A leaky speech for a leaky water system

Analysis: The Government will need a spectacular 2015 to put this debacle behind it

Minister for the Environment Alan Kelly spent almost half an hour outlining the Government's revised plan for water charges in the Dáil this afternoon.

There was hardly a syllable or detail of what he said that had not been trailed over the past five days. It was in keeping with the theme of the day - one of the leakiest speeches in recent political history about one of the leakiest water systems in Europe.

Kelly inherited the Irish Water problem from his predecessor Phil Hogan: the catchphrase of Oliver Hardy to Stan Laurel comes to mind in terms of the challenge he faced when it became clear during the summer that the Irish Water situation was becoming critical.

In the circumstances, and looked at in that narrow context, he has done a relatively good job of salvaging something from the mess.


The solution needed a few tangible and political components.

The first was to put his hands up and say straight out that mistakes were made. Enda Kenny was quick to say it during Leaders' Questions earlier this afternoon and Kelly acknowledged as such throughout his speech.

“I have listened carefully. Lessons have been learned,” he said.

There is no doubt about that. Like Nice II and Lisbon II, the revised plan set out today directly responded to the concerns of people . Firstly, water charges have been reduced significantly, especially for larger families with grown-up children.

Secondly, the charging system has been made much more simple and understandable. Instead of five different bands, there are now only two - one for a single adult household and one for a multiple adult household.

The Government has capped the maximum annual charge. The net charge for a single adult household will be €60 and that for a household with two adults or more will be €160.

Furthermore, the Government has promised that the charge structure and caps will remain in place until January 1st, 2019.

They have set about making it cheaper, simpler and more predictable.

Built into that lower price is a €100 rebate for those who register with Irish Water. The rebate will be handled by the Department of Social Protection, partly because it ensures Irish Water can stay off the central Government balance sheet (the last thing the Coalition wants is a requirement to come up with a further €800m in adjustments in Budget 2016 because water charges have come back on to the books).

But the corollary of this is there will be a powerful incentive for households to register - because if they fail to do so they will not be entitled to the rebate.

The thinking goes that the combination of cheaper capped charges plus the carrot of a €100 rebate will be enough to achieve critical mass when it comes to registration. At present about half, some 800,000 of households, have registered.

The political calculation is that once the figure goes beyond 1 million, it will continue to rise and effectively draw the shutters down on this controversy.

There are complications. The water meter installation programme will continue but already the meters (which are analogue and not digital for some reason) are being mentioned in the same breath as the e-voting machines.

Kelly did say this afternoon that that about half the households with meters installed could get even more savings. But given the dramatic reduction in charges, it seems they will have to be especially parsimonious.

Part of the reason for introducing meters was water conservation but that now seems to have been relegated in the hierarchy of importance. So comparatively low are the new charges that it could have left the new State utility company unable to stand on its own two feet.

That is the reason that the requirement for Irish Water to pay €60m to local authorities for commercial water rates next year has been removed, otherwise there would have been questions about its status as an independent entity.

Other well-flagged changes were the removal of the requirement for PPS numbers and the dropping of any threat that water supplies would be cut or reduced.

However, it would have been unjust and unfair if a system had been introduced where there were no sanctions for those who did not pay. It would lead to a bitter taste in the mouth for those households who were compliant, while those who were unwilling to pay were allowed off scott free - as opposed to those who were unable to pay.

In his speech, Kelly said the Coalition had a choice that was based on “either short-term emotion and anger or long-term prudence and common-sense”.

Funnily enough, it seems the reverse is the case. The measures announced today may have a short-term benefit for the Government but will still not shield it from long-term damage.

The reduction in prices as well as the certainty may persuade a sizeable majority of households to register - as happened when Revenue became involved with the property tax.

The over-aggression of street protests in the past week may also have alienated those who were opposed to the water charges but would consider themselves ‘moderates’ politically.

In that regard, the success or otherwise of the strategy will be gauged by the volume of new registrations over the next month or so.

Long-term there is no doubt that Irish Water has been a fiasco. The Government created the same kind of unaccountable self-important bloated quango it vowed to get rid off when in opposition. The sheer scale of the reversals and climb-downs has been enormous.

For the Government it has meant a significant undermining of confidence and authority.

It will need a spectacular 2015 if it is to put this debacle behind it.