The Politics of Water:Ireland is the only OECD country whose citizens do not pay directly for water use. In the first of a new series on water charges, Political Correspondent HARRY McGEEvisits some of the hundreds of group water schemes operating across Ireland, to discover why people are content to stump up for these but still baulk at paying water charges to the State
SEAN CLERKIN remembers traipsing, as a young man at his home in Tydavnet, Co Monaghan, 30 years ago, to the village pump to collect water when his family’s well ran dry in the summer. So when, some years later, notices were posted announcing a meeting to set up a group water scheme for the area, he was very interested.
It sounded like a perfect solution: a few hundred houses banding together to set up a water network using a plentiful local supply.
“I knew it would be a costly thing to do that and that the connection fee would be high,” he says. “But then they started talking about an annual charge for water. I was astonished. I just couldn’t get my head around that, couldn’t understand it at all. How could you charge for something that was free?”
Clerkin’s attitude was understandable. In the popular perception, water is to Ireland what sand is to Middle Eastern nomads. The island may lack many things, but there has never been any shortage of rain. Guinness World Records has conferred on Ballynahinch, in Co Galway, the dubious status of being the wettest place in Ireland or Britain. Water remains an abundant resource everywhere except Dublin, with its high population.
Abundant but not quite free, as Clerkin had discovered. For the members of hundreds of private group water schemes dotted around rural Ireland, water meters and water charges have long been an accepted way of life.
Because water is not free, of course. In 2010 water services cost the State €1.2 billion to run, with operational costs of €715 million and capital expenditure of more than €500 million.
Yet Ireland is the only country in the OECD in which households do not pay directly for the water they use.
This can be traced to a series of populist political fudges by successive governments. The first was when Fianna Fáil abolished domestic rates in 1978 without coming up with an alternative model. Seven years later, in 1985, the then tánaiste, Dick Spring, introduced a local-service levy, which included a water charge. Water charges were abolished again in December 1996 by environment minister Brendan Howlin, widely seen as a political move to block anti-tax candidates in a forthcoming election.
Since then, the only domestic users who have paid for water are those in group water schemes. For the rest of us, the water is paid for from general taxes.
In a paper for the World Bank in 2002, Sue Scott of the ESRI wrote about the effect of this: “Under an ‘absent hand’, a generation of people is growing up without realising that water is expensive to deliver.”
THE PAST WEEKhas shown that water is still a highly political issue. The Government's plan to set up Irish Water and to install meters in a million households is fraught with political risk.
The public has a strong aversion to any new taxes, particularly in a period of cutbacks when many households are struggling financially, and so soon after a household charge, or property tax, was introduced.
But there are many other problems. It is a double taxation, say the critics, who contend that water is already paid for by income tax and other taxes.
The United Left Alliance has already portrayed Irish Water as a Trojan horse for privatisation. Fianna Fáil has predicted it could lead to the loss of 1,600 jobs in local authorities.
And, in communication terms, Minister for the Environment Phil Hogan and Taoiseach Enda Kenny have refused to publicly discuss the price or free allowances of water. All that’s really known is that there will be a fixed annual charge of about €40.
Earlier in the week the Government struggled with the pricing issue: Enda Kenny said households would have to pay for meters but that their installation would be free. Tánaiste Eamon Gilmore said no decision had been made on how water meters would be paid for, while the Department of the Environment said the buying and installing of meters would have to be paid for. There was little clarification as the week went on.
Within the Coalition the issue could become a political embarrassment. It’s hardly a year since Labour Ministers, including Brendan Howlin and Eamon Gilmore, were opposing water charges hammer and tongs. The smaller Coalition party will be reminded of this constantly, and it will be painted as a political “flip-flop”.
In practical terms, to have more than a million meters installed by 2014 is as likely as Ireland winning a dozen gold medals at the London Olympics. Charges have to be introduced by 2014, which means if there are delays, a significant number of households will be charged on an “assessed” basis – that is, the charge will estimated based on the number of people in a home, and the size of the house.
