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Accept cuts or we'll target pensions, David Cameron warns unions


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UK Telegraph:

David Cameron will use the threat of cuts to public-sector pensions as a bargaining tool to counter trade union unrest over massive reductions in spending.

The Prime Minister’s advisers believe that widespread industrial action can be avoided if public sector workers are offered a deal over pensions.

The Coalition this week set out plans to cut almost £100 billion from public spending over five years, freezing pay for millions of public sector staff and sacking thousands of others. Unions have warned of coordinated strikes and other protests to resist the cuts, which experts have predicted could result in 700,000 people losing their jobs.

Adding to union anger, the Government is also seeking to cut the cost of what Nick Clegg, the Deputy Prime Minister, has called “gold-plated” public sector pensions.

Some senior figures, however, believe that the prospect of a deal on pensions could be used to lessen union opposition to spending cuts elsewhere. One idea is to give the unions seats on a review of public sector pensions led by John Hutton, the former Labour Cabinet minister. With official figures showing that the cost of funding state pensions will more than double to £9.4 billion in five years, public-sector employees could be asked to pay higher contributions for the same level of retirement income.

Richard Balfe, Mr Cameron’s trade union “envoy”, suggested that pensions could be used as a “lollipop” to soften union anger.

He told The Daily Telegraph: “Public-sector pensions are like lollipops for kids. You decide what sort of lollipop you’re going to give, and then you work out how you are going to pay for it. It’s perfectly possible to maintain public-sector pensions at their current level, if you make some fairly modest alterations to employee contributions.”

He added: “Public-sector pensions will clearly be a very significant issue in the wider relationship between the Government and the unions. I hope they can be persuaded of that.”

Would that our own politicians had Cameron's courage.
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