Nick Timothy
In London, they are closing primary schools, and more and more it will happen around the country. From Devon to Darlington we have more school places than children in need of an education, and the gap is growing. The total fertility rate in Britain has fallen to 1.49 births per woman – the lowest ever recorded.
No sudden moment prompted this trend. Just like in lots of other countries, we simply started having fewer babies, and the consequences will be profound. Without great productivity leaps made possible by technology, a population in numerical decline will struggle to fund pensions, public services and its own defence. It will demand higher taxes of working-age people and risks deflation, which reduces consumption, slows growth, increases the real value of debt, and leads to dangers such as banking crises.
For years, we knew this change was building, and today we know it looks set to continue. But unlike specific moments and events – a pandemic, perhaps, or a war or financial crash – we find slow change harder to confront. Far too long after the falling birth rate became clear, we are starting to consider what might be done.
Two decades ago, thinkers like Lord Willetts, the former pensions minister, warned us to heed declining birth rates. But something more pressing – or more convenient – always got in the way.
Only now are we debating how we blundered into making parenthood too difficult and expensive, how we encourage family formation, what we do about childcare, and whether tax breaks and direct payments might increase the birth rate. We are arguably already too late, but even today, there is a suspicion among some that worrying about the size of families is a sign of eccentricity or extremism.
Something similar applies to our ageing society. The growing number of people living in their 70s, 80s and 90s has led to an increase in the state pension age, but that is about all. County council budgets are now dominated by social care costs, and central government budgets by pensions, health and social care spending. This squeezes other budgets and makes it harder to keep taxes down. But despite the long notice, we did not plan for the problem. Our tax system traps older people in ill-equipped houses that are too big for them, and social care is an expensive and dysfunctional mess.
We neglect other kinds of demographic change. The census showed, for example, that the UK Muslim population has grown by 44 per cent in the last decade, and research by Pew suggests one in five us might be Muslim by 2050.
Whatever your view of the desirability of this change, nobody can doubt it has far-reaching social and political consequences, such as the recent election of Islamist MPs to the House of Commons. Yet the gradual nature of the change and fear of talking about race and religion means our leaders have preferred to turn their attention elsewhere. We see something similar with economic change too.
The Russian invasion of Ukraine caused an energy crunch two years ago, but British energy prices had been growing increasingly uncompetitive for decades. During the 1980s and 1990s we generally had the third most competitive industrial electricity costs of the G7 economies. But a lack of investment in nuclear power and later climate change policies meant this all changed.
The cost of policy failure was not sudden but gradual: our industrial electricity costs went from just above the average for an advanced economy in the years before Tony Blair became prime minister to 23 per cent higher by 2010, to 52 per cent higher for the past five years. As costs have risen, our manufacturing base has shrunk and the trade deficit has increased.
No single regulation breaks business, but the steady accumulation of taxes and laws can make an economy unproductive. According to research by Britain Remade, it costs Germany £24 million per mile to build new tram tracks. In Europe, the average is £42 million per mile, but in Britain it is £87 million per mile. It is more expensive here to build roads, railways and power stations than in comparable countries.
The reason is the gradual increase of regulation, administrative law and bureaucracy, created by public authorities and private businesses seeking to anticipate the whims of planning officers and judges.
Like bankruptcy, social and political change can happen slowly, and then suddenly. The revolt of the elites, in which those in positions of power became disconnected from the lives and interests of those they led or supposedly served, was foreseen by the late Christopher Lasch, in the early 1990s. But the ideas behind the change in culture – a fusion of selfish individualism and apparently high-minded ideology and internationalism – were decades in the making. So were the academic, commercial, institutional and technological developments that created the networks that made the change possible.
From housing to skills, we could list many more examples. Commentators talk about the European Convention on Human Rights as though it were still the same legal instrument as that advocated by Winston Churchill, yet decades of jurisprudence and the creep of the Court’s powers mean it is something else altogether. Our policy of benign neglect towards Beijing has led us to grow slowly dependent on Chinese investment, leaving us silent and complicit in its destruction of Hong Kong, its threats to neighbours, and the industrial espionage and economic warfare it wages here and elsewhere.
Our society, media and political system are geared towards the immediate and not the long term, and we struggle to notice deeper trends than headline events. But even when we do notice, we tend not to focus on them. The election cycle may be too short, our institutions too corrupted by ideology and frivolity, our society too divided and distrustful, our economy too dependent on the kindness of strangers, for us to think long to the future.
Too often, the slowness of change and distance of danger is a convenient and irresistible excuse for inaction. A country needs leadership, and leadership requires the bravery to confront the inevitable. From the economy to demographic change, from our legal system to national security, fatalism must give way to courage.
