New offer for public sector pensions

Ministers are set to outline an ‘enhanced offer’ to unions on public sector pensions.

The two sides are holding a special meeting at the Cabinet Office to discuss the proposals.

Danny Alexander, chief secretary to the Treasury, will announce the offer, which is understood to focus on more generous accrual rates and higher ‘cost ceilings’ – the limit on contributions paid by the Government.

The key elements of the proposals will remain the same, but longer-term plans due to come into effect from 2015, shifting to ‘career average’ rather than ‘final salary’ schemes, could be affected.

Chancellor George Osborne told MPs on Tuesday that the full offer is “fair to the public sector and fair to the taxpayers”.

A TUC spokesperson said: “We expect the Government to indicate whether they are prepared to move on their position. But we will need to listen to what they have to say rather than comment on advance spin, which can only get in the way of proper negotiation.”

The Government argues that the current system is unaffordable in the long term, especially with an ageing population, so changes must be made. One source said: “The unions argue that you would work longer, pay more and get less.

“We say: yes you will work longer. Most people will pay more, except the lowest paid. But you will not get less unless you are the highest paid. That is not as snappy as what the unions say. But it is fair.”

But Brian Strutton, the GMB union's national secretary for public services, told the BBC Radio 4 Today programme: “The Treasury say low and middle income people will get as good a pension as they do now, but that’s if they work eight years longer for it, and pay eight years more of contributions that are 50% higher so it is a bit of a fake argument. There is a considerable gap to close.”

The 24-hour walkout scheduled for November 30 is expected to involve at least 14 trade unions. Unison, the largest public sector union, will declare the result of its strike ballot on Thursday.