19/12/14 Senator Daly speaks on Water Services Bill 2014

Senator Daly: Like my colleagues, I am concerned about the tokenism of the plebiscite provision and the fact that it does not address the real issues raised by people around the country on the provision of water. I do not believe the assurances on infrastructure not being sold are sufficient because, when it comes to the privatisation of Irish Water, the money will not be made in the infrastructure. As is the case now with providers of electricity and gas, money will be made through the provision of the service. The Government wants to call the people using the service customers, rather than citizens. The provision of water could be regionalised under privatisation. The privatisation of infrastructure is a different issue as that mistake was made with Eircom but an imaginative financial institution could approach a future Government on the issue of the right to bill customers and offer to do it better. That institution could offer to provide water more cheaply and take responsibility away from the Government. I am sure there would be a tendering process but, as evidenced with broadband provision, the least economically viable areas would get the poorest service. This is already evident in how water is provided in rural areas where communities must provide their own water using their own methods.

The wording of the plebiscite pledge and the Government’s reluctance to guarantee a constitutional referendum on the matter concern me. The right to water is the most basic right and a plebiscite on this matter is merely tokenism of the highest order and a reaction to an outcry by the people on the Government’s lack of trustworthiness. The plebiscite offer is clear evidence that the Government cannot be trusted because, as I read into the record previously, in June 2010 the former leader of the Labour Party said water is a right. He did not believe it should be metered, that there should be a flat fee or that people should pay for it. For the record, I will read the exact quote from Deputy Eamon Gilmore in the Irish Examiner of 28 June 2010.

I am against water charging. Water is a necessity. I have always believed essential services like water should be delivered as a public service. A flat household charge would be unfair. It does not discriminate between houses with five bedrooms and those with none and metering is unworkable.

Why should people believe a plebiscite would be held on the sale of shares in Irish Water, though shares are part of the assets of Irish Water? Inventive financial engineering of the kind evident on Wall Street, around the world and here in Ireland, which created the financial catastrophe, would be invoked to manipulate Irish Water in selling off its customers to private equity investment companies. Those companies would reap the benefit of Ireland’s water infrastructure because one need not own the infrastructure. Owning infrastructure is a liability and having the ability to collect the money is the real asset.

Senator Daly: The taxpayers will.

Senator Daly: Who does Senator Brennan think will pay for all this?

Senator Norris: Hear, hear. Well said.

 Senator Daly: No.

——-Later——-
Senator Daly: The Minister, Deputy Noonan, stated he only governs for reasonable people, which goes to the Senator’s point in his interruption about who would pay for the infrastructure. As I stated, the infrastructure is a liability, in that the maintenance—– (interrupted)

Senator Daly: The point on the infrastructure and the requirement for a referendum as opposed to a plebiscite is there are many ways in which the customers, according to the Government, could be sold on to a financial institution, and while the billing would not be done by the State the infrastructure would remain with it as a quasi-asset on the books, but a liability, as Senator Brennan has stated, to—– (interrupted)

Deputy Eamon Gilmore made his famous statement that he did not believe in flat charging or metering, and that he believed it was a public service. All we are trying to do is give fruition to his beliefs and to the beliefs of the Labour Party. However, it seems that if it does not like those principles it has others. The biggest problem for many people with regard to the billing and the €3 a week for water charges is they simply cannot pay it. A referendum will be held in May so there would be no charge to the Government to include another issue on the ballot paper with regard to Irish Water. It would give people genuine assurances, as opposed to words and the promises of leaders of political parties in the run-up to an election that it is an essential public service which they do not believe should be privatised. Deputy Rabbitte made a famous comment about making promises at election time. All that really counts—– (interrupted)

The problem with the wording on shares is that it is possible to have subsections of shares, and assets, infrastructure, companies and sub-companies can be manoeuvred. Subsidiaries of Uisce Éireann could be moved, as could customer billing, and legal people would be able to argue Irish Water was not actually sold. This could well be the case as a technical point of the law. People want to be assured the State will maintain control over all aspects, from the provision of water to customer billing, if the Bill is passed. All that people can really believe with regard to what is being said about Irish Water is what is written in the legislation, and not what is being promised in speeches in this House and other places, or what was being promised in advance. The Government previously stated it was not possible to deal with ten different issues. We were told these were absolutely impossible. However, U-turns were made on all of them.

