Baroness Neville-Rolfe (Con)
My Lords, I congratulate the noble Baroness, Lady Nargund, on securing her first QSD, and on her perceptive comments after a lifetime devoted to reproductive medicine. I thank all noble Lords who have spoken. I was particularly struck when the right reverend Prelate the Bishop of Chelmsford reminded us that children are a blessing; and by the emphasis of the noble Baroness, Lady Finlay, on the elderly avoiding falls, which is a very good example of preventive healthcare.
The collapse in the birth rate is not a new issue, but it is an increasingly urgent one. As we have heard, the number of babies born per woman fell to 1.39 in 2025, down from 1.9 in 2010 and well below the 2.1 needed to replace the existing population. The ONS projects that over the decade to mid-2034 there will be around 450,000 more deaths than births in the UK.
It is a trend replicated in other developed countries, with Japan and Korea worst affected. I have spent time in both countries, and they are well aware of the problem. I remember addressing a large room of women working at the then Tesco operation in Korea. At the end, the male CEO emerged at the back to thank me profusely. Inappropriately, he added that Korea would not be facing the difficulties it was if mothers there had taken a leaf out of my book and given birth to four boys.
The UK is moving from a model in which population growth came from a combination of such births and some migration to one in which future growth is expected to depend on migration. That is a profound shift. I am going to focus on three of the challenges.
With the steep fall in the birth rate, there will be fewer children entering our nurseries and schools. This could mean smaller class sizes and an improvement in teaching, but I fear that with pupil funding per head, it will mean that more schools have to close, forcing some very difficult choices on the authorities, especially in rural areas. But there should be cost savings, which should be banked, even if we would prefer that they did not arise.
The lower birth rate will also mean fewer people entering the labour market in years to come. Falling birth rates affect both the number of people who need public services and the number available to provide them. That is critical in sectors such as health and social care, where pressures are already acute, as we have heard. This matters because our economy urgently needs sustained growth. Yet demographic change is pushing us in the opposite direction towards greater demand for public services and a smaller working-age population. The answer is that people must stay in work for longer, as many of us have done in Parliament, and that means raising the state pension age, except perhaps for those who have had particularly physically taxing jobs, as I suggested in my report for DWP on the subject in 2022.
Another challenge is the cost of an ageing population to the public purse. The OBR has warned that on our current trajectory the long-term pressure of ageing and related spending could push borrowing and debt to absurd levels. But the markets will not let that happen, so we have to develop a response. State pension spending is projected to rise from around 5% of GDP today to 7.7% by the early 2070s. At the same time, an older population will mean rising demand for health and social care. The state is therefore being squeezed from both directions—higher spending on one side and a smaller tax base relative to the retired population on the other. That is why declining birth rates are not simply a social trend or a private matter for families; they are central to the fiscal sustainability of the country.
What can be done? I believe the matter should be addressed with real seriousness. This is not an undergraduate debate; it is the future of the country. Government policies across the board will need adjustment, as we have heard. That means taxation, childcare, fertility treatment, social and welfare rules, technology, and what we teach our children in our schools. First, can the Minister set out whether the Government have a cross-departmental strategy for responding to the UK’s persistently low fertility with a view to changing the situation over time? Secondly, what assessment have the Government made of the long-term fiscal consequences of the demographic shift, particularly for pensions and for health and social care? This is a vital topic affecting our country into the distant future. We need answers to this problem, and quickly. I hope the outlines of a way forward will emerge from today’s important debate.