If reining in public sector pay were the toughest decision the UK government had to take in sorting out public finances, we could relax. But this is not the case. George Osborne, shadow chancellor of the exchequer, this week sparked a row with public sector unions by signalling that an incoming Tory government would have to make “difficult decisions in this area”. In fact, far harder choices await the next chancellor, whoever wins the election.

Mr Osborne said an incoming Conservative administration would look again at three-year public sector pay deals “because they may be very inflexible”. Rewriting the ­multi-year deals that currently apply to 1m National Health Service staff and to other public servants such as police and teachers would fritter away political capital. These deals come to an end in 2010-2011 anyway, and the amount saved from tearing them up would be insignificant compared with the goodwill destroyed.