Tuesday, 10 December 2013
Water Services (No. 2) Bill 2013: Committee Stage
Government amendment No. 1: In page 5, to delete lines 20 to 23 and substitute the following:“(3) This Act shall come into operation on such day or days as the Minister may appoint by order or orders either generally or with reference to any particular purpose or provision and different days may be so appointed for different purposes or different provisions, and for the repeal of different provisions effected by subsections (1) and (2) of section 4.”.
This amendment is a technical amendment which will facilitate a phased approach to the commencement of the legislation. For example, it may be necessary to commence the repeal of aspects of the Water Services Act 2007 and the Water Services Act 2013 on a staged basis - in other words it will not all happen on the same day. The Department will consult closely with the Office of the Attorney General when this legislation will commence.
Government amendment No. 2: In page 6, to delete lines 9 and 10 and substitute the following:“ “excluded provision” means—(a) section 32(1)(b) (insofar as it relates to the provision, operation or maintenance of storm water sewers) of the Act of 2007, and (b) a provision of Part 4A or Part 6 (other than sections 91 and 92) of that Act;”.
These amendments are to provide clarification regarding responsibility for the operation and maintenance of storm water sewers. The Bill as published provides that the ownership of the storm water sewer network would remain vested in the local authorities. These amendments provide that the local authorities would also retain responsibility for maintenance and supervision of the storm water network.
Government amendment No. 3: In page 6, to delete lines 32 and 33 and substitute the following:“ “storm water sewer” means any pipe or other conduit—(a) used solely for the conveyance of storm water, or (b) designed or intended to be used for the conveyance of storm water (whether or not it is connected to a sewer by a storm water overflow within the meaning of the Waste Water Discharge (Authorisation) Regulations 2007 (S.I. No. 684 of 2007));”.
Perhaps my question is not appropriate to the section but applies more to the way legislation is written in general. The Minister of State referred to the expenses incurred by the Minister in administration of the Act. Does the section refer to the overall expenses for bringing the new system into force? Is it strictly for administration?
Obviously a large bill will be incurred for the transfer, planning and delivery of the service. Can we discuss expenses while dealing with the section? Does the provision have a purely administrative background?
It is a standard provision. I presume that it is a standard provision enabling all expenditure by the Minister and-or his Department regarding the Act. I presume that the provision refers to the costs incurred and that they are legally and properly covered by the section. Is that okay?
I wish to raise the broader expense element, particularly in the context of an interesting article published in The Sunday Independent last week. Perhaps the Minister of State has not read the article but I hope that it has been brought to his attention. The article was written by Mr. Colm McCarthy whom Senators will know as the author of an bord snip. He raised problems of a fundamental and worrying nature about the actual and eventual cost to the taxpayer and consumer, perhaps due to the delay in rolling out the new system or 12-year period between the commencement date and eventual takeover of the system.
He also raised matters such as the hiring of 300 staff to date by the new authority. I want to pose some questions on the matter. Have staff transferred from local authorities? Are they new staff? If it is new staff then nobody will have left the local authorities - not that we seek that they do so.
He spoke about the intervention by the Labour Relations Commission, talks, dialogues and some sort of forum - that is presumably not mentioned in the legislation - to put in place all of the structures. He also spoke of the 12-year delay before the new system is up and running. All of those issues concern taxpayers and the eventual consumer will foot the bill. Perhaps I shall have an opportunity to go into greater detail with the Minister of State when we discuss later sections. As far as I was concerned, the article was a bolt from the blue.
I concede, a Leas-Chathaoirligh, that I missed the Second Stage debate last week so have not had an opportunity to contribute. Mr. McCarthy has raised some issues that I am sure the Minister of State shall attempt to address.
If it is helpful, the points made by the Senator are subject to the implementation of the Act. In other words, things that happen as a result of the implementation of the Act are different costs to the costs covered in the section, which are purely the administrative costs of the Act.
The Senator has raised a very important question. Let us compare what happened with the HSE and the health boards with what is happening with local authorities and Uisce Éireann. They are two entirely different procedures. Overnight everybody shifted from the health boards into the HSE but in this case there are service level agreements.
Each individual local authority will sign a service level agreement with Uisce Éireann as to what functions it will carry out. The local authority will carry out those functions and will be paid for carrying out those functions but will be under the direction of the Minister and Uisce Éireann. In other words, the staff will continue to be employed by the local authority. If one works with a local authority one may have the option to transfer to Uisce Éireann. Workers may remain with their local authority for at least 12 years should they so wish. At the end of that period, if workers were still doing that work, they would transfer to Uisce Éireann.
