The government has reached a tentative deal on pension reform with most public sector unions, treasury minister Danny Alexander said on Tuesday, easing fears of further strikes after a mass walkout last month.

Union executives and members will study the details of the proposals, part of the deficit-cutting coalition's efforts to reduce the cost of state sector pensions, which it says are unaffordable.

The unions are expected to respond early next year to amended proposals that the government said were cost neutral.

I am pleased to report to the House that heads of agreement have now been established with most unions in the local government, health, civil service and teachers' schemes, Alexander told parliament.

The power of Britain's trade unions was curbed by Margaret Thatcher's Conservative government in the 1980s, but the public sector remains one of their strongholds.

Alexander said 26 of 28 unions had signed up to an agreement in principle. However, it was unclear Tuesday evening that so many unions had signed up.

The Public and Commercial Services Union (PCS), which represents civil servants, has rejected a deal outright and several teaching unions, including the largest, the National Union of Teachers, said they would not sign.

A further hurdle appeared late Tuesday threatening a separate deal over pensions for local government workers, when three big unions said they had suspended their agreement with the government because of confusion over new conditions that had apparently been imposed by a minister at the last minute.

The GMB union, Unison and Unite said they were seeking urgent clarification, but the government immediately responded that there had been an official mistake and it was talking with the unions concerned to resolve the misunderstanding.

Cabinet Minister Francis Maude earlier said some details remained to be resolved in the overall deal, but nothing fundamental. Alexander, standing alongside him, appeared to close the door on any major amendments to the deal.

The negotiations ... are now concluded. This is the government's final position. Us and the unions agree that this is the best position that we can reach through negotiations, Alexander said, adding that he was already drafting legislation for new public service pensions to be introduced next year.

The PCS, which says it is Britain's fifth largest union, said singling it out as the main obstacle to the government's proposals was unacceptable bullying.

Further industrial action will be necessary in the new year if the government continues to refuse to negotiate on the main issues, the PCS said in a statement.

Many public sector workers blame the financial services industry for Britain's shaky public finances. Unions say the pension changes will force people to pay more for pensions that will be worth less.


The government, trying to turn around a debt-laden economy on the brink of recession, says reform is needed as people are living longer and public service pensions are unaffordable.

We should be really clear that we reached this point despite the strike action on November 30, not because of it, Maude said. That was wholly unnecessary and irrelevant. It was a distraction ... Strike action doesn't work.

No new money was offered to the unions as a result of the strike and the adjustments made to the government's proposals in response to union demands were cost neutral, Maude said.

Earlier Tuesday, General Secretary of the Association of Teachers and Lecturers (ATL) Mary Bousted told the BBC her union had agreed to put the deal to its leadership for approval and would survey its membership for their opinion.

If you ask me 'What do I think of the deal?', I think it's probably the best we can get through negotiation, she said.

Her stance, and that of other unions who have accepted the government's proposals in principle, could take the wind out of the sails of other unions that are calling for more strikes.

Hundreds of thousands of public sector workers went on strike last month over the government's pension proposals.

Union anger has been fuelled by new curbs on public sector pay and hundreds of thousands of additional job cuts outlined last month when the Conservative-led coalition government cut its economic growth forecast and said its tough austerity program would last until 2017.

(Additional reporting by Stefano Ambrogi; Editing by Peter Graff and Ben Harding)