Amsterdam’s council has helpfully explained that it only wants rich tourists in future

Luckily rich people never take cocaine. Image: Getty.

Amsterdam has a new resolution for 2017: care less. Between Christmas and the New Year – when everyone was still scrambling to work out which way was up and who shoved Uncle Richard’s homemade mince pies behind the radiator – the city council announced that it was upping the city’s tourist tax. This will reduce the number of cheap hostels in the city centre, while having little impact on the more expensive hotels.

Then, channelling the spirit of bah-humbug and DGAF, the council explained that they were doing this in an attempt to get rid of the budget tourists. And the stag parties. And pretty much anyone whose travel budget doesn’t extend to more than €50 a night. It’s a bold move: attack to defend, accuse yourself of elitism before committed carpers like myself have even logged onto Twitter.

Amsterdam alderman Udo Kock explained to Dutch newspaper Parool that 28 per cent of tourists visiting the city book into budget hotels – and “that has to be reduced”. The city’s plan to reduce the number of budget bookings involves slashing tourist tax breaks and changing the way tourist tax is calculated.

Right now tourists pay 5 per cent of the cost of their room when they check out – a system that the under-paid and much beleaguered hotel concierges just lurve explaining to hungover guests. In the future a split fee might be introduced; that’d mean the guest paid a fixed amount per night, plus a percentage of the hotel bill.

Kock and co claim that scrapping tax deductibles like agency fees while increasing the tourist tax will raise an extra €4m for the city in 2017. This extra money will presumably be spent washing the pleb-ooze off park benches and training a flock of iPhone carrying bluebirds to escort all the “quality” tourists to their “quality” hotels.

It gets better: in 2018, the increased tourist tax will bring in €9m, and encourage tourists to spread out across the city. This is a kind of divide and conquer style, where every borough gets a Minion-themed stag party, rather than letting the city centre hoard them all in some kind of weird, central, easily accessible, tourist district.

Anti-tourist rumblings first made headlines back in 2014, when high profile Amsterdam residents began complaining about the volume of visitors invading the city. Rijksmuseum chief Wim Pijbes claimed that tourists were causing the city to become “full”, “dirty” and “sleazy”, a description that travel companies are probably using verbatim for promotional purposes.

Following Pijbes’ complaints a number of Dutch politicians also expressed concerns over tourist numbers. A campaign was launched to encourage people to visit different parts of the city; a group of residents petitioned the mayor to crack down on disruptive tourists; the city put a stop to new hotel development; and a scheme was launched to calm tourists down via the universally soothing practise of sporadically flashing lights.


This latest attempt to dissuade low-income tourists from polluting visiting Amsterdam is the result of a familiar, yet grotesquely flawed, belief that wealthy tourists spend their holidays quietly, unobtrusively, spending money. Meanwhile the rank and file swim around in the city gutters – regurgitating cigarette butts into letter boxes, dousing everything with bodily fluids, and demanding to know why the local casino doesn’t take Love To Shop vouchers.

Evidence of this thinking can already be seen in ongoing attempts to gentrify the Amsterdam Red Light District. Despite being one of the city’s most commercially viable and popular areas, the Red Light District has remained remarkably accessible to all kinds of businesses. Independent brothels operated next to chain burger bars and eco-friendly sex shops while family-held businesses are commonplace. In 2008, however, the city council announced they would “clean-up” the Red Light District and began replacing the famous brothels and coffee shops with designer boutiques.

Set aside accusations of gentrification, landgrabs, offensive stereotyping and coded language: it doesn’t make sense for a city that makes so much money from the tourism industry to start pulling up the drawbridge in pursuit of a comparatively small pay-off.

As with most outwardly baffling, apparently self-sabotaging, schemes, though some of the blame for Amsterdam city council’s latest announcement can be attributed to Brexit. Yes, Amsterdam is swimming in tourist euros but it’s also attractive to international investors. With financial companies pulling out of post-Brexit London, a plethora of corporate tax breaks, an established international community and a “progressive spirit”, forecasters are already predicting that Amsterdam could become Europe’s next financial centre.

All of this means that 2017 really is looking like a win-win scenario for Amsterdam city council’s aversion to budget tourism. If Amsterdam does become the next go-to place for tax-dodging multinational companies the lost budget tourist euros will have little impact on the city’s income. And if the city is undercut by established tax havens like Luxembourg or Geneva (concerns have been raised over Dutch salary caps) at least the council will have freed up more space for the wealthy tourists to park.

