Stop Coalition Steamrolling Pension Cuts!

A section of the march through London on November 30 last year when two million public sector workers went on strike in defence of their pensions
A section of the march through London on November 30 last year when two million public sector workers went on strike in defence of their pensions

The Unite union has called for the rejection of the government’s final public sector pensions package.

‘The government is steamrolling through its final offer on public sector pensions, having avoided any meaningful negotiations over the last year,’ Unite said after last Friday’s ‘final offer’.

A union statement added: ‘The government’s agenda that employees pay more, work longer and receive less when they retire was non-negotiable from the very start – and that’s why Unite is recommending that its members in the NHS, Ministry of Defence (MoD) & government departments and in teaching reject the proposals.’

Unite called on ministers to return to the table for genuine talks with the unions.

Unite’s 100,000 members in the NHS are currently being consulted in a ballot, due to close on 19 March, on the pension proposals.

Its members in the MoD & government departments will also be having a consultative ballot.

Unite assistant general secretary Gail Cartmail said: ‘The coalition’s mask has finally dropped – it is pushing through a pensions package without having held real and genuine negotiations over the last year.

‘Ministers are using these hefty increases in pension contributions as an additional unfair tax on NHS workers to pay for the deficit caused by reckless bankers who have played havoc with the British economy and caused misery to millions of working people and their families.

‘Now many public sector workers – the bedrock of local communities, such as nurses and teachers – face working longer before they retire.

‘The prospect of a 68-year-old paramedic lifting patients will become a reality with the increased risk to patients. Do the public really want to see this?

‘From next month, public sector staff will be paying more in contributions, yet facing a further 12 months pay freeze. But at the same time chancellor, George Osborne is seriously considering abolishing the 50p rate of tax for the wealthy earning more than £150,000-a-year.

‘Public sector pensions were put on a realistic basis by the last government, but this government of the rich for the rich is targeting the modest retirement incomes of nurses and teachers.

‘These severe changes are being driven by the treasury, despite cabinet ministers Andrew Lansley and Michael Gove having expressed strong reservations about the long-term impact on the validity of the individual schemes, if these changes were steamrollered through.

‘It is national disgrace and Unite will continue to campaign against this putrid agenda of unfairness.’

The Public and Commercial Services union (PCS) issued a detailed explanation, saying the government’s ‘final agreement’ on pensions put to the unions last Friday ‘confirms again it intends to force civil and public servants to pay more and work longer for much less in retirement.’

PCS general secretary Mark Serwotka said: ‘Ministers’ obstinacy means we have this ludicrous charade of what is now our fourth “final” offer, with previous ones being desperate attempts to avert strikes and a failed bid to bounce us into accepting an arbitrary deadline before Christmas.

‘We will continue to talk to other unions about planning further widespread co-ordinated industrial action and there is as much reason as ever for our members to vote in our consultation ballot to reject these spiteful cuts.’

The PCS said: ‘Despite ministers consistently refusing to seriously negotiate, this is now the fourth time we have been presented with a “final offer”.

‘For more than a year, the government has shown no flexibility on the key issues in the dispute.

‘And when talks resumed in January, it again refused to discuss the three key principles that brought two million public servants out on strike on 30 November.

‘Under the proposals, all civil servants would pay more, all aged under 50 would work longer, and all would get less in retirement.

‘The government has simply confirmed its proposals from December. There is now more reason than ever to vote to reject these unfair cuts.

The offer

‘The offer relates to the new pension scheme from 2015. It sets out the latest position on the design of a new civil service scheme and is almost identical to the proposals outlined in the so-called “heads of agreement” in December.

‘It confirms that those within 10 years of pension age at 1 April 2012 will remain in the current schemes – all others will be offered the new scheme.

‘There is some protection on pension age only for those just over 10 years from retirement, with some more detail about protection for those in their late 40s – but everyone would be paying more for less.

Pay more

‘There are two elements to the government’s plans for increasing contributions:

‘From 1 April 2012

‘Confirmation of plans to introduce increased contributions for all public sector pension members, including those within 10 years of retirement, by an average of 3.2% of salary, phased in over three years.

‘The regulations bringing into law the contributions increases raise the prospect of further increases for the minister to decide, with no mention of negotiating with trade unions.

‘Information about how you will be affected by the increased contributions, as well as the pay freeze and cap, is available on our pensions calculator.

‘From 1 April 2015

‘The contribution rate will be an average of 5.6%. The indications in today’s offer are that the lowest level of contributions for those earning under £21,000 will be 4.6% rising to 9% for the highest paid.

‘However this is all subject to further discussion nearer the time. The government is telling people they will pay more, but not saying how much more.

Work longer

‘The normal pension age of the new scheme – the age at which scheme members can receive an unreduced pension – would be in line with the state pension age (SPA) which is set to rise to 68.

‘How this will work in practice has still to be discussed. Classic and premium schemes have a pension age of 60, and Nuvos has a pension age of 65.

‘People born on or after 6 April 1960, but before 6 April 1961, will have an SPA between 66 and 67.

‘People born on or after 6 April 1961 will have an SPA of 67 or higher.

‘But today’s document states that the government believes the SPA ‘should continue to keep pace with increases in longevity’.

‘So there is every likelihood it will be increased even further, meaning people will not know when they can retire on an unreduced pension.

Get less

‘Pensions will be recalculated every year to increase in line with the consumer prices index measure of inflation, rather than the retail prices index.

Over a normal 20 year retirement, this would make pensions worth up to 20% less. This is affecting members of Nuvos already because of the way career average schemes are revised annually.

‘This switch was introduced in chancellor George Osborne’s June 2010 budget with no prior consultation or negotiation and is subject to an appeal in the High Court following a judicial review taken by PCS and other unions.

More on the offer

‘Much of the detail is still not finalised, such as issues around “total reward” and how this will affect future pay agreements.

‘The “fair deal” – the arrangements for civil servants whose work is privatised – remains, but again the detail is lacking.

‘Other issues include a slight improvement on the accrual rate from 2.28% in December to 2.32%.

‘There is information about process on equality impact assessments but there has been no real discussion, despite PCS and the other unions raising specific issues.

‘Existing “added years” contracts will continue in the new scheme, but buying extra specifically to retire earlier is limited to 65.

‘As with Treasury secretary Danny Alexander’s “final offer” on 2 November, there is a veiled threat that it is conditional on the unions agreeing to recommend it to members.

‘This, again, is disappointing and ministers’ time would be better directed towards holding serious negotiations on the key issues affecting millions of public sector workers.’