Bloomberg News

U.K. Unions Still Plan Strikes After Government Pensions Offer

November 02, 2011

Nov. 2 (Bloomberg) -- U.K. public-sector unions said they will continue planning for strikes on Nov. 30 after the government made concessions over changes to workers’ pensions.

The concessions, including protecting existing pension rights for people 10 years from retirement, higher limits for government contributions and improved benefit-accrual rates, were made because of union pressure, the unions said in a joint statement published today on the website of their umbrella movement, the Trades Union Congress.

Labor negotiators “welcomed this movement in the government’s position, which has come as a direct result of the strength of feeling and determination shown by public-sector workers,” the unions said. “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.”

Fourteen unions representing teachers, health workers and civil servants are planning strikes to protest plans to make government employees retire later and contribute more to their pensions. Ministers say the overhaul, part of Prime Minister David Cameron’s 80 billion-pound ($128 billion) program of spending cuts, is fair as the more than 5 million workers who contribute to public-sector pensions get benefits no longer available in the private sector.

‘Affordable, Fair’

The government is seeking to communicate directly with public-sector workers over the heads of union leaders and will use the internet and pamphlets to spell out the details of the offer, Chief Secretary to the Treasury Danny Alexander said. The offer may be withdrawn if agreement can’t be reached, he said.

“This package is affordable, it’s also fair,” Alexander told lawmakers in the House of Commons in London. “If reform along these lines is agreed I believe we will have a deal that will endure for 25 years if not longer.”

It is not possible to give a precise estimate of how much the changes will cost because the fine details of the offer and its effects on four separate public-sector pension programs still have to be negotiated, Alexander said.

“It’s in the context of overall reforms that will save the taxpayer tens of billions of pounds over the next 30 or 40 years,” Alexander told reporters in London today.

The Institute of Directors, a business lobby group, criticized the concessions, saying the changes announced today weren’t sustainable. “The public-sector unions cannot be allowed to hold a gun to the government’s head in this way,” the IoD said in an e-mailed statement.

--Editors: Eddie Buckle, Andrew Atkinson

To contact the reporter on this story: Thomas Penny in London at tpenny@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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