Can Nigel Farage really boost Britain's birth rate?

Telegraph

2 days ago

As Sir Keir Starmer continued to drag his feet over one of the most contentious policy issues among Labour MPs and voters, Nigel Farage spotted an opportunity.
Proclaiming during a speech last week that Britain had 'lost our sense of focus of just how important family is', the Reform UK leader unveiled plans to lure frustrated Labour voters while also attempting to arrest a decline in the UK's birth rate.
Farage pledged that an elected Reform would scrap the two-child benefit cap and introduce a transferable tax allowance for married couples, in a bid to encourage people to have children.
'This is part of a bigger package and policy that we are putting together to try and make the family a more important element in British life,' said Farage.
It marks the party's move into pro-natalist policies.
Reform's proposed transferable tax allowance for married couples takes inspiration from central Europe. During his time in office Viktor Orbán, the Hungarian prime minister, has placed significant focus on the importance of birth rates and traditional families.
Earlier this week, Farage said he was 'not moralising' on the significance of marriage and added that having been divorced twice his 'track record was not so good on this'.
Reform's policy would exempt one partner in a marriage from paying tax on the first £25,000 of their salary.
Ben Ramanauskas, a senior fellow in economics at the Policy Exchange, says the proposal would bring the UK 'into a territory where most European countries are'.
He adds: 'They have a much more generous system when it comes to taxing households and families.'
However, Ramanauskas cast doubt on the idea that the measure could encourage couples to have children: 'The proposal itself won't have much of an impact on what Farage is aiming for in terms of hoping to increase the birth rate.'
Reform's plans also miss out a key group of would-be parents. More than half of children in the UK are born to couples out of wedlock. So with the transferable tax allowance only reserved for married couples, the baby boosting effect of the policy is unclear.
The party has also said it would scrap the two child benefit cap, a pledge which is estimated to cost £3.4bn, according to the Institute for Fiscal Studies.
Tomáš Sobotka, deputy director at the Vienna Institute of Demography, says abolishing the cap would help to lift children out of poverty but its impact on Britain's birth rate is likely to be 'marginal'.
'Most parents today don't desire more than two kids so it's a select group of women and families who are having a third or a fourth child,' he says. 'Providing a bit more in services … will not change fertility planning among many couples.'
In Hungary, Orbán's attempts to fix the country's birth crisis mean it spends around 5pc of its GDP on measures aimed at encouraging couples to have children.
The most significant of these measures is the country's large tax breaks. Currently mothers under 30 pay no income tax and mothers with three or more children are exempt from paying income tax for life.
Orbán has also pledged to extend the measure to mothers of two children by January 2026.
The government also offers loans to newly-weds that can be partially or fully written off if the couple has two or three children – as well as subsidies for family car purchases and housing.
Despite Orbán's significant spending and hopes of a baby boom, Hungary's birth rate stood at 1.52 children per woman in 2022, in the UK it was 1.53 children per woman in 2021.
For context, a country needs a fertility rate of 2.1 children per woman to ensure it has a stable population, without immigration.
'In the last few years Hungary has experienced fertility declines to the same extent as other countries and it now has exactly the same fertility rate as the European average ... from that perspective Hungarian policies are not bringing in tremendous success,' says Sobotka.
But Orbán's focus on large families is helping to deliver an uptick in the number of households with three or more children, Sobotka adds.
In the Nordics, the picture isn't any clearer. Finland pioneered the introduction of family friendly policies including parental leave and childcare from the 1980s onwards. The country reported a rise in its birth rates in the 1990s despite going through a financial crisis.
'Introducing these kinds of policies if they are long term … longer parental leave and especially affordable childcare have been shown in a wealth of studies both in the Nordic countries and from other countries to be associated with somewhat higher fertility,' says Anna Rotkirch, of the Family Federation of Finland's Population Research Institute.
'No silver bullet policy'
However, she warns these measures 'are not enough for today's situation,' and that 'there's no silver bullet policy.'
Indeed, the initial boost to Finland's birth rate in the late 20th century has waned and since 2010 the country has seen its birth rate decline by a third.
Yet, Rotkirch says that while government spending and Reform's proposed policies might not have much of a demographic impact they were an important element in reducing child poverty.
'The cost of parenting is real and it is also economic,' she adds. 'Why do we have a society where you get poorer if you have a child?'
Over in South Korea the picture is even more challenging. In May 2024, the then-president Yoon Suk Yeol asked for the parliament's cooperation to establish the Ministry of Low Birth Rate Counter-planning.
'We will mobilise all of the nation's capabilities to overcome the low birth rate, which can be considered a national emergency,' he said.
The country has gone through a raft of measures including baby bonuses, subsidised fertility treatments and housing assistance but the country's fertility rate stood at 0.78 children per woman in 2024.
Melinda Mills, a professor of demography at Oxford University say: 'They've also shown that throwing a lot of money at it doesn't work so you have to get to the root of people's lives. What are their work hours? Where do they live and work? Where's childcare?'
One nation that has a slight edge in the birth rate compared to its European neighbours is France.
Mills added that France's more comprehensive package of subsidised childcare, parental leave and school support goes some way in encouraging couples to have children.
Indeed the measures seem to be having a small effect on the country's fertility rate, which was 1.8 children per woman in 2021 compared to the EU average of 1.53 during the same year.
'It's harder work than throwing a baby bonus and trying to think you could do a silver bullet but actually creating an ecosystem that has childcare, that has good maternity and paternity leave, has a good work-life balance – that's where France has done very well,' says Mills.
However, it's clear that there is no one pro-natalist policy which will act as a catalyst to boost birth rates.
While Farage's proposed Hungarian-style tax breaks look unlikely to persuade couples to have children, Mills explained that measures which addressed quality of life were likely to be more impactful.
'People need a good life, they need good jobs, be able to get a house, childcare,' says Mills.
'It's about wellbeing, it's about work-life balance. That's not as sexy … but these are the things that have been shown to be more effective.'