David Prosser: Pensions that melt away

Outlook: If public sector workers are the cats that get the cream in terms of pension provision, spare a thought for staff at Dairy Crest. The milk producer yesterday added its name to the growing list of private sector companies planning to close its final salary pension scheme. Like Barclays, IBM and Morrisons, Dairy Crest says it can no longer underwrite the expense and volatility of a defined benefit fund.

Every time a private sector employer announces this sort of move – and Dairy Crest will absolutely not be the last – it adds to the pressure for public sector pension reform. The cost of these benefits, an unfunded liability in the Government's accounts, is no longer defensible.

And while scaling back the pension benefits on offer to future public sector workers – or even reducing those that existing employees get – will not do much to help the public finances in the short term, ducking the long-term headache is an abrogation of duty.

The divide between public and private sector on pensions is now a question of natural justice. Private sector staff who are no longer entitled to a guaranteed pension can't be expected to go on paying taxes to finance exactly that benefit for those in the employment of the state.