There are more than 4,000 people working in the water services nationally. It is important that the transition between all 34 local authorities to the unitary one body, Irish Water, will happen over a period, that it will be phased and paced and not cause disruption and that there will be no loss of corporate memory in respect of all the issues that workers would have and may not wish to transfer. There are all sorts of issues there. The key, as pointed out, is that there is an independent chairman who meets the local authority side, Uisce Éireann, the Department and the unions to iron out issues that arise from time to time. This will ensure as smooth as possible a transition of the services and of the people who want to transfer and that there is a period within which everything beds down in a cost effective way, because this is about getting new synergies between Uisce Éireann and the local authorities. Not everybody who works in the water services works 100% of their time with water, but many do. If one is working with a local authority today and decides to retire in five years' time, what happens to one's job. I presume a new job would be created in Uisce Éireann for which applicants would apply. All of those issues have to be dealt with in the spirit of a calm resolution which works to the benefit of everybody.
I thank the Minister of State for that explanation. It is an important point but I do not think it is in this part of the Bill as it deals with the administration. I read the article by Colm McCarthy on the transfer of assets and liabilities to ensure that everything is written down on paper. What the Minister of State has said is correct, namely, that one does not want to find at the end of, say, five years that good assets have been handed over for less than they are worth and charged more for rusty or lead pipes that have to be replaced. It is also important that everything is written down and spelled out in the plan when agreed to ensure there are no hidden costs.
We are moving outside the general issue of section 3. I will allow Senator Trevor Ó Clochartaigh speak. The point raised by Senator Paul Bradford appears to be a broad global issue. It is unfair that we should have a full debate on that issue on section 3. I ask the Senator to be cognisant of that.
Specifically, on section 3, the Minister of State has said that it is a general, generic phrase that is included in many Bills. Perhaps he would outline what kind of expenses are envisaged even if it is a general clause? What expenses will the Minister incur in the administration of an Act, such as this, how much will they be and what would they be expected to be?
On the broader issue, is it true that the real issue is that the Government had intended to transfer all the workers from the local authority to Uisce Éireann but SIPTU put its foot down because it was not happy. Perhaps the Minister of State would outline the position at some stage when going through our discussions. My understanding is the unions were not happy with the Government's plans, they have issues and are concerned that privatisation could happen down the road, due to an understanding here.
The Minister mentioned retirements and staff being replaced. In Uisce Éireann there are concerns that this will not happen and that one will really see a reduction in the workforce dealing with water services as time passes. Will the Minister of State touch on this issue?
I agree with the Leas-Chathaoirleach. Section 3 relates to expenses. Unfortunately, I am mystified as to why some of the amendments we have tabled, including those of Sinn Féin, have been ruled out of order. I do not understand why because they do not all pertain to an expense on the Exchequer. Perhaps the Leas-Chathaoirleach might clarify the position through his office, particularly on amendment No. 5. We can deal with each amendment as it arises. Perhaps this is the wrong time to raise the matter.
With regard to section 3 and the expenses incurred by the Minister in the administration of the legislation, there is no regulatory impact analysis accompanying the Bill. Particularly given that we are establishing significant State infrastructure that will be responsible for a public resource, water, there should be a financial impact analysis. It would be fair for the Oireachtas to expect a cost-benefit analysis, at the very least, of the cost of the establishment of Irish Water to the Department of the Environment, Community and Local Government which is funded by the Department of Public Expenditure and Reform.
Senator Trevor Ó Clochartaigh raised the matter of the 12 year contracts given to employees. What is the position on redundancy payments where an official of a local authority is transferring to Irish Water? I asked about this on Second Stage. Will a redundancy payment be made to the transferee, although his or her employment is continuing in the public service in Irish Water? If there is a redundancy cost, who will bear it? Will it be the local authority, Irish Water, the Department of the Environment, Community and Local Government or NewERA? What is the overall cost? I am sure a breakdown has been provided.
Substantial costs will arise nationwide under the legislation because Irish Water will be responsible not only for the water we drink but also wastewater. There are thousands of unfinished housing estates throughout the country. If a local authority has its homework done by transfer day, 1 January, it can transfer the assets to Irish Water. If it does not have that work done, what will Irish Water stipulate in order to bring wastewater units up to a standard whereby they can be transferred to it? Who will bear that cost? If local councillors across the country are being asked to find that money in their budgets, they will simply find it undoable. In a local electoral area in Inishowen in my county there are 55 unfinished housing estates and the biggest problem is wastewater treatment.
