A fundamental tensions at the heart of modern British Conservatism is between Economic and Social Conservatives, those who emphasise the need for lower taxes and a smaller state on the one hand and those who hanker for a more traditional society on the other.
This paper demonstrates that the interests of both are in common. Low birth rates create an ageing population increasingly dependent upon the state – and without more children, the UK and other developed countries are likely set on an endless journey towards greater dependence on the state, rising taxes and exploding levels of state debt.
Using original modelling, the paper explores three scenarios and finds that the combination of continued low birthrates and the ageing population could – absent wider efficiencies or increased growth – result in Government spending increasing to 58% of GDP – an increase that would require a rise in taxation equivalent to a rise in the average rate of income tax by 7.4 percentage points.
To reverse this trend, there would need to be a broader reorientation of policy, taxation and benefits across the board, from the focus on the individual to a system that consistently and systematically supports the family.