Water charges saga just won’t go down the political plughole
Fine Gael and Fianna Fail can’t agree on a way forward so an election might be on the horizon, writes Eoin O’Malley
FINE Gael’s election campaign last year was based on the promise of good times to come.
“Keep the recovery going” assured us there would be jam tomorrow. After years of austerity, we had become used to the never-fulfilled promise from Through the Looking-Glass: “The rule is, jam tomorrow and jam yesterday — but never jam today.” Fine Gael told us things were getting better and sometime in the future we might get back what we had.
Fine Gael’s campaign was bravely anti-populist. Especially in 2016, the year populist causes such as Brexit and Trump were to win. As well as being brave, it was also stupid. When people were demanding their jam, Fine Gael was saying “not quite yet”.
Populism is a rhetorical device more than an ideology. The populist contrasts a corrupt elite with the honest, plain people. The populist promises to “drain the swamp” or “take back control”. He offers simple solutions to complex problems: all we need to do is leave the EU or build a wall and then everything will be magically better.
When populists take power they get a rude awakening. The UK government is rowing back on the promises made on Brexit, and Donald Trump, who promised a reformed healthcare bill, now claims: “Nobody knew health care could be so complicated.”
It seems finding a way to pay for the necessary upgrade of our water infrastructure is just as complicated. The special Oireachtas committee on water met again last week and failed to agree a report. It has put back a vote to this coming Tuesday. Ireland isn’t coming from a position where the water system works well. We’ve still got 30,000 homes on boil notices, and because of loss of water through leaky lead pipes we consume more water per person than any other EU country, by a country mile. We need to invest about €2bn in water infrastructure to address these problems.
One option is to supply water for free to users paid for through general taxation. This is what the Socialist Party campaigned on in 2014. When Paul Murphy won a seat at Sinn Fein’s expense, Sinn Fein got spooked and increased its opposition to water charges.
Nowhere else in Europe funds water supply and treatment this way. That doesn’t necessarily mean it is a bad idea, but you’d want to have good reasons to use the general taxation model.
It’s also clear that, on its own, the policy of paying for water services out of general taxation would be illegal. The EU Water Framework Direc- tive requires that we have some mechanism to conserve and protect water resources, specifically that member states are obliged to recover the costs of water provision in accordance with the “polluter pays” principle. It says: “Member states shall ensure by 2010 that water-pricing policies provide adequate incentives for users to use water resources efficiently.”
The Government is taking this directive at its word. Pricing usually means that you pay per unit of a good or service. The trick is how to price water properly. Too cheap and there’ll be no incentive to save water; too expensive and you deprive poorer people of something that is essential to survive. If water is priced properly, people should reduce their water use — the purpose of the directive.
But the Government’s preferred policy is dead. It suffered further defeats even on its compromise position in the committee last week. This happened because Fianna Fail moved further away from a policy it proposed when in government in 2010 and closer to the Socialist Party position.
The committee’s report will advocate scrapping of water charges, but it makes no reference to charges for excessive use — now it refers to “wilful wastage”. It recommends refunds for householders who have paid water charges — presumably a Fianna Fail demand. It also recommends an end to mandatory metering of new houses and provides for a referendum to ensure a water utility can’t be privatised.
This is a complete victory for Paul Murphy.
It might be reasonable for Fianna Fail to argue that water is a good that is price inelastic — that changes in the price don’t affect demand — and so paying by volume of water consumed would not help, and may be very expensive to administer. But Fianna Fail is offering free jam today, and we’ll refund you if you happened to pay for jam last week as well. But it makes no provision for the supply of jam.
The committee’s proposal is not a solution to any problem, except maybe a political one. It either leads to no investment in the water infrastructure, or that the money will have to be lost to pay for schools, hospitals or some other public service. In the meantime, we’ ll likely be fined by the European Commission. It is a mishmash of positions that can’t even claim the elegance of being the lowest common denominator.
Fianna Fail is scared of the water charges issue. It won’t gain votes here, but is afraid of losing them to Sinn Fein. The risk for the party is that having spent so much effort rehabilitating itself for its role in the crash, it could lose that hard-won image of responsibility for an economically illiterate policy.
The agreement between Fianna Fail and Fine Gael requires the Government to facilitate any legislation that might emerge as a result of the committee’s recommendations.
Fine Gael clearly says it won’t do this, which raises the prospect of an election on an issue that suits neither party.
Some in Fine Gael seem to think it could do well from an election on water, pitching itself as the responsible party to Fianna Fail’s populism.
But does Fine Gael really want to go to the country with the slogan, “Keep the water charges going”?
‘The proposal isn’t a solution to any issue, except maybe a political one’