Over 100,000 Irish citizens protested against proposed water changes. Photo: Peter Muhly/AFP/Getty
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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 Images
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How can Britain become a nation of homeowners?

David Cameron must unlock the spirit of his postwar predecessors to get the housing market back on track. 

In the 1955 election, Anthony Eden described turning Britain into a “property-owning democracy” as his – and by extension, the Conservative Party’s – overarching mission.

60 years later, what’s changed? Then, as now, an Old Etonian sits in Downing Street. Then, as now, Labour are badly riven between left and right, with their last stay in government widely believed – by their activists at least – to have been a disappointment. Then as now, few commentators seriously believe the Tories will be out of power any time soon.

But as for a property-owning democracy? That’s going less well.

When Eden won in 1955, around a third of people owned their own homes. By the time the Conservative government gave way to Harold Wilson in 1964, 42 per cent of households were owner-occupiers.

That kicked off a long period – from the mid-50s right until the fall of the Berlin Wall – in which home ownership increased, before staying roughly flat at 70 per cent of the population from 1991 to 2001.

But over the course of the next decade, for the first time in over a hundred years, the proportion of owner-occupiers went to into reverse. Just 64 percent of households were owner-occupier in 2011. No-one seriously believes that number will have gone anywhere other than down by the time of the next census in 2021. Most troublingly, in London – which, for the most part, gives us a fairly accurate idea of what the demographics of Britain as a whole will be in 30 years’ time – more than half of households are now renters.

What’s gone wrong?

In short, property prices have shot out of reach of increasing numbers of people. The British housing market increasingly gets a failing grade at “Social Contract 101”: could someone, without a backstop of parental or family capital, entering the workforce today, working full-time, seriously hope to retire in 50 years in their own home with their mortgage paid off?

It’s useful to compare and contrast the policy levers of those two Old Etonians, Eden and Cameron. Cameron, so far, has favoured demand-side solutions: Help to Buy and the new Help to Buy ISA.

To take the second, newer of those two policy innovations first: the Help to Buy ISA. Does it work?

Well, if you are a pre-existing saver – you can’t use the Help to Buy ISA for another tax year. And you have to stop putting money into any existing ISAs. So anyone putting a little aside at the moment – not going to feel the benefit of a Help to Buy ISA.

And anyone solely reliant on a Help to Buy ISA – the most you can benefit from, if you are single, it is an extra three grand from the government. This is not going to shift any houses any time soon.

What it is is a bung for the only working-age demographic to have done well out of the Coalition: dual-earner couples with no children earning above average income.

What about Help to Buy itself? At the margins, Help to Buy is helping some people achieve completions – while driving up the big disincentive to home ownership in the shape of prices – and creating sub-prime style risks for the taxpayer in future.

Eden, in contrast, preferred supply-side policies: his government, like every peacetime government from Baldwin until Thatcher’s it was a housebuilding government.

Why are house prices so high? Because there aren’t enough of them. The sector is over-regulated, underprovided, there isn’t enough housing either for social lets or for buyers. And until today’s Conservatives rediscover the spirit of Eden, that is unlikely to change.

I was at a Conservative party fringe (I was on the far left, both in terms of seating and politics).This is what I said, minus the ums, the ahs, and the moment my screensaver kicked in.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.