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Government increases pensions offer by '8 per cent'

The government has made unions a renewed offer on pensions that it claims equates to an 8 per cent increase on previous proposals.

Speaking in parliament this afternoon, chief secretary to the Treasury Danny Alexander said he had listened to trade union representatives, who have been arguing against planned changes to public sector pensions.

He said pensions would be accrued at a rate of one sixtieth of an employees’ average salary, for each year of work, whereas previously the government planned to reduce this to one sixty-fifth.

Mr Alexander said: “That is an 8 per cent increase on the previous offer”.

In addition, anyone within 10 years of retirement will receive extra protection, meaning that - unlike other workers - they will not have to work longer before being able to retire and will see no decrease in the value of their pension.

Mr Alexander said this was “an affordable deal, that ensures that taxpayers are being asked to make a sensible contribution, but keeps costs sustainable and under proper control”.

It was “conditional” on an agreement being reached with unions before the end of the year, he added.

As expected, there was no movement on the planned switch from a final salary scheme to one based on career averages.

The Unison strike ballot on action starting from 30 November closes tomorrow. The outcome of ballots held by a range of other unions, including Unite, is due later this month.

NHS Employers director Dean Royles said: “This revised offer provides the basis for further detailed discussions with a chance to reach agreement and avoid industrial action.

“Employers and unions know that strike action will affect patient care and in light of this statement, such action would be premature.”

Unions met to discuss the proposals straight after a meeting with Treasury officials this morning.

14.27 - TUC statement issued

The TUC’s Public Services Liaison Group has issued a statement, welcoming the “movement in the government’s position”.

It said: “These proposals, and their detailed implications for the pensions offer within each scheme, will now need to be considered in detail within the sector specific negotiations, alongside all the other issues including proposed contribution increases, increases in the pension age, and the impact of the indexation change from RPI to CPI on which the government’s position remains unchanged.

‘All the unions have indicated throughout this process their determination to reach a negotiated settlement on all these issues. That remains the position and unions will engage intensively in the coming weeks. But unless and until further real progress is made and acceptable offers are made within those negotiations, unions remain firmly committed to continuing their preparations for the planned day of action on November 30.

‘A further meeting of the PSLG will be held in November to consider reports on any progress made within the sector talks.’

Readers' comments (10)

  • Shamefull interview from 2 cabinet ministers which attempted to divide and rule this country into those on low incomes and those on higher incomes, those in the public sector and those in the private sector, the unions and the individuals (what is in it for me).

    Why this strategy? because the offer does not stack up which is why no figures or accurate costs were shared. Shamefull. In particular the comment by Francis Maud 'we reserve the right to withdraw this offer unless all is agreed including a tie in agreement for the next 25 years' !! Oh and not forgetting the impact on the the private sector from public sector strikes - obviously the public sector do not use schools, hospitals, local authority provision and DO NOT PAY TAXES TOO. Shamefull and arrogant.

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  • If the announcement was made by a Lib-Dem on behalf of the coalition, it must be bad news. The Tories always leave their bad announcements for their mug colleagues to make on their behalf.

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  • Isn't the new NHS scheme already 1/60th anyway??!

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  • If this government can simply scupper the 2009 Health Service Pension agreement, then any future government can simply torpedo this imposed scheme too. So much for the benefit of secure pensions in the public sector.

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  • Public Sector employees are taxpayers too! NHS employees need to have the same detailed information about any further changes to the NHS pension scheme given that across the country we have not yet completed the current NHS Pension Choices exercise. Unless NHS staff can see the (devil) in any 'offer' detail cheap '8%' headlines from Danny Alexander are meaningless.

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  • It's disgraceful to speak of "improved offers" and "8%" better when the whole thing is a dictatorial reduction in pension payouts, pensions that have been paid for by the recipients and are affordable in the scheme.

    The only acceptable solution is a return to the preposal situation, no increases in contributions or retirement age, no change from RPI to CPI increases and allowing people to retire when they feel they can afford it, not making them stay at work and denying them their pension until they are 66.

    Furious? I should say so.

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  • For "preposal" please read "pre-proposal", sorry.

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  • This is very typical 'Hit & Miss' Coalition approach to management!
    They shoot from the hip, try and bully their plans through and then lie shamelessly when all don't work!
    The coalition has yet to think about the impact of compulsory older work force on employment creation for future generation very much the same way as they failed to think about the implications of abolishing SHAs and PCTs in the NHS.
    The Coalition need to be 'Performance Managed' but I don't see Labour being proactive enough either!
    The future is BLEAK INDEED!

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  • The HSJ, the media and even the BMA are all falling into the govt spin trap by using the same terminology that Danny Alexander is using - this misrepresents what is happening here...i.e. 'the govt increases its pensions offer by 8%'. This is total rubbish...this is not an 'offer' in any sense of the word or by any stretch of the imagination.
    I have been involved in many wage negotiations in my hospital management career and the term 'offer' is used when the management puts a proposal on the table and the other side comes back with either acceptance or a counter demand. The 'offer' is usually a wage increase or a positive change in T&Cs or both. It is not a promise not to do something.
    All the govt has done in this 'improved offer' is to 'offer' a reduction in the amount that they are going to cut our salaries by. Restoring the 1/60th which was part of the T&C anyway is giving us back what we already had, this is such an old trick I can't believe anyone has fallen for it.
    This is not a wage negotiation and certainly has not been a negotiation in good faith... the govt side has been simply been repeating the Treasury script and given not one inch... They have made a unilateral decision to cut public service pay by increasing pension contributions. End of.
    This is part of the overall agenda to reduce the size of the public service 1)privatising the NHS and getting people off the NHS payroll and pension scheme, and onto private providers payroll. This includes private providers and FTs and Social Enterprises (whose life expectancy must be very limited) and 2) reducing the pay and pensions of those that remain in the NHS.
    And it is a race to the bottom of the pension pile.
    The argument about public pensions being better than private pensions and how unfair a situation this is, is entirely disingenuous... this is what has happened to private pensions
    and now they are after our public service pensions.
    It is an absolute disgrace.

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  • Fantastic post anon 07/11 5.25 and so,so true...this bunch must think we are stupid in trying to fool us with undisguished smoke and mirrors. As you say an absolute disgrace. Unfortunately so many are in denial or apathetic (or both) as the 25% UNISON turnout showed that the Govt need do very little but sit back and let it happen...because there are few who seem that bothered. And as for the Govt writing directly to staff, circumnavigating Trades Unions: what a shabby thing to do and sure to provoke a reaction. Or maybe that's what they want? 2011 - the new winter of discontent.

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