Late deal on water charges follows public squabble at Cabinet

Controversial tax is one of last measures outstanding from EU-IMF bailout in 2010

Tánaiste Eamon Gilmore: senior Labour sources have cast the outcome as a win for  the party leader. Photograph: Frank Miller

Tánaiste Eamon Gilmore: senior Labour sources have cast the outcome as a win for the party leader. Photograph: Frank Miller


The Government’s belated deal on water charges follows weeks of antagonism between Fine Gael and Labour over the new charging regime. The charge, which follows the introduction of the property tax last year, is one of the final measures outstanding from the EU-IMF bailout in 2010.

While the agreement means Taoiseach Enda Kenny has come good on his pledge to reveal the annual charge before local and European elections on May 23rd, questions remain as to why it took so long to settle how much it will cost.

After an unnecessary squabble within Government over the charge, the affair has also damaged relations between Fine Gael and Labour. Kenny clashed with Tánaiste Eamon Gilmore in a Cabinet row on the matter before Easter, a highly unusual event given their preference to settle divisive fiscal questions within the confines of the economic subcommittee of the Cabinet, on which they both sit.

The central charge on the Labour side was levelled against Minister for the Environment Phil Hogan. Labour claimed he tried to railroad his proposal through Cabinet without any regard for its political sensitivities.

Labour, which attacked Fine Gael’s water charge proposals in the 2011 general election, is under attack in the current campaign for accepting the charge.

All of this met a cold response from Fine Gael. Members claimed Labour had manufactured the row for its own tactical ends. As Labour sources claimed relations within the Coalition had reached an all-time low as a result of Hogan’s manoeuvring, Fine Gael sources claimed Labour had been unable to articulate its concerns over the original proposal until after the acrimonious Cabinet meeting two days before the Easter break. What followed was an inelegant dance of compromise, which took almost three weeks to complete.

The deal was done on a bank holiday Monday, but not before further divisions over the scope of the hardship remediation package sought by Labour.

Senior Labour sources have cast the outcome as a win for Gilmore, with concessions granted for certain welfare recipients and the scrapping of the €50 standing charge which was to be levied on all households. But senior Fine Gael sources say Labour went too far with its demands.

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