Over 100,000 Irish citizens protested against proposed water changes. Photo: Peter Muhly/AFP/Getty
Show Hide image

How water became everything in Ireland

Patience with austerity has run out, and Irish people are pushing back against the Irish Water debacle.

Ireland is feeling emotional. After six years of benign cooperation with a tough austerity regime, one subject became a tipping point late last year. That issue? Water.

Last November – receiving meagre attention in the UK – over 100,000 Irish citizens marched through the streets of their towns and cities, protesting against proposed water charges. “Enough is enough,” was the message delivered with aplomb. “We can’t pay any more.”

Just a few months earlier, an ironically portentous article had appeared on the Guardian. “Why has the Irish response to the financial crisis been so peaceful?”, the subheading asked. It then attempted to find answers: because we feel partially to blame for the crisis, because we remember violence and don’t want it repeated, because so many young people emigrated.

As it turned out, Irish people had been quite angry for some time – and not with themselves, but with bankers, financial regulators and policymakers.

Since 2009, almost half a million people have left the country. Public services have been cut across the board, with the introduction of a variety of additional taxes including the Universal Social Charge (payable on incomes over just €4,004 in 2011) and the new Local Property Tax, payable on all residential properties since 2013.

New semi-state Irish Water – an epic PR disaster from start to finish – will be remembered as the straw that finally broke the camel’s back.

On reflection, it is hard to believe that Irish Water wasn’t specifically designed with the intention of mobilising the Irish population. Part of the EU-IMF bailout agreement, it landed – with a thud – on public consciousness last January, when its chief executive admitted that it had already spent €50m on consultants.

This was followed by a controversy involving the organisation’s collection of PPS digits (akin to National Insurance numbers) and outrage over a proposed bonus scheme structure for its employees.

The main issue though, was that no one was clear exactly how much they would have to pay. Indeed, the pricing model has changed so often that the Irish Times’ long-suffering consumer affairs correspondent has produced five Q&As – and counting – on the topic so far.

In a sudden manner reminiscent of the 2011 London riots, it all came to a head on a day in mid-November. Surrounded by angry protesters, Tánaiste (Deputy Prime Minister) Joan Burton found herself trapped in a car in Jobstown, Dublin for almost three hours. She described the events nervously as having “parallels with fascism”.

Perhaps if the whole situation hadn’t been handled so shambolically, more people would have been willing to pay the charges. The original plan to charge separately for each adult household member appeared nonsensical and money-grabbing. And the costs were to affect everyone – including the most vulnerable – at a time when the economy was finally on an upwards slope.

The “conservation” argument used by the government has also become redundant. Although the installation of water meters was to be completed by January, half a million are yet to be installed. The necessary flat rates – guaranteed until 2019 – mean that it will now generally be far cheaper to pay them than to use your meter (if you have even one yet).

Of course, it’s worth noting that in the majority of European countries – including the UK since Thatcher – water is a paid-for service. After November’s nationwide protests, the Irish government backtracked to the point where Ireland’s charges will now be some of the lowest in Europe, at €160 for a two-adult household (factoring in a “water conservation grant” for pre-registering).

But regardless of how far rates have been slashed, a level of hostility towards Irish Water as an organisation is likely to remain. There are suspicions it will eventually be fully privatised, although this government has vowed that will “never” happen and that it would necessitate a referendum.

Water, essential to life, is a highly emotive issue and should have been handled with far greater care. One need only look to bankrupt Detroit, where water supplies have been disconnected in their thousands, to see why the Irish nation might be nervous of paying directly for the privilege.

Ultimately though, the Irish Water debacle has been a lesson in two major areas: first, in how not to set up a commercial semi-state company. The second, and more positive, is in the very real power of the people to influence policy. While the long-term political effects will not be seen until the 2016 election, one fact remains clear: the Irish may be used to enduring hardship, but push them far enough and they will always fight back.

Photo: Getty
Show Hide image

Theresa May's U-Turn may have just traded one problem for another

The problems of the policy have been moved, not eradicated. 

That didn’t take long. Theresa May has U-Turned on her plan to make people personally liable for the costs of social care until they have just £100,000 worth of assets, including property, left.

As the average home is valued at £317,000, in practice, that meant that most property owners would have to remortgage their house in order to pay for the cost of their social care. That upwards of 75 per cent of baby boomers – the largest group in the UK, both in terms of raw numbers and their higher tendency to vote – own their homes made the proposal politically toxic.

(The political pain is more acute when you remember that, on the whole, the properties owned by the elderly are worth more than those owned by the young. Why? Because most first-time buyers purchase small flats and most retirees are in large family homes.)

The proposal would have meant that while people who in old age fall foul of long-term degenerative illnesses like Alzheimers would in practice face an inheritance tax threshold of £100,000, people who die suddenly would face one of £1m, ten times higher than that paid by those requiring longer-term care. Small wonder the proposal was swiftly dubbed a “dementia tax”.

The Conservatives are now proposing “an absolute limit on the amount people have to pay for their care costs”. The actual amount is TBD, and will be the subject of a consultation should the Tories win the election. May went further, laying out the following guarantees:

“We are proposing the right funding model for social care.  We will make sure nobody has to sell their family home to pay for care.  We will make sure there’s an absolute limit on what people need to pay. And you will never have to go below £100,000 of your savings, so you will always have something to pass on to your family.”

There are a couple of problems here. The proposed policy already had a cap of sorts –on the amount you were allowed to have left over from meeting your own care costs, ie, under £100,000. Although the system – effectively an inheritance tax by lottery – displeased practically everyone and spooked elderly voters, it was at least progressive, in that the lottery was paid by people with assets above £100,000.

Under the new proposal, the lottery remains in place – if you die quickly or don’t require expensive social care, you get to keep all your assets, large or small – but the losers are the poorest pensioners. (Put simply, if there is a cap on costs at £25,000, then people with assets below that in value will see them swallowed up, but people with assets above that value will have them protected.)  That is compounded still further if home-owners are allowed to retain their homes.

So it’s still a dementia tax – it’s just a regressive dementia tax.

It also means that the Conservatives have traded going into the election’s final weeks facing accusations that they will force people to sell their own homes for going into the election facing questions over what a “reasonable” cap on care costs is, and you don’t have to be very imaginative to see how that could cause them trouble.

They’ve U-Turned alright, but they may simply have swerved away from one collision into another.  

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.

0800 7318496