The recession is exposing a “very severe divide now opening up between the public and private sectors”, with state employees enjoying better pay, pensions and job security, the UK’s Taxpayers’ Alliance told the Financial Times on Friday.

The lobby group, which views a smaller state as integral to its campaign for lower taxes, has highlighted pay levels for quango and town hall chiefs as symptomatic of public sector excesses. It is an argument that is resonating with increasing force in Westminster as politicians seek to convince financially-pressed voters their taxes are not being wasted by the state.