The fertility rate in Britain will continue to decline over the next twenty years, according to the latest projections by the Office for National Statistics. In 2022, births in the UK reached their lowest point since 2002. By mid-2045, fertility is expected to drop from 1.61 to 1.59 children per woman.
Meanwhile, the percentage of people over 85 years in the UK is predicted to rise in the next fifteen years from 2.5 to 3.5% of the total population. As the Centre for Policy Studies reports, ‘by the end of 2026, the UK will have more people aged 65+ than under 18 for the first time in its history’.
Very soon we will live in a country where the old outnumber the young. With a shrinking workforce and tax base, care for the elderly will place an increasingly heavy financial burden on young people, while also exerting unsustainable pressure on the healthcare system.
This is why we must ask: why are people in the UK having so few children, and what can be done about it?
The underlying reason is obviously that we now have the choice: birth rates began their longest and steepest decline in history all over the developed world shortly after the introduction of the birth control pill. Yet the puzzle to solve is why so few people are willing or able to make the choice to start a family.
Many governments have tried, without success, to boost their birth rates through pro-natalist policies. In Italy, the fertility rate has reached a record low and continues to drop at an alarming rate despite government pleas for more children. Poland also has a lower fertility rate than the UK, notwithstanding its generous child benefit scheme.
Hungary is often hailed as the exception, having apparently managed to boost its fertility rate through a series of pro-family policies introduced in the past ten years.
In 2015, the Hungarian government introduced a Family Housing Allowance, providing couples with children subsidies to build or buy homes, with maximum benefit awarded to parents of three or more children.
Mothers and fathers in Hungary can also share up to three years of paid parental leave between them. Women who have children before the age of 30 are granted tax exemptions.
Since 2015, the fertility rate in Hungary has increased from 1.44 to 1.59 – a boost often attributed by conservatives to government incentives to have more children.
The elephant in the room is that Hungary also experienced significant economic growth over the same time period in which its pro-family policies were introduced, averaging around 4% since 2015 adjusting for the pandemic years and outperforming many European countries.
In fact, most eastern European countries are experiencing rising fertility rates. In Czechia, fertility has risen by 21% between 2010 and 2021 – not far below the 27% in Hungary. Fertility rates have also risen markedly in Romania.
The common denominator is economic growth. Whereas Hungary, Czechia and Romania have experienced spikes in economic growth over the past fifteen years, Britain’s economy has been relatively stagnant.
Historically, declining fertility rates in the UK have corresponded with economic stagnation. The last record low in fertility in the UK was in 2002, which was the first time since 1991 that the economy had been stagnant for two quarters in a row. Another low point in fertility was in 1977, following a massive recession in the 1970s.
As Niall Ferguson observed in his Keith Joseph Lecture for the Centre for Policy Studies, the UK is in a similar position now to that of the 1970s. ‘To a greater extent than is true of peer countries,’ he argued, ‘Britain seems to me to be in danger of repeating the 1970s’.
We are by other accounts in a period of ‘stagflation’ reminiscent of the 1970s, which is a dire combination of ‘slow economic growth, high inflation and high unemployment’.
In light of the cost-of-living crisis, it is not surprising that more people in Britain are having fewer children, or none at all.
According to the ONS, inflation in the UK is at a 41-year high. Nearly 40% of people are struggling to pay their energy bills. The overall price of food and non-alcoholic beverages increased by 26% between December 2022 and December 2023, compared to an average annual increase of 9% over the past ten years.
Policymakers often remark on the situation in the Nordic countries, where in spite of socialist, pro-family policies the fertility rates continue to decline. In Finland, which prides itself on gender-equal support for families, the fertility rate since 2010 has fallen by a third. Likewise in Sweden, known to have one of the most generous family policies in the OECD, fertility continues to decline.
Again, these stubbornly low fertility rates can be explained by low economic growth. The Finnish economy has only grown by an average of 1.2% since 2010, excluding the post-pandemic recovery. Sweden is similar, with average growth over that period hovering around 2.6%.
Take a look at the OECD’s chart showing UK economic growth over the past fifteen years and you will also see a very flat line.
Cash-for-babies policies are not only ineffective, but also remarkably unconservative. The Conservative Government is playing the wrong card by trying to out-compete Labour with childcare subsidies. What the Conservatives should be focusing on is economic growth, which tends to correspond with free-market policies.
Margaret Thatcher knew this. Rather than increase benefits, Thatcher focused on economic growth. As Prime Minister she controversially froze child benefit in 1987, in line with her belief that ‘public expenditure is at the heart of Britain’s present economic difficulties’. In the years that followed, the fertility rate increased.
In the same year that she froze child benefit, Thatcher famously said ‘there is no such thing’ as society, ‘there are individual men and women and there are families and no government can do anything except through people and people look to themselves first.’
Government can do very little to directly encourage people to have more children. What it can do is help people to feel more hopeful about the future by supporting economic growth.
As the Centre for Policy Studies points out in its report Justice for the Young, polls show that young people are increasingly hopeless about their prospects for home ownership and material advancement, seeing diminishing returns for their efforts as inflation rises and salaries lag behind.
It is hope for the future, above all, that drives population growth. If we want Brits to have more children, we must convince them there’ll be a better world for them to grow up in.
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