LONDON: The British government agreed not to go ahead with its plans to raise the retirement age of its civil servants and workers in the public sector, paving way for a deal with the trade unions, which averted a major strike in the country.
Some three million workers were to go on a strike in protest against the government's plan to raise the retirement age from 60 to 65 and to bring in by 2018 a pension scheme based on average earnings instead of the current last drawn salary.
The deal provides for all the existing workers in the civil service, health and education to retire at 60, while employees added henceforth will technically retire at 65, though they will have an early retirement option. The deal, however, does not cover employees of local authorities and talks are continuing separately on this issue.
Trade and industry secretary Alan Johnson described the agreement as providing flexibility for public sector workers, which will mean that experienced employees would not automatically be lost at 60.
The trade unions welcomed the deal and secretary general of TUC Brendan Barber said it is breakthrough describing it as a change of heart by the government.
However, employers and industry have reacted to the agreement saying the government had given in easily. Director general of British Chambers of Commerce David Frost said the government appeared to be adopting one policy for the public sector and government employees and another for the private sector. Sir Digby Jones, director general of the CBI, said the government has succumbed to pressure from the unions.
The government had started proposing changes to the various public service and local government pension schemes last year. While these have different features, a common theme of the government's plans has been a raising of the standard retirement age to 65, aiming to cut the cost of running the pension schemes.
The TUC had at its annual conference in September decided that its 13 different unions, representing more than three million public sector workers, would go on a general strike if the government went ahead with its plans.
Posted
on : Wed, 19 Oct 2005 09:25 GMT | Pensions News
By : Pippa Fielding
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