Jason Nissé: Carry on working: the unacceptable face of solving the pensions crisis

As if to confirm his reputation for being the least charismatic cabinet member in living memory, the new Secretary of State for Work and Pensions, Andrew Smith, was almost criminally uninspiring when he rejected the recommendations of the Pickering Review on pensions. Mr Smith's parliamentary performance aside, it was clear that Alan Pickering's prescription for solving the looming pensions crisis was not going to be swallowed by a government that lives or dies by public opinion. Get rid of widows' benefits? Stop automatic increases in pensions? Come on, Alan. Labour has shown itself unwilling to think the unthinkable so it's not going to flog the unfloggable.

Ironically, the former head of the National Association of Pension Funds avoided the most radical conclusion of all. In the words of the NAPF's current chief executive, Christine Farnish, it is a "no-brainer" that the retirement age has to be increased from its current 65. Most other commentators agree. The 65 figure was set by Bismarck when he was running Germany in the 19th century (his statisticians said the average life expec- tancy was 66, so he decreed that people should have a year to "put their affairs in order"). It can hardly be relevant in 2002.

However, despite hints that the retirement age might be up for discussion, there was a stony silence last week. Even Alan Pickering probably reckoned it was too radical a thought for the new Secretary of State.

But is it? Think of Mr Smith's job description: his department covers both Work and Pensions; the idea is that the two issues are related. Yet we seem to be looking at solutions for the pensions crisis that do not take account of answers from the world of work.

Raising the retirement age to, say, 70 would create some problems. The most obvious is in physical ability. There are some jobs where it is difficult to keep up with the demands of the workplace when you are 60, never mind 70. Anything to do with physical manufacturing, where you need good hand-eye co- ordination and are involved in manual labour, might not be suitable for some older people.

But most people in their mid to late-60s are still bright, alert and able to offer a great deal in most areas of working life (ask Tesco, which has had great success employing older staff in its superstores).

The thing is that your motivation may dwindle after years doing the same job. Or you may not want to work full time. This is where the Work part of Mr Smith's job description applies.

He needs to look at how the working week is structured. Over the past couple of decades, the strain put on employees has increased and the concept of a nine-to-five job is largely a thing of the past. These days you can find – in the same office – people working 60 hours or more a week, while others have part- time contracts meaning they maybe work a quarter of that. Companies have woken up to the demands of women who need to take time off to have children yet want to resume their careers; the more enlightened firms are now well set up for part-time working by senior executives.

Working from home, workplace crèches, flexitime. These are all recent, sensible innovations. Companies also recognise that younger, unattached employees might want to take time off for travelling. Fine. So why not set up similar structures for older people? Part-time working. Senior sabbaticals. Retraining. The Government should support the lot as part of a package to encourage people to work longer.

And if it wants to be really radical, it could look towards France's adoption of the 35-hour week. This was initially opposed by employers on the grounds that it would decrease flexibility and increase costs. The irony is that it is now the unions which are bleating, because employees are losing out on overtime payments but are still getting the job done. If you are forced to go home at 5pm, you will often finish your task, whereas previously you might have slogged it out until 6.30pm achieving little more. A long career of 35-hour working is preferable to a shorter career of 60-hour working.

Of course the 35-hour week is more politically unacceptable than raising the retirement age, which is more politically unacceptable than Alan Pickering's report, which is itself politically unacceptable. What chance is there of sorting out this mess?

j.nisse@independent.co.uk