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Tuesday, 20th December 2011

An early Christmas present for the coalition

Peter Hoskin 2:24pm

It has only taken several months of bitter negotiation and a national strike to get here, but a deal between the unions and the government over public sector pensions could finally be in sight. Danny Alexander has just announced the details in Parliament, but basically it seems that, across a range of schemes, the coalition has offered kinder accrual rates than it did in November. And this more generous proposal has now been accepted in principle, or at least not turned down, by 26 of the 28 relevant unions. Among those who still oppose it outright are the PCS, led by everyone's favourite union malcontent, Mark Serwotka.

What happens next, in theory, is that the ‘heads of agreement’ signed over the past two days will be turned into a proper, formal arrangement over the next few months. Some unions will require more time to mull over the fine print; some will need to discuss it with their memberships. The talks are certainly not over, and the coalition will be careful not to ruffle feathers and tempers in the meantime.

That said, the coalitioneers that I've spoken with today seem genuinely pleased at this outcome. Yes, they have made concessions to the unions. But, as they see it, they have also achieved, in the words of Danny Alexander, ‘the government's key objectives in full’ — lowering the cost of public sector pensions to the Exchequer, and along the lines recommended by John Hutton in his original report on the matter. And, what's more, the prospects for a prolonged period of widespread industrial action have now been whittled down almost to naught. Few believe that last month's national strike did the government any real harm, but they were worried about the stress fractures that may appear were it repeated again and again.

As others have pointed out, these latest negotiations have also split the unions, leaving Serwotka largely isolated. So, all in all, a spot of Christmas cheer for Alexander and Francis Maude. Although I wouldn't rest too easily it I were them. The New Year may yet bring more frustration, as the unions debate today's agreement among themselves.

UPDATE: Actually, those frustrations may have started already. As James Kirkup points out, the GMB has just announced that ‘GMB in local government is reconsidering its position regarding the proposed heads of agreement in the light of the new conditions laid down by Eric Pickles today.’

UPDATE 2: As BigC points out below, the letter that disgruntled the GMB was sent out in error, and has now been withdrawn.

Filed under: Coalition (2090 more articles) , Danny Alexander (67 more articles) , John Hutton (9 more articles) , Pensions (53 more articles) , Public sector (118 more articles) , Treasury (226 more articles) , UK politics (5408 more articles) , Unions (143 more articles)

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BigC

December 20th, 2011 3:03pm Report this comment

RE the "UPDATE"... Danny Alexander said this was the result of a letter that was sent in error and had now been withdrawn.

pete-s

December 20th, 2011 3:05pm Report this comment

The only union left is the PCS headed by a Trotskyist, what a surprise!

Mudplugger

December 20th, 2011 3:11pm Report this comment

A far bigger Christmas present for Cameron was the scale of the poll-boost when he 'stuck it to the EU'. The pollsters always claim Europe doesn't score as an issue - that's bollocks, it does now.

Now he has his 'Get Out Of Coalition Free' card up his sleeve - all he needs to do is heat up the anti-EU rhetoric and commmit to an IN/OUT referendum, then the Lib-Dems will immediately vapourise and Labour will evaporate - hello, working majority.

All we need then is for him to mean it - maybe that's the tricky bit. I don't trust him on the EU topic either.

Verity

December 20th, 2011 3:12pm Report this comment

Public sector strikes should be illegal. Public sector workers are already privileged enough.

Singapore doesn't allow public sector strikes. If people don't like the conditions, the are free to hand in their notice. Oddly enough, one does.

dearieme

December 20th, 2011 3:22pm Report this comment

I imagine that I can be confident that the government has committed too much of my money (and my descendants' money) to its employees.

BigC

December 20th, 2011 3:47pm Report this comment

"The only union left is the PCS headed by a Trotskyist, what a surprise!"

A Trotskyist? No. Serwotka is so left wing he makes Trotsky look exceedingly right wing! I left the PCS because of his extremist and unreasonable views.

wrinkled weasel

December 20th, 2011 4:00pm Report this comment

There are three games the government cannot afford to lose; Europe, the economy and the Unions.

Oddly enough it's the MAD option that characterises them all. None of these can go nuclear.

We have some ammunition. There is no public will for strikes and this dispute and its series of disputes place the union fat cats on the level of banking fat cats.

Its a battle of hegemony as all battles are, and like all wars the appeasers delay the inevitable.

The outrageous fact that the public pays for these tyrants to foment dissent and public disorder is nothing short of a scandal.

Baroness Helena Handcart QC

December 20th, 2011 4:34pm Report this comment

Cannot Mr Serwotka be detained on some disputed charge and extradited somewhere cold, much like that other bloomin' nuisance gob on a stick Mr I Inform, You Leak, He Betrays Assange? Either that of a full clip of 9mm behind the ear for both of them. I'm easy about the options, personally.

justathought

December 20th, 2011 4:45pm Report this comment

Another Christmas present from the taxpayer; the Telegraph is reporting that Kweku Adoboli who is accused of unauthorised dealing which may have cost UBS $2.3bn is to receive legal aid.