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“Stop worrying about hairdressers”: The UK government has misdiagnosed its productivity problem

We’re going as fast as we can, here. Image: Getty.

Gonna level with you here, I have mixed feelings about this one. On the one hand, I’m a huge fan of schadenfreude, so learning that it the government has messed up in a previously unsuspected way gives me this sort of warm glow inside. On the other hand, the way it’s been screwing up is probably making the country poorer, and exacerbating the north south divide. So, mixed reviews really.

Here’s the story. This week the Centre for Cities (CfC) published a major report on Britain’s productivity problem. For the last 200 years, ever since the industrial revolution, this country has got steadily richer. Since the financial crash, though, that seems to have stopped.

The standard narrative on this has it that the problem lies in the ‘long tail’ of unproductive businesses – that is, those that produce less value per hour. Get those guys humming, the thinking goes, and the productivity problem is sorted.

But the CfC’s new report says that this is exactly wrong. The wrong tail: Why Britain’s ‘long tail’ is not the cause of its productivity problems (excellent pun, there) delves into the data on productivity in different types of businesses and different cities, to demonstrate two big points.

The first is that the long tail is the wrong place to look for productivity gains. Many low productivity businesses are low productivity for a reason:

The ability of manufacturing to automate certain processes, or the development of ever more sophisticated computer software in information and communications have greatly increased the output that a worker produces in these industries. But while a fitness instructor may use a smartphone today in place of a ghetto blaster in 1990, he or she can still only instruct one class at a time. And a waiter or waitress can only serve so many tables. Of course, improvements such as the introduction of handheld electronic devices allow orders to be sent to the kitchen more efficiently, will bring benefits, but this improvements won’t radically increase the output of the waiter.

I’d add to that: there is only so fast that people want to eat. There’s a physical limit on the number of diners any restaurant can actually feed.

At any rate, the result of this is that it’s stupid to expect local service businesses to make step changes in productivity. If we actually want to improve productivity we should focus on those which are exporting services to a bigger market.  There are fewer of these, but the potential gains are much bigger. Here’s a chart:

The y-axis reflects number of businesses at different productivities, shown on the x-axis. So bigger numbers on the left are bad; bigger numbers on the right are good. 

The question of which exporting businesses are struggling to expand productivity is what leads to the report’s second insight:

Specifically it is the underperformance of exporting businesses in cities outside of the Greater South East that causes not only divergences across the country in wages and standards of living, but also hampers national productivity. These cities in particular should be of greatest concern to policy makers attempting to improve UK productivity overall.

In other words, it turned out, again, to the north-south divide that did it. I’m shocked. Are you shocked? This is my shocked face.

The best way to demonstrate this shocking insight is with some more graphs. This first one shows the distribution of productivity in local services business in four different types of place: cities in the south east (GSE) in light green, cities in the rest of the country (RoGB) in dark green, non-urban areas in the south east in purple, non-urban areas everywhere else in turquoise.

The four lines are fairly consistent. The light green, representing south eastern cities has a lower peak on the left, meaning slightly fewer low productivity businesses, but is slightly higher on the right, meaning slightly more high productivity businesses. In other words, local services businesses in the south eastern cities are more productive than those elsewhere – but the gap is pretty narrow. 

Now check out the same graph for exporting businesses:

The differences are much more pronounced. Areas outside those south eastern cities have many more lower productivity businesses (the peaks on the left) and significantly fewer high productivity ones (the lower numbers on the right).

In fact, outside the south east, cities are actually less productive than non-urban areas. This is really not what you’d expect to see, and no a good sign for the health of the economy:

The report also uses a few specific examples to illustrate this point. Compare Reading, one of Britain’s richest medium sized cities, with Hull, one of its poorest:

Or, looking to bigger cities, here’s Bristol and Sheffield:

In both cases, the poorer northern cities are clearly lacking in high-value exporting businesses. This is a problem because these don’t just provide well-paying jobs now: they’re also the ones that have the potential to make productivity gains that can lead to even better jobs. The report concludes:

This is a major cause for concern for the national economy – the underperformance of these cities goes a long way to explain both why the rest of Britain lags behind the Greater South East and why it performs poorly on a

European level. To illustrate the impact, if all cities were as productive as those in the Greater South East, the British economy would be 15 per cent more productive and £225bn larger. This is equivalent to Britain being home to four extra city economies the size of Birmingham.

In other words, the lesson here is: stop worrying about the productivity of hairdressers. Start worrying about the productivity of Hull.


You can read the Centre for Cities’ full report here.

Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and on Facebook as JonnElledgeWrites

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