The capacity of Irish Water to further undermine trust in our politics has not gone away
Noel Whelan, Barrister and Political Analyst
The introduction of water charges in Ireland – and the establishment of a centralised utility company, in the form of Irish Water, to own and run the national waste water and fresh water services – was characterised by fundamental errors in policy analysis, drastic mistakes in implementation, disastrous political strategy and very poor public presentation. These failings occurred throughout the timeline of the introduction of water charges and many of those failings, particularly the political failings, still endure.
It did not have to be this way.
Improving our water services and making water usage measurable and chargeable per household could and should have been a worthy policy initiative. It should have appealed to the highest public sentiment and the environmentally friendly instincts of the Irish electorate. It is bizarre, frankly, that the whole issue of water and all matters associated with it has become a divisive and contentious political issue. The water charges controversy destroyed the last government’s mandate. It still threatens the survival of the current government. The controversy contributed to the collapse in support of the Labour party. It diminished Fine Gael. It facilitated the growth of the Anti-Austerity/People before Profit parties. It has Fianna Fáil in a bind.
The controversy over water charges has been both a consequence of and a contributor to the volatile politics reflected in last February’s election and to the stagnant form of government which we have suffered since.
THE FAILURES IN POLICY ANALYSIS
The introduction of water charges breached a central, and almost universal rule of politics namely:
Thou shall not charge people for a service which they have previously obtained for free.
You can ask a people to pay for optional add-ons or for premium content but you cannot ask them to pay for that which is merely as good as – or still as bad as – it was before you introduced the charge without considerable blowback. If you are doing this for a service they cannot do without, then the blowback will be very intense indeed.
If the introduction of that new charge is for a public service – something over which politicians have or are seen to have control – then breaching this rule will always have dramatic political consequences. People will pay a toll for a new improved road or motorway, which bypasses towns or other bottlenecks, but they will not pay today to travel on the same badly surfaced and winding road they travelled on for free yesterday. Asking them to pay now to fund future improvements in the conditions of that road will meet with similar resistance.
This is a near universal political rule but you don’t have to look outside Ireland or even outside Donegal to learn that lesson. One only needs to look back to the controversy over the attempt to introduce MMDS and close down community TV deflectors in the late 1980s to be reminded of how politically contentious such moves are. The community TV deflectors’ controversy was of course confined to those parts of the country where such deflectors had operated; water charges are being applied to every house in every part of the country and so the political consequences are national.
Those looking for an even more recent example of popular resistance to new charges need only be reminded of the events of October 2008 when cuts to the (recently introduced) free medical cards for over 70s were announced in an emergency budget. On the 22nd October 2008 fifteen thousand people protested outside the Dáil, most of them seniors and many of them having used their free travel pass to come to Dublin from different parts of the country. By the following weekend the proposed costs had been reversed. The political difficulties of charging for a public service that was once free are even more acute when the service is seen as an essential service. Few things are as essential in the public mind as water.
MISTAKES OF TIMING
Water charges were introduced at arguably the worse possible political moment for such a move. This was a measure which could and should have been introduced in good times, when income taxes were falling and when a government could at least try to present charging for water as a reform in public taxation and expenditure policy and/or as environmentally motivated.
Instead, water charges were introduced at a time of actual economic hardship and after years of spending cuts and tax increases. They were proposed at a point when most householders had dared to hope austerity might be easing. Talk of the introduction of water charges intensified at the end of 2013 and the beginning of 2014 just when householders, who had smothered under recession for more than five years, felt they might be able to breathe again. In the months leading up to the 2014 local and European elections, media and political discourse was dominated by discussion about how much the water charges would be. Confusion on the pricing compounded the controversy. At one stage it was speculated the water charges could be as high as €900 per household.
Because of the timing, the introduction of water charges became in the public mind an austerity measure rather than a tax reform or an environmental initiative. On that basis alone it seemed doomed to fail.
PRESENTATIONAL AND POLITICAL ERRORS
Not since Sellafield has a company been as toxic to the Irish public as Irish Water has become. Irish Water’s brand became radioactive. The company itself made many errors especially around the issues of consultants and ‘bonuses’ but most of the reasons for its bad image were not the company’s fault.
The creation of a large ‘commercial’ water utility funded by water charges was a project and a policy determined by politicians and senior civil servants. The key decisions about how Irish Water would operate were made at cabinet level in Irish government, not at board level in Irish Water. The government made massive political errors. They disrespected parliament by ramming through the original legislation. They dismissed opposition suggestions and they disregarded backbench criticisms.
They pushed through legislation requiring us all to hand over our PPS numbers to Irish Water. They told us it was absolutely necessary. They were tone deaf to concerns on this point even from more moderate political voices. At one point they voted down a legislative initiative from Senator Fergal Quinn seeking to control Irish Water’s access to PPS numbers. Then, a few months later, they decided it wasn’t necessary at all and with apparent ease abandoned the requirement for PPS numbers.
‘That in respect of each and every sections undisposed of, the section is hereby agreed in Committee, The Title is hereby agreed in Committee, the Bill is accordingly reported to the House without amendment, Fourth Stage is hereby completed and the Bill is hereby passed.”
