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British government unveils plans to introduce water charges in north

JM Thorn

22nd August 2004

On the 11th August Northern Ireland Office minister John Spellar unveiled the British plans for the future of water services in the north.  These plans envisage the creation of a government owned company to take over the duties of the Water Service and the introduction of new water charges.  This company is to be set up within eighteen months, while the new  water charges will be in place from April 2006.  It is the British government’s aim to make the Water Service entirely self-financed through charges by 2008-09.  These charges could be as high as £400 per household a year.

Charges – a step towards privatisation

Currently households in the north pay for water as a component of their rates.  So in effect, a water charge already exists.  The Water Service is funded through this charge and also through the funding Northern Ireland receives from the British treasury. If it was merely to intention of the British government to upgrade the water system as it claims, then it could be achieved through the existing means.  However, the intention is not the upgrading of the Water Service but its privatisation.  The creation of a government owned company and the introduction of a separate water charge are essential steps towards that.  These are changes that will effectively lever the Water Service out of the public sector.  The government owned company will be run like a private company.  It will be established under company law, operating in the market place like any other for-profit organisation, able to contract out services and borrow money.  Though the government may initially be the sole shareholder, once the company is up and running and making a profit, it can be sold off.  The experience of water privatisation in England and Wales shows that water services provide rich pickings.   Last October, the Commons Select Committee on Environment, Food and Rural Affairs heard that, "Whilst operating profits and dividends (in the water industry) are down from the 1990s, dividends are still showing growth and the sector outperformed the Financial Times All Share Index by 58% in the last two years."  The water service industry is generating profits almost sixty per cent higher than across industry in general.  With monopoly ownership over a vital resource water companies virtually have a licence to print money. 

Moving the Water Service towards privatisation also involves a big attack on those who work within it.  A leaked report has revealed that up to 700 jobs out of a total of 1,800 will be lost when the new company replaces the Water Service.  There are also plans for more contracting out of services and Public Private Partnerships - effectively privatisation.  When unveiling the governments plans for the Water Service, Spellar had the gall to assure staff that “their interests will be protected."  Alongside job loses, terms and conditions and pension rights will also come under threat.  The government says that terms and conditions will remain intact with “broadly comparable” pension rights subject to “independent validation”.  However, these commitments are vague enough to allow for a substantial deterioration.  Any new employees of the government owned company would not be covered at all.  With the Water Service shifting towards privatisation and the priority of generating profits there will a determined effort by management to squeeze the workforce as hard as possible. 

British policy

A timely leak from the NIO, just over a week after the initial announcement on the Water Service, provides yet more evidence that privatisation is on the agenda.  This centres on a letter from the Secretary of State Paul Murphy to the chief secretary to the treasury Paul Boateng about the future of the Water Service.  Dated the 8th July, this letter showed that the Treasury and the NIO had been discussing the issue over a period of time.  While this has been played up as a dispute between the ministers, the dispute was not on the substantive issue of privatisation.  They both agreed that privatisation “must not be ruled out in the medium term”.  Their differences centred on how it should be introduced, with the Treasury minister arguing for rapid privatisation and Murphy for a more cautious approach.  Arguing for “flexibility and discretion” Murphy warned that the Government was being dragged into "a battle we do not need to fight".  His main concern was that revealing an unambiguous privatisation agenda could increase opposition to the introduction of water charges. 

"I believe that if we adopt this strong approach to seeking private sector involvement from the outset, it will be seized upon by the many opponents of water reform as evidence that the Government has a clear privatisation agenda for the water industry in Northern Ireland, against the united opposition of local politicians and the public," he wrote. 

This, he adds, "could add weight to those who are arguing for a water charge non-payment campaign".  The discussions going on between ministers clearly show that the fundamental issue in relation to the Water Service is privatisation not charges.  The charges are merely a means to an end.  They also show that the government is concerned about the opposition to water charges.  Campaigners can take encouragement from this and use it to counter apathy and the feeling that water charges are inevitable.

