions reform, which are scheduled to continue into July, are a genuine consultation. The meeting is part of this ongoing series, set up at the request of the TUC.

"We believe both sides have a responsibility to see the talks through and we would urge public workers not to strike while they are ongoing.

"Public sector pensions will still be among the very best, with a guaranteed pension which very few private sector staff now enjoy. But they will be paid later because people live longer. and public sector staff will pay more, for a fairer balance between what they pay and what other taxpayers pay.

"While the talks are ongoing it is obviously disappointing that some unions have decided on industrial action. But what the recent ballot results show is that there is extremely limited support for the kind of strike action union leaders are calling for. Less than 10% of the civil service workforce has voted for strike actions and only about a third of teachers.

"I can assure the public now that we have rigorous contingency plans in place to ensure that their essential services are maintained during the strike action on Thursday."

The government has based its proposals on a report earlier this year by former Labour minister Lord Hutton, which recommended increased payments, a switch from final salary schemes to those based on career-average earnings, and rises in the pension age.

In a speech last week, Lord Hutton warned the government it could force people out of pension schemes if reforms were too punitive, stressing the dangers of raising pension contribution levels so high that scheme members would leave.

GMB national officer Brian Strutton said: "When Danny Alexander appeared to be pre-empting our negotiations over public sector pension reform I particularly criticised the proposal to increase employee contributions by 50%.

"GMB has provided detailed evidence about this and the consensus of all experts involved in the local government pension scheme is that it would be a financial disaster.

"The local government workforce are already pulling out of the Local Government Pension Scheme (LGPS) at an alarming rate because with two years of pay freezes they simply can't afford it - survey evidence is that a further half of scheme members would withdraw if contributions rose unaffordably.

"Because the LGPS is funded this would have dire consequences, would put at risk all the UK equity investments and significantly raise taxpayer costs. I'm not prepared to see the LGPS made bankrupt and that's why I described Mr Alexander's contribution proposals as a showstopper. It's good to see Lord Hutton now able to support this view and I urge government to reconsider its proposals."

The meeting tomorrow comes amid reports that ministers are considering moves to impose a minimum threshold on strike ballot turnouts before industrial action can be taken, something the CBI business group has been pressing for.