The problem of transfer day is very unfair. Local authorities will not be in a position to have all of their infrastructure ready for that day. That is why one of my amendments proposed a transition period. That would be sensible, but the amendment was ruled out of order by the Cathaoirleach.
Fundamental questions arise in regard to the cost involved. As Senator Trevor Ó Clochartaigh said, we are setting up what I regard as a quango, potentially the biggest the State has ever seen. Under that quango, we are leaving open the possibility of privatising public drinking water supplies in the years ahead. It may not occur under the Government's watch, but a future Government might decide it was economically viable to sell Irish Water, thus privatising public drinking water supplies. If that is to be the case, we are telling everyone to purchase the water he or she uses in his or her home as he or she would purchase it in a supermarket.
The other issue to which there is no reference in any accompanying documentation is the cost to the Irish household. It is written in the Bill that this will be at the discretion of the Minister or the Government, but there must be a debate on that as part of Committee Stage as well. It is not relevant to this section but it is something that will have an impact on every family across the country.
I share the frustrations of Senator Ó Domhnaill that amendments we put down are ruled out of order. My amendment, amendment No. 24, was ruled out of order because it involves a potential charge on the Exchequer. My intention is to find out what we have failed to find out, as Senator Norris asked on the last occasion - that is, the amount of the "generous" free allowance. That will be an expense. I attempted to quantify it in terms of a number of litres, but the amendment was ruled out of order because it involved a cost to the Exchequer.
There will be a cost to the Exchequer if the Minister of State implements the programme for Government commitment to the generous free allowance, of which we still have not been told. Neither do we know how much the water charges will be. It is time for the Department to come out with details of the expenses. What will the Department itself bear, how much will be the free allowance to users and what will be the cost of the water? Most of the other amendments seem to have been ruled out on fairly contestable grounds, but the Minister of State should tell us the full cost of this and who will bear it.
A number of issues were raised.
If a person is working with a local authority, the only way he or she can be transferred to Uisce Éireann or Irish Water is if he or she goes there. He or she will not become redundant to go there. The person will transfer in and the question of redundancy will not arise. There are no plans for any redundancies of local authority staff. Either they will transfer or they will not.
An unfinished estate, by definition, is in private ownership; in other words, it is unfinished and has not moved to the local authority, and the local authority has no responsibility for taking it over.
It does not. If the roads and the lighting are not up to scratch and if it is not finished, then the public could not take over such a liability. If there are issues, however, I presume they would have to be resolved. In other words, if there is an estate that has inferior, insufficient or inadequate water infrastructure, that is a problem for that estate to resolve.
I am aware that there is an official list of unfinished estates, and the Minister of State at the Department of the Environment, Community and Local Government, Deputy Jan O'Sullivan, is dealing with that. As far as I am aware, they are in the process of transition to finished estates which can then be taken over. Deputy Jan O'Sullivan is bringing into public ownership a transparently listed number of estates in the context of services.
On the question of the free allowance, the programme for Government provides for a free allowance for every household. The approach to providing the free allowance - I acknowledge the questions from the Senators present - and the level of such allowance is being considered by an interdepartmental group being chaired by the Department of the Environment, Community and Local Government, which will be bringing proposals to Government on this matter shortly. In other words, all of the issues are being debated, they will be finalised fairly soon, and when they are there will be transparency and a full debate. There is no reason for concern that it would not be discussed fully here in the House.
Senator Keane asked about assets. At the time, I understood her to be speaking about staff, not assets. When staff transfer, the 12-year rule applies in that there are up to 12 years in that arrangement. While the Bill provides for the transfer of all assets, there is a commencement date on which they will transfer.
This means that the assets will not transfer simultaneously or in any given year but will be subject to due process.
The book value of the assets is deemed to be approximately €11 billion, a significant sum. Each asset and the liabilities attaching to it must be processed individually. Nothing is being rushed and the legislation provides for transfers to proceed when appropriate. Clearly, however, the quicker the process proceeds, the better. If there are differences of opinion or issues arise in respect of certain assets, these must first be resolved before the transfer proceeds. For example, in the case of an asset which has a community facility such as a football field attached to it, decisions must be taken on who will take over the facility, access and so forth. Each local authority will have different issues to address.
I understood, perhaps wrongly, that in the case of staff who transferred to Irish Water on a ten or 12 year contract, a mechanism might be in place under which they would receive a redundancy payment on leaving the local authority. I seek clarification on whether that is the case. This issue has been raised with me by councillors who have obtained information to that effect from directors of services in various local authorities.
