The chancellor has promised us that her tax rises will be “fair”. That is usually a code for whacking them up, with those with higher incomes seeing the biggest rises.

I support the principle of a progressive tax system — but not when the principle of “fairness” is only applied selectively. And when it comes to public sector pensions, the system we have at the moment could not be more unfair.

That unfairness comes in two ways. Firstly the sheer generosity of public sector pensions compared with what is available in the private sector. While the rest of the country has moved to defined contribution pensions (broadly speaking linking the value of a pension to what has been put in by an employer and employee over a working life), most of the public sector remains on defined benefit schemes.

Those schemes, which have long since been abolished in the private sector, link a pension entitlement to the value of someone’s salary in work. Unlike in the private sector, those sums are then guaranteed, with the employee bearing no risk at all. And they are incredibly generous. Public sector pensions are typically double private sector pensions — and worth even more than that when benefits such as inflation protection are included.

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When the generosity of such pension contributions is taken into account, the remuneration of many public sector employees vastly outstrips those in the private sector doing similar work. According to a paper published by the Institute for Fiscal Studies last year, public sector care home workers get 34 per cent more, auxiliary nurses 25 per cent more and doctors 15 per cent more pay than they would for equivalent work in the private sector.

In other areas the difference is lower: for regular nurses the difference is just 4 per cent. Those figures were calculated before Labour’s £9.4 billion bung to public sector unions last July. We all depend on the public sector but it is funded by the private sector, and we are expanding it at a rate that the economy simply cannot afford. This is why the chancellor keeps coming back with tax rises.

There is another unfairness, which is in many ways even worse. The state does not put aside the pension contributions for its employees to use for their retirement. Instead it uses them to fund the pensions payable to those who have already retired. That means that our vast public sector pension liabilities are unfunded.

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According to the Office for Budget Responsibility, the value of that liability is about £2.4 trillion, around 100 per cent of GDP. It means that, in future, taxpayers will have to fund more than £50 billion of pensions every year.

That is particularly unfair on younger taxpayers. They are already facing the pressure caused by an ageing population in which there are fewer workers to support every retired person. But on top of that they are also having to fund the pensions of public sector workers because (with the honourable exception of local government) the state has been spending rather than setting aside pension contributions.

We are not alone in this: France, Germany and Italy are in a similar position to the UK. Japan and the US have partially funded their public pensions. Among the G7 countries, only Canada has been properly virtuous by effectively funding its public sector pensions, something that will save Canadian taxpayers a fortune over time. It had a similar system to the UK but made some bold reforms two decades ago. They included a modest reduction in benefits, significantly increased contributions and establishing an independent, arms-length corporation to invest any surpluses.

The Canada Pension Plan investment fund now has nearly £400 billion under management, getting average returns of 9 to 10 per cent. It is fully funded with independent, actuarial oversight. It is now able to pay the pensions of Canadian state pensioners in full — and is one of the most respected pension funds in the world. It is also saving Canadian taxpayers a fortune.

What should we do in the UK? It is not possible, or fair, to change the benefits for public sector workers who are due to retire shortly. But for younger public sector workers, the social contract needs to reflect what the economy, and other taxpayers, can actually afford to pay.

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Defined benefits schemes should be closed to new entrants, with recruits to the civil service or wider public sector given defined contribution pensions, as in the private sector.

Inflation protection, one of the most expensive elements of public sector pensions, should be capped in the way that happens in the private sector.

Over time, Canadian-style reforms should be introduced so that we too build up a fully funded pension fund to pay for the pensions of state employees. That doesn’t just remove a major intergenerational unfairness but also makes it more likely that we will be able to afford the health and social care costs of our growing army of pensioners.

The last Conservative government didn’t fix this issue but we did make some progress: defined benefit schemes were changed to offer career-average salaries rather than final salaries and a new, simpler state pension was introduced which avoids the traps associated with means-testing.

It is, however, next to impossible to imagine a Labour government willing to take on the unions with the public sector pension reforms we now need. But when we hear the phrase “fixing the foundations” isn’t that actually what we need?

Jeremy Hunt is the Conservative MP for Godalming and Ash. He was the chancellor of the exchequer from 2022-24 and health secretary from 2012-18