And now it appears that a third of houses eligible for water rates will always have to pay a flat charge, because their properties are not suitable for the installation of meters, according to the executive manager at Dublin City Council, Tom Leahy. This is because the houses share supply pipes with neighbours or their water supply from the mains enters the house under their back gardens.
As the household charge has demonstrated, people have deep antipathy to flat taxes, which make no distinction between thrifty people and spendthrifts.
The presence of meters in group water schemes is one of the reasons water charges have been accepted with hardly a murmur of complaint by a generation of rural households that makes up 8 per cent of the population. In these cases, the voluntary nature of the groups leads to strong “buy-in” and is another persuasive factor.
So what can the Government learn from rural water schemes? Well, in most of these cases, metering works, and works well. Those who run the rural schemes believe that standing, or fixed, charges will fail, because they don’t encourage conservation. They also argue that meters should be paid for by customers upfront.
But they also point out that their schemes are predominantly rural and and run by local communities and by voluntary committees. That gives them a moral persuasion that central government can never have.
Clerkin sets out a strong case for metering. “In Tydavnet we put meters on each house from the word go. We had a ground source and knew that it was limited enough. Metering helps to conserve the supplies much better and allowed people to know that they were paying only for what they used,” he says.
In his role as national policy adviser for the National Federation of Group Water Schemes, representing about 370 groups, Clerkin has drawn on his own experience – and his initial shock at having to pay for water – to convince others of the merits of charges. There is almost no scheme that is not metered nowadays.
As his colleague in the federation Brian McDonald says: “We realised from the beginning that [meters] were the fairest and most equitable way of paying for water. If there is a widow on her own paying a flat-rate charge, where’s the fairness or equity in that? She is subsidising the bigger user.”
Clerkin zealously gives The Irish Times a tour of another large scheme in Co Monaghan: the Glaslough and Tyholland scheme, catering for 700-plus households. The source for the scheme is Emy Lough, and there is a treatment works on its shore, which was designed, built and is operated by the French company Veolia. In the plant, there’s a demonstration sink with four taps, each producing water at different stages: raw; filtered; after ozone treatment; and final. The colour changes from brownish to clear.
Committee members David Wright, Padge McKenna and Nuala Murphy describe how about half of the households stay within their free water limit, while most others pay between €50 and €100 a year. However, there is an annual Government subsidy of up to €400 per household.
In Tydavnet, says Clerkin, there is a basic free allocation; the average two-adult, two-child family will pay about €100. The bill is sent out in March each year, and if it is paid by the end of the month there is a 20 per cent reduction. About 96 per cent pay within that first month.
And what of those who refuse to pay? “On two occasions in the past 28 years we have had to bring the digger to the roadside. Our board and management have the power to waive, but we use common sense. If somebody is in difficulty, we will give them time to pay it, but we will insist they pay it in time. We don’t want to give anybody the impression that it is free,” says Clerkin. Both Clerkin and McDonald believe metering works, both in terms of equity and in conserving water. They also argue that the cost per cubic litre must not be too low, and they do not favour the Government’s proposals for a standing charge, not linked to usage, which they say is a disincentive.
“If you give it away too cheaply, people won’t have any regard for it,” says Clerkin.
“If there’s a flat-rate charge and no metering where’s the incentive to turn off a tap? Our emphasis is to put all the water being used on the meter and not have a standing charge. Our view is that the Government should consider giving people the option of paying for the meter upfront. In Arva, Co Cavan, a new scheme was introduced five years ago with meters. There was also a decent charging regime, and the consumption dropped by 55 per cent.”
IN OTHER WORDS, group schemes are advocating slightly higher prices as a water-conservation measure. This is completely at odds with the view of the group campaigning against water tax that held a press conference in Buswells Hotel in Dublin on Thursday. Underneath a yellow banner crammed with information, the Campaign Against Water Tax predicted a similar fate for the water tax as for the household charge. The top table included veterans of the 1980s and 1990s campaign, which gave Joe Higgins an electoral foothold.
