Water farce continues but the joke is on all of us, not just the Coalition

The politics of yesterday’s decision by Eurostat are appalling for the Government. Don’t gloat, however. They are worse for the country, writes Gerard Howlin.

That the majority who haven’t paid their water bill, are even less likely to now, is the least of the Government’s problems. The appalling vista after yesterday’s debacle is that those who have already paid, will turn on them. Fool me once, shame on you. Fool me twice, shame on me.

About 46% of households paid up for their water. Last Sunday a Red C opinion poll put support for Fine Gael at 25% and Labour at 8% — or 33% combined.

I bet that most voters who are currently in the mood to vote for one or other government party, are payees. Add in Fianna Fáil’s 18%, just one point ahead of what it got in 2011, and the old two-and-a-half party system stands at 51%, or just over half of the electorate.

My hunch is that a lot of Fianna Fáil’s 18% are payees too. The party’s voters are essentially the core who stuck with it through the maelstrom of the crash, and the cuts that followed. Whatever about the scathing and cogent criticism of party environment spokesman Barry Cowen on Irish Water, water charges are a Fianna Fáil–Green legacy. The Greens came to them out of principle, Fianna Fáil out of necessity.

If there is bitter agreement between Fine Gael and Labour on one hand and Fianna Fáil on the other about the structure and architecture of Irish Water, there is a shared view that people should pay a user charge. The critical difference is that Fianna Fáil advocates a charge only after the system is invested in, and a capacity for conservation embedded in a partially user-pay model.

Whatever about the principle involved, every idea needs a practical plan to implement it. It is now apparent that from the get-go the Government has not had a workable plan. What Eurostat have said is that the Government’s scheme to set up Irish Water as a standalone, credible, commercial body with an income stream capable of servicing its own debts, is incredible. It’s damning and it’s political poison.

There were two underlying reasons to set up Irish Water:

One was to create a body that could borrow off the Government’s balance sheet, and invest multiples of what could be raised in charges into renovating our dilapidated water infrastructure. This investment would eventually be paid for by the user charges, which are its income. That’s all now flat on its face in the mud.

The second reason was conservation. By having metering and user charges, we would all be less flaithúlach when we turn on the tap. It works that way everywhere else, and it would have worked here too. Instead a €100 “water conservation grant” was introduced last November, which is actually a grant to turn on your tap for as long as you want, regardless whether you are liable for, or pay your water charge.

It’s instructive to recall Environment Minister Alan Kelly at full tilt in the Dáil that day. His speech was a combination of cleverness and bombast. The cleverness was that this dog’s dinner of a policy was enough of a row back to keep the superstructure of Irish Water afloat, the principle of a water charge intact and government safe from increasingly large and angry crowds outside the gate.

He got a lot of kudos, because while the political fudge was readily apparent, it seemed the €100 was enough of a sweetener to dampen down burgeoning protest. And so it proved to be. Government support rallied in the spring while the temperature and scale of anti-water protests abated. The bombast of the minister’s delivery on the day, seemed then like a renewal of confidence and political adroitness in a badly bruised government.

That was then and this is now.

The rationale for Irish Water is shattered. The pain the Government took to put the principle of a user-pay water charge into action has apparently been pointless. And the political costs paid are not poor opinion poll ratings. They prophesy that the yet-to-be-paid future cost, on top of what has been paid already, is significant.

Fine Gael lost more than 100 seats in the local elections last year and Labour lost 81 — a virtual wipeout. The party leader was gone within days. There was more to that than water, but water charges crystallised negativity towards the Government. Now both parties have slid back approximately to the poll rating they had in May 2014, and Eurostat has arrived to deliver the coup de grâce.

The misunderstanding is to think that this is their political problem, but not ours. We still have a water system that is unfit for purpose. It may be a minority view, though I am not sure about that, but I absolutely believe that water should be paid for by user charges.

It works for waste; it promotes conservation; and it frees up taxes for things that cannot be directly charged for. If it was up and running properly, it could in the future have the approval of Eurostat to borrow off the government balance sheet. The fact that it can’t means that the annual deficit will be calculated at about 0.2% higher than it would have been.

That won’t, as Michael Noonan said yesterday, affect the plan to spend between €1.2bn and €1.5bn between additional expenditure and tax cuts in the budget. But it does mean that potential borrowing for other purposes will be constrained. Perhaps most significantly it leaves a credibility gap at the heart of the Government. This is now the core political issue.

If the principle of a user charge cannot survive the next election, and based on opinion polls there are ominous signs it cannot, then the worst of what was wrong with this country has survived not just intact but enhanced. This Government bears the primary responsibility.

Across the board it has squandered the opportunity for substantive structural political reform. The Constitutional Convention was an amusement arcade for busybodies. The National Economic Dialogue is a resuscitation in nascent form of the former social partnership.

The key relationships between ministers and civil servants remain purposely opaque, and the Government is as unaccountable to the Dáil as ever. The underlying driver of the multi-seat constituency is revving up again in advance of the general election. All the while you can leave your tap on as long as you like. Some 40% of the water pumped to it is lost into the ground before it gets there — and no, you needn’t bother to pay, as nothing will happen if you don’t.

If all that isn’t enough, there is more. Candidates will call to your door to tell you that water charges can be abolished, in return for your vote. Someone else, will somehow pay. The good old days never went away, it seems.

Candidates will be calling to the door telling you water charges can be abolished - but then who will pay?