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Government’s NHS pensions offer angers unions

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by Jan Harris
Government’s latest pensions offer angers unions

The government has announced changes to its pensions offer for NHS staff, which it claims are an improvement designed to protect low-paid employees, but which unions claim is a tax on middle-earners.

Last week up to two million public sector workers went on strike over the government’s plan to increase the amount they will have to pay towards their pensions.

Workers would also have to retire late and move to a “career average” pension rather than a “final salary” scheme under the government’s proposals.

Keen to avoid a repetition of last week’s situation, when 400,000 NHS workers walked out leading to hospital operations being cancelled, the government hopes its ‘improved’ offer on NHS pensions will help bring an end to part of the wider public sector pensions dispute.

Under its latest offer 530,000 NHS staff earning between £15,000 and £26,557 would not have to pay higher pension contributions next year.

Under the previous offer, only workers earning less than £15,000 were protected from having to pay higher contributions.

However, under the latest offer, employees earning between £26,558 and £48,982 would be expected to contribute 8 per cent of their monthly salary next year, up from 6.5 per cent now.

Workers on salaries between £48,983 and £69,931 would have to contribute 8.9 per cent, while those earning between £69,932 and £110,273 would have to contribute 9.9 per cent.

Health Secretary Andrew Lansley said: “Having listened to staff and stakeholders, we have improved our proposals so that an extra 630,000 NHS staff will not pay any more into their pensions next year.”

Commenting on the latest offer, the Unite union’s assistant general secretary Gail Cartmail said: “The harsh reality of what the government is pushing is that middle earners will be the ones paying for these impositions.

“This is a tax on those workers, plain and simple,” she said.

Yesterday, the Chancellor George Osborne announced plans to end to national pay rates for teachers, nurses, prison officers and civil servants by April 2013, in order to tie public sector wages more closely to the cost of living.

This could mean a pay cut of up to 10 per cent for public sector workers in poorer parts of the country, where private sector staff are currently paid significantly less.

Figures from the Institute for Fiscal Studies suggest that the pay differential between the public and private sector could be 10 per cent in some parts of the country.

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News posted: December 8, 2011

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