Government offers unions new pension deal to avert strike

LONDON (Reuters) - The government offered unions a revised deal on public sector pension reforms on Wednesday, but unions said it was not enough to avert a day of strike action planned for later this month.

Unions representing upwards of 2 million workers have been locked in a bitter dispute with the Conservative-led coalition government over its plans to raise pension contributions as part of austerity measures to tackle a big budget deficit.

Treasury minister Danny Alexander met union leaders earlier on Wednesday, before announcing an offer in which workers would build up their pension 8 percent more quickly than previous proposals, while workers within 10 years of retirement would see no change to their pension.

"I hope on the basis of this offer, the trade unions will devote their energy to reaching agreement, and not to un-necessary and damaging strike action," Alexander told parliament.

"Of course if agreement cannot be reached, we may need to revisit our proposals and consider whether those enhancements remain appropriate," he added.

The unions, who are planning a national one-day stoppage on November 30, said they welcomed the offer and would study it pending further talks, but the current deal was not enough to give workers confidence they would have a decent pension.

Britain's government says pension reform is necessary because people are living longer, the system is no longer affordable and pensions are generous compared with those in the private sector.

The battle over pensions mirrors those being fought in a number of European nations saddled with high public debts and a greying population.

"Unless and until further real progress is made in those negotiations and acceptable offers are made, unions remain firmly committed to continuing their preparations for a planned day of action on November 30," said Brendan Barber, general secretary of the Trades Union Congress.

"We want to reach a position where public service workers can have real confidence that they will have a decent pension on which they can rely on," he added.

Almost a third of a million public sector workers will lose their jobs under government austerity messages and millions of teachers, nurses and doctors are facing a pay freeze.

Prime Minister David Cameron threw his weight behind Alexander's plans.

"Low and middle income earners will be actually getting more from their public sector pensions. Everyone will keep what they have built up so far," he told parliament.

"At the end of all this, people in the public sector will actually still get far, far better pensions than people in the private sector," he added.

(Writing by Mohammed Abbas; Editing by Roger Atwood)