The fall of Rutte III, the allowance affair and the elections

Writer: Koen Donatz

After weeks of suspense and speculation, the time had come on Friday 15 January 2021: the entire cabinet submitted its resignation to His Majesty the King. Thus, Rutte's third cabinet was stranded two months before the elections due to the infamous allowances affair. The allowances affair shows the flaws in our welfare state. Although the government is there to protect its citizens, the Ministries of Social Affairs and Employment and the Ministry of Finance destroyed the lives of 26,000 families. It happened under the eyes of politicians like Lodewijk Asscher, Eric Wiebes and Mark Rutte, but they failed miserably in their duty to spot the injustice in time and intervene. The allowances affair and subsequent cabinet collapse may have implications for the 2021 parliamentary elections. But first, let's see what the allowances affair was even about.

The benefits affair in a nutshell

The benefits affair concerns the childcare allowance, a means-tested allowance that parents can receive to help with childcare costs. As with any benefits scheme, there is a risk of fraud. For instance, by providing incorrect information about the childcare costs incurred, people can receive too much childcare benefit. Of course, this sometimes happens, but in most cases it is a matter of people making a mistake, which is understandable given the complexity of the benefits system. Nevertheless, especially after it emerged in 2013 that some 800 Bulgarians had received €4 million in undue childcare benefits, the Lower House urged a strict approach to fraud. Officials at the Ministry of Finance and the Tax Administration eagerly complied, with the result that between 2013 and 2019, 26,000 parents were wrongly labelled fraudsters and had to pay back the childcare allowance they had received, sometimes as much as tens of thousands of euros. This plunged a lot of these families into misery, losing their jobs, homes, marriages and suffering mental health problems, all because of mistakes made by the government. On the initiative of GroenLinks MP Bart Snels, a parliamentary interrogation committee led by CDA MP Chris van Dam questioned a number of (former) ministers and top officials of the ministries of Finance and Social Affairs and Employment about the benefits affair in late 2020. They included Eric Wiebes, Lodewijk Asscher, Wopke Hoekstra, Tamara van Ark and Mark Rutte. On 17 December 2020, the committee published its hard-hitting report, called Unprecedented injustice. The report shows that the basic principles of the rule of law were plainly violated.

The fall of the cabinet and of Lodewijk Asscher

Then the speculation began. Which ministers will step down? Will the cabinet fall? Can Lodewijk Asscher actually stay on as PvdA leader? Indeed, the first to draw his conclusion was Asscher (former Social Affairs and Employment Minister), who left as party leader on 14 January. Internally, things had been unsettled within the PvdA for some time by then; a vote of no confidence in him was due to arrive at the next party congress. A day later, the cabinet fell. Although most members of the cabinet will continue to govern on a caretaker basis, Eric Wiebes (responsible for the Tax and Customs Administration as state secretary during Rutte II) decided to resign altogether.

The impact on different political parties

It is still difficult to say for sure now how these events will affect the various political parties, but I will make a tentative attempt anyway.

VVD: While no scandal seems to really affect Mark Rutte, the fall of his third cabinet is a defeat for Rutte. It means that two of his three cabinets have not lived up to the ride. The VVD has been at a lonely height in the polls for months. I expect the allowances affair to do little to change this. Since Asscher has resigned as the leader of his party and the affair is a gross stain on the cabinet, the question now arises whether Rutte can stay on as VVD party leader. Yet I do not expect Rutte to step down from this position. After all, there are no obvious counter-candidates for the party leadership within the VVD. Besides, Rutte has become incredibly popular due to the corona crisis.

Labour Party: The PvdA looks set to feel the blow of the allowances affair. The PvdA's electorate was already historically small, and with the party losing its leader some two months before the elections, the party is likely to drop even further in the polls. Lilianne Ploumen, Asscher's successor, will have a lot of work to do in a short time to ensure the PvdA gets back on its feet.

CDA: The allowances affair is a double-edged sword for the CDA. On the one hand, it means CDA Finance Minister Wopke Hoekstra had to resign one day before his final confirmation as list leader over a huge scandal his ministry is responsible for. On the other hand, the surcharges affair has brought much appreciation to CDA MP Pieter Omtzigt, who has been working on this issue for a long time. So the effect of the surcharges affair on the CDA is uncertain. Moreover, given all the internal chaos that preceded Hoekstra's list leadership, he is unlikely to resign as party leader like Asscher.

GroenLinks: GroenLinks did not play a central role in the surcharges affair, so the direct electoral effect for GroenLinks is not very big. However, it is true that the Labour Party is one of GroenLinks's biggest electoral competitors and the blow to the Labour Party from the surcharges affair could be a gain for GroenLinks.

All in all, the fall of the cabinet so far does not seem to make much difference to the polls, although this could change in the coming weeks.

Election time

Political Hague has been dominated by two issues in recent weeks: The COVID-19 crisis and the surcharges affair. With the fall of the cabinet, the surcharge affair is likely to play a bigger role at election time. That in itself is good news for GroenLinks. As long as election time had been mostly about COVID-19, it would have mainly benefited Rutte as crisis manager. Now that the focus is shifting a bit to the benefits affair, GroenLinks can capitalise on this nicely by conveying the importance of a strong, social system and why welfare state reform is needed. GroenLinks has clear ideas on this in its election manifesto, such as abolishing the childcare allowance and making childcare free for four days a week.

Although the cabinet has fallen, the misery for the tens of thousands of aggrieved parents is obviously not over. They have yet to be compensated, but the damage done to them cannot be undone with a sum of money. Hopefully, though, this cabinet fall is a turning point, and will serve as a reminder to future cabinets that the human measure must always be observed when implementing (social) policies. In the coming weeks, all political parties will start telling us how terrible the benefits affair was and that this should never happen again. Fine words, but hopefully the next cabinet, with GroenLinks in it, will also translate this into action.