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Danny Alexander: Strike action over public sector pension reform will be a "colossal mistake"

David Woods , 20 Jun 2011

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Unions will be making a "colossal mistake" if they strike next week over public sector cuts and pension reforms, according to treasury minister Danny Alexander.

The news follows Alexander's announcement last week when he said public sector employees would have to work for an extra six years (to age 66) to receive their pension and those earning more than £15,000 in salary would have to pay higher pension contributions.

In an interview yesterday with Sky News Alexander said: "There is a huge amount of room for dialogue," he told Sky News. "Industrial action is a colossal mistake. To go on strike prematurely would be wrong."

Responding to the announcement on pensions, TUC general secretary Brendan Barber said: "At such a critical time in complex negotiations this is a deeply inflammatory public intervention with a clumsy mix of announcements apparently designed to pre-empt the talks, coupled with crude threats that even worse terms might be imposed if unions refuse to acquiesce to this assault on their pensions.

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"Many of the detailed proposals set out by Danny Alexander today have not even been put to the TUC negotiators, and the Government has yet to give a response to specific proposals tabled by the trade union side.

"I have found over many years that if you are seriously trying to build trust to settle a difficult dispute you should talk honestly and openly inside the negotiating room and exercise self restraint outside.

'This speech, and the media-spinning operation around it, has dealt a serious blow to union confidence in the government's good faith in these talks."

Speaking out, the Confederation of British Industry's director-general, John Cridland said the Government must ignore union threats of mass strike action and stick to its guns on reforming public sector pensions.

He said: "Public sector pensions must be fair for employees and fair for taxpayers. That means they must be affordable. It's been widely acknowledged that contributions paid to these schemes do not equal the value of benefits being promised. As we've highlighted, this gap is £10 billion a year, and growing.

"We understand that increasing contributions at a time of wage constraint may be difficult for public sector workers. That's why the Government is right to say it will protect lower earners from the full increase.

"Workers in the private sector have accepted significant changes to their pensions to maintain good schemes. The current dispute doesn't bode well for implementing the essential reforms included in the Hutton report. Once Lord Hutton's proposals are implemented, public sector workers will still have among the best pensions in the UK. Many of the lowest paid will be better off in retirement than they would be in the current schemes.

"The strikes planned for 30th June will cause major disruption for families and businesses. Thousands of parents will be forced to take a day off work to look after their children, leaving businesses in the lurch.

"I don't think the unions have a mandate with such low ballot results. Only 20% of PCS members, 37% of NUT members and just 29% of ATL members supported strike action. Yet the majority of their members, who didn't vote for strike action, will find themselves in a very difficult position and losing pay in the process.

"The CBI wants the 30 year-old strike laws to be changed. We believe at least 40% of the balloted workforce and a simple majority of those voting should support strike action before it happens.

"Workers must also be made aware of the consequences of going on strike. Some will not only lose a day's pay, but lose over-time opportunities for a month if they agree to the ban. This is why ballot papers should include a clear warning that pay and other benefits can be withdrawn if an employee goes on strike."

Meanwhile, in an interview on the BBC'S Andrew Marr Show yesterday, Ed Balls, labour party shadow chancellor accused the Government of "provoking" a confrontation with the unions - leading to strike action - so ministers would have some one to blame for the economic situation.

 

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Public Sector Pensions

Isabel 20 Jun 2011

The public sector unions have always supported the higher paid staff against the interests of the lower paid. E.g. % increases across the board rather than increases that would reduce differentials. Middle management is grossly over staffed and computer systems not effectively used to reduce layers of management. Senior staff complain that they don't get private sector scale pay but are happy to hide behind politicians decisions and let them take the driving seat when convenient. Pension payments to senior staff have been grossly abused - e.g. allowing them to lock AVC's into higher annuity levels before retirement/ transfers to 3 day weeks in other public sector jobs following 'retirement' are common for senior staff. Lower grade staff are not given access to the tricks and not given the golden handshakes for failure. No doubt the unions will try to down- play the advantages for lower paid staff in this deal and argue for 'equity' which with the same pot available will probably mean the lower paid losing out yet again.

generalisations on public sector

Sue 21 Jun 2011

Not sure where Isabel is getting her generalisations from but that is not my experience working for the council that I do.

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