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Public sector pensions: Changes are fair, say ministers Public sector pensions: Changes are fair, say ministers
(about 1 hour later)
Ministers say plans for public sector pensions will ensure they are "fair and affordable", but unions have accused them of sabotaging negotiations.Ministers say plans for public sector pensions will ensure they are "fair and affordable", but unions have accused them of sabotaging negotiations.
Treasury minister Danny Alexander will confirm the public sector retirement age will be linked to the state pension age, which is due to rise to 66.Treasury minister Danny Alexander will confirm the public sector retirement age will be linked to the state pension age, which is due to rise to 66.
Contributions must go up, he will add, but rises will be capped for the low paid and existing benefits protected.Contributions must go up, he will add, but rises will be capped for the low paid and existing benefits protected.
But unions said the speech, while talks were continuing, was "inflammatory".But unions said the speech, while talks were continuing, was "inflammatory".
The two sides have been holding negotiations over pensions but tensions have risen in recent days after unions representing up to 750,000 public sector workers voted to strike on 30 June.The two sides have been holding negotiations over pensions but tensions have risen in recent days after unions representing up to 750,000 public sector workers voted to strike on 30 June.
'Affordable and sustainable''Affordable and sustainable'
On Friday the National Association of Head Teachers said it would also ballot its members about striking over pension cuts.
Lib Dem Chief Secretary to the Treasury Mr Alexander said the government's position had been misrepresented and it was committed to conducting talks in a "reasonable fashion".Lib Dem Chief Secretary to the Treasury Mr Alexander said the government's position had been misrepresented and it was committed to conducting talks in a "reasonable fashion".
According to pre-released extracts of a speech in London later he will confirm that the government will adopt many of the recommendations on pension reform made in the Hutton report earlier this year.According to pre-released extracts of a speech in London later he will confirm that the government will adopt many of the recommendations on pension reform made in the Hutton report earlier this year.
He is expected to say most public sector workers - bar the army, police and fire service - will see their retirement age - currently set at 60 - linked to the state pension age in the future. This is due to rise to 66 for both men and women by April 2020. He is expected to say public sector workers - bar the army, police and fire service - will see their retirement age linked to the state pension age in the future. Many can currently receive a full pension at 60. The state pension age is due to rise to 66 for both men and women by April 2020.
He will say workers, on average, will have to pay 3.2% more in annual pension contributions phased in between 2012 and 2014. He will say workers - on average - will have to pay 3.2% more in annual pension contributions phased in between 2012 and 2014.
But he will also guarantee that low-paid public sector workers on less than £15,000 will not face any increase in pension contributions and those earning less than £18,000 will have their contributions capped at 1.5%.But he will also guarantee that low-paid public sector workers on less than £15,000 will not face any increase in pension contributions and those earning less than £18,000 will have their contributions capped at 1.5%.
And he will insist all pension benefits earned before any reforms are introduced - including retirement ages and final salary benefits - will be protected.And he will insist all pension benefits earned before any reforms are introduced - including retirement ages and final salary benefits - will be protected.
In his speech, Mr Alexander will say "it is unjustifiable to ask the taxpayer to work longer and pay more so that public sector workers can retire earlier and receive more themselves" and criticise unions "who seem hell bent on premature strike action before discussions are even complete".In his speech, Mr Alexander will say "it is unjustifiable to ask the taxpayer to work longer and pay more so that public sector workers can retire earlier and receive more themselves" and criticise unions "who seem hell bent on premature strike action before discussions are even complete".
'Need for reform''Need for reform'
Speaking to BBC Breakfast, Mr Alexander said: "The fundamental point is that if people are going to work longer, contribute a bit more - we can also ensure people's pensions in future at retirement are broadly similar to those at the moment.Speaking to BBC Breakfast, Mr Alexander said: "The fundamental point is that if people are going to work longer, contribute a bit more - we can also ensure people's pensions in future at retirement are broadly similar to those at the moment.
"And I think that is a very fair and balanced offer in the context of the enormous demographic and economic changes taking place in our country.""And I think that is a very fair and balanced offer in the context of the enormous demographic and economic changes taking place in our country."
