Thomas Pringle (Donegal South West, Independent) | Oireachtas source

Thank you. While I must admit that the idea of setting up a single utility company to manage water services across the country does have some merit, I worked in water services myself in the real world before being elected to the House and I have seen some of the problems that have arisen. They were created through the mismanagement of such services. Within the 34 local authorities, there is currently a surfeit of management of water services. In many counties there is not enough scale involved, particularly when one looks at smaller counties where services are duplicated. From that viewpoint, there is some merit in having a single utility but the Bill's motivation is not to provide for an improved service. Its motivation is to privatise water services. I will return to that point later.

If we do establish a single utility there are risks involved. We will lose local knowledge in terms of how staff can respond to emergencies. We will lose the local workforce and the ability to react quickly. This was shown starkly a few years ago during the severe winters. In County Donegal, staff were out every day dealing with issues and resolving problems right away.

Across the Border in the Six Counties, as Deputy Stanley mentioned, water services collapsed because a decision was taken to establish a single entity to look after them. They took away the local knowledge and workforce and centralised the service. It turned out in the North that they could not respond to emergency situations when a crisis occurred. I fear that under the aegis of Irish Water that level of response will be taken away from local services. The management will be too distant from what is happening locally.

The Bill also provides for the introduction of domestic water charges. The costs involved have already been mentioned in the House. I must agree that the Government is underestimating the cost, which will be significantly more. Over the last six or seven years, Donegal County Council has rolled out a non-domestic water metering programme. The council borrowed €9.7 million to install 11,000 meters across the county. On a pro rata basis, it means that the cost to the State could be anything up to €1.7 billion for the roll-out of water metering across the country. That money will be raised by a loan through Irish Water and whether it is from the National Pensions Reserve Fund or elsewhere, it will have to be repaid. In County Donegal, commercial water charges are repaid through a standing charge. Every metered property has a standing charge and the entire amount goes back in loan repayments.

Will there be a standing charge on domestic properties here to pay for installing water meters? If so, not only will the Government be charging for water, it will also force consumers to pay for installing meters on their property.

Water charging is the real goal of this Bill. I never cease to be amazed to hear Deputies saying that one cannot get something for free, and that we cannot continue to pay nothing for a service that costs a lot to deliver. That is the kind of mantra being put out by those in favour of water charges, but it is utter rubbish. We do pay for water in this country. People who tax their cars have been paying for water since 1997. We also pay through general taxation, so everybody who contributes tax to the State pays for water.

When Irish Water is established and metering is put in place, we will still be taxing our cars and paying taxes to the Exchequer. We will also be paying for water at an estimated cost of €370 per household. That is the figure that has been quoted so far. The Fine Gael election manifesto promised that no water charges would be introduced until every property in the country was metered. We can see where that promise has gone. We now see that a fixed standing charge will be introduced while the water metering programme is being rolled out.

Following evidence to the Committee on the Environment, Community and Local Government, we heard that at best only 15% of water meters will be installed in 2013. For many years to come, therefore, people will be paying fixed charges for water services, which Fine Gael has said should not be paid for until a fair metering process can be put in place and people can thus be charged on the basis of water consumption.

The Government continues with the mantra that if one pays for something, one will respect it, that the dearer something is, the less one will use and that people will respect water and use less of it because of the price. However, the consumption of water does not respond to price. One may get an initial kick when water charging is introduced and some drop in consumption but the consumption of water does not respond to price. It is deemed to be price inelastic in economic terms, which means that if one increases the price, consumption is not affected. The figures in this regard are quite low and there is very little reduction in consumption on foot of a price increase.

The motivation for this measure is completely flawed. It appears to be to set up a utility, a billing system and a management system nationwide, thereby setting it up for privatisation. Over the past 20 years of privatisation, massive profit-taking has taken place within the English water companies. In one instance, according to figures I have seen, the water utility in Devon and Cornwall made a profit of more than £100 million in a year. I believe this to be the ultimate goal this Bill hopes to achieve in Ireland.

As for water charging, in his summing up the Minister of State might explain whether VAT will be charged on the water that will be provided to consumers and whether the charge per year of €370 will be inclusive or exclusive of VAT.

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