THE PROSPECT of widespread industrial action looms following the publication yesterday of plans that would require 2.5 million British public servants to pay significantly more in pension contributions from next year.
Under the scheme, next year civil servants would pay £180 million more; teachers an additional £300 million; and staff in the National Health Service an extra £530 million. Larger contributions would be required in the years following.
Three-quarters of a million public servants earning less than £15,000 are exempted from higher contributions; many of those earning between £15,000 and £21,000 would pay 0.6 per cent more of gross salary in pension payments and one million staff would pay 2.45 per cent more.
The department of education, fearful that public pension schemes could be threatened by mass resignations, has proposed that teachers would not pay more than 0.6 per cent extra until they earn more than £26,000.
Unions, which have been in negotiation with the government on the issue for months, have held one mass demonstration in London. Their leaders have now warned that a series of all-out strikes are likely.
Public and Commercial Service Union general secretary Mark Serwotka said: “[These] proposals show that the government has made its mind up and is not negotiating seriously. It makes a mockery of the ongoing talks.
“The government talks about the need to make changes to help reduce the deficit in four years. But these changes would be permanent – a life sentence for civil servants,” said Mr Serwotka, who has been one of the most vocal union leaders against spending cuts.
Nurses were equally angry. The Royal College of Nursing’s general secretary Peter Carter said ministers had thrown up an agreement “that would have led to increasing affordability in public sector pensions.
“That agreement would have delivered long-term savings. It appears that nurses and other public servants are now bearing the brunt of a financial crisis caused by reckless risk-taking in the banking sector.
“Hard-working nurses are in the middle of a two-year pay freeze, inflation is soaring and they now face the prospect of paying more money into their pension next year for no additional benefit.
“It is the start of a process that will increase contributions even further and make nurses work until they are dropping on their feet. All this is likely to have a devastating impact on the morale of dedicated nurses,” he said.
Besides facing higher contributions, public service workers will no longer be sure of their final pension entitlements.
Ministers wish to scrap the current final-salary pension scheme, where calculations are based on the last year’s earnings together with length of service.
Under the replacement offer, workers would get a career average revalued scheme where the pension benefit earned for each year would be based on the salary in that year rather than on the final salary. It would then be subject to a revaluation that introduced uncertainty into the final figures.
Older workers nearing retirement will not be affected by the new rules, while pension benefits that have already accrued for existing staff up to the 2015 start date for the new system will not be touched, ministers have guaranteed.
