HCILRHE:

In 1968, a Stanford University professor, Paul R Ehrlich, warned that by the 1980s, humanity would be starving to death thanks to overpopulation. Time has turned the book, and its author, into a economists' joke; almost nothing he predicted has come to pass. While the world's population certainly has grown, human ingenuity more than kept up. The average human is now better fed than at any point in history.

Indeed, curiously, in the developed world, we now face the opposite problem: ageing. Italy, the total fertility rate has fallen to 1.23 children per woman, and one in five Italians is now over the age of 65. At one point, Russia's population was actually falling at a rate of 800,000 per year - though the decline has now slowed. Japan's working age population is expected to decrease by 20 per cent over the next 20 years, as is Germany's. These are only the extreme examples.

And the problem with ageing populations is that they are expensive. All of these countries provide tax breaks, benefits, pensions and so on to the elderly, and they all subsidise healthcare one way or another. As we report this morning, in the United Kingdom, rising life expectancy could eventually add another £750 billion to the national debt through the cost of pensions alone. Add the extra 5 per cent of GDP that the Office for Budget Responsibility says we'll have to spend on healthcare, and suddenly you can see why we're stuck on what my colleague Benedict Brogan calls the "great tax escalator".

But in this country, things aren't so bad, because unlike in Italy and Germany, the birthrate has actually increased quite a lot over the last 15 years. One of the reasons why is that New Labour's attempt to reduce child poverty through tax credits made it a lot cheaper for people to have children. Predictably enough, the result was that they are now having more of them. Thanks to this baby boom, our long term fiscal prospects are less bleak than they otherwise would be - more taxpayers means less tax per payer.

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