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Alistair Darling's rescue Budget package did, as this column suggested last week, raise taxes on high earners. Hiking the top rate for those earning £150,000 a year from 40 to 45 per cent won't raise an enormous amount of money in the grand scheme of things, but it is an important piece of symbolism, indicating that the government is seeking to make the better-off do some of the heavy lifting to get the books - eventually - back into balance.
A far trickier, though equally important, area was left untouched, however: public sector pensions. Experts have been warning for several years that spending in this area is unsustainable, particularly after 600,000 public sector workers have been recruited since 1997 - a sentiment echoed last week by the well-respected Liberal Democrat Treasury spokesman Vince Cable.
Tory leader David Cameron went for the jugular, with a deliberately provocative vow to end 'pensions apartheid' by scrapping the final salary schemes offered to public sector workers and replacing them with stock market-linked plans. It is a policy that puts him on a collision course with furious trade unions, though at least he has done the decent thing by saying he will start with MPs' generous arrangements.
The cost of public sector pensions is revealed in the back pages of the pre-Budget report, where only the most dedicated geeks have the will to venture; the figures show that the bill is expected to rise by almost £1bn next year to £3.8bn. Taxpayers' total liability is reckoned to be anything between £650bn and £1 trillion, depending on which expert you talk to.
Workers in the public sector understandably feel deeply aggrieved at the attacks on their retirement nest-eggs, routinely described as 'gold-plated', pointing out that many recipients work hard in low-paid jobs, and the sums on retirement are modest.
Unfortunately, millions of private sector workers also consider themselves underpaid and overworked - but can expect even less. Only 16 per cent are in final-salary schemes, compared with 90 per cent in the public sector, and employees live with the insecurity their employer might collapse, as Woolworths did last week, with a huge deficit in its pension plan. The Pension Protection Fund set up by the government gives a safety net, but there are fears its coffers will not be deep enough to withstand a wave of bankruptcies.
Millions of workers have seen their final salary pensions closed down and replaced by stock market plans; tens of thousands of others have had their funds sold by the parent company to buy-out operators. As for those who have opted for a personal pension, an insurance company chief executive pointed out to me last week that a typical annual payout is only a couple of thousand pounds a year. Worse still, large numbers have made no provision at all, either because they cannot afford to save or have been relying on the value of their home - hardly the best strategy in current housing market conditions. Asking these private sector toilers to pay through their tax bill to carry on financing public sector retirement will be an increasing cause of resentment, particularly in a recession.
The government has attempted to reform public sector pensions, but its efforts, for example to raise the retirement age for civil servants and NHS staff, have not come to much and are not yielding much in the way of cost savings. Yet the bill for providing all types of pensions will swell as we live longer. The redoubtable Joan Bakewell suggested recently that people these days still count as middle-aged until they pass 70; economist John Llewellyn, in a report published by Japanese bank Nomura, claims it is not appropriate to consider a person 'old' until they are nearly 80.
Cameron's throwing down of the gauntlet will not win him any friends among nurses or teachers, but he has identified a weak spot for the government. This is an issue that can only become more divisive.
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