Outlook: Hewitt grasps nettle of Britain's growing Struldbrug problem

"As soon as they have completed the term of 80 years, they are looked on as dead in law, their heirs immediately succeed to their estates, only a small pittance is reserved for their support, and the poor ones are maintained at the public charge. After that period they are held incapable of any employment of trust or profit, they cannot purchase lands or leases, neither are they allowed to be witnesses in any cause, wither civil or criminal, not even for the decision of meers and bounds." Jonathan Swift, Gulliver's Travels. 1726.

In Gulliver's Travels by Jonathan Swift, the apparent attractions of great longevity find their nemesis in the cautionary tale of the Struldbrugs, a race of people destined to live for ever, not as the virile, hopeful souls of their youth, but as decrepit, useless good for nothings, increasingly eaten up by disease and so despised by all around them that their very language becomes forgotten and redundant with each new generation. The apparent benefits of great wisdom and long life are superseded by the living hell they are forced to inhabit. The writer reflects that "no tyrant could invent a death into which I would not run with pleasure from such a life".

In the 18th century, few people lived even as long as today's official retirement age of 65, let alone 80, but today, the problem of longevity that Swift so eloquently described is very much upon us. If you make it to 65, as the great bulk of us now do, you are quite likely to live to 80. Many of us will survive a great deal longer.

For at least 150 years now, the so-called elderly dependency ratio has been rising strongly across the developed world. As the postwar baby boom generation reaches retirement it will further accelerate, with the phenomenon particularly acute in the Far East and Europe. In Japan, for instance, the proportion of the population aged 65 or older is already 17 per cent and it is expected to climb to as high as 30 per cent within the next 30 years. The Struldbrugs are already with us.

Yet the phenomenon is only a problem if we do nothing about it, or we allow the sort of ageism visited upon the Struldbrugs to become entrenched. Patricia Hewitt, Secretary of State for Trade and Industry, has moved to address at least part of the public policy challenge of longevity with proposals to lift the age at which employers can retire their workers from 65 to 70, and to outlaw age discrimination in the work place. Some of us might regard the cut off point of 80 at which the Struldbrugs became "dead in law" an improvement on Ms Hewitt's plans, but an extension of five years is at least something.

Even so, her proposals won't be universally welcomed. The maturer employee invariably has plenty to offer, not least wisdom and experience, but the reason why employers on the whole prefer younger workers to older ones is based on two very simple principles. The first is that they are cheaper, the older ones having built up years of salary increases, and the second is that they have more productive years left in them, and are therefore a lot more valuable all other things being equal. A third attraction of youth is that it tends to be more innovative and adaptive.

Greater labour mobility, with employees highly unlikely to stay with one company all their working lives, has decreased the value of youth in the workforce to some extent. The elderly are now also healthier than they used to be with less disability, while work is generally less physically strenuous than it once was. None the less, many employers will remain resistant.

There are plenty of people who are enormously productive well into their 80s, but lots who are not. Defining the cut off point in law fails to address these obvious differences in working capacity. Most employers would prefer a market-based solution which would allow them to determine when workers are retired. To lift the age ceiling by law may be detrimental to competitiveness.

Of course, there is an ulterior purpose in the Hewitt proposals, which is to reduce the dependency of the elderly on the state. Britain is already more advanced on this front than most of Europe, or even the US, having taken steps as early as the 1980s to limit state pension costs by indexing them against inflation rather than earnings. This ought to make the basic state pension an affordable burden on the taxpayer regardless of the growth in retired people, as the tax base should increase faster than the cost of pensions.

By contrast, ageing populations in Europe and the US will make existing social security and medicare arrangements in those countries unsustainable in the long term. Even so, the problem in Britain is quite bad enough, particularly with regard to the pressure the elderly will put on the tax funded health service. Raising the retirement age to 70 will ease the growing benefits problem somewhat, as well as making presently stretched private pension provision go further. There are lots of reasons for companies to be suspicious of these proposals, but if by limiting benefit spending they reduce the possibility of heavier increases in payroll taxes to fund the growing masses of age dependents, then they may be a price worth paying.

Dealing with the Struldbrugs is a challenge for all us, for perhaps unfortunately, even if we are not already one of them, we will quite likely become so one day.

Beautiful game

What is it about football clubs and tycoons? Famous and not so famous football clubs alike have never lacked for rich sugar daddies willing to bail them out when the going gets tough. Roman Abramovich, the 36-year-old Russian billionaire who has come riding to the rescue of Chelsea Football Club, is just the latest in a long line of such figures. He is perhaps also more colourful than most. You don't, presumably, get to make a billion by the age of 36 on the wild eastern frontiers of Russia's newly capitalist economy without cutting a few corners.

None the less, the spectacle of Tony Banks, the former sports minister, questioning whether Mr Abramovich is a "fit and proper person" to own a football club was quite the most hilarious idea I've come across in a long time. Mr Abramovich has aspired to own a well-known British football club for quite some while. Chelsea's well chronicled financial difficulties made it an obvious target. If Mohamed Al Fayed, another controversial foreign businessman, can own a football club, why not Mr Abramovich? What makes Chelsea so special that, like some medieval cathedral, it needs to be saved for the nation?

Football is not as big a business as its public profile suggests, but even so it ought to be a nice little earner given decent management. For the better clubs, there's the captive revenue stream of loyal fans, willing to pay once at the turnstyle and then all over again in the extortionately priced merchandise shop. On top of that, there's the revenue from pay-TV, which through the good endeavours of BSkyB has transformed the finances of the Premier League in recent years.

Following pressure from the European Commission, the TV deals are to be sliced and diced in a different way to current arrangements, but there's no reason to believe that the overall amount of money coming into the industry from TV will decline. Football remains too important a driver of audiences and subscribers for that. Most football clubs none the less still struggle to make a decent return. The main reason is the cost of players, which has sky rocketed over the past 10 years, more than eating up all the extra money from Sky. In premiership clubs, wages and salaries are on average 60 per cent of income. The cost of player acquisition comes on top, leaving little for anything else.

Ken Bates, chairman of Chelsea, has struggled to make his charge into as much a leisure and property company as a football club, but it hasn't really worked. Mr Abramovich thinks he can do better, but although greater investment in players may win him the adulation of the fans, the end result is likely to be more of a drain on his bank balance than an addition to it. Still, by the sound of it, he can afford his indulgence.