Treasury Chief Secretary Danny Alexander has confirmed details of concessions offered to trade unions as the Government attempts to avoid strike action over public sector pensions.
Alexander (pictured) issued a statement in the House of Commons outlining plans to increase the ‘cost ceiling’ for Government spending on public pensions and provide certainty for people who are close to retirement.
The revised proposals mean that public sector defined-benefit pensions will now be based on 1/60th accruals, rather than 1/65ths as Lord John Hutton proposed in his independent review.
In addition, the Liberal Democrat MP said “transitional arrangements” will be put in place so no one within 10 years of retirement will see any change in when they retire nor any decrease in the amount of pension they receive.
Alexander said: “I believe this package is affordable. I believe it is also fair, not just to public sector workers, but delivers significant long term savings to taxpayers who will continue to make a significant contribution to their pensions.
“If reform along these lines is agreed, I believe that we will have a deal that can endure for at least 25 years and hopefully longer.
“If reform of this sort is agreed, then no party in this house will need to seek further reform of the overall package. This sustainability is an important prize.
“So I hope that the trade unions will now grasp the opportunity that this new offer represents.”
Responding to the statement, Labour Shadow Treasury Chief Secretary Rachel Reeves said: “We welcome today’s signal the Government is now willing to enter into proper discussions. It is a welcome change from the months of intransigence which have come before.”
She added that Labour would judge the success of the negotiations on whether they deliver a settlement which delivers on affordability, fairness and sustainability.
In a statement the Trades Union Congress said: “We welcome this movement in the Government’s position which has come as a direct result of the strength of feeling and determination shown by public sector workers and the groundswell of support for the TUC’s day of action at the end of this month.”