On unfinished housing estates, the Minister of State's comments do not reflect what I am being told by directors of services in a number of local authorities, several of whom informed me in the past week that there was an obligation on local authorities, under current legislation, to take over finished housing estates.
There is also an obligation on local authorities to take over unfinished housing estates where the developer has gone bust and a mechanism is not in place to complete the necessary works. A number of local authorities have drawn up lists of relevant estates and are trying to find funding to improve them. Irish Water will only take over estates that are complete and meet certain standards. Where an estate is substandard and the developer has gone bust or no management company is in place, who will fund the works required to bring it to a certain standard? I raise this question because the cost may be borne by taxpayers.
The debate is moving in circles and extending far beyond the scope of the section. I was in the process of putting the question when Senator Brian Ó Domhnaill entered the Chamber. I will allow the Minister of State to reply before putting the question.
I understand the Minister of State with responsibility for housing, Deputy Jan O'Sullivan, is dealing with the official list of unfinished estates that can be remediated, in other words, taken in charge. This list is compiled and verified by local authorities before being submitted to the Department and published. People living in the estates on the list did not have to pay the household charge because they were living in a development that did not meet certain criteria. I understand the estates in question are being worked through. While I do not have a copy with me, there is an official list of estates on which the Department is working. I do not expect the Department's commitment to complete unfinished estates to change.
The Gas Regulation Act 2013 included an interim measure to provide for the making and approval of superannuation schemes by Irish Water. This was considered necessary to enable Irish Water to put in place superannuation schemes pending the enactment of this Bill. As the legislation establishes a comprehensive statutory framework for the company to put in place pension schemes for any staff it may recruit, it is appropriate to repeal the interim measure contained in the 2013 Act. The repeal will take effect only when the relevant sections of this Bill are commenced.
I presume that property vesting day is the day on which the property is vested in Irish Water. Property vesting day could therefore be any day in the future, but as the Minister will have to approve the day by order, it will ultimately be at his or her discretion to decide when to take over a housing estate or water services infrastructure. My difficulty with this aspect of the Bill, in respect of which I have tabled an amendment, is that the transfer day will be 1 January if the legislation is passed before Christmas. Local authority members and officials have expressed particular concern about unfinished estates and sewerage infrastructure. If, for example, an unfinished estate has broken sewerage infrastructure it might cause contamination to the surrounding town and the council will have to find the money for repairs. What standard will these estates have to meet before the transfer takes place? This could cost councils billions of euro. I understand there are at least 2,500 unfinished estates.
We spoke earlier about local authorities taking over estates, and the Minister of State, Deputy Jan O'Sullivan, is working with local authorities. The difference with the infrastructure to be transferred to Irish Water is that the company will not be taking over the estates. The local authority will continue to have responsibility for the estates. The water assets will transfer to Irish Water when the Minister signs the order. Irish Water will have no responsibility for the estates themselves.
I move amendment No. 6:
We discussed this issue on Second Stage and the Minister of State is aware of our opposition to the manner in which the Government is paving the way for potential future privatisation. We are assured that this is not the Government's policy and there is no intention to proceed in that manner, but the ducks certainly are being lined up for potential future action, to which we are generally opposed. On the contrary, we are firmly of the view that water is an important public utility and, as such, should remain in public ownership.
In page 7, between lines 24 and 25, to insert the following:"(2) The Minister shall, by order, enact a service level agreement within this Act no shorter than thirty years.".
We are proposing in this amendment that a service level agreement, SLA, of no fewer than 30 years should be enacted, that period being reflective of the timeframe allocated for public private partnerships under local authority agreements and so on. Twelve years might seem like a long time at this point, but we cannot know whether a future Government led by Fianna Fáil, Fine Gael or another party might be in favour of the privatisation of such utilities. A service level agreement of 30 years or more will kick that argument out of the ball park, as the Yanks would say. If the Government really does have no intention of privatising our water utility, then the Minister of State should agree to this amendment. Doing so will make no difference to what the Government is proposing to do and is in line with the Minister of State's assurance that he is favour of keeping the water asset under State ownership. The proposal would strengthen that connection.
