Leading article: Public pensions and private cost

The burden of public sector pension schemes is fast becoming too heavy to bear. Between 2001 and 2007, the Government's liability effectively doubled. Although 20 per cent of British workers are employed in the public sector, they receive 40 per cent of our pension entitlements. Much of that is unfunded and so paid directly by tax revenues.

At a time when private sector schemes are being ravaged by the falling stock market and increased taxation, the costs are unsustainable. So the hints by the Tory leader, David Cameron, that a future Conservative administration would tear down the "pension apartheid" and phase out the most generous public sector retirement plans is a welcome first step. The Government, by contrast, has remained perversely silent on this important issue. The last time it seriously examined it in 2005, the then Pensions Secretary, Alan Johnson, cravenly surrendered to the unions by refusing to adopt Lord Adair Turner's recommendation to raise the public sector retirement age from 60 to 65 and thus slash taxpayers' liabilities. As a result, the cost has spiralled with Monday's pre-Budget report indicating that expenditure on public service pensions will treble by 2010. In an era of rising public debt, the Government should make cuts where it can and so must look again at public pension reform.

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Before it does, however, it must give two commitments. Firstly, a robust and transparent estimate of what taxpayers owe should be made available. There is no clear data on the total long-term cost of public sector pensions. The Treasury's estimate of a £650bn liability, to be paid out over 50 years, is hotly disputed, with some credibly estimating that the real burden could be as high as £1,000bn.

Second, the Government must dispel the impression that it is unable to undertake reform because of Labour's intimate financial relationship with the unions, which have donated tens of millions of pounds to the party's coffers over the past decade. Each time the Government accedes to union demands on pensions, the rest of us get the bill. In the current economic climate, we are in no mood to pay it.