That’s what a parliamentary guillotine sounds like. That’s how the official Dáil record recounts the imposition of the guillotine on the Water Services (No.2) Bill 2013. This is the piece of legislation that handed our water system to Irish Water. In fact it is a guillotine upon a guillotine: the impact of these words was to both end the committee stage of the legislation and ensure there would be no report stage at all.
Large pieces of legislation are usually dealt with in the Dáil over weeks or months to allow time for adequate consideration and to enable amendments to be drafted and introduced where weaknesses are identified. However, the Water Service (No.2) Bill 2013 was rushed through all stages in the Dáil over four hours on December 19th 2013.
When the Education Minister, Ruairí Quinn, standing in for the Taoiseach and Tánaiste, proposed this truncated timetable for the legislation at the Order of Business that morning there wasn’t just the usual pro forma resistance from the Opposition; there was genuine anger at the pace at which this important legislation was to be rammed through. Fianna Fáil leader Michéal Martin told the Ceann Comhairle that, “given the fundamental disrespect for parliamentary democracy”, his party had no intention of “participating in the charade” and he led his TDs out of the House. Sinn Féin and most of the Independents also absented themselves from the debate.
Some derided the Opposition on the day for grandstanding but it is now clear they had a point. Minister Phil Hogan did not take the Dáil debate on the Bill, leaving it to his Minister of State, Fergus O’Dowd, who ironically, after being demoted, was later to become one of the strongest critics of Irish Water.
When anger at water charges gave rise to the largest protests of the austerity era the government at first ignored it. It was only after getting a wallop in the 2014 local and Europeans elections that the government was forced to react. Phil Hogan, the chief architect of the original arrangement, was promoted to be European Commissioner. The new Minister Alan Kelly, the Economic Management Council and the Cabinet then redesigned the project in a way that stripped Irish Water of all its original justification. The re-launch announced that autumn meant the charging structure no longer encouraged reduction in water usage and no longer meant a reclassification of state borrowing.
The government introduced a ‘water conservation grant’ that has nothing to do with conservation. It was truly Orwellian. The grant was said to be a part reimbursement for paying water bills but it was granted even to those whose water bills remain unpaid. The water charge itself became a fixed levy payable by all, irrespective of how much water they use or how much levy they can afford
Then the decision of Eurostat to designate Irish Water as a state agency and its borrowings as sovereign debt was a further twist to this crazy political story. Government Ministers said the Eurostat verdict wouldn’t impact on public budgeting because they had already factored in a Eurostat rejection. They say this now even though they have spent months and years justifying Irish Water and water charges as a necessary evil because the sovereign debt was already so large.
A QUESTION OF TRUST
In 2004, the Norwegian Academic Odd-Helge Fjeldstad published a detailed study on the non-payment of local service charges in South Africa. The study was called: What’s trust got to do with it? Non-payment of service charges in local authorities in South Africa. A major financial problem in many municipalities in South Africa in the 1990s was the inadequate collection of service charges due to widespread non-payment. The prevailing view was that non-compliance was caused by poverty and the existence of what some called an ‘entitlement culture’. However Fjeldstad’s study showed that huge variations in compliance existed both within poor communities and between communities with similar socio-economic characteristics. He argued that non-payment was related not only to inability to pay and ‘a culture of entitlement’, but also to whether citizens perceive the local government to act in their interest. In particular he concluded three dimensions of trust may affect citizens’ compliance:
(1) trust in the local government to use revenues to provide expected services;
(2) trust in the authorities to establish fair procedures for revenue collection and distribution of services; and
(3) trust in other citizens to pay their share.
It will be many years before we have similar studies of the pattern of non-payment of water charges in Ireland. It is likely that such studies will show the causes for non-payment as multifaceted and complex. It does seem that, once the policy proved so unpopular, the spread of a pattern of non-payment became a self-actualising phenomenon. The more people felt others wouldn’t pay or wouldn’t be compelled to pay the less inclined they were to pay themselves.
The explanation around the failure of the introduction of water charges may of course go deeper and in fact turn on deeper issues surrounding the relationship between the people and the state. There are more deep-rooted reasons for the resistance to water charges.
At its core is a much more serious political problem which looks, to me at least, likely to get worse in the foreseeable future and it is that successive governments have failed to persuade the Irish electorate to take ownership of their own state. This disassociation from the state may have originated in our experience under British occupation but frankly this is no longer an excuse. This has been compounded by a lack of political leadership, generally a fondness for soft options and, during the boom years, too much cash around.
THE WATER PROBLEM HASN’T GONE AWAY YOU KNOW
The political controversy around water charges is far from resolved. It is merely one of the difficult issues which has been given a political ‘poc fada’. It has been lopped off to an independent commission of international experts. It is impossible to see how such a group of international expertise could do anything other than recommend household charging for water. That group’s report when published is to be sent off to a Dáil committee for further consideration. The issue will come back front and central in the political system, probably in the middle of next year.
Ultimately this issue is going to be resolved, for the medium term at least, by some massaged political solution agreed between Fine Gael and Fianna Fáil. This will probably involve a large allowance of free water per household, a reduced water charge being paid by those household who use more than the free amount, and a waiver for many households on income grounds. How such a ‘solution’ will sit with obligations under various EU directives, and with the need for massive investment in our water and waste water systems remains to be seen.
Water charges may have been suspended but the potential for the controversy about water charges to cause political eruptions, and to further undermine trust in our politics, has not gone away.