I heard on the radio as I travelled to Dublin yesterday that the sale of Bord Gáis Éireann will proceed if the right price is secured. People are fearful that our water asset, too, could end up in private hands, which would have major downsides. The proposal to install water meters and charge households for water was dreamt up by the previous Administration but is being brought to life by this Government. We are asking the Minister of State to take on board our suggestion that SLAs be extended to 30 years so that the argument for privatisation can be put to bed, once and for all. A contract of that duration would send a signal to private corporations around the world which might be interested in buying up our water utility that they should back off.
I thank the Senator for moving this amendment, but I cannot support it. He referred in his contribution to public concerns regarding privatisation. In the case of the ongoing difficulties at ESB, the public concern was not whether that company was publicly or privately owned but whether the service would be provided. The outcome of this legislation and of the Government's deliberations must be the provision of a top-class water service, devoid of leaks and other difficulties which prevail throughout the country at present, at a fair and reasonable cost to consumers. That is the objective to which we all aspire.
The suggestion that the service legal agreement should extend beyond what is an already excessive provision of 12 years does what Senator Ó Clochartaigh wishes it would in that it will make the legislation quite irrelevant. We must ensure that taxpayers, who foot all of the State's bills, get value for money and a top-quality product at a reasonable price. The Senator mentioned that there is a Fine Gael view and a Fianna Fáil view on this issue. His own party is in power in another part of this island but I do not see the Northern Ireland version of Sinn Féin doing much to dismantle whatever privatised services are in operation in the North. Every party in government soon discovers the reality-----
Yes, it is probably a discussion for another day. There is an onus on every party in government to do its best for taxpayers. My concern is that the legislation as currently construed, with the provision for a 12-year service level agreement, is effectively saying that there will be no great change and that the dawn of a new day, with a new authority acting efficiently and effectively in providing such an essential service to the public at a fair, appropriate and reasonable price, might not come about quickly enough.
I presume the Minister of State will not accept the amendment but, in responding to it, he might indicate why he feels the 12-year limit should be in place, and he might refer to the forum he mentioned in passing earlier. I apologise for being absent last week, but I would like to learn more about the forum. There is a new board in the form of Irish Water as well as local authorities and the Government, but, with classic partnership precision, a new forum has emerged. Who or what is the forum? Who sits on it and who appointed these people? The Minister is rightly taking the law into his hands to set policy. The forum seems to have become a co-Minister in this legislation, deciding when staff may be transferred and whether a service level agreement has been reached. For all the faults of Members, we have the opportunity to debate this in public and put the situation on record before the taxpayers of the country, and to put on record what should be the situation.
The Senator's contribution is not relevant to the transfer date, which is dealt with in this amendment. I also stopped Senator Ó Domhnaill during his contribution. It may be an interesting issue, but I must ensure Senator Bradford is within the confines of this matter.
I will ask the Minister about the setting of dates on service level agreements and whether the forum has played a role in it or made submissions about dates and service level periods. If so, can the Minister of State provide more information on the forum? Who decided or dictated that it should be set up? What is the genesis of the forum?
I welcome the Minister of State. It is good to speak on this Bill, which is crucial because we cannot live without water. It is a basic need and a matter of public health. I have concerns about the service level agreement, whether it is a 12-year or a 30-year agreement. I have spoken to councils and they are concerned. With less than one month to go until January, many councils to whom I spoke felt they were out in the cold and that there had been no consultation on the issue.
Will these issues be sorted out by the transfer date? These include the question of who will take over liability for senior staff pensioners, now retired, and whether the domestic allowance that must be paid will be passed on to councils. Some councils fear it will come out of the local government fund. This will short-change customers and put councils on the back foot. What happens if we are charged on the basis of use above a certain quota, which I understand to be the case? If demand for water drops, which it should with good behavioural change, what will be the knock-on effect on cost? We are entering with a certain expectation. Councils have a fear of being out of pocket because of the service level agreement and the transfer date.
If they are not relevant to the section, the Minister of State does not have to answer them. We cannot have a plethora of questions referring to subsequent amendments or sections when it is more appropriate to deal with them at a later stage.
I have one final question. The Minister of State has indicated an interest in responding and we do not know if he will present for the entire debate.
Health and safety is also an issue, which has not been resolved in the service level agreement. Who has responsibility for it? There will be a service level agreement between Irish Water and the local authority, which will have to repair burst pipes, etc. If there was a fatality, which often happens in situations like this, will Irish Water or the local authority address this? These are important logistical issues.
On a point of order, with the greatest respect to the Senator, I prepared for this debate on the basis of us going through the amendments as set out in the document before us. Are we going to deal with the amendments in order or-----
I am not sure that is a point of order but I agree with the Senator's comment. The thrust of Senator Healy Eames's contribution relates to sections 15 and 16. I would like Members to confine their remarks to the amendments and sections as we deal with them.
