James Boyd-Wallis is a communications and public affairs consultant.
Last month, a small family law firm became the first UK business to appoint a fertility officer. Burgess Mee wants to help its people have kids and a career. The news highlighted Britain’s demographic crisis and the free market reforms that could help tackle it.
New Office of National Statistics (ONS) data shows that the number of people aged 85 years and over will almost double in 25 years.
Meanwhile, England’s birth rate remains stubbornly low. At 1.58 children per woman, it’s well below the rate needed to maintain a stable population. As a result, the ONS projects 59,000 more deaths than births over the next decade.
With fewer young people and more pensioners, the ‘bill for our ageing population will rapidly outpace our ability to pay it’, as Robert Colvile of the Centre for Policy Studies argues.
In the last 50 years, spending on pensions and healthcare has risen faster than on anything else. In 1966-67, the Government spent 6.8 per cent of GDP on these two items combined, according to the Office for Budget Responsibility. By 2024-25 it will be 14.2 per cent.
The UK is running up an enormous tab which the next generation is expected to pick up.
Government debt now stands at £2.2 trillion, or 103 per cent of GDP. And this bill will only increase. An ageing population creates more complicated health problems that cost more to solve. All while the number of taxpayers to fund it continues to shrink.
So what can government do to help foster a new baby boom?
There are two big costs deterring couples from having children and sooner: housing and childcare.
The average house price in England is nearly £300,000 – more than nine times the annual income for most people. In London, property values are around 13 times average salaries.
British families also face some of the highest childcare costs in Europe. OECD data shows that a couple with two pre-school age children in the UK spend 30 per cent of their income on childcare. This compares to 10 per cent in France and just seven per cent in Spain, for instance.
Given these costs, many couples delay having children until they feel they can afford it or have fewer than they’d like. Some may not bother at all.
Unsurprisingly, the answer to high housing costs isn’t for young people to move north, cancel their Netflix subscription, and stop buying avocado on toast for brunch as some have argued.
Instead, the government must reform planning once and for all.
This means allowing green belt land that’s a 10-minute walk from a commuter station and isn’t otherwise protected to be developed, as Kristian Niemietz of the Institute of Economic Affairs argues.
Releasing just two per cent of such land across five major cities would increase Britain’s housing stock by seven to nine per cent, according to the Centre for Cities.
Boosting supply would reduce costs. It would make it easier for younger couples to get on the housing ladder and give them the security they need to start a family sooner.
What’s more, improving the supply of housing would also help raise the UK’s sluggish productivity rates, as argued by the Entrepreneurs Network. With lower housing costs, people will be free to live closer to productive cities and sectors.
When it comes to reducing childcare costs, the answer isn’t more state funding and more state intervention, as those on the left would argue.
Instead, as with most sectors, the government should encourage competition to lower prices.
However, the regulatory and compliance burden on childcare providers has increased costs and pushed many out of business.
Government data shows more than 3,025 childminders, nurseries and pre-schools closed in the year to 31 March 2021. While the pandemic hit these businesses hard, overly burdensome and costly regulations are likely to have proved the final straw.
But many of these regulations are unnecessary and do little to improve outcomes for children.
Rather than mandating what is and isn’t appropriate care, the government must allow parents to decide for themselves.
Take, for instance, the Early Years Foundation Stage (EYFS) framework that all childcare providers must follow. Staff spend time grading children on a range of areas such as communication and language, maths, and literacy among others.
I receive regular EYFS updates from my daughter’s nursery about how my three-year-old is “performing”. Most feel arbitrary. Some a little cut and paste.
Instead of being required to report back on whether my daughter meets set criteria, I’d rather staff were free to use their time to play with, or care for, her as she needs. I’m sure many parents feel the same.
By reducing such regulations, childcare providers would face lower running costs. This would encourage more providers back into the sector and reduce fees for parents.
Implementing such free market reforms would ease housing and childcare costs, creating the right environment for couples to have more children sooner.
But, when politicians are often unable to look past the next election cycle, and this government has the myopic focus on surviving the next week, I won’t be holding my breath.