The prime minister's official spokesman said the government had a responsibility to make its case to those public sector workers who were not members of unions as pension provision was a "long term problem that isn't going to go away".The prime minister's official spokesman said the government had a responsibility to make its case to those public sector workers who were not members of unions as pension provision was a "long term problem that isn't going to go away".
In his final report in March, former Labour cabinet minister Lord Hutton concluded there was a "clear need for reform".In his final report in March, former Labour cabinet minister Lord Hutton concluded there was a "clear need for reform".
He rejected any suggestion that public sector pensions were "gold-plated" but said in order to make them affordable in future, millions of employees should work longer, receive less and have their pensions linked to career average earnings, rather than final salaries.He rejected any suggestion that public sector pensions were "gold-plated" but said in order to make them affordable in future, millions of employees should work longer, receive less and have their pensions linked to career average earnings, rather than final salaries.
Speaking on Friday during a trip to Belfast, Chancellor George Osborne said the government had accepted Lord Hutton's "non-partisan" proposals as a basis for consultation with the unions.Speaking on Friday during a trip to Belfast, Chancellor George Osborne said the government had accepted Lord Hutton's "non-partisan" proposals as a basis for consultation with the unions.
"What I would say to the trade unions is sit down with us, as you are doing, talk to us about how we can achieve a fair deal for people working in the public sector and for the taxpayer. I think we are in touching distance of being able to do that.""What I would say to the trade unions is sit down with us, as you are doing, talk to us about how we can achieve a fair deal for people working in the public sector and for the taxpayer. I think we are in touching distance of being able to do that."
'Serious blow''Serious blow'
But Brian Strutton, of the GMB union, said Mr Alexander's message could be a "show-stopper" for negotiations.But Brian Strutton, of the GMB union, said Mr Alexander's message could be a "show-stopper" for negotiations.
He told BBC Radio 4's Today programme: "What he seems to be saying is the government has already made its mind up on some of the matters we are negotiating on. If that's right, if that's the government's position - that they have decided what they want the answer to be - then it is going to make it impossible for us to stay in these negotiations.He told BBC Radio 4's Today programme: "What he seems to be saying is the government has already made its mind up on some of the matters we are negotiating on. If that's right, if that's the government's position - that they have decided what they want the answer to be - then it is going to make it impossible for us to stay in these negotiations.
And the TUC said the government was announcing its intentions before they had been discussed with the unions. "At such a critical time in complex negotiations this is a deeply inflammatory public intervention," its general secretary Brendan Barber said.And the TUC said the government was announcing its intentions before they had been discussed with the unions. "At such a critical time in complex negotiations this is a deeply inflammatory public intervention," its general secretary Brendan Barber said.
BBC political correspondent Ross Hawkins said some unions were considering whether to pull out of the talks as they sought to clarify whether Friday's proposals meant pension policy was fixed or whether there was room for negotiation.BBC political correspondent Ross Hawkins said some unions were considering whether to pull out of the talks as they sought to clarify whether Friday's proposals meant pension policy was fixed or whether there was room for negotiation.
Labour leader Ed Miliband said the government was "hopelessly mismanaging" the issue, accusing it of pre-empting the findings of the Hutton report and then "shouting from the rooftops" at workers.Labour leader Ed Miliband said the government was "hopelessly mismanaging" the issue, accusing it of pre-empting the findings of the Hutton report and then "shouting from the rooftops" at workers.
"What people want the government to do is to get round the table and sort this out on the basis of negotiation not on the basis of megaphone diplomacy," he said during a visit to Inverclyde. "Both sides have a responsibility to engage in negotiation to prevent the public being inconvenienced.""What people want the government to do is to get round the table and sort this out on the basis of negotiation not on the basis of megaphone diplomacy," he said during a visit to Inverclyde. "Both sides have a responsibility to engage in negotiation to prevent the public being inconvenienced."
Are you a public sector worker? How will you be affected? Send us your comments and experiences using the form below.Are you a public sector worker? How will you be affected? Send us your comments and experiences using the form below.