Consequences of the baby bust are all around us

Jaw-dropping official figures released this week revealed a worrying trend: the level of childbearing in the UK has dropped to barely 1.5 children per woman, little over half of what it was in the early 1960s.

Don’t expect births to bounce back soon. The effects of Covid were given as a reason for people to delay having children, though to what extent is not yet fully clear. Whatever the case, it’s been almost 50 years since women in the UK were bearing children at or above replacement level. The longer the baby bust goes on, the greater will be the consequences. Indeed, some of those consequences are already making themselves felt.

First, there was the petrol shortage. It was not caused by a lack of petrol but by a lack of people. Pay people more in one sector and, if you are generally short of workers, the gaps will show up in another sector. This week alone we have heard about shortages of care workers, midwives (despite the small number of births) and butchers. When I joined the workplace back in the early 1980s, there were almost twice as many people of the age to start work as there were of an age to retire. Now there are almost as many people of an age to leave the workforce as of an age to join it.

That gives rise to the second consequence; immigration. The vast inflow of people over the past two decades has been the only way to meet our voracious appetite for labour without producing the people ourselves. But this is not a sustainable strategy for the future. When it comes to small family sizes, most rich countries (and some notso-rich ones) have been in lockstep with us. The number of Poles born in the early 2000s, for example, is half the number that was born in the early 1950s. So expect fewer people queuing up to come here from countries with high productivity workers, whether we favour their coming or not.

The third consequence of our persistently low birth rate is an ageing population. Having an older population does have some advantages; older people are less likely to commit crime – in London, for example, the oldest boroughs are the ones with the lowest murder rate – and countries with older populations are less likely to go to war. But an ageing population also has some negative ramifications.

Older people are less likely to take a risk with their capital and more likely to look for government guarantees for their investment. The state not only can but must borrow and spend that capital if we are to avoid a great demand hole at the heart of our economy.

Additionally, older people are more demanding of state services. Around half of the extra per capita spend on the NHS in the last decade has been required just to reflect the needs of an older population. The state pension meanwhile will make increasing demands on the public purse even if it only goes up with inflation.

The fact that we are living longer is of course good news, but so many of our difficulties stem from the reality that while our lives have got longer, we have failed to bear enough children. Governments can tweak policy, but what is really required is a much less apocalyptic view of the future and a much more positive approach to the joys of parenting.