There was a U-turn on the suspension of the charge. A household benefit payment, a winter fuel allowance and tax credits on payments were introduced. There was a replacement of the water conservation payment, a side-lining of the free allowance, an expansion of water application packs, the introduction of flat fee and the temporary abandonment of water meters and the bonus system for Irish Water. We were all told this could not be done yet it was done. The CER has been sidelined and now the Government is fixing pricing and not an extra cent in capital investment. Now the Government is telling us that there is all the capital investment in the world. When people see those U-turns and what the Government said could not be done being done, and when they were told that we could not have people having a say in Irish Water and the Government doing a half measure on a plebiscite, one needs to understand how people have no faith in the Government’s assurances on the privatisation. The wording and phraseology by Minsters is quite clear. They talk about the infrastructure. There is no money in the infrastructure. The financial houses are looking at how they can maximise an investment on taking over the billing and that is where the money is. There is no provision within Irish Water to stop that from happening because the U-turns that have happened in the past 12 months can happen again.

As we know from plebiscites and the Constitution, the wording here can be interpreted in so many ways that it will not prevent them from retaining the infrastructure and at the same time, ensuring that the Government, which has abandoned Irish citizens and which says that it does not represent people who do not agree with it, cannot assure them that at some future date without a plebiscite or a constitutional amendment, it could not sell them down the Swanee and sell the billing rights under the great auspices and guise of the ever-demanding European search for the all-mighty euro and the belief that someone must make a profit at all times and that there should be competition. On the altar of competition, we would then see many of the people that the Government has abandoned and turned into customers would then be required to pay not to Irish Water but to some third party which has won a competitive bid.

We see in rural Ireland how disastrous the provision by private entities has been when it comes to broadband. I would imagine that in respect of our famous and much-lauded infrastructural improvements that the Government said could not happen but now there is capital investment in the water services, we would not see that happening. We will never see a plebiscite but I can guarantee that at some future date because of the requirement for money and Europe’s instructions, we might end up having to look at a situation where there will be four different providers of the service who do not own the infrastructure but who will end up billing the customers nonetheless. In that case, the Government will say that it is within the legislation. Therefore, the U-turn will go from ten to 11 and the Irish citizen, who is our main concern, will be no better off.

—–Later—–

Senator Daly: I welcome the Minister back to the House. I share previous speakers’ concern about the lack of fairness in the section. The lack of regard for ability to pay, which also arose with the property tax, is most unfair aspect of the section. As other Senators noted, it is unfair that Members of the Oireachtas and people on higher incomes are being charged the same as everyone else. The fact that someone may have a swimming pool, five houses, five bedrooms or five bathrooms makes no odds to the Government.

This is all part of the Government’s U-turn. I cited the statement made by the former leader of the Labour Party, Deputy Eamon Gilmore, that he did not believe in metering or flat charges. We see both, in black and green, in the Bill passed by the Dáil, which provides that charges of €160 and €260, respectively, will apply to the principal private residence occupied by one adult and two or more adults.

Many of the technical questions raised by citizens or customers, as they are described by the Government, have not been answered because the entire scheme has not been thought out. The installation of meters as a conservation measure is a fig leaf that is of no real consequence. A previous section provides that the Minister may make amendments as he or she sees fit, as is always the case in legislation. This section does not provide for justice or fairness but creates a get-out clause for a Government that has already done a U-turn. While the current proposal is to charge citizens a small amount for a short period, in 2018 Irish Water will start charging people by the litre to make money. Moreover, the Government will not be able to borrow money to build water infrastructure.

I find most disturbing the assurance we have been given that this is the best that can be done on the issue of privatisation. We receive assurances that a flat rate would not apply and investment would be made in infrastructure. A flat rate has been introduced and investment in infrastructure is unlikely to take place. The Government will be lucky to reach the point where it covers the cost of this colossal monster.

