COLM McCARTHY
Flip-flopping, short-termist politicians are making a great national shambles by not facing up to the reality of water costs, writes Colm McCarthy
ALL the main political parties in Ireland were, until quite recently, in favour of a State-owned national utility to run the water industry, financed mainly through user charges.
This was clearly understood by all three of them to imply charges on domestic users in urban areas who have never paid for water or wastewater disposal. The three biggest parties — Fine Gael, Fianna Fail and Sinn Fein — have now executed a full 180-degree somersault on the issue. This has been a sequential, rather than a synchronised, pirouette, and has not been pretty to watch.
Sinn Fein was first out of the blocks following its surprise defeat at the Dublin South-West by-election in October 2014. The winner was the AAA candidate and Right2Water activist Paul Murphy, who won slightly fewer first-preference votes than the Sinn Fein favourite but eventually took the seat on the distribution of lower preferences.
There was a low turnout — Murphy’s tally of 6,540 on the first count represented just over 9pc of those entitled to vote. Sinn Fein promptly flipped, displaying a dexterity in political memory loss which drew gasps of admiration from more experienced practitioners. The first to flatter by imitation was Fianna Fail in the run-up to the February 2016 general election, responding to Sinn Fein’s improved showing in opinion polls.
The hat-trick has now been completed with the inelegant capitulation of the Fine Gael party, the terms of whose surrender are being worked out by lawyers as a weekend assignment. This sequence of climbdowns over water charges is lamentable in itself but tells a more worrying tale about the current condition of Ireland’s national politics, which faces far bigger challenges.
That the outcome of a single low-turnout by-election should have resulted in the abandonment of their support for water charges by the country’s three biggest political parties has been hailed as a tribute to the tenacity of Murphy and his fellow campaigners. An alternative verdict is that the three parties have produced an unprecedented display of abject spinelessness.
When the Irish Free State was established in December 1922, one of its first headaches was the sorry state of the electricity industry. There were 300 companies and organisations producing electricity in small-scale generation units, including 16 local authorities. There was no national grid and most homes and businesses had no connection. Even in Dublin, where the beloved Corpo was the main supplier, power was expensive and unreliable.
The government decided to construct the Shannon hydroelectric scheme and work commenced in 1925. Two years later, the power industry was taken into State ownership with the establishment by statute of the Electricity Supply Board, to be financed through user charges. Happily there were no by-elections fought by Right-2Electricity candidates and every householder in the country has long had reliable supply. There are no boil notices for electricity.
The water industry was left in the hands of local authority politicians with charges for only commercial users. Rural dwellers were left to fend for themselves, with patchy State assistance for group schemes.
It had been accepted for decades that this system was no more likely to work for water than it would have done for electricity, and the government eventually committed in the 1990s to the establishment of a State water utility, funded by user charges and run by engineers.
The State-owned utility is apparently to be retained but only the Green Party and the Labour Party have stuck with the accompanying logic that was applied since the early days of the State, namely that users should pay for the costs of publicly provided utilities.
This does not inhibit an element of State subsidy, including some free electricity and telephone usage for pensioners and others deemed deserving of relief from charges.
The water industry has been the Cinderella of Irish public utilities since the State was founded. Until Irish Water was finally established in 2013, it was the responsibility of 34 local authorities and operating costs, whether expressed relative to population or extent of network, are almost double those at Northern Ireland Water.
The Republic boasts no fewer than 856 water treatment plants, Northern Ireland has just 24. Leakage absorbs almost half the water provided in the Republic, double the 28pc in Northern Ireland. The water capital programme has been inadequate for decades, resulting in boil notices and supply disruptions. Until Irish Water was finally and reluctantly established, there was no centralised procurement for capital works or supplies and no standardisation of equipment or procedures. The electricity industry would have been a comparable disaster had it been run on the same basis since 1927.
The decision to establish a single national utility to run the water industry should have been taken at least 30 years ago. The emerging problems were clear and the precedent (national utilities directed by engineers rather than local politicians) had already been employed for electricity, gas and telecoms. The decision to establish Irish Water as a State company was always the obvious solution. The mystery is not the decision taken but the extraordinary delay in taking it.
All household utilities in Ireland are funded largely through user charges, with some State mitigation of costs for less affluent households. What you pay for electricity, gas, telephone service and cable TV reception is (almost) enough to cover the costs of delivering these services to each premises. Water is different: rural dwellers provide their own water and wastewater treatment, often at considerable expense, commercial premises pay for public water and sewage disposal, but urban dwellers have paid nothing towards the cost of the public system.
Irish Water is short more than €1bn per annum between operating losses and backlog capital spending. The difference will be paid for, according to Sinn Fein, Fianna Fail and now Fine Gael, by the tooth fairy.
Apparently this great national political shambles is to be resolved through the cancellation of charges for urban households, notwithstanding the requirements of the European Union’s Water Treatment Directive. Lawyers have been located by Fianna Fail who advise that the directive does not mean what it appears to say, and that Ireland can introduce charges, then abandon charges, and now claim a derogation from charges. In God’s lucky country, Heaven’s Reflex, it rains not just water but also reservoirs, water-treatment plants, pipeline systems and sewage disposal works, and all for free.
The Oireachtas committee will deliver the results of its agonised deliberations this week and there will be refunds for the citizens (the majority) who forked out the €260 demanded of them. The €100 “water conservation grant” will be deducted, which should be fun to watch since some people managed to trouser the grant without paying the charge.
Back in the real world, the Government, or the next one, whatever its composition, will face a long list of hurdles in economic and social policy, of which water is a minor component. These are to be met through passive harvesting of the (guaranteed, sound as a bell) tax revenues to flow from the expansion in economic activity presumed to be inevitable. There is instead Brexit, an incipient public pay explosion, faltering control on public expenditure and a renewed house price bubble. And “free” water.
‘Apparently Irish Water’s shortfall of €1bn a year will be paid for by the tooth fairy’