The group is made up of members of the United Left Alliance and other small socialist groups, as well as Independent TDs. Despite its small size, it has already outflanked Sinn Féin on the household-charges campaign. The strategy and tactics are the same for water charges: resistance; mass protest or boycott; refusal to accept the tax or to pay. One of its leaders, Pat Dunne, says there will be a “revolt” against this new tax.
Its argument is simple. People already pay for water. This is another tax. It is a money-raising and privatisation ploy by the Government, it claims.
The group’s banner proclaims “no meters”. But isn’t that a flaw, allowing individuals who are wasteful with water off scot-free? No, says Clare Daly of the Socialist Party. The focus should be on mains water that is unaccounted for. In some areas more than 40 per cent of water is lost in this way. She claims studies have shown that meters result in a 10 per cent drop in consumption but that this tapers off.
But, against that, the Government’s own consultation paper gives alternative evidence showing a reduction of 12.5 per cent in Denmark and a potential 16 per cent drop in metered areas of Britain and Northern Ireland.
There’s a bigger context too. Down the line there is the possibility of the Dublin region extracting water from the Shannon basin, a controversial plan that will encounter fierce opposition, but a long-term Government project underlies it.
“Ireland’s rich water resources will become of increasing strategic importance as the value of water increases globally,” says the position paper.
Tom Leahy of Dublin City Council supports this. “Ireland will be one of the few countries that will not be under stress for supplies. It’s an enormous opening; it could be the equivalent of oil to drive the economy.”
Joe Higgins takes the opposite view. “It’s turning water into a commodity that can be bought and sold in the marketplace. It’s a prelude for European water companies to muscle in and take over the rights.”
On tap: A short history of Irish water charges
The first serious blow against domestic charges was struck shortly after Fianna Fáil came to power in 1977. Its manifesto in that election had promised to abolish domestic rates, and it came good on the promise in the budget of early 1978. Deprived of this funding, local authorities became dependent on a central government fund and were described by critics as "toothless".
In 1985, the then tánaiste, Dick Spring of Labour (pictured), partially reversed the decision when he facilitated the introduction of a local-authority domestic-service levy.
But in 1985, when local authorities tried to reintroduce water charges, they encountered varying degrees of opposition, at its most concerted in Dublin. Dublin Corporation and county council eventually decided not to reintroduce the domestic service and water charges, leaving an anomaly between the capital and the rest of the country, where everyone else was paying water charges.
The issue re-emerged in 1994 when Dublin County Council was split into three. A fresh attempt was made to introduce water charges in Fingal, South Dublin and Dún Laoghaire-Rathdown county-council areas. A campaign opposing the charge continued for more than two years, involving disconnections and court cases, some of which were successfully appealed.
The decisive moment came in 1996, when a byelection was held in Dublin West following the death of Brian Lenihan snr. While his son Brian, who has also since died, won the seat, he was only a hair's breadth ahead of Joe Higgins, who stood as an anti-water-charge candidate and polled 23 per cent of first preferences.
In that byelection, the Labour candidate Michael O'Donovan got less than 4 per cent of the vote, and it was widely thought that then environment minister Brendan Howlin's decision to abolish water charges (which were then flat charges) was in response to the byelection defeat.
He did so despite a report prepared for his department by consultants KPMG that recommended the introduction of meters.
Between then and last year's general election, Labour has opposed water charges. In the Dáil debate on the Water Services Bill (which was long-fingered) Eamon Gilmore, then Labour's environment spokesman, said: "The legislation is a thinly disguised attempt to privatise the water supply. Going hand in hand with that is a formula to get around the 1997 Act and reintroduce water charges by another name, be that a rent for the meter or a straight-up charge. It is our duty as an opposition to oppose this legislation."
It sounds very like the argument currently being used by opponents of Irish Water.
The Green Party did want water to be metered but could not convince Fianna Fáil to include it in their programme for government in 2007. However, it was included in the revised programme in 2009. Subsequently, the introduction of meters formed part of the memorandum of understanding agreed with the troika in late 2010.
In its programme for government the Fine Gael and Labour coalition also stated that its objective was to install water meters in every household in Ireland.
For Labour, that represented a change, given the party had opposed the charges in opposition.
