Today
Thu 29 July 2021

Jonathan Portes looks at the causes and consequences of the record low total fertility rate in the UK

In 2020, there were fewer births than deaths in the UK for the first time since a very brief period in the mid-1970s.   This is a huge reversal – as recently as a decade ago, births exceeded deaths by more than a quarter of a million.

Obviously, this reflects in part the toll of the pandemic – an extra 80,000 or so deaths in 2020. This effect will thankfully be temporary – while there were some tens of thousands more excess deaths in the first quarter of this year, death rates (the ongoing impact of the Delta variant notwithstanding) are now below normal levels.

But the number of births was also well down, to the lowest level since 2002.    And while some of this fall, especially in the last few months, can also be attributed to the turmoil of the last year, this merely reflects a slight acceleration of a longer-term trend. Fertility rates have been falling steadily in the UK since 2012.   The Total Fertility Rate (TFR) at 1.58 in 2020 (and even lower in the first quarter of this year) is the lowest ever on record and is now not that different from the EU average of about 1.5.


Factors Behind the Baby Boom

To understand why fertility is falling now, it is helpful to look back at the experience of the 2000s, when the UK saw a mini baby boom. Like the recent fall, this was largely unforeseen, but we now know it was driven by three main factors.

First, an increase in fertility rates among older mothers. A combination of both social trends and technological progress (the widespread availability of in-vitro fertilisation) meant that the number of children born to women over 30 grew rapidly. 

Second, it was driven by immigration. The increase in inward migration which began in 1997, and accelerated in 2004, translated – as migrants who came here originally for work settled down, and began having families – into an increase in births. By 2010 over a quarter of English babies were born to mothers who themselves had been born elsewhere. 

And third, improvements to financial support for children and childcare provision, in particular to low-income working mothers.

A country where young people – especially young women – don’t want to have children… is not one that is delivering for its people, either now or for the future

All of these factors pushed up birth rates, so that by 2008 the TFR was over 1.9, only just below the replacement rate of 2 to 2.1 children per woman, and among the highest in Europe. When Tony Blair said that he wanted Britain to be a “young country”, it wasn’t as absurd as it sounds – in large part due to his own policy decisions. 

But all those drivers have now largely reversed.  The increase in fertility for older mothers has only a one-off impact on fertility, which has now largely worked through (and indeed improvements in IVF technology mean multiple births are less common).  While immigration continued, more recent arrivals seem less keen to have children here, and the proportion of births to foreign-born mothers has levelled out. Indeed, if it turns out that we have been underestimating the number of recent migrants from Europe, that implies that their fertility rates have been rather lower than we thought.  

And finally, and perhaps most importantly, not only have there have been major cuts to the benefit system in the 2010s but they have been targeted particularly at low-income families with children.  The benefit freeze, cuts to housing benefit, and most of all the two-child limit all impact such families disproportionately.  Analysis by Howard Reed and myself for the Equality and Human Rights Commission suggests that the overall impact of changes to the tax and benefit system costs poor families an average of about £5,000 a year, about a fifth of their total income. On top of that, cuts to local authority funding have disproportionately fallen on Sure Start and other children’s’ services. 

Much attention has – rightly – been paid to the analysis of Sir Michael Marmot and others, which has demonstrated the connection between austerity and a general slowdown in the rate at which life expectancy is growing – with actual falls for some low-income groups. But it looks increasingly plausible that austerity has equally had an impact at the other end of the life course: not just shorter lives, but fewer babies. 

Developments in the labour and housing markets following the financial crisis have exacerbated these pressures.  The combination of high and rising house prices – again, driven in part by government policies like Help to Buy – with stagnant real wages has made it much harder for lower and middle-income young couples to buy a house unless they get significant financial support from their parents.  That in turn – given the UK’s cultural norms about homeownership and the nuclear family – makes starting a family much harder. And while the UK has made huge strides towards gender equity in the workplace, there is still a very large “child penalty” for mothers – but not for fathers.  Unsurprisingly, an increasingly well-educated generation of women is unwilling to accept this.


A Symptom of Unease

How much further has this fall got to go?  We simply don’t know.  As noted above, few people predicted either the rise in fertility in the 2000s or the fall in the 2010s, even if we can now identify the key drivers.  But what is clear from international experience is that there’s no automatic self-correction mechanism – fertility rates don’t naturally recover to the replacement rate.  South Korean women have an average of less than a single child apiece, and the trend is still down.  It’s not obvious that any of the factors I’ve described above are likely to reverse themselves in the immediate future.

What are the implications?  Not a falling population; births are probably now exceeding deaths again albeit not by much. And while the overall population did almost certainly did shrink significantly in 2020 as many EU migrants returned home during the pandemic, net migration is likely to be positive again as the economy recovers. Nor, in the short term, a rapidly rising dependency ratio or an overall shortage of workers – indeed, over the next decade, we’ll still see an increasing number of young people entering the workforce, as the mini-boom of the 2000s works through.  

It looks increasingly plausible that austerity has equally had an impact at the other end of the life course: not just shorter lives, but fewer babies

So we’re not going to run out of people or of workers any time soon. But that doesn’t mean that low and falling fertility isn’t a problem – both as a symptom of a more general problem and as a cause of others.  

A country where young people – especially young women – don’t want to have children, because they think they can’t afford it or because they think it’s incompatible with a successful career or a fulfilling life is not one that is delivering for its people, either now or for the future.   That will eventually have a damaging impact both on social cohesion and general wellbeing, and on economic dynamism.

So while I think much of the rhetoric about “intergenerational fairness” is misplaced, and (deliberately or inadvertently) distracts from the real drivers of poverty and inequality – the benefit cuts I listed above were not necessary to finance the pensions “triple lock”, but rather to reduce taxes –  this is one area where it rings true.  

What can, or should, we do?  Immigration is often proposed as a solution to a falling or ageing population. But while I’ve spent much of my professional life arguing for an open, liberal immigration policy – which I think has huge economic and social benefits for the UK – I don’t think it’s the answer to falling fertility rates. Immigration can smooth the transition to an ageing population, but – as indeed the last two decades have shown –  it doesn’t address the root causes.   After all, migrants face broadly the same economic and social constraints as the rest of us, so it’s not surprising that their fertility rates will converge over time.  

So there’s really no substitute for policies that make children more “affordable” – in the broadest sense – for lower and middle-income families.  The Conservatives have long claimed to be the “party of the family” – indeed, in 2014, David Cameron announced that all government policies would have to pass a “family test”, a rule which is still notionally in force, although Boris Johnson is perhaps unsurprisingly less keen to highlight this commitment. Ironically, however, they have presided among the most anti-family policies of any government in living memory.   

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Reversing that will require more government spending – restoring and rebuilding Sure Start and other services that support families, and focusing the benefit system on helping rather than punishing low-income families with children. But it’s not just about spending. Affordable housing for young couples and changing career structures and workplace cultures so to reduce the “child penalty” are equally important.  

Demography may be destiny but it is not fate; there’s no reason that the UK shouldn’t be a great place to have and to bring up children. But it will need a government that actually cares about the issue and about families.

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