Letter: Fresh ideas to tackle the pensions crisis

But the government has also been typically inept, despite appointing an ex-Labour minister, Lord Hutton, to review the future of public pensions - and even his proposals are not radical enough.

The inequity and unsustainability of all such guaranteed final-salary pensions, or even career-average pensions, in both the public and private sectors, has been clear for at least a decade, from the analyses done by Dr Ros Altman and others; and irrespective of the credit crunch, they would need tough changes.

Last May, the coalition should have introduced a bill with these broad outlines:

• The worst culprit, the MPs' and MSPs' own gold-plated pension scheme, be terminated forthwith, preserving its existing benefits accrued to date, and replaced by a money-purchase scheme such as almost all the private sector now operates, with taxpayer contributions limited to 10 per cent of MPs' salaries.

• Within five years, the basic state pension be increased to the minimum wage level for 18-to-20-year-olds (now around 200 per week) which would also become the tax-free personal allowance; and a new top-up optional contribution be established with the aim of increasing that to the average wage level; both to be funded and ring-fenced to prevent the current deception bordering on fraud by all governments, of raiding pension contributions for current expenditure.

• Within two years, employers' tax relief be terminated on their contributions to the remaining final-salary schemes in the private sector.

This would encourage employers to end such schemes, while preserving existing accrued benefits, and to replace them by money-purchase schemes.

It is such schemes that have led to the nonsenses of the Goodwin-type pensions; it is unrealistic for any company - even John Lewis - employing someone in their early-20s, to be committed to supporting them so generously for quite possibly the next 70 years under current demographic projections, irrespective of social, market and economic developments in that period, and to be partly subsidised by taxpayers to do so; and otherwise more and more companies will follow Dawson International in having more pensioners than employees on their books.

• Also within two years, all public sector schemes be converted to money-purchase schemes, with 10 per cent maximum contributions from taxpayers, realistic employee contributions, and existing benefits preserved.

It is such schemes that led to the similar nonsenses of massive pensions still applying to the top brass (and often lower levels) throughout the public sector, BBC, universities and quangocracy, most of them not funded and therefore a liability on our children and grandchildren - including those of the current protesters.

John Birkett

Horseleys Park

St Andrews

David Cameron is quite clear in what he says about civil servants having to take the pain of reduced pensions plus added contributions as the UK simply cannot afford to continue to fund such pensions.

What he does not say is that all politicians - MEPs, MPs and MSPs - enjoy the very best pensions in the land and can retire after a few years with a sizeable nest egg all funded from the taxpayers' coffers.

Unless we see a fresh review of politicians' pensions in line with the changes and pain that others are being forced to accept, the credibility and trust placed in our politicians will stay at the current all-time low.

Dennis Grattan

Mugiemoss Road

Bucksburn, Aberdeen