Return to water charges menu
Hain’s triple whammy – redundancies, rates rises, and water charges 

When the Government announced it was to postpone the introduction of water charges some peple hailed it as a sign that the government was on the back foot. However, this optimistic assessment was punctured by Secretary of State Peter Hain’s keynote speech setting out his vision for the future. Delivered to a meeting of the Institute of Directors in Belfast on 21 September it set out a comprehensive programme for the neo-liberal reform of the local economy.

The basic tenet of Hain’s speech was that the economy was over-dependent on the public sector. He cited the fact that public spending accounted for over 60 per cent of GDP, nearly a third higher than in the UK, and that a third of all employment was in the public sector, compared to the UK average of a fifth.


Following on from this premise, Hain set out a number of strategies on how a massive reduction in public spending will be achieved. The first of these is privatisation, with parts of the public sector, and those who are employed in them, to be handed over to private companies. This is euphemistically described as giving the “private sector a greater role in the delivery of public services”. In reality, it is the destruction of public services, and is always associated with a deterioration in the terms and conditions of the workforce. This process is already ongoing in with the expansion of Private Finance Initiatives, particularly in the health and education sectors. Hain’s speech envisaged an acceleration of this with an “ambitious programme of asset sales” (i.e. privatization).

Review of Public adminstration

The second element of element of Hain’s programme, and probably the most far reaching, is the reorganisation of the Governmental structures, from health and education boards, to local councils. This is being carried out under the Review of Public Administration. It is due to put forward its proposals later in the year. These are likely to include the abolition of boards and councils and the centralisation of services over larger geographic areas. While this is proposed under the guise of the phoney populism of cutting bureaucracy and shifting resources to the frontline, it will actually result in the loss of services and massive public sector redundancies. We can see that already happening with the cuts in the education budget. Schools are losing teachers, special needs assistants and crossing patrols, while parents now have to pay for what were once “concessionary” services such and transport and music lessons. In the health sector, rural hospitals are being stripped of acute services. The recent Appleby Report on the health service envisages this process of rationalisation going further. It also proposes the introduction of regional pay for health workers. The Review of Public Administration will move this process a step further with the complete closure of many schools and hospitals.

Waters charges and rate rises

The third element of the programme for reducing public spending is an increase in rates and the introduction of service charges. The aim is to raise the level of the household bill for rates and water closer to the average in England and Wales, which is about £1,500 a year. The average rates bill in Northern Ireland is around £600 a year. Key to this is the introduction of the water charge, which will be around £400 a year. Hain signalled that, despite the opposition, the government is determined to introduce this in April 2007. He also repeated the lie that any surplus raised by the water charge can be used to fund other public services. The fact is that any money collected through the water charge will be private money; the newly created water company will own it. Indeed, the point of setting the water charge so high is to build up a capital surplus that will attract investors when the Government owned water company is eventually privatised.
Building an opposition

An effective opposition to this onslaught must be built at the grassroots level, among trade union members and in working class communities. It is only a mass campaign that will move politicians and the Government. It must also be a campaign that has opposition to privatisation as its foundation. What Hain’s speech makes clear is that this is a general offensive against the public sector, of which the introduction of water charges is but one part. Therefore the response must also be generalised. This is why the CAWP has continued to highlight the importance of privatisation in the anti-water charges campaign. It is the issue that ties all these various attacks together and the basis on which they should be opposed. The positive thing about Hain’s speech is that it clearly lays out the intentions of the Government. It should serve as a shake people out of their complacency. Hain has thrown down the gauntlet; now is the time for us to pick it up and meet the challenge. 


Return to top of page