British trade unions and the government clashed on Wednesday as unions threatened millions may strike over pensions and the ruling Labour Party's proposals to raise the retirement age for civil servants.
Union bosses said that the government had underestimated people's anger in formulating plans to change pension schemes as it struggles to deal with an ageing population and the inevitable pinch on the public finances.
"It has united the trade union movement in a way that we have not seen in many, many years," Public and Commercial Services union head Mark Serwotka told reporters at the annual Trades Union Congress in Brighton, southern England.
Serwotka said any showdown wouldn't come until later this year and after much negotiation. But he warned: "If the government imposes an increase in the pension age my view is that industrial action is absolutely inevitable."
Pension reform looks set to be a major political battleground later this year as the government will have to address the thorny question of compulsory savings.
European governments are also struggling as state funded benefits in countries such as Italy, Germany and France come under severe budgetary pressure.
UK Secretary of State for Industry Alan Johnson told the TUC on Tuesday that while the government does want to eliminate the "retirement at 60 ethos", it was seeking a flexible arrangement so that many people may choose when they retire.
"But we can only deliver this within a scheme that is capable of withstanding the demographic changes that are bound to have a radical effect on pension provision," he said.
A string of high profile failures, mis-selling scandals and the 2000-2002 bear stock market which wiped billions off company-run retirement schemes have put pressure on politicians to deal with what many call a looming pensions crisis.
Adair Turner, chairman of a pensions commission due to issue a key report later this year, portrayed any solution as a "trade-off" and suggested in a speech that it will fall well short of union demands for mandatory pension contributions.
The TUC has been pressuring the government to make such contributions mandatory and published a study this week that showed that only one in four private sector workers in Britain has a work-based pension.
"On compulsion, quite as much as on state pensions, taxation and pension ages, there are no easy answers," Turner said. He warned union delegates that economic theory shows that over time, forcing employers to make pension contibutions tends to come at the expense of workers' wages.
But unions, which have struggled in recent years with recruiting new members and have seen their political clout erode, have made it clear they won't back down.
Earlier this year public sector unions nearly staged a national strike that would have affected 1.5 million workers over the retirement age but called it off only when ministers returned to the bargaining table at the eleventh hour.
Bosses and delegates from 13 unions met on Tuesday night to give a sign of unity over pensions, which Serwotka said could result in more than 3 million people walking off the job.
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