According to the Irish League of Credit Unions, 500,000 people do not have any money at the end of each month. People simply do not have the €260 or €160 they will need to pay the charge. Previous speakers described the water charges as the straw that broke the camel’s back. Irish people were not late to the game in this regard. While people in Greece and Spain vented their anger on the streets and it looked good on television, the numbers involved were not especially large. What we are seeing here is a mass mobilisation, with people gathering in large numbers in Dublin and many other parts of the country to engage in peaceful protest. This protest will also be seen at the ballot box because promises were broken. Deputy Gilmore deserves to be mentioned again in this regard. He stated he did not believe in charges for water because it is a necessity that should be delivered as a public service. A flat household charge, he added, would be unfair as it would not discriminate between houses with five bathrooms or none, and metering, he continued, would be unworkable. To give the Deputy some credit, he was right about metering. It is unworkable. Metering will be a cash cow and bonus for those at the top and a burden for the 10% of the population who do not have any money at the end of each month.

Those at the top – the elite and members of the commentariat – are doing all right and getting by.

They will be able to pay the bill, and that is why it is not of concern to them. I refer to the Ministers who say it is only €3 a week and what is the problem; €3 is a lot of money for someone who does not have it. It is the same in Italy, in Spain and in Greece, with regard to those at the top, those in the media, those in the establishment, those in positions of power and influence in the Civil Service, the public service, the unions, the employers, the politicians. Those at the top are fine and are happy with the status quo. They are happy to put this burden on people because they think “It is only €3 a week,” and anyone who disagrees with them is obviously irrational and unreasonable. It is not irrational and unreasonable for people to protest when they do not have the money because of all the other incremental charges that have been put in place in recent years. Yet those at the top – as we have seen in the most recent budget – are the ones who seem to have less of a burden placed on them. Some of my colleagues have made the point that they would regard it as fairer if more were paid in tax than paid to what has turned out to be the monster of Irish Water, which, depending on who is doing the figures, may never pay for itself and will only pay for the bonuses of those who are at the very top, who are quite happy for the fiasco to continue.
However, it will be the ballot box at the next election that will give us the answer to the comments that politicians have made – they were true when they made them – about metering being unworkable. Some said they were against the flat charge and said that water is a public service. When one considers that all those politicians and their parties will be before the electorate—–

An Cathaoirleach: The election has nothing to do with this section of the Bill.

Senator Daly:I would say it has a lot to do with it.

An Cathaoirleach: On the section, please, Senator.

Senator Daly: It will certainly have lots of consequences as part of the election. Section 3, and the fig leaf of a standard charge, is like a stay of execution for those who cannot afford water. The charge is only €3 a week in some cases. However, for those who do not have it, they will not be able to pay it. There has been a U-turn on the facility to have a consultation with the people, which has now become a plebiscite, which is not worth the paper it is written on. Section 3 also shows the cost imposed upon people and the next election will allow the people to give their judgment. Just as was the case in Spain, Greece and Italy, the people will vote against those who broke their promises, those who said this was a public service and stated that a flat charge would be unfair. The opinion that a flat charge would be unfair was reported in the Irish Examinerin 2010. I wonder what has changed since 2010, when a former Tánaiste made that statement. It is probably more unfair now, when people—–

—-Later—

Senator Daly: Section 3 states that a dwelling occupied by two or more adults as the place of their principal private residence would not pay more than €260. That is a flat charge. It is €160 for one adult. I am wondering how the Government can stand over such an issue and the same section, subsection (7), states that metering will be put in place at a charge of €1.85 for each 1,000 litres supplied and €3.75 for 1,000 litres supplied and waste water removed. Yet, I read that metering would be unworkable. I am wondering what happened in the four years intervening and what road to Damascus did someone take that would allow him or her to do that. I look forward to the Minister’s reply.

