Irish Water: Killing off conservation and the real agenda behind water charges
By David Gibney, Mandate Trade Union and Right2Water/Right2Change coordinator
THERE are three obvious agendas behind the imposition of domestic water charges. If you were to believe the government spin, you’d think it was about conservation.
But the three real reasons are:
- Shifting the burden of paying for water from commercial enterprises to households;
- Giving tax breaks to the wealthy while imposing water charges on everyone else; and
- Lining up the future privatisation of our water industry.
There are a number of ways we can prove the conservation argument is a farce. The first and most obvious is through direct comparison with other countries that already have domestic water charges in place.
According to the UK water supply boards, where they have had domestic water charges in place since the 1980s, the average end user uses 68,405 litres of water per year. Yet, according to Irish Water, that figure in Ireland is 54,750 litres. So the evidence shows that water charges actually increase water consumption by up to 20%.
A SIPTU report from 2011 flagged up the results of international research into the issue. It found that installing domestic water meters was unlikely to make any real difference to the amount of water used by families.
The report stated: “In the UK, Germany, and the Netherlands it has been found that metering each home makes little difference to the amount of water used by families. Researchers have found that while consumption dropped initially following the installation of meters, after a relatively short time, this was more or less reversed with families returning to the pre-metered level of consumption.”
Senior Executive Engineer for Water, Gerry Concannon, estimated that the costs of metering — involving installation, maintenance, administration and replacement — would double our spend on water in the medium term.
That figure has now trebled, and yet the professional body Engineers Ireland stated: “The proposed expenditure on water metering would mean spending more than €1 billion which we don’t have on something we don’t need!”
So if conservation is not the real motivation behind water charges, and we’re spending so much money on a phenomenally-expensive metering programme, what is the real motivation behind water charges?
1. Shift the burden from corporations to households
The EU says that households account for only 10% of all water usage. The biggest users of water are agriculture and commercial companies, using 90% of all water. Yet, a quick look at the breakdown of the new water billing structure shows that householders will initially be expected to pay up to 78% of all costs, and that figure will no doubt rise in the immediate future.
Commercial companies will be expected to pay 22% of the costs for using 90% of the product, yet at this point in time, evidence shows they already have a non-compliance rate of 37% and €50m in water debt has been written off for them.
2. Give tax breaks to the wealthy while imposing water charges on everyone else
In the 2015 Budget, the Government gave a €405m tax break to the top 17% of earners. In the most recent Budget they gave further tax cuts disproportionately benefiting the highest earners. Those political decisions widened the wealth gap by €1,003 in two short years.
At the same time, Minister Alan Kelly has said he expects households to pay €271m in water charges. This is simply a transfer of wealth from the poorest in our society to the wealthiest. The unemployed, underemployed, disabled and pensioners all spend more of their time in the home than those who are lucky enough to be in full-time employment. This means they’ll use more water and when the cap on charges of €260 per year ends in 2019, their water bills will spiral out of control.
3. Lining up the future privatisation of our water industry
Water is one of the most profitable industries in the world. In 2013, in Britain, private water companies made profits of €2.81bn and paid €2.55bn to shareholders while paying only €101m in taxes. Seven water companies paid no corporation tax at all.
The dividends paid out to UK water companies are double that of your average non-financial company. As a result, there is almost no retained profit which is usually used to upgrade infrastructure future.
More than half of all water companies in the UK are owned by Private Equity Consortiums — a group of High Net Worth Individuals who pool their money to strip profits from any industry they can get their hands on. The impact is that for every £100 spent on a water bill in the UK, between £20 and £30 goes directly to the companies.
Anyone who still believes that Irish Water is about conservation should ask themselves why the Irish Government is steadfastly refusing to hold a referendum which would enshrine ownership in the hands of the public. This simple referendum could save the Labour Party and many of the seats for Fine Gael and yet they still stubbornly refuse.
When the Troika visited Portugal and Greece, their bailout terms included the privatisation of water services. That was because they had already metered, meaning there was a revenue stream in place. In Ireland we hadn’t put in place a revenue stream so the Troika played the long game and forced the metering programme into our Memorandum of Understanding first. Next step, full privatisation.
Without a referendum, there will be nothing a future government can do to prevent this.
In lining up this policy, the last two governments have cut spending on water by 65% and then have the neck to complain about the need for further investment after the infrastructure falls apart.
As Noam Chomsky said: “That’s the standard technique of privatisation: defund, make sure things don’t work, people get angry, you hand it over to private capital.”
That’s why water will continue to be the single most important issue for the upcoming general election. This one policy exposes the priorities for political parties and politicians.
Some are happy to lift the burden on employers, who already benefit from one of the lowest corporation tax rates and lowest employers’ PRSI rates in Europe, and impose that burden on low and middle income households.
They are happy to transfer wealth from some of the poorest in our society to the wealthiest. And they’re happy to line up our water services for future privatisation. They do this unashamedly hiding behind a bogus conservation argument.
It’s our job to hold them accountable, and we can do this by joining and supporting the Right2Change campaign as the election looms. Go to www.right2change.ie for more.
Originally published at http://right2water.ie on December 30, 2015.