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Water charges: Another Irish solution to an Irish problem

The report by the Expert Commission on Domestic Public Water Services represents a retreat by Irish capitalism in the face of popular discontent. Quite simply, in the endless succession of charges, taxes, wage and pension cuts and the slashing of services designed to pay the European banking debt, a section of the working class became unable to pay more and others decided that they would not pay more. The resistance was strengthened by the endless corruption in setting up Irish water as a commercial entity and in the payment of hundreds of millions from the state pension reserve to wealthy businessman Denis O'Brien to install water meters.

The report aims to put the voices of resistance to sleep by proposing that the majority of the population would not pay directly for water. "Average use" would be paid from general taxation. Within this overall retreat the report sets out to preserve the principle of water charges with charges for "excessive" use. This scheme has the twin advantages of preserving the principle of water charges and the network of water meters needed for eventual privatisation.

As a distraction the idea of a constitutional amendment to ban water charges and/or water privatisation is thrown into the report. This proposal came originally from a section of the trade union movement supporting charging for water and was then part of the nationalist and populist "Right2Change" that the unions tried to set up.

The report deals with ongoing funding of Irish Water but doesn't deal with the issue of the €8 to €12 billion investment needed to modernise a system left to rot for more or less the entire history of the state.

There is an outstanding political difficulty in that the populist Fianna Fail party won seats in the current Dail on the strength of a promise to completely abolish charges, but there is no reason why some variant of the report should not become policy with a strategy of seeing costs rise, the limits on charging relaxed and payment categories broadened and later a return to the issue of privatisation.

Fight Back?

The opponents of charges are in a poor position to fight back given the nature of the campaign. The vast majority of the population will accept that the fact that many will not have to pay as representing complete victory

The main campaign was run by a section of the trade unions, applying standard lobbying techniques. From this perspective when a deal is struck the campaign is closed. They have mothballed the Right2Water campaign and are likely to accept a report drafted by a former union bureaucrat.

Socialist groups oppose the report because it leaves the door open to the eventual privatisation of water. However they are in a weak position. Opposition to privatisation was not a central plank of the left campaign. It organized specifically around the tactic of non payment.

The avoidance of politics was a deliberate decision. It allowed a movement to be built on the most insubstantial of bases. Unwillingness or inability to pay on the one hand, subservience to the manoeuvres of the union bureaucracy on the other marked the boundaries of the campaign.. The argument was that a victory, on whatever terms, would allow workers to gain confidence and take on wider battles. The evidence is against this argument. The battle around water charges left little political consciousness with which to fight an imposed settlement by the capitalists.

However a settlement of water charges is far from the end of the story. The attempt to privatise water sits alongside the widespread privatisation of public services and natural resources. This is feeding into an acute housing crisis. Public services are now in a state of collapse and there is growing pressure in the workplace as it becomes clear that the much vaunted economic recovery will not lead to the restoration of wages.

No recovery for the workers

This is hardly surprising. Wages are held down because reducing the cost of labour is the grounds for capitalist recovery. The concentration of wealth inside Irish capital and the wholesale selloff of housing stock to vulture capitalists mean that conditions for Irish workers have worsened, with a housing bubble forcing thousands onto the streets and forcing others to spend a greater proportion of their already low wages on rent.

The resolution of the contradictions between labour and capital are supposed to be resolved in an area of the budget called the "fiscal space." This is the amount that the the government is allowed to spend after meeting payment schedules on the banking debt and abiding by austerity measures set by the Troika.

With the everyday costs of Irish water built in, this space is estimated at slightly over €2.3 billion, reduced to €1.6 billion after 1/3 is reserved by Fine Gael for tax cuts.

Into this space must fit government interventions in housing, transport, health, education, wages. The pressure would be even greater but for the fact that many services and resources are earmarked for privatisation. The retreat on water means that at least another €6 billion will have to be found over the next 5 years from the fiscal space.

The trade union bureaucracy and socialist groups insist that the use of the fiscal space could be made more effective by doing away with tax breaks. Moreover, a wealth tax could extend the boundaries of the space by a further billion, ex-tending it to a total of €3.5 billion.

But the sums won't add up. Even if a government of speculators and tax dodgers could be persuaded to introduce a wealth tax and if Irish capital could be persuaded to pay it rather than move their tax address to another haven the amounts raised would fall far short of what is needed.

A realistic working class policy would start from the need to repudiate the payment of vast sums to bankers and speculators and expropriate the resources now in the hands of vulture capital.

A difficult struggle

The low level of class consciousness means that winning support for such a policy will involve a difficult struggle. There is a widespread and almost universal conviction of Ireland's dependency on finance capital. Recently the population of Athenry demonstrated for the suspension planning of procedures to allow the construction of a small Apple factory. Given that the majority of the 150 long-term roles will be filled far from the town, it is an example of desperation and dependence.

Few question the central policy of a 12.5% corporation tax. The radical call of the trade unions is that transnationals be made to pay that rate rather than the zero rate that many actually pay. In reality the Irish government has been found conspiring with Apple to hide €13 billion in untaxed income from around the world in a quantum reality where the shell companies simultaneously existed in Ireland and also had no physical location.

Ireland was awarded the full €13 billion in a move by Europe against Apple and promptly appealed against the judgement on the grounds that it would discourage further transnational investment. The level of class consciousness can be judged by the fact that polls show majority support for the government at a time when many public services are on the brink of collapse.

One element driving low consciousness and combatively is the policy of social partnership between trade unions and Irish capital. With this strategy the trade union leadership were part of the insane decision to guarantee the full cost of the bankerís debts, demobilising resistance and actively implementing the programme of austerity, doing so in a blind spot created by the unwillingness of the socialist groupings to break a policy of peaceful coexistence with the bureaucracy.

Socialist opportunism is out of place in Ireland today. Eight years of austerity and the dawning recognition that the claims of recovery do not include the workers mean that Irish society is at breaking point. The government is fighting to keep wages down while a property bubble pushes housing costs to unaffordable levels. Government agencies claim unbounded economic growth into the future while in the real world Brexit and Trumphonomics threaten to cripple the Irish economy and many indicators point to a new global recession.

The case for programme of working class revolution has rarely been stronger. 


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