Pensions offer ‘fair’ – Cameron

TUC general secretary Brendan Barber: ”The minister has set out a number of new points for us to consider”

David Cameron has said the government has made a “very fair offer” to unions in a bid to get public sector pension changes agreed.

The two sides held a 90-minute meeting in London on Wednesday in which ministers tabled new proposals.

It is understood this focused on more generous accrual rates and higher “cost ceilings” – the limit on contributions paid by the government.

The offer must be “fair to taxpayers and workers”, the PM said.

Many unions are balloting their members about a proposed strike on 30 November over the pension changes.

Negotiations between ministers and union chiefs over pension proposals from the Labour peer Lord Hutton, who chaired an independent review, have been deadlocked.

‘Considerable’ gap

Ministers argue that change is needed because people are living longer, and say the cost of public sector pensions to the taxpayer has already gone up by a third.

But the unions say the changes will mean people working longer, paying more and getting less – and point to forecasts that the cost of pensions is forecast to drop as a share of GDP by 2060.

Chief Secretary to the Treasury Danny Alexander and Cabinet Office Minister Francis Maude met union leaders at the Cabinet Office in London and will update MPs later in a Commons statement.

Emerging from the meeting, TUC general secretary Brendan Barber said he did not want to comment on what had been discussed until he had “reported back” to union colleagues.

Government sources said the aim was to inform public sector workers about what the changes would mean for their pensions before the results of strike ballots were announced.

Asked about the talks at Prime Minister’s Questions, Mr Cameron said the cost of public sector pensions needed to be reduced but they would remain “far far better” than those in the private sector.

He said the government had made a number of proposals – including no changes for workers within 10 years of retirement – and challenged Labour to condemn any potential strike action.

“This, I think, is a very fair offer to hard-working public servants to say this is a strong set of pension reforms which will give pensions that are still better than anything available in the private sector.”

But GMB national secretary Brian Strutton, one of the chief negotiators for the unions, said the difference between the unions and the government was “quite considerable”.

He said workers were being asked to pay 50% more into their pension but they will receive a 25% cut in what they will be paid out.

‘Final positions’

Mr Strutton also disputed Treasury’s claims that public sector workers on low or middle incomes would be better off as the proposals would see them being asked to work eight years longer.

Speaking to BBC Radio 4’s Today programme, he said: “I’m hoping that what comes forward today is a sign that government is negotiating genuinely.

“I hope rumours of final positions today aren’t true because we will need to examine whatever’s said if we are to give it any sort of chance of working.”

Labour leader Ed Miliband has said public sector pensions need to be reformed to secure their future and warned against industrial action while negotiations are still alive.

This stance has angered union leaders. Mary Bousted, from the Association of Teachers and Lecturers, said her union had “given up” on Labour to support their cause.

“I am not relying on the Labour Party to come to our aid or even to talk much sense about pensions at the moment,” she told the BBC’s Daily Politics.

Sticking point

The BBC News Channel’s chief political correspondent Norman Smith said that although the government would not say publicly this was their final offer, ostensibly this was the case.

The proposed 3% rise in contributions remained the major sticking point, he added, with unions regarding this as an unacceptable pay cut at a time when most workers’ incomes were frozen.

More than a million members of public sector union Unison are being asked to vote on the 30 November strike – the result is due to be announced on Thursday.

Ahead of the ballot, workers from Unison and other unions are holding a rally against the proposed changes in London on Wednesday.

A number of other public sector unions are also proposing strike action on 30 November, and some of them will continue to ballot until 16 November.

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