Executive to introduce extra water charges
23 October 2007
The North’s regional development minister, Sinn Fein’s Conor Murphy, has announced that the Executive is to press ahead with the introduction of additional water charges. Under the plans set out by him householders will have to start paying charges from 2009. These are to be phased in over a two-year period. Murphy claimed that his proposals represented the “Executive's commitment to tackling the inequality of double charging.”
Independent Review Panel
The minister’s announcement followed on from the publication of the report of the Independent Water Review Panel. This was set up in June to carry out an analysis of the direct rule ministers' 2004 proposals on the water and sewerage services. One of the many reviews established by local ministers, it was designed to buy the Executive some time on the issue and provide a cover for the introduction of water charges.
Guided by the principle (set down by the minister) that households shouldn't have to pay twice for water and sewerage services, the Panel’s report presented a number of findings and recommendations. The most important finding was that households were already making a contribution (estimated to be an average of £160 per household per year) to the cost of water and sewerage services through their rates. This debunked the claim by direct rule ministers that householders had been making no contribution since 1998, when the link between the rates and the funding of the water service was supposedly broken.
After establishing this as its premise the report then went on to make a number of recommendations on how the water service should be financed in the future. It recommended that there should be no separate bill for water and sewerage services and that payment should be through the rates system and based on property values. It also recommended that plans for metering domestic customers be abandoned and that an improved affordability scheme be introduced to prevent water poverty. Other proposals were that householders should not bear the cost of roads drainage or of the shareholder’s dividend taken out of Northern Ireland Water (NIW). To facilitate this Northern Ireland Water’s efficiency savings target would be almost doubled (from 22 % – 40%), and its portfolio reviewed in order to identify surplus assets that could be disposed of. All this would allow the additional water charges to be kept down to an average of £145 per year!
While the proposals put forward by the Review panel, and subsequently adopted by the Executive, have a progressive veneer - the property based charge, the affordability scheme and the rejection of water meters – in essence they differ little from those put forward by the direct rule ministers. The main proposal is that next years payment of the water charge be subsidized from general taxation as it was this year. Although it was true that £160 in the rates was a water charge, that money has been lost in the general pool of public expenditure and effectively been spent. The subsidy will have to be taken from the block grant of public expenditure. Effectively we will pay twice – through taxation and again as money is taken from public services.
Under the Panel’s proposals the average charge per households will be around three hundred pounds (that comprises the £160 currently paid through the rates plus the £145 additional charge). This compares to £334 envisaged under direct rule. To achieve this modest reduction in the bill the water service is to be gutted. The demand is for a forty percent cost reduction. Such a dramatic reduction can only mean further attacks on the workforce with more redundancies and deteriorating conditions. It also means the sale of water service land and infrastructure. The inevitable result of this will be a decline in the quality of the service. We therefore face the prospect of paying more for a worse service. Despite the Panel’s rejection of privatisation this threat still remains. Large parts of the water service, such as water and sewage treatment, have already been privatised. Also, the structure of Northern Ireland Water, as a separate company, still remains intact.
The Panel’s demand for a cost reduction from NIW is actually likely to hasten privatisation as more and more services and functions will be outsourced. Tellingly, the Panel refers to Scottish Water as a model to follow. In Scotland, water is nominally still under public ownership. However, the Government owned company is no more that a shell holding together a series of PFI schemes. (It was a privately run treatment plant that was responsible for a major sewage spill into Firth of Forth earlier this year.) The proposals from the Review Panel neither prevent a dramatic rise in the amount households pay for water services, nor diminish the threat of privatisation.
Despite its disappointing recommendations the report of the Review Panel was welcomed by many of the groups who have been formally opposed to water charges. The trade union movement gave it an enthusiastic endorsement. Peter Bunting of ICTU calmed that it was a vindication of its call for non-payment of water charges and “a terrific vote of confidence for the public sector”. This is despite the fact that hundreds of union members in the water service face redundancy. Eamonn McCann of Communities Against the Water Charges said he was giving the Panel’s proposals a “cautious welcome” on the basis that the water charge would be lower than expected and continue to be part of the rates. The only dissent came in the form of a populist rant from the UUP’s Michael McGimpsey who said that they were not acceptable because all the parties had pledged to reject any additional water charges. However, this opposition was abandoned the next day.
The We Won’t Pay Campaign correctly pointed out that the Panel’s proposals represented the introduction of ”water charges through the back door”. But in their ludicrous claim that the Executive was forced to introduce the water charge through the rates because of the threat of non-payment, they implicitly recognise that such a move makes the tactic of non-payment much more difficult. They can no longer say non-payment would not be a criminal offence. The central tenet of their campaign – that it would easily build mass non-payment because it was not a criminal offence – has collapsed.
These reactions demonstrate the weakness of the various campaigns against the water charges. The unions, with the muscle to take industrial action, covered their own inactivity and secret negotiations with the government by posturing at the head of a public campaign to which they devoted minimal resources. The left groups hoped, by ignoring the issue of privatisation, to shortcut the absence of political and class consciousness. By pandering to the lowest common denominator of saying “don’t pay twice” or basing themselves on a single tactic they have left themselves with very little to say when outflanked by a few simple manoeuvres on the part of the capitalist administration.
However, that does not mean that the issue of water charges and water privatisation is dead. The Executive proposals will buy them some time, but they will not stick over the longer period. The cost reduction envisaged by the Panel, and on which their proposals are premised, is very unlikely to be achieved. This means that money will continue to be taken from the block grant to subsidise water charges. In the drive to make the water service self financing such a subvention cannot be sustained. In the future there will be pressure for the introduction of a separate water bill and full privatisation. There are still struggles to be fought over the water service, but for those struggles to be successful they must be based not on a single tactic or an appeal to the lowest level of consciousnesses, but on the political principle of opposing privatisation. As the offensive against the public sector intensifies the need to create such a campaign becomes more urgent.