In her Budget speech, Rachel Reeves said that the measures announced would ‘restore stability to our public finances and rebuild our public services’. Yet, despite pledging to increase state spending to a whopping £1.5 trillion by 2029/30, Labour have failed to grasp an important piece of the crumbling-public-services-puzzle: the problem of a shrinking workforce.
The latest figures, released from the Office for National Statistics last week, show that the fertility rate in England and Wales has dropped to the lowest rate on record. Between 2022 and 2023, the average number of children born to a woman in England and Wales was 1.44. In Scotland, this number was even lower at 1.3.
These rates do not only signify the choice among young adults to delay parenthood, but a growing trend to forgo it altogether. The UK Generations and Gender Survey released earlier this year found that 15% of those aged 18 to 24 definitely did not intend to have a child. That is a 10 percentage point increase from people who were the same age in 2005. Among younger millennials (those aged 25 to 34), less than half said they definitely or probably intend to have a child.
Labour’s approach to this problem is to look the other way. On a flight to Washington in September, Prime Minister Keir Starmer responded to a question about falling birthrates by saying he did not want to dictate ‘whether [people] should or shouldn’t have children’ and that he does not have a ‘birth plan’ for the country.
This response seems inconsistent with Labour’s broader interventionist approach to public health issues which has seen them propose junk food ad bans and smoking bans in beer gardens. On the other hand, it is entirely consistent with the narrative around pronatalist policies espoused by the political Left. In an article recently published in The Guardian, writers Phillip Inman and Jedidajah Otte warned of the many economic and fiscal problems that accompany Britain’s falling birthrate but ultimately concluded that ‘pronatalist policies – those that attempt to boost the birthrate – are also often problematic in terms of entrenching gender inequality and reducing reproductive freedom’.
How can Britain solve its birthrate crisis if attempting to do so is considered ‘problematic’ even by those who acknowledge the fiscal and economic risks of population decline?
Across Western Europe, countries that have treated the problem of falling birthrates like the apolitical public health issue it is have reaped some rewards, although it is worth noting that there is no country in Western Europe with a replacement-level fertility rate. Still, France’s ‘quotient familial’ tax system, which provides tax breaks for households with children, has contributed to France having the highest fertility rate among European countries.
South Tyrol, an autonomous province in northeast Italy, has maintained a steady birthrate, while the rate in other parts of the country continues to decline. This is likely due to a number of family-friendly benefits provided by the provincial government, including discounted preschools, baby supplies and savings on public transportation and after-school activities.
Elsewhere, Hungary has introduced a loan forgiveness program for newlyweds with three or more children, Germany’s now-exhausted Baukindergeld programme helped parents with children build or buy a house, and Sweden provides generous family and social benefits to Swedish parents – including 480 days of paid parental leave.
In the UK, not only do parents suffer under a grossly unjust and family-unfriendly tax system in which single-earner households are penalised and fiscal cliff-edges stifle ambition, there is also no political will to fix the issue. In fact, one could argue there is instead a desire to double-down on it.
In last week’s Budget, Reeves said the Government would not be proceeding with reform of the High Income Child Benefit Charge (HICBC). The reform, proposed by the former Conservative government, would have seen HICBC calculated on a household, not individual basis, therefore treating single-income households more fairly, but this, Reeves concluded, would have ‘come at a significant fiscal cost’.
Perhaps it is time for Labour to acknowledge the fiscal costs that come with declining fertility rates and an ageing population instead. Indeed, for a party that seeks to increase state spending to unprecedented levels, it would be in their interest to keep tax receipts healthy. Yet even our current, chronically unfair economic order, which sees young workers being financially squeezed to support older retirees, looks unsustainable as the number of young workers per pensioner decreases.
To bring about real, lasting change to Britain’s public services, Labour will have to change not only the policies that discourage young adults from having children, but the anti-natalist rhetoric that often accompanies these policies. Parenthood is not ‘problematic’ or old-timey. Nor is it a sinister invention of ‘rightwing populist governments’ who want women to ‘breed’.
For those who are called to it, parenthood is one of the most important things a person can do, not only for themselves and their families, but for their communities and society at large.
Click here to subscribe to our daily briefing – the best pieces from CapX and across the web.
CapX depends on the generosity of its readers. If you value what we do, please consider making a donation.
