ELDR theme resolution - the Economic Impact of an Ageing Society

Welcome back, as our review of the ELDR Congress theme resolution continues...

The European Liberal Democrat and Reform Party convening on 14-15th October 2010 in Helsinki, Finland

Economic Impact of an Ageing Society

• Notes that longer life expectancy in the EU should be celebrated and that there are consequences for the structure and financing of health, social care and social protection as well as the need to meet the housing, security and environmental needs of older people;
• Notes that post-war baby boomers are approaching their later years, with Finland and Italy the first EU countries set to experience this adjustment in workforce composition. Without effective policy responses, this change could significantly reduce the size of Europe’s workforce and threatens economic competitiveness, productivity and service provision;
• Notes the EU’s Barcelona Summit proposals to raise the average actual ages of retirement; that a number of member states are discussing raising the age of eligibility for state pensions; and that some have already done so;
• Notes that Europe’s economy needs more entrepreneurs to stimulate economic growth and knowledge sharing and it is important that the member states find ways to overcome the factors that particularly discourage women from taking up the option of entrepreneurship;
• Considers that relying on state expenditure to meet the largest part of the income of retired people is no longer a sustainable economic model and that individuals must work in partnership with the state and employers to enable sufficient income in later life;
• Considers that the need to maintain an adequately skilled workforce across the EU is vital for sustainable economic growth, particularly in a post-recession period, and notes that previous economic downturns have led to the loss of skilled and experienced workers and to increased costs in social support, health and care services;
• Considers that the employment of older workers has positive effects on the economy in terms of them remaining active consumers and spenders, which in turn creates demand and jobs;
• Recognises the importance of flexibility in labour markets which allows employers to pay appropriately for the contribution which workers make, while safeguarding older workers' pension and employment rights,
• Calls for the abolishment of mandatory retirement ages in EU member states. Older people are not a collective group and must have the individual freedom to continue working, if they so wish and if they meet employers’ proper expectations;
• Supports the concept of a 4th pillar of income in later life, focussing on the flexible extension of working life in order to supplement retirement income;
• Calls for common EU guidelines for member states on how to ensure people’s financial future, including the abolition of retirement ages, greater incentives for longer-term saving and private investment, and a review of unsustainable public sector pension schemes;
• Calls on governments actively to promote healthy ageing programmes, as Finland has done successfully;
• Calls on governments at every level in the EU to support the development of age-friendly communities to enable older citizens to play their full part in society;
• Calls for a business climate that is favourable to female entrepreneurs, as well as social structures that encourages and enables a larger number of new women entrepreneurs and, in general, greater equality between male and female workers to facilitate wider female participation in the labour market;
• Calls on the EU institutions and member states to recognise the implications of societal ageing in their policies for aid and development.

Once again, the resolution, in its draft form, is relatively uncontentious from a British perspective. Indeed, elements of the resolution are already UK policy, with the abolition of the mandatory retirement age, the move away from mostly state provision of retirement income, and an ongoing review of public sector pension schemes already part of the policy furniture, so to speak.

I would suggest that the implication that public sector pension schemes are unsustainable fails to take into account the 'social bargain' made between public sector unions and their governments, but doubtless there will be an opportunity to clarify that further.

There are, as one would hope for and expect, the usual clauses calling for greater participation of women in the workplace, particularly as entrepreneurs, a group that our more free-market sister parties (no, I didn't call them ideologues...) tend to like.

Finally, you'll notice the occasional reference to Finland. Don't be particularly surprised, as such resolutions tend to include a favourable reference to the host nation... especially if they are in government...