I welcome the Minister of State. I have two issues with the Bill which are relevant to this amendment. The first is the removal of powers from local government in respect of water services. I served on a local authority for seven years and I heard many calls from councillors of all parties and none for more powers to be given to local government. We had a discussion during the Seanad referendum campaign about whether we had a robust system of local government and the need for a debate on the powers and function of local government in the context of empowering local authorities rather than taking powers from them. Previous Governments took powers from local authorities in respect of waste management-----
This is a general point. We are dealing with the extension of the service level agreement for 30 years. If I have to constrain one Member, I must constrain others. I cannot make chalk of one and cheese of another. The Senator's point is general. It is relevant to the legislation but not to the amendment.
Then he will know it is directly relevant to the issue at hand. If we are not allowed to make these general points in the context of these amendments, it will be a bad day for local democracy and for the Seanad, but the Leas-Chathaoirleach is entitled to his opinion. I do not agree with taking powers from local government.
The second issue I have relates to the potential privatisation of Irish Water, which is also relevant to the amendment. We should not go down this road. The company must remain in public ownership. I agree water is a scarce resource, which we need to protect and invest in, but I am concerned that we would be going down the slippery slope of privatising water services. We have seen this many times before with local authority services where the first thing done to privatise a service is to transfer responsibility for it from local government to a quango or board before eventually privatising it. It may not happen during the Government's term but it could happen down the road.
The amendment seeks to ensure the service level agreement will be no shorter than 30 years, not the 12 years proposed by the Government.
These are the two core points I intended to make. The first relates to taking powers from local government for water services and giving them to Irish Water. The second relates to the potential privatisation of water services down the road.
We are working under the rules of the Seanad rather than mine. I am happy to provide responses that are not allowed to be given now and will get the answers to Senators before Thursday, if I can. This is all about transparency and accountability and I am happy for it to be that way. We must work within the rules as we go through the sections.
Senator Trevor Ó Clochartaigh raised a question regarding the Irish Water consultative group, which comprises the Department of the Environment, Community and Local Government, Uisce Éireann, local authority managers and local authority trade unions. It is chaired by an independent chairman from the Labour Relations Commission. The group agreed that the first service level agreements to be put in place between Irish Water and each local authority should be of 12 years duration, with two interim reviews after two and five years. The Bill, as published, does not specify a duration and the issue is still being considered by the Department in consultation with stakeholders. Amendments may be submitted on Report Stage. However, the duration of the agreements proposed by Sinn Féin is not considered appropriate, having regard to the agreement of the consultative group. Outside of this, there is room for further service level agreements should they be required and agreed after 12 years. The process is entirely flexible in that respect.
I do not wish to break the rules, but there is a new amendment No. 78. Although it does not mention it, it clarifies absolutely that there cannot be privatisation. When we get to the amendment, I will be happy to speak to the issue. The amendment has been added on Committee Stage as we consider, like everybody in the House, Irish Water cannot ever be privatised. This will copper-fasten the position in legislation and I hope Senators will be able to support the amendment.
I will reply to those comments, as I tabled this amendment and most of the amendments we have tabled have been ruled out of order. Will there be a review after two and seven years? Could the service level agreements be shortened if there was agreement among the group?
After two years there might be consideration of how it was working. If a person is living in County Westmeath, as opposed to Dublin city, there would be different issues. There is a standard service level agreement which is consensual. There may be consideration of progress, how the process is working, whether it can be made more efficient and if parties can agree on a plan and move forward.
Yes, but there may be an agreement not to continue for 12 years. In the same way, the process could be longer. There are 34 local authorities which are massively different in terms of size of population, infrastructure, etc. We are dealing with major cities and small counties, with different issues in each of them.
That would add greater fear to the point we are raising. For example, there will have been a general election by the time the second review occurs and a future Government might bring pressure to bear on the parties to the service level agreement to shorten it and, therefore, speed up the potential privatisation and transfer to Uisce Éireann. That might happen if a future Government was to be more gung-ho on the issue of privatisation and the consultative group could be asked to consider shortening the length of time given for service level agreements. If a potential buyer for Uisce Éireann could be found, the process could take less than 12 years.
In adjoining local authorities common infrastructure may be developed.
