The UK’s Demographic Future

Lord Frost Excerpts

Thursday 11th December 2025 Lords Chamber

[Lord Frost (Non-Afl)]

My Lords, I begin by declaring my interest, if perhaps a rather general one, as the incoming director-general of the Institute of Economic Affairs, which has an interest in these and many other questions.

It is a pleasure to take part in this debate and to follow the noble Baroness, Lady Verma, who made a powerful speech, if I may say so, that compelled attention. It is also a particular pleasure, of course, as many other noble Lords have said, to be able to support the noble Lord, Lord Hodgson, today and to pay tribute to all his work over many years. The report on population that we are debating today is entirely characteristic of the serious, evidence-based examination of issues that he has always brought to bear and is particularly needed on this subject.

For there is, without question, a real problem. The numbers are striking. We have heard them already today, so I will not go into the detail, but as the report notes, over the past 20 years the UK population has risen by nearly 10 million people. One-third of that increase has arrived in the past four years or so, and another who knows how many—five, six, seven million—may arrive over the next decade or so. Population growth on this scale concentrated on an already densely packed island and particularly in the south-east of England, which is now one of the most densely populated areas in the whole world, apart from island states—a point that is repeatedly underlined in the report by the noble Lord, Lord Hodgson—obviously poses challenges for housing infrastructure, public services, social cohesion and so on.

As we have heard, the implications of all this are simply not taken into account systematically in government planning. Indeed, the debate on the subject is too often stigmatised, as if expressing doubts about whether rapid population growth is desirable or possible to accommodate marks one out as being beyond the pale. One of the important things about today’s debate is that it is a way of beginning to break some of those taboos about important issues. It is necessary because polling consistently shows that the public feel that the population is growing too fast and that immigration has been too high. They know that something is amiss.

We have already discussed those issues at some length today, but there is one aspect that I want to focus on today, which has been mentioned but not covered in detail, and that is fertility and the birth rate—the number of children that we have in this country. That is where I want to focus my remarks. Just reviewing the facts briefly, all western countries, with the exception of Israel, have seen significant declines in fertility rates. The UK’s current fertility rate, about 1.4 children per woman, is the lowest it has ever been. Thirty years ago, all our population growth—it was much slower then, of course—pretty well came from births, from natural increase; 15 years ago, it was 50:50; now, births and deaths are roughly equal and all our population growth is coming through migration. This is historically unprecedented, at least since the fifth century AD.

Why has this decline in fertility happened? Some of this is obvious. Social changes are real and well documented. Women have more choices, education and careers rightly come first and marriage is delayed, but these changes have been in progress for many years now. They surely account for the fall in the birth rate over the 1960s and the 1970s, but since then, between about 1980 and 2015, the fertility rate—the number of children per woman—has bumped along at around 1.8. That is not at replacement rate, but not so far from it.

Since 2015, however, fertility has fallen precipitously again to around 1.4, as I said. It is tempting to attribute this, and it often is attributed, to particularly British factors such as high housing costs—which are, of course, themselves driven by immigration, at least in part—or to a tax system that is, compared to much of continental Europe, remarkably unfriendly to families. In truth, though, that is not quite good enough. A similar trend is visible across most European countries. It is more or less strong from country to country; the starting points are different, but the trend is still quite clearly visible.

Why is this happening? The only honest answer to give, I think, is that we do not really know. One can of course speculate. The slow to zero growth in incomes across Europe since the financial crash is no doubt part of it. There is perhaps a growth in cultural disapproval—I do not know; I feel it is rarely stated openly, but it is certainly present—of those who choose to have large families. Could it be that the growth in social media since around 2015, the boom in dating apps and the growth in, shall we say, novel conceptions of sex and the family have had some effect on all this? Unpopular though it may be to say it, I will say it anyway: the increasing recourse to abortion, now at its highest ever level in this country with a quarter of a million abortions in 2022, not far off now half the number of live births, clearly has an impact on the figures.

Or could there be something more intangible and more profound—some sort of loss of confidence in the future more broadly? Some say this is about climate catastrophism; others see it as a decline in confidence in the values of western civilisation. Who knows? Whatever it may be, when people do not believe that the future will be better than the present, they tend not to have children. The fact that Israel, a country with strong civilisational self-confidence among many other things, has more or less avoided this trend suggests that there is at least something in that view.

