Government set to offer pensions deal

The government is expected to try to end a long-running dispute over pensions reform which would affect two million local authority workers.

Unions have threatened to ballot for strike action if a deal cannot be struck during talks with deputy PM John Prescott.

Currently, the local government pension scheme lets some workers retire early, but this is set to change. Unions say staff must be protected if the pension age is standardised at 65.

Employers and ministers feel new age discrimination laws coming into force next October will mean the scheme has to be scrapped.

Unions, however, are demanding workers in their 50s be protected if the pension age is standardised.

A possible solution would see older workers qualify for a cash lump sum and lower pension if they wanted to stop working early, reports suggest.

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