Chris lancashire

December 20th, 2011 5:10pm Report this comment

There is absolutely no chance of repeated or prolonged public sector strikes - there is zero appetite amongst the workers and considerable public antipathy towards them. The union leaders know this (Serwotka pretends otherwise) and the government negotiators should know it. I hope they haven't given more of my hard earned tax money to buy them off.

William Blakes Ghost

December 20th, 2011 5:25pm Report this comment

It has only taken several months of bitter negotiation and a national strike to get here,

A one day strike by a bunch of teachers, nurses and bureaucrats. Its hardly the winter of discontent or the raging battles around the South Yorkshire pits in the 80's is it?

Like much of what passes as contemporary society most of these Public Service Unions are a sad caricature of their predecessors of a generation ago. In this case they were wrong to consider strike action in the first place. However, by making the wrong move and by capitulating relatively easily they will find it much harder to be taken seriously down the road should a real issue arise and in this economic climate it may well.....

disenfranchised

December 20th, 2011 5:35pm Report this comment

flabby danny, champion of the world!!! according to the torygraph.
with this pensions deal they're getting all christmas-cuddly in cabinet, apparently. more likely been at the cabinet, the drinks cabinet. gawd, what is there to celebrate? public sector pensions are already going to cripple us, no matter what sleight of hand they make now.
when is a politician in this country going to face the full ghastly reality of it all?
certainly not at this time of the year, quite obviously. i'm sure they all believe in santa, like their pals in brussels.....

Dennis Churchill

December 20th, 2011 5:48pm Report this comment

This will be revisited again and again.
The problem is we have an increasingly divided country with regard to pensions. The private sector no longer has generous final salary schemes yet will be expected to fund the public sector ones. At the same time our society is becoming less homogenous which can be seen from the birth statistics for women born in the 1960s who had fertility levels of 1.91 children, one in five having had no children compared with one in nine women born in the 1930s.
The only reason we, unlike Germany and Italy, are not going to experience a population crash, quite the contrary, is immigration.
Will young ethnic minority workers with little or no pension provision of their own be prepared to pay high taxes to fund the pensions of old white Britons?

fergus pickering

December 20th, 2011 6:47pm Report this comment

But WBG my ld chins, the South Yorkshire Miners lost. Their leader was, and is, a fool. Their strike was instrumental in putting the great Maggie in three times. Not much of a result, was it?

anyfool

December 20th, 2011 8:06pm Report this comment

If growth remains weak or shrinks over the next 15 years, on current trends public sector pensions will consume the full GDP of the country, but we will be bust long before then. Danny has just made another promise the lib-dems cannot or will not keep and the tories know this while labour believe any words that come out of their own mouths,

Nicholas

December 20th, 2011 9:07pm Report this comment

All I want for Christmas is . . .

Clegg and the Lib Dems to STFU!

Cromwell

December 20th, 2011 11:24pm Report this comment

This is a lousy deal for net tax payers. Those who support the state through their private sector earnings.

Net tax payers had the pensions playing field disgracefully tilted against them by Gordon Brown and his stealth taxes.

Ably assisted of course by Gordy's public sector cronies.

These public sector pensions were never paid for. They are an IOU on our children and Grandchidlren.

This reflects a lack of leadership by yes politicians but also senior Civil Servants and Public Sector Union leaders.

It is a fundamental point of accountancy that when an obligation is taken on - a provision is made for it. Fundamental everywhere but the public sector.

So because annual salary numbers did not reflect the true cost of pensions, Politicians, Union leaders and Senior Cilivil servants were able to bid up public sector wages and employee numbers over the years.

This of course happened in spades under 'New' labour.

If the full cost had been borne - both wages and numbers would have been lower.

This governent thus misssed a great opportunity when it came into power.

It should have immediatelty
Closed the index linked system - honouring obligations incurred to date
Cut public sector wages by 25%.
5% going as a budget saving to offset the excessive growth under Labour
20% going to individual retirement accounts.

From here on all obligations would be accointed for when they were taken on. Public servants would receive a fully funded 'Money purchase' pension just like the private sector.

Tax payers would face a declining pensions burden as the prtion of fully funded retirees increased.

Nirvana!

Instead the Governemt listened to the people who were the beneficiaries of the current system - Civil Servants - and made a few minor changes around the edges.

They did not fundamentally reform the system or make it self funded.

1 out of 10 Dave

Colin Cumner

December 21st, 2011 6:12am Report this comment

What is needed now is a Tory government with a clear majority over all other parties. This so-called 'Coalition' is failing the country on nearly every front. Churchill's wartime Coalition with all its divergences of opinion over many matters was, by comparison, a marriage made in Heaven.

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