Monday, December 21, 2009

Water Charges: The Battle Commences

Twenty-Six County minister for finance Brian Lenihan has confirmed the Dublin government’s plans to impose domestic water charges.

This follows an agreement reached last October between Fianna Fáil and their Green Party coalition partners in the renewed programme for government.

Not so long ago, Fianna Fáil ministers were quick to deny that water charges were even on the agenda. It is interesting to recall what former Twenty-Six County minister for the environment and local government Dick Roche had to say on the issue of domestic water charges during the debate on the Water Services Bill, which was passed in 2007. The Act gives local authorities the power to supply domestic water through a metering system and deems it an offence to remove or tamper with a water meter. During the debate on the bill, Roche argued that metering was simply a device aimed at encouraging conservation of water and not, as was argued by others, simply a backdoor attempt to introduce water charges. Roche was emphatic in his denial:

“I would like to discuss the issue of domestic water charges. If I may be excused the pun, it seems that there has been a deliberate attempt to muddy the waters in this regard. I stress that the Bill before the House does not provide for or facilitate the re-introduction of domestic water charges. The Government’s position on water charges is not changed in any way by this Bill... I repeat that the Bill is not a Trojan horse for domestic charges.”

Dick RocheSignificantly, the minister was equally emphatic in his rejection that the Water Services Bill paved the way for the eventual privatisation of the service: “Nothing in the Bill is intended to move water services policy towards privatisation.”

Needless to say Roche’s assurances about privatisation should be taken as seriously as his denial in relation to water charges. The introduction of water charges and the privatisation agenda is part of a wider government strategy as illustrated by the recent savage budget. Lenihan’s declaration of war on the working class was framed in order to satisfy powerful international interests, admitting as much himself in his budget speech:

“The measures we have taken have been commended by international bodies such as the European Central Bank, the European Commission, the IMF and the OECD. They have also won the approval of the international markets.”

The Dublin government sought to reassure international finance markets that they were serious about slashing public spending; driving down wages; cutting jobs in the public sector and opening up the public sector to the private market.

IMFThe poorest and most vulnerable sections of Irish society, such as the unemployed, carers and blind people, were sacrificed in order to satisfy the wealthiest and most powerful institutions in the world.

The IMF is notorious for holding some of the poorest countries in the world to ransom. This is done through what are known as Structural Adjustment Programmes, whereby loans are only given on condition that public services are opened up to the private market, wages are driven down in order to improve what economists like to call ‘competitiveness’, markets are entirely de-regulated, and exports encouraged. This neo-liberal policy considers the state to have a minimal role in the economy, except, of course, when it comes to bailing out banks. It is a policy that has proven ruinous for developing countries and one which has driven millions further into poverty. Indeed, former IMF senior economist Davidson Budhoo was forced to admit that IMF policies had created ‘economic bedlam’ in Latin America and Africa.

If one looks closely at the Twenty-Six County government’s agenda and how it is being rolled out, it is clear they are following the direction given by international finance houses and ensuring that the economy is organised in the interests of the world’s global corporations.

The first element of the plan was to cut public spending and public sector wages, which was done in the most ruthless fashion with a 4.1 per cent cut in welfare payments, a €16 [£14] per week reduction in child benefit and the halving of jobseekers’ allowance for young people. Wages for the lowest paid workers in the public sector were cut by five per cent, representing an overall cut of 12 per cent this year, while day-to-day departmental spending was cut by almost €1 billion [£890 million].

With this element of the government plan complete, signalling their intention to introduce water charges was the Dublin government’s message to the IMF that privatisation is on the way. The softening up of public opinion over the coming months should be expected. The noises coming from the Twenty-Six County Department of Finance about cutting pay levels in the semi-state sector and IBEC’s call for a reduction in the minimum wage should also be seen in this context.

'Anything you say Biffo'The propaganda war will begin in earnest. The corporate media and right-wing economists will be mobilised to tell us that water is simply another ‘commodity’ which has an ‘economic’ value and that failure to recognise this has led to wasteful practices. It is these supposed wasteful practices, it will be alleged, that have led to water becoming a scarce resource, and, therefore, the only way to conserve water, we will be told repeatedly, is by turning water into a commodity and to charge consumers for its use. Green Party spokespeople will be trotted out ad nauseam to tell us of their deep concern for the environment (they are the only ones who care, it seems) and to reassure us that only those who ‘waste’ water will be charged a fee.

Once this is complete, the next, ‘logical’ step the right-wing quack economists so-beloved of RTÉ will inform us is to open the water service to the market. All in the interests of ‘competition’ you understand and, of course, ‘cheaper’ prices. It’s all just ‘common sense’ really. For right-wing economists and their corporate friends where the bottom line is profit it is, of course, common sense. Their attempts to convince us that it is, similarly, in the interests of the wider public needs to be resisted as the transformation of water into a commodity is far from ‘common sense’. It is a sign that the capitalist class is desperately seeking to open yet another market in which to invest and turn a profit.

While it is fair to say that fresh water supplies are becoming scarce; this is not as a result of the profligacy of domestic users, rather it is a result of the failed policies of government and the insatiable demand of capitalist industry and agriculture. In fact, domestic users and municipalities account for just 10 per cent of global water use. Meanwhile, a total of 400,000 litres of water is used in the production of one car and it is estimated that the computer industry in the US will use 1,500 billion litres of water and produce 300 billion litres of waste water each year.

The failure of the Dublin government to invest in the maintenance of the water infrastructure across the Twenty-Six County state has resulted in huge amounts of water being lost through leaking pipes. Despite claims in 2004 that over €5 billion [£4.5 billion] would be invested in water infrastructure, the recently published Local Government Management Services Board (LGMSB) report on Service Indicators in Local Authorities demonstrates that almost two thirds of local authorities in the Twenty-Six Counties are losing over 40 per cent of their water through leaking pipes.

