North England vs. The Netherlands.
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Years ago I saw a collection of maps with the title "Holland is not a dense country, but an empty city". This was before the Dutch government's campaign to get people to correctly call the country The Netherlands.
The core of the Dutch economy is the Randstad, a disperse urban area of about 8 million people centred on the cities of Rotterdam, Amsterdam, The Hague, and Utrecht. The Randstad extends into at least four provinces in the West of the country, of which just two are Holland.
When I first saw this map, I opened up QGIS and created a version to show what was then called the Northern Powerhouse, which I defined as the urban areas centred on Manchester, Leeds, Liverpool, and Sheffield, in the same way.
Simlarities and differences.
The Northern Powerhouse and the Randstad are almost exactly the same in population, scale and density. And the similarities between North England and the Netherlands don't stop there.
Beyond the 8 million population urban core of the Netherlands live another 9 million Dutch. Beyond the 8 million population urban core of North England live another 7 million Northerners. The area of North England is almost identical to that of the Netherlands. The two have about the same length of major roads and railways.
The Netherlands isn't even that much further South than North England; Groningen is North of Chester. Culturally we share more than just beer, darts, football, and fried food — but that's a good start.
For all our similarties, there are a lot of differences too. Since I am interested in economies, I've focused on them and summarised some in the table below.
The economy of the Netherlands is at least 50% larger (probably more like two thirds larger) than the economy of North England. The incomes of people in North England are boosted by money transferred from the more prosperous South East, but Dutch households still have 20% more money to spend.
Public sector spending on research and development in the Netherlands is twice as high as in North England. So is private sector spending.
The Netherlands has just as great a length of railways as North England, but twice as much is electrified. Much larger, faster, and more reliable Dutch trains carry at least twice as many passengers per year. A new freight railway connects the country's main port to the rest of Europe without disturbing passenger trains. A new high speed railways does the same for international travel, relieving congestion so that more local and regional trains can run.
North England has nothing similar. Nor, of course, does it have anything like the same infrastructure for cycling and walking.
Equally poor vs. unequally rich.
Regional inequality of the economy in North England is very low. This surprises a lot of people, but the data is clear. Cheshire has a strong economy, but it is an exception. The majority of Northerners live in places with near-equally weak economies.
This is not true of the Netherlands. North Holland, South Holland, North Brabant, and Utrecht all have populations larger than, and economies stronger than, North England's strongest economy, Cheshire. The Dutch regions with the weakest economies (Groningen and Friesland) trail behind the Netherlands' leader by more than Tees Valley and South Yorkshire trail Cheshire, but they would be considered strong economies in North England. Even the weak eceonomies of Groningen, Friesland, and Flevoland are the equals of Greater Manchester, Cumbria, West Yorkshire, and North Yorkshire.
The same pattern is true of incomes, though the size of the effect is reduced by fiscal transfers into North England and within the Netherlands.
Cities, cities, cities.
The most obvious differences between the economies of North England and the Netherlands are found in their large cities. It is in the underperformance of the Northern Powerhouse's four cities compared to the four cities of the Randstad that the gap really opens up between the economies.
Dutch cities are no bigger than North England's, the OECD's harmonised city size data shows North England's to be larger if anything. But as is suggested by the far better transport infrastructure — over four times the number of trams and metro stops in the Netherlands than North England, double the train use, and far better cycling and walking provision in cities — the Randstad's cities are far easier to get about and to get between. This is obvious when in the Netherlands, alongside the better housing, lower absolute poverty, and obviously greater prosperity.
Why has this happened and how can North England do better?
North England's economy was stronger than the Netherlands' for at least one hundred years, from the mid 1800s until the mid 1960s, when the Netherlands caught up and overtook it. Since then, North England has fallen ever further behind the Netherlands, despite their similarities.
The reasons for this are complex, contested, and impossible to know. Here are some of my opinions on why I think the Netherlands has so outperformed North England. But first, why I don't find some explanations that I've heard unconvincing.
Proposed explanations of Dutch overperformance that I'm unconvinced by.
- Oil and Gas: Yes, the Netherlands discovered gas at around the same time as the UK discovered oil and gas. But the UK has since found and extracted more natural resources than the Netherlands as a percentage of GDP. I don't think this can explain the Netherlands' outperformance.
- Topography: North England is divided by the Pennines, which some suggest forms a natural barrier to agglomeration and thus prosperity. I find it implausible that the minor inconvenience of a small mountain range is comparable to the cost of the Netherlands being at constant threat of catastrophic flood and having to reclaim much of its usable land from that threat.
- Deindustrialisation: The Netherlands' former coal mining areas in Limburg have recovered. The former industrial areas especially in North Brabant too. South Holland and especially the port of Rotterdam has been rebuilt from near-total destruction in World War II. Through huge investment in infrastructure it has been made the leading European trading economy. In many ways the Netherlands is a case study in how de-industrialisation is not an excuse for enduring economic underperformance of the scale seen in North England.
Why I think that the Netherlands' economy has outperformed North England.
The Dutch people and thus the Dutch government are interested in the prosperity of the Netherlands more than the North English people and the UK government are interested in the prosperity of North England. In part this is because the Netherlands cannot rely on large inward transfers of money from South-East England to pay for its standard of living in the way that North England can.
In large part I think that this greater focus on prosperity is because the Dutch government is based within the Netherlands and the UK government is not based in North England. The Dutch have more skin in the game and a greater belief in their own ability to suceed. North England's ambitions are set by, and in effect constrained by, a government in Westminster that doesn't believe that North England can achieve as much as the Netherlands, and which invests with preference to the seat of government.
Differences in attitudes and ambitions lead to different actions.
Importantly, the government of the Netherlands has allowed the Dutch economy to focus on the Randstad in a way that the UK's government refuses to let North England's thrive. This manifests itself most obviously in local power — all Dutch provinces and cities enjoy regulated public transport, still effectively illegal (though this is changing) in North England — and investment in growth via both infrasturucture and R&D spending. Dutch cities enjoy excellent transport infrastructure because the Dutch government has invested in it ahead of perks such as free bus passes to buy votes.
Where the UK government has cancelled tram and metro building projects in North England's cities, the Dutch government has not. Delft has an underground railway station like the one considered too costly for Bradford. Rotterdam has a fantastic metro and tram system, a dedicated freight railway to keep its port the most important in Europe, and a dedicated high speed railway to ensure high capacity services to the whole of the Netherlands. Compared to Leeds, where all equivalent investments have been cancelled by UK government, it is no surprise that the Dutch economy is far stronger.
The good news for North England is that I can see little reason why it, with better government and a similar desire to build a better and more prosperous society, could not achieve the same prosperity as the Netherlands. It will probably require slightly higher taxes to fund higher public spending, but this should pay dividends quite quickly. It will require greater freedom from a UK government that currently restrains ambitions for economic growth locally for short-term political reasons. It will require a desire locally to build the more and better homes, business premises, and infrastructure that the Netherlands has in excess of North England and that form the foundation of its economic outperformance. It will need the UK government to stop preferencing investment and the creation of new 'national' organisations in South East England such as The Crick, the CDEI, and Tech Nation for no good reason and to the detriment of both the UK's regional economies and the UK's overall prosperity. It will require the recreation and funding of abolished regional development agencies, equivalents of which operate with success in the Netherlands. Most controversially, it will probably require greater realism about how equal (and equally poor) North England currently is and the extent to which inequalities within North England may rise if society becomes as prosperous as the Netherlands. But there is nothing magic in the Netherlands that we could not emulate in North England, if we wanted to and were free to do so.