At times over the past few weeks it seemed as if the Government’s inept handling of the water charges issue could spill over from being a severe political embarrassment into a full-blown crisis. The Coalition has made a mess of the issue at every stage since it took office and, as Taoiseach Enda Kenny told his parliamentary party on Wednesday night, it now has just one last shot at getting it right.
Mind you, no Government was ever going to have it easy when it came to making people pay for something that has been supplied free to urban dwellers for generations. It is a long time since Edmund Burke, one of the greatest political thinkers in history, remarked that, “To tax and to please, no more than to love and be wise, is not given to men.”
It hasn’t helped that over the past few decades all of the political parties in the country have played a cynical game with property tax and water charges continually seeking short term advantage by outdoing each other in opposing their introduction.
The 2008 crisis in the public finances exposed the shortcomings of our political system and its reliance on a narrow and unsustainable tax base. Property tax and water charges were an inevitable and appropriate part of the EU/IMF bailout deal. The political problem is they both fell to be introduced by parties that had denounced the bailout in Opposition only a few months before they took office.
The first big mistake of the Coalition was to defer the introduction in 2012 of a €400 flat charge for water that had been agreed between the Fianna Fáil-Green Party government and the troika. It was still early enough in the lifetime of the Coalition to pin all the blame on Fianna Fáil. The political reality, though, was that at the time the Coalition was struggling to implement the household charge, the precursor of the property tax, and Labour Ministers felt that the loading on of a water charge at the same time could lead to the break up of the Government.
The second and really big mistake was the way in which the Government allowed the bureaucrats to go ahead and set up Irish Water without strict supervision at every stage. The result was that the political system lost control of the process. By the time the State company was ready to roll, the level of costs involved in its establishment meant that the charges for water were going to be far steeper than anybody had anticipated.
Back in the spring, Taoiseach Enda Kenny insisted on going ahead with announcing the scale of the charges, against the strongly expressed wishes of Tánaiste Eamon Gilmore. That had a catastrophic impact on the Labour vote in the European and local elections in May which cost Gilmore his job. During that election campaign Kenny insisted that the average water charge per household would be €240 a year.
When the regulator published the framework for the charges later in the year that figure seemed like a substantial underestimate. Householders who have already had meters installed calculate that the charges will be much steeper than promised although that implies that people will continue to use water in the profligate fashion to which they have become accustomed.
The whole point of charges is to make people control their use of water in the same way as they do when it comes to using gas or electricity. Persuading the public that this is necessary has been complicated by the series of political errors and particularly by the uncertainty about the kind of bills householders are going to face.
Both government parties received a clear warning in the European and local elections about the potency of the water issue so it should not have taken the protests of recent weeks to alert them to the potentially fatal political damage.
Yet over the past week they have continued to make mistakes. The difference between Tánaiste Joan Burton and her Fine Gael colleagues over whether the charge for most households will ultimately end up being around €200 or €300 a year was more apparent than real because one figure is gross and the other net. Nonetheless it gave the impression of continued confusion.
It was compounded by the decision of Labour senators to break with their Fine Gael colleagues and back Fianna Fáil’s proposal for a constitutional ban on the privatisation of water. If it is to have any chance of regaining the initiative, the Government needs to come up with its plan to deal with the public concerns as quickly as possible.
The broad shape of that plan was revealed by Irish Times political correspondent Fiach Kelly during the week. It will involve capping water charges at around €300 a year per household until 2018. A rebate of €100 will come back to consumers through the tax or social welfare systems, leaving the net charge around €200.
While there are complex legal issues to be dealt with to ensure the cost of Irish Water is not added to the national debt, the Coalition doesn’t have much time to play around with. The plan, when it comes, will not halt the protests or the attacks from the Opposition. The question is whether it will be enough to reassure the 60 per cent or so of the population who still support the mainstream political parties.
The only silver lining for the Coalition parties is that the controversy has taken place about a year in advance of the general election. They have enough time to steady the ship but it will take the kind of political skill and resolve that has not been in evidence since the troika left at the end of last year.