Why do we still retire people in their prime?

RECENTLY, I invited an old university friend to a New Year party at my home. She politely declined, citing the fact that she and her husband were now retired - from public-sector jobs - and didn’t feel up to a raucous time chez Kerevan. If I tell you that we both graduated in 1972, and are in our mid-fifties, you will appreciate my being shocked.

Shock soon gave way to several uncharitable thoughts. First, as public-sector pensions are paid for by those of us still in work, I felt a tang of resentment that I was funding her long holiday. She is not the only one of my generation to have hung up their coat and retired early on the cash I send every month to Chancellor Brown. In the UK, fewer than half the men of my age are still in a job, and across the EU, only 39 per cent of those aged 55 to 64 are in work.

Any nascent jealousy was stifled by another thought: why on earth would any sane person in their youthful fifties want to retire, when there are companies to be founded, books to be written, political parties to be created, scientific discoveries to be made and money to be minted?

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Churchill was a sprightly 66 when he first became prime minister and saved the country. Roy Thomson was a mere 60 when he turned up in Edinburgh from Canada and proceeded to buy The Scotsman and the Times, as well as found Scottish Television. And both last year’s winners of the Nobel Prize for economics are over 60, which means I’ve still time yet.

So you will understand why I am bemused by the decision of Britain’s major trade unions, Unison and the T&G, to ask hundreds of thousands of public-sector workers to strike over the government’s plans to raise the official retirement age for local-government employees from 60 to the 65 which applies to most private-sector workers. Expect the first one-day action on 23 March.

The government’s reason for wanting the later retirement age is to hold down the spiralling cost of public- sector pensions - that’s the bit you and I subsidise via our taxes. It’s not often Gordon Brown wants to keep down my taxes, so you can bet he wouldn’t be upsetting the trade unions unless the public-sector pension bill was about to go nuclear.

I am sure the unions will get a good response to their strike call. I can see why many teachers (like my friend) are only too desperate to escape their ill-disciplined charges, in the sink comprehensives bequeathed to us by the great failed comprehensive experiment. Yet I remember a time, in my Glasgow youth, when the schools were filled with teachers long past retirement age, who had come back voluntarily to the classroom to instil wisdom in we teenage baby-boomers.

Teaching is something an 80-year-old could still do, and probably better than a raw recruit of 22. In the best of circumstances, why would you want to give up a teaching career, just when you’re getting good at it, for the Mogadon of sitting in front of Countdown?

Why aren’t our teachers striking for retirement at 70 or 75, rather than fighting for the right to live on a modest pension during the prime of life? If the real problem is the terrible state of our schools, why not go on strike for something sensible, like better classroom discipline?

Of course, the March strike against retirement at 65 will fail. The government is picking on the public sector first because (1) it knows it can win; and (2) because Tony Blair is only too happy to bash the unions just before a general election.

However, all this is only a prelude to the government raising the official retirement age for everyone. Gordon Brown’s biggest cock-up since becoming Chancellor was abolishing the tax incentives that underpinned final-salary pensions in the private sector. The resulting collapse in private pension provision leaves Gordon having to pick up the bill, which he doesn’t want to do. Ergo, make everyone work longer before they are eligible for a state pension.

Interestingly, the government’s first attempt at raising the retirement age for everyone has just gone off half-cocked. The cunning plan had been to use the EU edict to introduce legislation to outlaw age discrimination by next year to slip in mandatory retirement at 70. But manufacturers objected. Some 90 per cent of manufacturing companies wanted the state-pension age to remain at 65, doubtless because they think (erroneously) that they need cheap, nimble young fingers to beat the Chinese. I’d suggest older brains and better machinery, myself.

AS A result of this resistance, the government has backed down. Companies will still be able to set fixed retirement ages for their staff after 2006, with 65 the norm. Individuals will have the "right to request" to work on past 65, but don’t count on it unless you’re up for an employment tribunal.

But this retreat is only temporary. Not raising the pension age could bankrupt the Treasury. Others have already bitten the retirement bullet: the US has effectively scrapped compulsory retirement, the positive effects of which will kick in over the next few decades. Germany and France, both with a de facto retirement age of 60, are in worse trouble than either the US or the UK.

Here in Britain, the arrival of lots of tax-paying young immigrants might give the Treasury a breathing space, but Gordon still wants you to work till you are 70 (by which age he may have been in No 10 for around 15 years).

I think Gordon Brown should be held to account for his pensions disaster, and I think tax incentives for company pension schemes should be reintroduced. But I don’t think we should fear any such rise in the mandatory retirement age. Indeed, I would go further and scrap altogether the legal compulsory retirement age - something even the ultra-conservative Institute of Directors is also advocating.

The arguments for a legal retirement age are not without merit: it creates a career space for the next generation, and it makes it easier for employers to get rid of staff who no longer deliver of their best. On the other hand, with a sharply declining population, there will be no shortage of job opportunities or promotion prospects for the young. And why penalise everyone with a mandatory retirement age if all you need to do is have older workers pass an annual fitness examination?

Besides, the real reason people are desperate for early retirement is the boredom of their existing work situation, especially in the public sector. Much of this is down to a bureaucracy that saps personal initiative; to the politically-correct brigade who have turned our schools into academies for failure; and to myopic trade unions who oppose the very efficiency reforms that could raise wages and incentives in public jobs.

Karl Marx, who worked hardly a day in his entire life, was wrong to say that work is alienation and exploitation. Rather, it is the creativity, challenge and community of work that makes us human. Which is why retiring is the last thing on my mind.