Irish parties seek bridge over water trouble

DUBLIN — It’s a €5 billion problem with the power to bring down governments — but now Ireland’s two major political parties think they have a solution to the nation’s water problem.

With a new plan to charge only the highest water users, they hope to neutralize what has become a highly politically toxic issue.

In most countries, the monthly household water bill would not feature near the top of voters’ concerns. That’s not the case in the Republic of Ireland, where people don’t pay directly for what comes out of the tap.

Many voters, who regard a water bill as akin to trying to tax the air they breathe, want to keep it that way. In recent years they have punished politicians who have tried to introduce such charges.

Now Ireland’s two main parties believe they have come up with a formula that will satisfy the country’s creditors by imposing charges of a sort — but one which will draw much of the political poison from the issue by exempting the vast majority of the population.

The agreement between the governing Fine Gael and the main opposition Fianna Fáil proposes charging only those households who use more than 1.7 times more than the average. That would mean 92 percent of households would pay nothing.

If the deal flies, it will bring to an end a seven-year controversy that has dogged Ireland’s politics. But the history of the issue suggests that is far from certain.

Richard Boyd-Barrett, a member of parliament for the People before Profit party, believes the charges are the thin end of the wedge and the first step on the road to water privatization.

“As far as we are concerned, the funding has to come from progressive central taxation rather than regressive user charges which disproportionately hit low-income people who can’t afford it,” he said, “The corporate sector, for example, is one of the biggest users of water in the country and they pay pitifully low levels of tax so they should be making a bigger contribution.”

“[The establishment parties] are now trying to slither out of what the public asked them to do,” he added.

The problem is that the country’s ancient water infrastructure loses close to half of the water it transports to leaks — around 800 million liters a day. An upgrade will cost €5 billion between now and 2021, and all of those new pipes need paying for.

‘Off the hook’

The idea of water charges became a real possibility in 2010 when the Troika, consisting of the European Central Bank, the European Commission and the International Monetary Fund, began scrutinizing Ireland’s books after providing an emergency bailout fund to rescue the country’s economy.

In an effort to raise much-needed revenue, the Troika insisted on the re-introduction of household water charges that had been abolished in 1977. The government brought a proposal to levy fees of €260 a year on every household — then subsequently tried to make that more palatable by offering a €100 rebate.

But on the lush Emerald Isle where it rains on average every other day, voters viewed water charges as an austerity measure too far. They exacted their punishment at the 2016 general election in which the co-ruling Labour Party took a hammering and lost 30 seats, leaving it with just seven members of Parliament. Lower income voters, in particular, blamed the party for not sticking up for them.

What had made the issue even more politically toxic was the revelation that consultants were paid €86 million in fees for advice on the establishment of a new state-run water utility service.

Fianna Fáil was initially in favor of the charges but subsequently moved with the political wind to oppose them. The party’s environment spokesperson, lawmaker Barry Cowen, told POLITICO, “The proposal … guarantees continued investment as outlined by the utility up to 2021.” But he made it clear the charges would not mean an end to government funding of network improvements.

“It’s government’s responsibility and obligation to ring-fence funding from within taxation and the revenue stream for the provision of water and wastewater services and its infrastructure and capital investment,” he said.

Green Party Leader Eamon Ryan, who served in government with Fianna Fáil between 2007 and 2011, accused his former cabinet colleagues of doing u-turns on the issue for political popularity. “This is unworkable, it’s there for political reasons to get people off the hook in terms of party political positions.”

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The majority of homes outside cities do not have water meters, so monitoring usage will be impossible in practice in many cases. Also, charges will only come into effect after a warning letter and a six-month grace period for high-use properties.

Ryan’s party would like to see better water conservation, treatment and other measures aimed at preventing pollution, improving quality as well as charges that discourage excessive use.

“It doesn’t make any real kind of sense in terms of promoting conservation or tackling the issue that a small percentage of people may use a large amount of water and in the end, it’s not fair that the rest of us pay for that,” he said.

Ryan sees the deal as a crafty scheme to satisfy the Troika that will not actually result in any revenue for the State. “The only reason they [Fianna Fáil] have changed their tack is because other parties have used this as a political football and I deeply regret that,” he said.