UPDATE DUTCH POLITICS Cabinet Rutte resigns following childcare benefit scandal

Today, Prime Minister Mark Rutte will offer the resignation of his Cabinet to King Willem-Alexander, following a parliamentary report on a childcare benefit scandal, involving parents who were wrongly accused of defrauding the childcare benefit system.

In the report “Unprecedented Injustice”, a Parliamentary Inquiry Committee concluded, among other things, that fundamental principles of the rule of law were violated by the Dutch Tax Authority. Legislative implementation to fight fraud leading to these violations was not sufficiently overseen by several Cabinet members, which is now one of the reasons for the Cabinet to resign. The consequences of the resignation – in particular how the outgoing Cabinet will deal with the COVID-crisis – will become clear in the next few days.

What happened!?

The childcare benefit scandal is a political affair in which approximately 26,000 parents became unjustly victim of suspected fraud with the childcare allowance and/or became victims of a hard fraud approach by the Tax Administration. The result was that many of these parents found themselves in significant financial difficulty, in some cases even bankruptcy and uncertainty for many years. Many families were pursued for fraud before the courts, ordered to repay benefits and denied the right for appeal from 2012 on.

This came to light in September 2018 and subsequently led to the resignation of state secretary of Finance Menno Snel (D66). Current Prime Minister Mark Rutte (VVD) was head of the ministerial committee against fraud at that time. Current minister of Economic Affairs Eric Wiebes (VVD) was state secretary for Finance. The Parliamentary Inquiry Committee reports he misinformed the House of Representatives about the issue. In addition, Lodewijk Asscher (PvdA), then minister for Social Affairs and currently opposition leader of the Social Democrats in the House of Representatives, was also held responsible. Asscher announced on January 14 to resign over the affair as political leader for the upcoming elections. The government has apologized and in 2020 set aside compensation of over 500 million euros.

Caretaker Cabinet

When Prime Minister Rutte – who said earlier this week that the VVD was to opposed dissolving the current coalition – has offered the resignation of his Cabinet to the King, his Cabinet becomes a so-called caretaker cabinet. A caretaker Cabinet with currently four ruling parties, has the same powers as a regular cabinet. When the Prime Minister offers the resignation of his cabinet, the King asks the Prime Minister “to do whatever is deemed necessary in the interest of the Kingdom”. In practice, this means that the Cabinet only deals with “current affairs” – policies that are urgent and not controversial. It is the House of Representatives that decides what is urgent and not controversial. The House already would have ended its formal session on February 12 due to the upcoming national elections and campaign recess. It seems likely that in the coming months the focus of the Cabinet remains primarily on COVID-related issues and that most other topics will be declared controversial. Prior to today’s resignation, opposition parties PvdA and GroenLinks have already announced to support a caretaker Cabinet fighting the COVID-pandemic.

Elections on 17 March 2021

When a Prime Minister offers the resignation of his cabinet to the King, new elections need to be held no later than three months after the King has signed the so-called dissolution decree. Since the elections were already scheduled for 17 March 2021 and this date falls within this three-month period, this date is expected to be maintained. After the elections, the Cabinet will maintain a caretaker status until a cabinet is formed. Which parties will form a new Cabinet depends on the election results. Thus far the VVD of Prime Minister Mark Rutte, the PVV/Party for Freedom of Geert Wilders and the CDA/Christian Democrats with the new political leader Wopke Hoekstra, are doing well in the polls.