Vince Cable said last week that now was a time for calm heads amid increasing tensions between the government and the unions. Negotiations over public sector pensions are at a very delicate stage.
So how come Danny Alexander seems to have provoked the wrath of the brothers this morning? The GMB has called his comments a “show-stopper”. Unite has called it “gunboat diplomacy”.
Even mild-mannered Brendan Barber of the TUC has stepped in angrily, saying:
“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.”
It’s worth examining what Alexander’s comments. He will promise in a speech this afternoon (at the IPPR) that the lowest-paid workers (under £15k) will be protected from the worst of the rise in pension contributions, as the FT reported this morning.
Another half a million workers will have contribution increases limited to 1.5 per centage points. And overall there will be a cap of 5 percentage points, meaning the average public sector worker will be paying an extra 3 percentage points of their salary towards their pension.
The broad numbers shouldn’t have been a surprise; and the mitigation for low-income workers ought to be welcomed by the unions.
The reason for their anger is the perception that Alexander has presented a fait accompli just at the wrong point in the negotiations. UPDATE: Downing St this morning insisted that the numbers are still “proposals”.
They are also furious about the headline accompanying his article in the Daily Telegraph: “Strike and pensions will suffer.”
That, obviously, sounds a lot like a dark threat. In fact, the chief secretary to the Treasury was making the point that if the issue of overly-generous (their term not mine) public sector pensions are not reformed now there could be deeper pain at some unspecified future date. That’s subtly different.
Incidentally, Ed Davey – who is the minister responsible for employment laws – is still striking a conciliatory note. (Although we recently revealed that he was pressing for minimum service agreements with unions).
The fellow Lib Dem MP is quoted in People Management Magazine saying that it would be “odd” for unions to like job losses and cuts to their pay and pensions. “Taking on the unions through the statute book is not the policy of the government, and for good reason.”
Jim Pickard
Kiran Stacey