Pension legislation to go ahead

The Government is pressing ahead with legislation to enact its controversial public sector pension reform in the new year, even though an agreement has not been reached with unions to end the bitter dispute.

Ministers made clear they had made a final offer, saying it was a "fair deal" for workers and the taxpayer, which would save billions of pounds in the coming years.

Chief Secretary to the Treasury Danny Alexander told MPs that "heads of agreements" had been reached with most unions during lengthy negotiations covering local government, NHS, civil service and teaching pension schemes.

But a number of unions said they will not be signing up at this stage, the biggest civil service union took legal advice over claims it was "excluded" from talks, and a last-minute row blew up over the local government scheme.

The GMB warned it would reconsider its position after new conditions had been laid down in a letter from the department run by Local Government secretary Eric Pickles.

Mr Alexander said later that the letter had been withdrawn, adding: "It is not a position that has been agreed. A replacement letter will be issued."

He told the Commons that the changes to pensions delivered the Government's key objectives of amending them to a career average arrangement, leading to public sector staff working longer before they receive a pension and paying higher contributions.

Heads of agreement have been reached with the NHS Pension Scheme, the Principal Civil Service Pension Scheme, the Teachers' Pension Scheme and the Local Government Pensions Scheme, based on an improved offer made on November 2, said Mr Alexander.

The agreements all deliver on the approach set out in a report by former Labour minister Lord Hutton, with further work on the remaining details set to take place in the new year.

Most unions had agreed to suspend any further industrial action while the final details are resolved and they consult their members, said ministers.

"In all cases the enhanced cost ceilings set on November 2 remain unchanged and no additional money has been made available. These agreements deliver the Government's key objectives on linking normal pension age to the state pension age and moving to career average schemes.

"While most workers will still have to work longer and pay more, most low and middle earners working a full career will receive pension benefits at least as good, if not better, than they get now," said a Government statement.

Mr Alexander said: "We and the unions agree that this is the best outcome that can be achieved through negotiation. For our workforce, it means they will continue to receive the best quality pensions available in this country. This is a proper reward for a lifetime's commitment to serving the public.

"These agreements deliver the Government's key objectives in full, and do so with no new money since our November offer. These reforms will save the taxpayer tens of billions of pounds over the next few decades and significantly improve the long-term fiscal sustainability of this country.

"This is a fair deal for public service workers, an affordable deal for the taxpayer, and a good deal for the country."

The Public and Commercial Services union said it was taking legal advice over being "excluded" from the civil service talks, adding that the Government had a legal duty to include all unions under the 2010 Superannuation Act.

Cabinet Office minister Francis Maude said the Government had fulfilled its obligations by holding months of talks.

The future of the teachers' pension scheme remained unclear after some unions agreed to take the Government's offer to their members and others held off.

The National Union of Teachers (NUT), the NASUWT, the University and College Union (UCU) and Welsh teaching union UCAC all confirmed that they will not be signing up at this stage.

But the Association of Teachers and Lecturers (ATL) and the National Association of Head Teachers (NAHT) said they will take the revised proposals to their members, with the latter stressing that there is no deal yet.

Dr Hamish Meldrum, chairman of council at the BMA, said: "While we acknowledge that the Government clearly states that this is their final offer, and whilst it is a modest improvement on their original proposals, we have not accepted it. Along with the other health unions, we agreed that this was the best that could be achieved by negotiation at this stage. We told the Government that we will consult our members on the offer."

Mr Alexander said legislation would now be drafted ahead of a Bill being introduced in the next session of Parliament.

:: Speaking during a pre-Christmas visit to troops in Afghanistan, Prime Minister David Cameron said the Armed Forces had received a specific exemption from higher pension contributions, adding: "I'm pleased to see some of the trade unions look like they have settled in terms of the public sector."

PA