Public sector strike could scupper pensions deal, warns Danny Alexander
Chief secretary to the Treasury urges union leaders to persuade members the offer on the table is a 'good and generous one'
Union leaders risk losing out on a deal on public sector pensions for their members by "marching them up the hill" in a mass walkout next Wednesday, the minister leading negotiations has warned.
In an interview with the Guardian, Danny Alexander, the chief secretary to the Treasury, urged trade union leaders to "show leadership" by persuading their members that the offer on the table is a "good and generous one".
His words will be seen as a last ditch attempt to stave off what is expected to be the biggest strike in decades, involving 33 unions representing 2.6 million workers.
"I really believe that a deal is within our grasp," he said. "I think that we absolutely can get to an agreement on the future of public service pensions and what frustrates me a lot is that we're having these discussions centrally with the TUC and in individual schemes and they're making progress, actually.
"The strike action in a sense is both a distraction to that process and also a risk to it in the sense that, obviously, part of going on strike will harden opinions on the union side and might make it harder for them to sell a deal to their members when in fact I think we've got the basis of an agreement that is a pretty good deal for both sides."
Alexander made his comments in a week that saw David Cameron urge union members to defy their leaderships next Wednesday and go to work as normal.
The government argues that the proposed changes will see low and middle earners receive a pension "at least as good if not better than now", while unions say that members will pay more and work longer for a worse deal at the end.
Alexander, who has been heading the talks on behalf of the government alongside the Cabinet Office minister Francis Maude, said the decision to strike in the middle of negotiations and after a "better offer" had been tabled was "ut! terly bi zarre" and suggested a leadership failure among the unions.
Unions say it was the balloting of their members that jolted the government into improving its offer at a late stage, and that some scheme-specific talks have not taken place since the offer was announced. They say they have been left with no option but to strike because ministers have yet to provide the necessary details.
Alexander made clear the government would not blink first and insisted that the offer on the table was the best it could make given the money available. In fact, he said, the offer could go backwards if the strike went ahead. "It will take leadership from the union side because they have built up their rhetoric, they've built up the political positions they have taken.
"I believe that many unions I talk to are serious and sincere about their desire to reach an agreement, but they are obviously going to have to persuade their own members who they've marched up this hill that in fact the agreement and the nature of the deal on offer is a good one."
Alexander says the improved offer involves two significant changes enhanced accrual rates for the new pension schemes and protection from pension changes for anyone within 10 years of retirement. But he warned: "I reserve the right to take those enhancements off the table if an agreement can't be reached.I don't want to do that. I don't want to be in that position. I want to be in a position where we have got an agreement."
Alexander claimed this week the strike could cost the economy 500m in falling output a claim dismissed as "fantasy economics" by the unions and an attempt to scapegoat public sector workers for poor growth. Maude told journalists at the same briefing that the strike could lead to job losses because of lost output. Alexander distanced himself from the latter claim when asked to comment on whether citing job losses was nothing more than scaremongering to persuade members to cross the picket line. "I didn't set out a jobs figure," the L! iberal D emocrat minister said pointedly. "I set out a figure on the impact on the economy. Half a billion pounds could be lost to the British economy. That is a serious hit to the economy as a result of the action."
One important point of disagreement with the unions is over a proposed rise in workers' contributions over the next three years, averaging 3.2 percentage points, to save 2.8bn by 2014-15, which is separate from long-term changes. Unions say this is nothing more than a cash grab by the Treasury. The first phased-in increases will kick in next April and coincide with the second year of a public sector pay freeze, job losses, and inflation currently at over 5%. Alexander said unions had already agreed with the previous government an increase in contributions worth 1bn next year under a "cap and share" agreement.
To soften the blow, he announced last July that those paid less than 15,000 would be protected from any rise. Those earning less than 21,000 would see their contribution rise set at no more than 1.5 percentage points, while those in the top echelons will see contributions rise by up to points. He revealed it was decided a few weeks ago that cabinet ministers, who earn a combined ministerial and parliamentary salary of 134, 565, would see their contributions rise by the maximum. "I hope they have all been told," he laughed a little nervously.
Unions representing Whitehall civil servants are among those taking strike action next week. Alexander says that there is bound to be some level of disruption in government, but he is not expecting tumble weed to blow through the treasury on Wednesday because most people working in his department are not trade union members.
Alexander said the disruption could see him bring his four-year-old daughter to work. "Certainly her school is going to be closed, I guess like most schools around the country, unless some of the unions change their minds."
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