——-Later——

Senator Daly: Again, to Government Members the surcharge of €30 or €60, depending on whether it is one or several occupants in the house, might appear to be a small amount of money. In the event people do not pay and with the new section on the prohibition of the reduction of supply, Senator Barrett will agree that sections 4 and 6 would go against the laws of economics. On the one hand, one cannot turn off the supply so there are no consequences if one does not pay for it. I am not as knowledgeable as Senator Barrett when it comes to the laws of economics but maybe he will enlighten us as to whether, like the Government’s policy on Irish Water, this not only defies the laws of economics but the laws of rational thinking.

I am, of course, opposed to the section. Has the Government done a regulatory impact assessment on this section, coupled with section 6? What is the likelihood of people not paying? The Minister referred to the law of unintended consequences with regard to the plebiscite and the demand for a constitutional amendment. Yesterday, we were informed that only 8% of civil servants in the Department of Finance are actual economists. Surely, someone in the Department has looked at this section, coupled with the provision that supplies will not be turned off. Surely, a regulatory impact assessment has been carried out as was stated in the programme for Government for all future policies and legislation. To date, only one assessment has been carried out by the Department of Public Expenditure and Reform, which introduces a whole new level of comedy when one thinks it is meant to be the lead Department in this regard. Has any economist looked at section 5 and the fact water supply will not be turned off? I will venture a guess that—– (interrupted)

Senator Daly: (continued)—Water Services Bill 2014: Committee…: 19 Dec 2014: Seanad debates (KildareStreet.com)https://www.google-analytics.com/plugins/ua/linkid.js//www.google-analytics.com/analytics.js/js/main.js//

There are no consequences with supply if one does not pay water charges, other than a surcharge on one’s bill. I am sure someone in the ESB has done a little rule on this. Can one imagine if there were no consequences for not paying an electricity bill? There was a time, I accept, one could ratchet it up but it would never be cut off for a couple of years. In the same regard, if electricity supply was not cut off, how would the ESB fare if the majority of its customers did not pay?

How big would the bad debt provision be? There are unanswered questions also in regard to landlords and tenants and the fact that the bill for the property seems to be the responsibility of the landlord, which is a situation the ESB has learned from.

We were told Bord Gáis was the repository of all wisdom and the oracle of all knowledge when it came to how to run a service. Being the geniuses they are in Bord Gáis, have they a policy of not turning off the gas of customers who do not pay or of only adding a charge of €60 per annum to a bill for non-payment? Would anybody believe Bord Gáis would have a small bad debt provision? Does anybody believe that neither Bord Gáis nor the ESB would have gone broke at this stage? Of course they would have gone broke, because, as no doubt Senator Barrett would point to first year economic students, if there are no consequences for an action, it is likely people who might get advantage from the action will carry take that action.

If a report has been carried out on this, I would like to see it. What are the consequences of section 4 when we couple it with the fact that nobody’s supply will be cut off? Has anybody followed the Government’s policy and carried out a regulatory impact assessment? I would be amazed, but pleasantly surprised, if someone can produce such an assessment.

—–Later—–

Senator Daly: Going back to the regulatory impact assessment, will the Department make available its costings and figures concerning the change in the original legislation whereby the supply will not be cut off and the fines are €30 and €60? How many do they expect? I am sure those figures must have been done and somebody in Uisce Éireann must have carried out that assessment. It would be imprudent not to make budgetary provision for bad debtors who will not pay, as well as for those who are unable to pay.

Will the Minister make available to the House on Monday the assessments that were carried out by Uisce Éireann due to the change and the fact that people’s water supply will not now be cut off? What effect will this have on the figures? Fundamentally, it will have an enormous effect on the figures. For Uisce Éireann to tell the Minister otherwise would – let me put this as diplomatically as possible – be misleading the Minister to the point at which it will require the Government and therefore the taxpayer or consumer to make up the loss. There must be figures on this somewhere. They must have been done by Uisce Éireann, but has it made them available to the Department? If not, there is a serious accountancy error, because the books will not balance. The figures must have changed and there must be a bigger bad debt provision now as a result of sections 4 and 6.

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