Professor David Hall addresses anti-water privatisation meeting in Belfast
26 February 2007
On 22nd February Professor David Hall spoke to anti-privatisation activists at a public meeting in Belfast. An academic from the trade union backed Public Services International Research Unit at Greenwich University; he is the author of the NIPSA commissioned report on the Government’s water reform proposals. He was the main speaker in a panel that included John McAnulty of the Campaign Against Water Privatisation (CAWP) and Albert Mills of the T&GWU.
The first person to address the meeting was John McAnulty. He said that water bills were coming in two months time, and that we could assume that some people would pay and others would not. John made the point that non-payment, despite the legal arguments, meant coming into conflict with the state. Faced with such a challenge the Government would not sit back and allow a non-payment campaign to develop. It would use any means, including the reintroduction of draconian laws, to crackdown. The issue was not about how many people would pay or not pay, the core issue was privatisation. Therefore, any campaign against water charges had to base itself on the principal of opposing privatisation rather than the tactic of non-payment. This would also cover a whole range of issues, as water charges were just one element of a broad neo-liberal offensive by the Government. As an example, John cited the recent rates rise, the purpose of which was fund a programme of privatisation. Under these financial arrangements the public would pay the interest on capital borrowed from the private sector. In a low wage economy, such as that in the North, the inevitable consequence of privatisation, with the value of wages falling and of charges increasing, would be greater hardship. J
ohn finished off by raising the question of what was needed to stop this offensive. For him it was a mass campaign of opposition. This would involve trade unions, community groups and political parties. The campaign also needed to be political, to understand what privatisation is and how to resist it. There was also a need to rid people of the illusions that the political parties opposed water charge, citing the DUP’s call in its election manifesto for the introduction of water meters. John ended by saying that such a campaign would have to be open and democratic, and that while it did not exist the moment, the creation of a network of activists and consistent propaganda work could lay the foundations.
Albert Mills was the next speaker. He began by remarking on the relatively small attendance at the meeting, and how it was always the same faces at such events. This was a reflection that the campaign against water charges had failed to grow. Albert said that the general public apathy was also reflected among Water Service workers. When union leaders tried to organise opposition the restructuring of the service all they could get workers to agree to was a one day protest strike. He said that while the issue had been running for some time it was only recently that local politicians have been jumping on the bandwagon, and that rather than taking responsibility they were all putting the blame on the British Government.
However, he argued that it was important to keep water charges on the agenda and keep pressure on politicians. Albert also claimed that people were being complacent about the water charges because the initial bills would be low. He pointed to England, where the average annual rates and water bill was £1,500, as a more realistic measure of the level domestic bills could reach. Albert said that while the Government had promised not to privates the Water Service, privatisation through the backdoor was ongoing. This involved the outsourcing of jobs and parts of the Water Service to private companies. Also when the new water company was created workers would lose their status as “industrial civil servants”, with inevitable implications for conditions and pensions. Albert concluded by saying that the call for metering had to be rejected as this would put neighbour against neighbour, and also have a negative impact on public health.
The final panel speaker was David Hall, who noted that this was the third time he had been in Belfast to speak on the water issue. He started off by talking about the Public Services International Research Unit (PSIRU). This unit, based at Greenwich University, has been in existence for eight years and is funded by the international trade union movement to conduct research into pubic services around the world. David said that the struggle against charges in the North of Ireland had to be seen in a global context. When the PSIRU was set up water and electricity privatisation was seen as inevitable, but now that is not the case. This period has seen the emergence of many campaigns against water privatisation, many of which have been successful in stopping privatisation or even reversing it.
David cited a number of examples. In the US cities of California and New Orleans referendums were held that overwhelmingly rejected water privatisation. In Germany, Hamburg city council was forced to drop plans for privatisation in the face of public opposition. This was also the case in the Polish city of Wodz. In Tanzania the multinational Biwater was kicked out and replaced by a public company. There have also been successful anti-privatisation campaigns in Bolivia, Brazil and Argentina. In Canada privatisation was revered in the City of Walkerton, Ontario after people died. David said that anti-privatisation activists in the North should take encouragement from being part of a global movement that is winning.
In the next part of his talk David spoke about the economics of the water industry. He said that as a result of the opposition to water privatisation many of the specialist water companies were retrenching. Suez was trying to sell its water division while RWE had recently sold off Thames Water. Private equity companies were now moving into the water sector, looking to make quick profits by taking out capital and replacing it with borrowed money. David then raised the question of how the water industry should be financed. As it was capital intensive, the bulk of costs being ongoing investment in the infrastructure, it came down to how cheaply money could be borrowed. If a water company was fully private, i.e. financed by its shareholders, the interest rate would be six percent in the form of dividends. If the private water company borrowed money from the banks the rate would be four per cent. But if the water company was publicly owned, and financed through government borrowing, the rate would only be two and a half percent. Therefore, as the Water Service is pushed towards privatisation it will become more expensive to run and the cost to the customer will increase.