However, we do not really know. That is part of the problem because it makes the issue particularly difficult to deal with, but the fact that we do not know is not a reason not to talk about it. We have to deal with the consequences because they exist whether we like them or not. We have to try to find some way of mitigating them if we cannot change them.

So what can we do? I identify—here I am echoing work by other demographers, notably Dr Paul Morland—three possible solutions to this predicament. The first is to try to have more children and increase the fertility rate back towards replacement. As I say, so far only Israel has really achieved this among developed nations, and other countries that have tried it in various ways, with extra public support or whatever, such as the French and the Hungarians, have had only a very limited effect. That suggests to me that, although there is an economic aspect to the problem, it is not really the whole problem.

The second approach is to give up on trying to change demographics and simply adjust to an ageing society: accept lower fertility and a shrinking workforce but invest heavily in productivity, automation and reform of the labour market and pensions to accommodate this older population with fewer children. That is the solution set out by Professor Sefton in the report of the noble Lord, Lord Hodgson, and Japan is the obvious case study here. The basic difficulty, though, is that, in order to increase productivity in this way, we would need, in this country and across Europe, to embark on a campaign of liberalisation and reform of the economy for which no political party really seems to have the appetite, and which perhaps ageing societies are particularly reluctant to contemplate.

The third approach is the one that we have actually chosen over the last 30 years along with most developed countries, and that is bring in a replacement population: import workers and their families to maintain the worker to dependant ratio and supply the labour that the native population cannot. The problem with that option, whatever its appeal—and it is of distinctly limited appeal to me at least—is not actually a solution at all, for two reasons. First, the economic case for mass migration is weaker than is often claimed. The work of Dr David Miles and others, again as cited in the report, shows that mass migration does not boost per capita growth—it may produce a growth in the absolute size of the economy, but not per capita—and of course there are lots of social and other consequences that we have discussed.

Secondly, and more fundamentally, mass migration is simply a way of deferring the problem. If you try to hold the dependency ratio constant through immigration—that is, at about its current 3:1—to ensure that there are always enough working-aged people to support those in retirement, simple maths shows that you end up needing inflows of half a million to three-quarters of a million people every year in perpetuity.

On that trajectory, by 2050, a third of the British population will be born overseas. I do not particularly welcome that prospect; I do not think that it is a sustainable policy for us, and it may not, in any case, be a solution that is available to us due to the growing scepticism about mass migration that has been touched on in our debate today.

We have to exclude the option of importing a replacement population. The option that is before us is to bring immigration down, close to zero, for a prolonged period. If we choose to resume it later, on a more selective basis, then we can, but it does, of course, leave us with a problem. What can we do to solve it?

First, we can try to increase the birth rate. That involves boosting economic growth, building more houses, reforming taxation and doing what we can to change and reinforce the civic and cultural messages that are around. We should not and cannot count on that working. Secondly, there is the Japan solution: do what we can to create a more productive workforce if we cannot create a bigger one. Luckily, the solutions there are largely the same: more growth, more reform and more incentives to boost incomes, however challenging that all looks. Thirdly, and this is a bureaucratic solution, is the recommendation in the report from the noble Lord, Lord Hodgson, for an independent advisory body on demographic strategy to provide us with honest, evidence-based advice about the trade-offs and the numbers. I would add that this body should be explicitly tasked with studying trends in the birth rate and fertility. It should be tasked with looking at whether measures taken in any other countries across the world have made any difference, and why. More broadly, it should look at what the experience of other nations tells us about managing demographic change.

Finally, we need to break the taboo on discussing these things. I remember the scorn that was poured on politicians sharing my political opinions, such as the former MP Miriam Cates or the current MP Danny Kruger—who are my friends—when they sought to raise these questions two or three years ago. They persisted—credit to them—and now the birth rate is slowly becoming part of the debate. We cannot avoid it; indeed, it is very welcome. Honest, open, evidence-based discussion—on the interaction between fertility and migration, and its economic and social effects—is vital if we are going to restore public trust in our institutions’ ability to solve these difficult questions. The report from the noble Lord, Lord Hodgson, is a vital contribution to that conversation, and I hope that it marks the beginning, not the end, of a more serious engagement with one of the defining challenges of our time.