Pensions Deal In Doubt As Unions Backtrack

Three major unions have accused Eric Pickles of "undermining" a provisional new deal on public sector pension reforms and have suspended their earlier agreement.

The GMB, Unison and Unite backed out just hours after signing up in principle to "heads of agreement" over changes to the payouts.

Chief Secretary to the Treasury Danny Alexander had earlier told the Commons that 26 out of 28 unions backed the new offer in what appeared to be a significant breakthrough.

The changes would mean a shift to a career average arrangement with public sector staff working longer and paying higher contributions, MPs heard.

Mr Alexander insisted it was a "fair deal" and claimed it would save the taxpayer "tens of billions of pounds" in decades to come.

Speaking in Afghanistan, Prime Minister David Cameron added: "I'm pleased to see some of the trade unions look like they have settled in terms of the public sector."

But there was confusion over a letter issued by Mr Pickles, the Local Government Secretary, which apparently sought to impose new conditions - including limiting employer contributions

The Government immediately said the letter had been withdrawn and Mr Alexander made clear "it is not a position that has been agreed", but the unions were not satisfied.

In a statement, the three said: "The Local Government Trade Unions have been surprised by the response from Eric Pickles today to the joint proposal from the unions and Local Government Association for reform of the LGPS.

"We understand the Secretary of State's response has subsequently been withdrawn. In light of this confusion we therefore suspend our agreement and now seek an urgent meeting with government to establish an agreed way forward."

Brian Strutton, GMB National Secretary for Public Services, added: "The proposed way forward for the LGPS, worked out by unions and council leaders, had been shared in advance with government and no problems had been raised.

"It is therefore all the more surprising that as Danny Alexander was announcing our agreement to the House of Commons, his Cabinet colleague Eric Pickles was completely undermining it. I think we need to restore trust and confidence urgently."

The new plans had also already been rejected by the Public and Commercial Services Union (PCS) who argued that "nothing had changed" since last month's strike.

General secretary Mark Serwotka said: "We continue to oppose the Government's attempt to force public servants to pay more and work longer for less.

"Public servants should not be forced to pay off a budget deficit caused by the greed and recklessness of bankers and exacerbated by the Tory-led government's economic incompetence."

Mr Alexander said the rejection by the PCS was "deeply disappointing".

A Cabinet source later told Sky News that the PCS had not turned up for Monday's talks and would now not be invited to "any further discussions to agree the final details" of the schemes.

The PCS said it would take legal advice over being "excluded" from the talks, pointing out that the Government has a legal duty to include all unions under the 2010 Superannuation Act.

Talks between Whitehall officials and unions representing the four public sector pensions schemes covering the NHS, teaching, local government and the civil service were called in an attempt to find a breakthrough before Christmas.

Unions were reportedly earlier given the go-ahead to reach an agreement in each of the four individual schemes rather than wait for a single deal covering the whole public sector.

TUC General Secretary Brendan Barber said earlier: "Certainly in two of the sectors there is a strong sense that progress has been made - local government and health.

"But I want to emphasise very strongly, to be crystal clear, at this stage no agreements have been reached.

"In all of these areas, these points of potential agreement have to be taken back to union executives and the appropriate body within each union."

Before the latest twist, Prospect , the second-largest civil service union, said it was putting a deal for its members to a union committee, and Unison said it would put an outline agreement for health sector workers to its officials.

Under the health scheme proposals, staff less than 10 years away from retirement would not face any change to their pension and those earning less than £26,000 would be protected from an increase in contributions next year.

Also included is a pledge to consult over the impact of these changes on staff in the emergency services, including paramedics, as well as a commitment to allow those transferred out of the public sector to retain their right to stay in the pension scheme.

Christina McAnea, Unison's head of health, said: "On some issues, such as contribution rates for the low-paid next year, and for people close to retirement, we have made progress.

"On others, we always knew this would be a damage-limitation exercise aimed at reducing the worst impacts of the Government's pension changes."

However, the education pensions talks appeared to have been less successful, with the National Union of Teachers (NUT) saying it "was not able to sign up to the Government's headline proposals".

Christine Blower, NUT General Secretary, said: "There was insufficient progress in terms of the Government's position that teachers should work longer, pay more and get less."

Mr Alexander stressed the current deal is the Government's "final offer" and said legislation would be drafted ahead of a Bill being introduced in the next session of Parliament.