Britain’s falling birth rate risks increasing the income tax burden [1] on people by one quarter by 2080, a think tank has said.
A report by Policy Exchange [2] calculated that continued low birth rates and the ageing population could result in government spending rising to 58 per cent of GDP.
In the absence of sufficient economic growth, this would require an income tax rise equivalent to 7.4 percentage points, from the current average of 26.4pc of income to 33.9pc of income.
The official fertility rate is now well below replacement level and statistics released at the end of last year showed the number of children born to British mothers has fallen by a quarter in 15 years.
The Policy Exchange report warned there was no “silver bullet” for collapsing birth rates and said high levels of net immigration in recent years had only provided a “temporary fix”.
“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”, it concludes.