David said that he had calculated that if the water industry in England was renationalised it would actually save £900 million every year, the equivalent of 10 – 12 percent of the current average annual water bill. He said it was a myth that private water companies were more efficient; all indicators demonstrated that they were not. The consequence of privatisation for workers was the outsourcing of jobs and the deterioration of wages and conditions. There was also a cut in training, which lead to skills shortages, and a cut in research and development. Another problem with the private water industry highlighted by David was the lack of accountability. There was a regulator, but he was just a Government appointed bureaucrat. The regulator has proved no match for the water companies, and they have been able to pitch their price rises very high. David concluded by stating that the proposals for the Water Service didn’t make good economic sense. They would result less accountability and greater exploitation of workers and consumers.
At this point the meeting was opened up for discussion. There first contribution from the audience was a question about the consultation process over water reform. Albert replied that the consultation had lasted three months, in which time the Government had received an almost totally negative response to its proposals, but went ahead with them anyway. John said that in law the Government was not bound by consultation. Another question was about the fairness of basing the water bills on house values. David replied that this was the traditional way of charging and was fairer than charging on the basis of consumption. Albert said that people in the North had always paid for their water through the rates system. The next speaker from the floor was Padraig Mulholland of We Won’t Pay Campaign. He said that activists should take encouragement from the struggle against water privatisation. He also agreed that water charges were one part of a mass programme of privatisation. For him the key to defeating water charges was non-payment, a victory here would serve to push the Government back on the other parts of its agenda. Padraig said there was still a strong mood against the water charges. However, the trade unions were not doing enough to organise this, they needed to get up into the communities. The next speaker, Kevin Doherty of the Belfast Trades Council, rejected this criticism of the trade union movement. He said that trade unions were serious about building a non-payment campaign; they were sending out a leaflet to every home; they were unloved in the picket of the debt collection company; and they were organising a demonstration in Belfast for the 31st of March. Kevin admitted that is was difficult attracting people to public meetings, but this did not a indicate lessening of the opposition to water charges. He dais that non-payment would clog up the legal system, and that it did not requite a high percentage of non-payers to achieve this. Privatisation could be stopped by stopping the revenue flow. David Hall responded to these contributions by saying that a range of tactics had been used in the anti-water privatisation campaigns around the world. He noted that it only took a non-payment level of 16 per cent to defeat the poll tax in Britain in the early 90’s. John McAnulty said that the poll tax revolt was successful because it was a mass movement. Such a movement did not exit in the North at the moment, although the process of building one was ongoing. John said that this process wasn’t dependent on whether people decided to pay or not pay when the first bills dropped through their doors in April.
The next speaker, from the We Won’t Pay campaign, claimed they had 1,000s of members in neighbourhoods across the North. A Canadian student who is studying in Belfast said that he was familiar with the case in Walkerton, Ontario, where water privatisation lead to deaths. He said that a campaign should focus on the implications of privatisation for public health. A civil servant worker said that the campaign against water privatisation would a long-term struggle, and the issue of privatisation would be central. He cited the Reform of Public Administration as another element of the Government privatisation programme. He also said that there was a lot a lot of apathy in trade unions, and this made it difficult to build a grassroots campaign.
The next speaker was Joe Craig of the Campaign Against Water Privatisation. He said that while to opposition to water charges had potential it had not been realised. What was needed as a basis for building such a campaign was unity and an appreciation of what the real situation is. Joe said that the example of England, where the issue of privatisation still on agenda after 18 years, demonstrated the long term nature of such a struggle. Brendan Harrison of the CAWP said that while he favoured unity it shouldn’t be conditional, it shouldn’t exclude people who do not support the tactic of non-payment. He said that report of non-payment committees were exaggerated, and that there was a danger of bringing people into struggle then abandoning them. The final speaker from audience was a representative for the health union Unison. She said that her union was campaigning against privatisation in the health service, and was also opposed to water charges. However, she admitted that many of the workers she spoke to were not alarmed by water bills. She said that while her union support non-payment it had a duty to tell its members of the possible consequences of non-payment. In her view most people were resigned to paying.
After the discussion the panel speakers came back for a brief round-up. Albert Mills dispute the claims that the trade union movement was not committed to opposing water charges. However, he said they were not going to build up illusions in non-payment, citing the example of the rent and rates strike of the 1970’s when the Government introduced draconian laws to deduct money from people’s wages. He said that privatisation of the Water Service was not going to begin in April but was already in place; water treatment plants had already been privatised. Albert denied he had a gloomy outlook, but was rather giving people a reality check. He said that people had to concede that there had been a poor public response to the campaign. David Hall concluded by saying that what the campaign needed to advance was an event that would capture the public mood and provide a focus for the widespread opposition that existed.
While the turn out at this meeting was
disappointing, confirming the lack of public engagement in the issue, the
level of debate was high and served to clarify many of the issues.
The talk from David Hall was encouraging in that he made clear that the
struggle against privatisation was long-term, and also that it was part
of a global campaign that was enjoying some success. It also clear
that many people have resigned themselves to paying the charges.
What was needed was a more political campaign to emerge that identifies
privatisation as the key issue, and places it in the context of the general
neo-liberal offensive in the North. Such a campaign does not exist,
but the creation of a network of trade union and socialist activists who
hold with this perspective would be an important step forward.