Yet, if the Dublin government is successful in introducing charges, it will be domestic users who will be forced to pay for this lack of investment.

Throughout the building boom, the Dublin government failed to introduce building regulations that would conserve water. Currently, the vast majority of toilets in domestic households across the Twenty-Six Counties use at least nine litres of water per flush.

Over a 13-year period between 1995, when the housing boom took off, and 2008, when it crashed, a total of 828,875 housing units were built in the Twenty-Six Counties. Yet, it was not until August of last year that regulations were introduced that require all new buildings to be installed with dual flush toilets.

Protest against water charges in DublinIn 1996 an attempt to foist water charges on Dublin households was defeated by a campaign of mass non-payment. One of the demands of the Federation of Dublin Anti-Water Charges Campaigns was the introduction of building regulations that would install water saving features into homes across the Twenty-Six County state. Had a decision been taken at that time to introduce dual flush toilets, billions of litres of water would have been conserved. The Dublin government’s failure to do and the construction of over 800,000 housing units since then exposes their rank hypocrisy in relation to conservation.

Of course, we will be told by the quack economists that ‘we are where we are’. Much like the actions of the bankers, property developers and stock-brokers who gambled with our futures, they will tell us there is no point in looking back or seeking to cast blame. Already, the corporate media is cheerleading for water charges on the basis that the installation of water metres will create employment. But so would the dredging of rivers, which help to prevent flooding, as would the installation of water gatherers and dual flush toilets, and both are initiatives that would actually assist in the conservation of water.

However, for the Dublin government and the business class, it is market interests that prevail. The imposition of water charges is not about conservation, it is about privatisation and the creation of a new market for international capital to invest. Turning water into a commodity and charging domestic householders for its use is simply a means by which to create a profit. Conservation is the propaganda tool to prise open a market in water.

As it stands, the Water Services Act promotes the involvement of Public Private Partnerships (PPPs) and section 31.2 of the Act is explicit in opening up the supply of water to the market:

“A water services authority may provide water services or supervise the provision of water services by other persons, in accordance with any prescribed standards, for domestic and non-domestic requirements in its functional area.” (Water Services Act, 2007)

For private companies, profit maximisation is the bottom line and the experience of privatisation of the water supply in England and Wales has proven disastrous. For domestic householders, the Thatcher government’s decision to privatise the 10 local water authorities in England and Wales resulted in high prices for households and a diminishing service; for the private companies it proved a boon. The newly privatised water authorities failed to invest in the water infrastructure, leading to a situation in which over one third of the water supply in some parts of England was lost through leaking pipes. Yet, between 1989 and 1995, there was a 106 per cent increase in water rates and a 50 per cent increase in service disconnections. Meanwhile, company profits soared by 692 per cent and salaries for CEOs increased by 708 per cent.

Suez's international water interestsThat is the reality of privatisation: private profit and inflated salaries for company directors, not conservation, is the driving force. Water has become a major global business. French corporations Suez and Veolia have amassed enormous profits from the privatisation of water supplies, particularly in developing countries. The Suez Corporation is 80th on Fortune magazine’s list of the world’s top 500 corporations. It recently won a €100 million [£89 million] contract to build and operate water treatment facilities in seven African countries.

The battle over water charges is just commencing and the announcement in the Twenty-Six County budget that water metres are to be installed and domestic charges to be introduced are but the opening salvos. This is clearly part of a wider war that the Dublin government has declared on the working class and public services.

Let there be no doubt that privatisation is the real agenda. It ought to be recalled that the imposition of household waste charges, which were championed by the local authority management as part of a recycling initiative, was simply a precursor to the privatisation of bin collections. We were also told that the poorest households would receive a waiver on charges; yet, last week, Dublin City Council announced that, from next year, the poorest households in the local authority area will be charged up to €208 [£185] per year for bin collection.

Within days of the budget, John Gormley, the Twenty-Six County minister for the environment, announced the establishment of a ‘Local Government Efficiency Review Group’. Its terms of reference are as follows:

“To review the cost base, expenditure of and numbers employed in local authorities with a view to reporting on: specific recommendations to reduce costs; - the effectiveness of particular programmes; - optimal efficiency in the way programmes are delivered; and - any other proposals to enhance value for money in the delivery of services at local level.”

The Review Group is to be headed by Pat McLaughlin, a former member of An Bord Snip whose recommendations formed the basis of Brian Lenihan’s savage budget. The McCarthy Report also recommended the imposition of water charges and the slashing of over 17,000 jobs in the public sector.

This is what the latest Review Group can be expected to deliver, which, of course, will be presented as simply being in the interests of ‘efficiency’ and ‘value for money’. Needless to say, the advance guard of right-wing economists and the corporate media will do their bidding over the coming months. The neo-liberal agenda that seeks to drive the working class into poverty while putting tens of billions of tax-payers’ money into bailing out the banks and developers will succeed unless the combined forces of the left, trade unions and working class communities are mobilised in determined opposition.

Meanwhile, in the North, the Six-County finance minister Sammy Wilson and his minister for regional development Conor Murphy have both talked up the possibility of the implementation of water charges and are now using the spectre of these charges as a threat to smooth the way for cuts in other public services. The implication of their recent dire warnings on the size of the British government’s stipend to the Six County state has been that, if there is too much resistance to cuts in the services that working class people rely on, water charges will be introduced in earnest.

As éirígí has repeatedly pointed out, the Fianna Fáil/Green Party budget represented a declaration of war on the working class. The fight back must to begin in earnest.

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