For instance, there is an arrangement that Louth County Council in Drogheda runs the water supply services for east Meath. Of course, service level agreements between Irish Water and local authorities can vary. It would, however, be by consent. For example, an adjoining local authority, such as a city, should be able to bring new synergies to a neighbouring local authority which might be predominantly rural. If this agreement was not in place, then the opportunity for new efficiencies in the provision of services for those communities which might not have the capacity to provide that infrastructure from their own resources might not arise.
We all agree we need better water services and to ensure the system is upgraded to address leakage levels. We also agree that it is important that if a large municipal centre in one local authority area can service a broader hinterland in another, then synergies between the two local authorities should be encouraged. That can be achieved through the service level agreement being in place.
I note, however, the Minister has not ruled out the potential that within the 12-year period, after agreement between all parties, the assets could be fully transferred to Uisce Éireann.
I understood from Second Stage and my contacts with local authority workers represented by SIPTU, that detailed discussions had taken place at the Labour Relations Commission on this whole issue. The decision to enter into the process in question was consensual and welcomed by all parties. If there were to be a change, will the Minister clarify that it would have to be agreed by all parties?
With all due respect, I see issues arising. We have seen issues with unions recently with the two Haddington Road agreements. Much pressure was put on the unions to accept the agreements on the table. How do we know a future Government which wanted to sell off the State’s water utilities will not bring such pressure to bear? Unless it is in the legislation that the service level agreement will be in place for 12 years, then the Minister cannot guarantee there will not be a change of the position in the interim.
My amendment on transfer day was ruled out of order. I have great concerns about how transfer day is set out in the legislation, prescribed as 1 January. I presume water supply systems in unfinished housing estates or town sewerage infrastructure which does not meet EU environmental standards will also be transferred to Irish Water on transfer day. While I know the Minister of State does not have responsibility for unfinished housing estates, this issue is a timebomb.
It will be an issue come the next local elections in 2014. It will be very difficult for councillors, Government or Opposition. Through no fault of their own, they will be left to carry the can, with residents coming to them who have not made their applications to local authorities to take over their housing estates before transfer day on 1 January. Thereafter, Irish Water will set the standards with which wastewater treatment systems will have to comply before it takes them over. The local authorities and housing estate residents will have to fund the cost of bringing the systems up to standard. These are people who have bought houses, have high mortgages and young families and live in estates all over the country, including commuter estates outside Dublin. They and the local authorities will not have the finance to do this work.
I heard what the Minister of State said, that another Department was responsible for bringing all parts of unfinished estates up to standard, but no fund is available to do the work required. While the local authorities have drawn up a list of all the estates and the work that must be done, they do not have the money to meet the costs associated with it. I am talking about estates where developers have gone bust. Let us remember that the councils granted planning permission for these estates and were to obtain bonds from developers. Some of these bonds may be available to carry out some of the works, but in the vast majority of estates the bond would not cover a fraction of the works to be carried out.
On transfer day, according to the capital requirements for bringing public service infrastructure - wastewater and public drinking water - up to standard, it would cost €600 million annually in the next ten to 15 years to fund all of the work. It gives me little hope when I see a 32% reduction in the water infrastructure and capital investment programme during the 2011 to 2014 period. I acknowledge that the Bill provides for Irish Water to raise capital of €2 million in the Irish markets, but that will not fund what is required. That €600 million annually would be spent on public infrastructure to meet EU legislation, but that would not cover the 2,500-plus private estates throughout the country. Some of it involves roads and footpaths, but wastewater treatment systems account for the vast majority of the big, difficult issues.
How will local authorities fund themselves to meet the standard Irish Water will set after transfer day? Perhaps the Minister of State might outline what the standard will be because it is not set out in the Bill. What standard will Irish Water set for local authorities for private wastewater infrastructure that will be transferred after transfer day? What will be the cost of bringing all these pieces of infrastructure up to standard? From where the money will come? We can say another Department will pay for it and that is fine, but under this legislation, the local authorities will be duty bound and people will be left high and dry. They will be caught between a rock and a hard place. At least the local authority is currently responsible for wastewater and public drinking water, but these functions will be transferred to a semi-State body, Irish Water. I can imagine housing estate owners in Connemara, County Louth, County Monaghan or Donegal Donegal ringing a call centre in Cork to try to negotiate the taking over of their wastewater treatment systems. It will be much more difficult because we are centralising the system and that will leave things much more difficult and we are not sure what the standard of compliance will be.
