Lord Elder was born in Kirkcaldy, Scotland. He attended Kirkcaldy High School and later went on to obtain an MA in Economic History from the University of Edinburgh.
Lord Elder has held several important posts in his career. He was General Secretary of the Labour Party in Scotland (1988 – 1992) and Chief of Staff to the Leader of the Labour Party, John Smith (1992 – 1994). In 1994, he became Political Adviser to Tony Blair.
Lord Elder was also Adviser to Donald Dewar (1996-97) and Special Adviser to Donald Dewar (1997-99) when he was the Secretary of State for Scotland. In the latter post, he worked closely with Donald Dewar on the preparation of the White Paper on Scotland and on the details of the subsequent devolution bill. He has been a member of the House of Lords since July 1999.
Lord Elder was a member of the House of Lords Select Committee on the working of the Monetary Policy Committee (2000-2001). He is currently a member of the House of Lords Economic Affairs Select Committee and an Adviser to the Smith Institute, an increasingly influential think-tank. Lord Elder is also Patron of the Adam Smith Foundation, the fundraising unit of the Fife Further Education College.
He was later appointed as Chancellor of Al-Maktoum College of Higher Education on 15 January 2003 and is also the Chair of the College Council.