On a more general level the Water Service issue demonstrates that the British government is taking a different approach, in terms of funding, in relation to Northern Ireland.  The British Treasury wants its peace dividend in the form of cuts and privatisation.  There is clearly a view within the government that the north is lagging behind in terms of the neo-liberal agenda that swept Britain in the eighties and nineties.  That fact that the state sector dominates the economy and that seventy percent of employment is dependent, directly and indirectly, on the state, illustrates this.  In some ways the “Troubles” allowed Northern Ireland to escape the worst of the Thatcherite economic agenda.  However, alongside the peace process that agenda is now being brought forward.  This can be seen in the current industrial disputes involving Civil Servants and teachers over attempts to introduce regional pay, and also in the expanding number of Public Private Partnership projects. 


All the local parties say they oppose water charges and privatisation of the Water Service.  They blame “direct rule” ministers and claim that it would be different under a devolved administration.  However, this claim doesn’t hold up when you examine the record of the Stormont executive.  It was actually local politicians who first raised the prospect of water charges, agreeing with the British Treasury that the Water Service should be self-financing.  The general policies of the Executive were also neo-liberal in orientation.  Rather than opposing cuts and privatisation, the executive actively promoted these policies.  Despite their rhetoric it was the Sinn Fein ministers at Health and Education who were the most enthusiastic proponents of Public Private Partnerships.  The DUP and the Ulster Unionists have already said that they won’t reverse the proposed changes to the Water Service if the Executive is restored.  Opposition from the local parties is no more than gestures and point scoring.

If there is to be a serious opposition it will come from grassroots campaigns and the trade union movement.  There are two main grassroots campaigns.  The first is Communities Against The Water Tax, which is mainly made up of the state funded community sector.  It obvious weakness is that it is based on a network of people whose jobs depend on the goodwill of the government.  This is reflected in their lobbying and pleading approach to government.  They have also missed completely the main point of the proposed changes to the Water Service.  Instead of privatisation they are focusing on the water charges as a form of “double taxation”.  As well as being factually wrong it is politically backward.  Seeing “community” as the most important basis of organisation leads them to accommodate to the lowest level possible level.  The second campaign is the Won’t Pay Campaign which is under the leadership of the Socialist Party.  On the face of this campaign is the most militant, calling on people to defy the law and not pay their bills.  This campaign is informed by the Socialist Party’s role in a similar campaign in Dublin a decade ago when an attempt to introduce water charges was defeated.  At the time there was a real grass roots campaign that had mass support among working class people.  However, the more recent campaign against the bin charges in Dublin shows the other side of such campaigns.  It was a campaign that involved non-payment and direst action, but was defeated when the government jailed the leading members of the campaign.  The failure to build up mass support through a democratically organised campaigning structure proved fatal.   The fact that the Socialist Party refuses to recognise this reality does not bode well for the campaign in the north.  The third campaign is the trade union lead Water Group campaign which is based on the unions that organise workers in the Water Service.  Its current strategy is mainly based on lobbying local parties and the British government.  It has raised the prospect of strike action though not in a serious manner.  The assistant general secretary of the NIPSA union, Bumper Graham, has said that strike action could not be ruled out:  "If that means having to close the Water Service down for a week or two, to safeguard the long-term public provision of water, we will," he said.  However, he must know that a one week strike is not going to stop a major plank of government policy.  His own union has been involved in a civil service pay dispute that has lasted nine months, and that’s only to win an inflation level pay increase.

Fighting to win

If the moves to privatise the Water Service are to be defeated it will require a serious struggle.  For Socialist Democracy that struggle has to be based on organising the working class. This means the mobilisation of organised workers within the Water Service and in society generally.  It also means having a clear focus on what the struggle is about; that water charges are a step towards the privatisation of the Water Service and are one part of a general offensive against public sector workers that is gaining pace in the north.  The worried correspondence between ministers shows that the government is vulnerable on this issue.  This is a campaign that can be won.  What is required is a strategy that is based on and lead by the workers.  The role of Socialist Democracy in the anti-water charges campaign is to fight for such a strategy.  If you agree with our arguments and want to help advance then within the campaign then get in touch with us.


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