Issue 7: Nov 2013

INTERVIEW: DANNY ALEXANDER MP, CHIEF SECRETARY TO THE TREASURY

By Professor Richard Kerley

Speaking to the MacKay Hannah/Age Scotland Productive Ageing summit in Edinburgh this October, Danny Alexander MP, Chief Secretary to the Treasury, spoke of the critical reasons why we have to think much harder about ‘productive ageing‘.

He stressed it was an economic imperative for the future:

“… if we really want to secure the long term economic stability of the UK, one of our key challenges will be to keep control of the dependency ratio.
... the number of dependent people not of working age, relative to the number of working-age.
To do that, we have to ensure that our older people can be as productive as possible.
Because – over the longer term – any significant increase in that dependency ratio would place a greater tax burden on everyone of working age…
And result in a smaller working population, paying for an expanding support system.”

"…if we really want to secure the long term economic stability of the UK, one of our key challenges will be to keep control of the dependency ratio. .. the number of dependent people not of working age, relative to the number of working-age."

He also aligned what he was saying to other speakers who had talked of  the importance of active lives for older people whether through working, volunteering or a combination of this and social activities.  

“It also strikes me that the implication that when people hit 65 they want to put their feet up is misleading.
That isn’t what I see either here in Scotland, nor south of the border.
But where our older generations want to remain in the workplace…
And want to continue to support their families, and contribute to our economy…
Then we need to make that not only possible, but also much easier.”

He continued by outlining the steps that the Westminster government had taken to facilitate this: providing advice and support to employers and employees on ‘age positive‘ approaches to employment; removing the default retirement  age as one of a number of measures to remove ‘ageist‘ legislative provisions and removing the requirement to annuitise retirement savings at 75.

Danny Alexander also lauded the contribution of volunteers to society, emphasising that many such volunteers were older people in both local and national organisations. He was, however, unwilling to respond to a suggestion in an audience question that there might be financial incentives for volunteering – other than to commit to taking it back to the Treasury team!

"where our older generations want to remain in the workplace… And want to continue to support their families, and contribute to our economy… Then we need to make that not only possible, but also much easier.”

Other questions related to the potential inequities of increasing the age for access to state pensions, particularly because of the apparent levels of ill health that might lead to earlier deaths among the older population in Scotland.

…and in interview with Danny Alexander..

Speaking exclusively to Scottish Policy Now after the conference, the Chief Secretary repeated his theme that in principle, varying pension age should not be used as a device to address other inequalities. He was specifically asked about the potential inequity of life expectancy between middle class professionals and people working on refuse collection in all weathers or continental shifts in a hospital. His response:

"… well ...first of all as a society we need as many people to work as they can in order to support the services we all need.
I think it’s a much more fundamental question which I don’t think is answered in the debate about pensions – it’s about health inequalities, and that is much more about how you direct resources to the health system; it’s about opportunities available to young people as we know that inequalities start to emerge at a very, very young age – even at birth and that means working with families (as we are doing)... I don’t think it’s within the terms of the pension discussion and is a huge social problem that needs to be addressed through other areas of policy."

“We also have means to support people who become unwell or otherwise unable to work. But in principle I don’t think we should confuse the pension debate with debates about health inequalities which is the real issue here in Scotland.”

“well, working longer is already incentivised…because you don’t pay National Insurance after the State Pension age; and if you think about that then we’re talking of removing a deduction which if you think of NI rates is between 11-12%."

When questioned on financial incentives for working longer (one of the questions raised in the conference) Alexander also makes the point that:

“well, working longer is already incentivised…because you don’t pay National Insurance after the State Pension age; and if you think about that then we’re talking of removing a deduction which if you think of NI rates is between 11-12%. Actually that’s little known; perhaps we should promote that more!”

He is not persuaded of the case for incentives for volunteering or staying on in work.

“I don’t think the barriers are financial either to staying at work or volunteering. I think there are other factors: peoples’ perceptions of themselves – and that’s changing and many people want to continue longer. Much more importantly it’s about employers’ attitudes and society attitudes to working longer and I think we’re seeing those attitudes change.”

“We’re seeing a group of businesses where attitudes have definitely changed and they’re saying older workers are a vital part of our workforce. We want to keep them and cherish them for as long as we can. We need to encourage those attitudes and ensure they are more widespread.”

Danny Alexander MP is Chief Secretary to the Treasury, HM Government and was speaking at the MacKay Hannah conference on Productive Ageing in Edinburgh

By Professor Richard Kerley

Issue 7: Nov 2013

OTHER ARTICLES IN THIS ISSUE

Issue 7: Nov 2013

HEALTH, WELL BEING AND AGEING: SCOTLAND 2020

Re-energising the move towards integrated care

Scotland's move to integrated care can learn from elsewhere by focussing on two key differentiators between successful partnerships and those paying lip service to integrated working: Shared outcomes and common language is one, the other is demonstrating mutual investments and mutual benefits.

Integrating Health and Social Care - Grasping the Opportunity

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