Is Dutch tolerance dying?

Spectator

5 hours ago

Campaigners across southern Europe are protesting against 'touristification'. Meanwhile, in the Netherlands, wealthy expats are in the firing line. Businesses in Amsterdam could be asked to foot the bill for local housing if they employ highly-skilled internationals. Alongside paranoia about asylum seekers, there is a rising feeling that expats and even holidaymakers are unwelcome in parts of the continent.
The Netherlands was once an outward-looking, tolerant, trader nation. Is that still the case?
It's not much fun to live in a place – or even visit somewhere – that resents your presence, especially if you have bothered to learn the local language and swallowed the high tax rates that fund northern Europe's generous social benefits. But this 'me-first' sentiment in Europe is great news for London and anywhere else in the market for scarce global talent.
Post-Brexit 'trading volumes shifting to Amsterdam appear to be here to stay,' Dutch financial paper Het Financieele Dagblad jubilantly announced earlier this year. The paper claimed that 'Amsterdam is now bigger than London'. In the aftermath of Britain's departure from the EU, there certainly appeared to be some evidence that London's dominance as a global financial centre might be at risk.
But – unlike the years after the 2016 EU referendum, in which the European Medicines Agency relocated to Amsterdam, and the Netherlands Foreign Investment Agency loudly boasted about winning businesses, jobs and investments – there has been a change of tone. The Netherlands was once an outward-looking, tolerant, trader nation that advertised for foreign students and was proud of its English-language proficiency. Is that still the case?
Last week, Amsterdam council voted to pass a motion to ask international businesses based in the Dutch capital to contribute to solving a general housing shortage and pay for programmes to get their 'lonely' foreign workers to integrate. The policy, 'Make Amsterdam your home', sounded friendly enough, but the message behind it was anything but.
'In short, internationalisation is part of our city but it also brings challenges, such as driving up house prices, the emergence of a parallel world and the transformation of neighbourhoods, for example because more and more English is spoken,' it declared. Foreign companies, said the accompanying Labour press release, should be expected to give something back.
As the Netherlands remembers 80 years of liberation from the Nazis – thanks to Allied troops, speaking that awful language of English – foreigners are being blamed for driving up house prices and sabotaging social cohesion. The facts are less important than nationalist gut feeling: the Dutch government offers 110,000 highly-skilled migrants (including footballers) a temporary tax break to compensate for its high income taxes. But despite the expats, who don't even have a vote, benefitting our country, they are far from popular.
It doesn't seem to matter that a government analysis found the tax break raises €128.5million (£110 million) a year, has a 'very modest impact' on house prices and 97 per cent of the highly-skilled professionals work full time, compared with 52 per cent of the Dutch. Nor that Statistics Netherlands research suggests that Germans and Brits lead the least segregated lives and wealthy locals the most.
The Dutch government recently collapsed in a row over asylum created by far-right veteran Geert Wilders. Universities are scrapping English-language courses and capping international student numbers. Now, Amsterdam councillors are pointing the finger at internationals for the consequences of the Netherlands' part-time lifestyle, lack of house-building and preference for single-person households.
Meanwhile, the country continues to ignore calls from the European Commission, Dutch central bank and its own economists to reduce home owner tax breaks that inflate its housing market.
It's easy – if absurd – to vilify other people and treat hard-working foreigners who do the jobs you can't or won't do as 'exploiting' your system. But the result is obvious: when places like the Netherlands become hostile to international business and talent, it will go elsewhere.
The failure of Dutch tolerance is a marvellous opportunity, in other words, for a place like London – where you can be judged by what you can do instead of by your name; where a finance minister doesn't have to admit the tax office has a problem with 'institutional racism'; and a government doesn't fall after falsely accusing some 40,000 families of childcare benefits fraud. Non-doms might not be welcome in the UK – and Wise, the British fintech, might be leaving for New York – but filthy-rich talent is not a problem in London.
Some Dutch experts, at least, recognise that their golden age is tarnishing. To the concern of the Confederation of Netherlands Industry and Employers (VNO-NCW), the country dropped from 4th in 2021 to 10th this year in the IMD's world competitiveness ranking. The Netherlands might be ahead of the UK (29th) with the help of its international trade, but tax policy is rated a dismal 67th – well under Britain. The general-director of the VNO-NCW Focco Vijselaar tells The Spectator that there is cause for concern.
'For quite some time, we have been pointing out the concrete rot in our business climate,' he said. 'And you see the cracks in these kinds of lists. If you look at international investment, we are at 41st place, an unprecedentedly low spot. We are struggling with major bottlenecks in the Netherlands: a housing market that is locked down, nitrogen pollution problems and high energy prices.'
Flip-flopping on highly-skilled migrant tax breaks does not help, he added: 'We need the expats.'
Liberal democrats in Amsterdam are also worried about scapegoating the international community. 'That social cohesion is under pressure is not solely due to the expats,' said Democrats 66 economics spokesman Erik Schmit last week. 'Housing prices are rising: it is not proven that this is solely due to the international community…As a government, we have other priorities.'
But after constant changes to the 30 per cent highly skilled migrant tax-free allowance and the removal of its non-dom ruling, the Netherlands is increasingly out of favour. New foreign student numbers have plunged, threatening various courses. Data from jobs site Indeed shows a drop of 48 per cent in applications from India and 40 per cent from the UK this year. Emigration appears to have peaked and highly-skilled migrant numbers are tumbling.
Britain might have creaking infrastructure and complex regulation, but it is remarkably open and far less corrupt than many of its neighbours. If the Dutch want to drive out innovators, talent and factories with high energy prices, punitive taxes and cultural suspicion – and if southern Europe is busy fighting with tourists – other cities have a chance. Now is the time to declare Britain open for business.