Tá Sinn Féin i gcoinne an roinn seo den Bhille. Léiríonn an rud atá á dheánamh an bun prionsabal atá ag an Rialtas maidir le Uisce Éireann agus tá muide i Sinn Féin i gcoinne sin, go príomha ar chuid mhaith de na cúiseanna a léirigh an Seanadóir Ó Domhnaill mar a tharlaíonn sé, ach is ait liom go raibh Fianna Fáil ag cur chun cinn na polasaithe sin roimh an toghchán deireannach chomh maith céanna. Go bunúsach, dar linne nach bhfuil sé seo - an mhaoin seo a aistriú ó na comhairlí contae go dtí an lár eagraíocht mór seo - chun na fadhbanna atá againn maidir le cúrsaí uisce a leigheas, ar na cúiseanna atá luaite. Níor chóir go mbeadh muid ag glacadh inniu le aistriú muna bhfuil a fhios againn céard iad na táillí a bheidh á ghearradh, cén liúntas a bheidh ag daoine nó cé mhéad uisce saor in aisce a bheidh le fáil acu. Níl an Rialtas tar éis cúrsaí airgid a chur san áireamh. Táimid ag caint ar an rud céanna a bheith le n-íoc ag an té atá ar ioncam íseal agus an té atá ar ioncam ard.
Luaigh an tAire go bhfuil an príomh fheidhmeannach atá i bhfeighil an chomhlachta nua seo, Uisce Éireann, ar thuarastal de €200,000. Beidh an táille céanna le n-íoc ag an té sin agus a bheidh ag duine atá ag strachailt faoi láthair le cuid mhaith chostas eile. Níl sé seo chun an fhadhb atá ann a leigheas. Ní leigheasfaidh sé an fhadhb maidir le uisce ag dul le sruth. Tá cuid mhaith uisce ag dul le sruth in áiteanna éagsúla. Ba chóir go mbeadh infheistíocht i bhfad níos mó déanta sa gcóras. Táimid ag caitheamh thar €500 milliún ar cur isteach na méadair nuair ba chóir dúinn a bheith ag cur isteach píopaí nua agus píopaí níos fearr ná na píopaí atá ann i láthair na huaire.
Níor tógadh san áireamh ach oiread na costais breise atá gearrtha ag an Rialtas ar dhaoine le roinnt buiséad anuas, ar a áirím an household charge, an ardú ar chostas bhreosla, an laghdú ar an liúntas bhreosla, 2% breis VAT atá ag cur isteach ar dhaoine ar ioncam íseal, ardú sa chostas bhoilscithe, ardú ar chostais iompair agus ardú ar chúrsaí eile.
Tá, mar tá an tAire ag iarraidh aistriú a dhéanamh ó na comhairlí áitiúla go dtí Uisce Éireann agus lena chois sin tiocfaidh na méadair, na costais agus na táillí - táillí a bheidh lom díreach mar a chéile do chuile duine trasna na tíre. An pointe atá á dhéanamh agam sa gcomhthéacs níos leithne ná gur sin fáth, i bprionsabal, go bhfuil muid i gcoinne go n-aistreofaí an rud seo. I gcomhráite a bhí agam le cuid de na comhairlí áitiúla, ba léir nach raibh siadsan ró-shásta go mbainfí an cúram seo díobh agus nach mbeadh smacht acu ar an chúram seo níos mó. Is léir go bhfuil an cúram áitiúil níos fearr.
Tá imní amuigh ansin. Táimid tar éis sampla an HSE a fheiceáil. Tá a fhios agam go ndéarfaidh an tAire Stáit nach ionann an dhá chás, ach táimid tar éis an rud céanna a fheiceáil ó thaobh lárnú seirbhísí in aon rud mór amháin. Táimid tar éis cloisint ó na hAirí éagsúla go mbeidh na seirbhísí i bhfad níos fearr agus níos éifeachtaí. Tá an rud céanna feicthe againn le SUSI agus le cártaí leighis - go bhfuil deacrachtaí ollmhóra nuair a cuirtear gach rud in aon láthair amháin. Is ar an mbunús sin-----
Leis an gceart a thabhairt, b'fhéidir gur é an Rialtas atá ag dul ar strae. Nuair a rialtar as ord na leasuithe féaráilte atá muide ag iarraidh a chur chun cinn, tá sé tábhachtach go gcuireann muid in iúl don Aire cén fáth, go bunúsach, go bhfuil muid i gcoinne na reachtaíochta seo. Beimid i gcoinne na míre seo go háirithe.
Déanfaidh mé mo dhícheall freagra a thabairt ar na tuairimí sin. Maidir leis an méid adúirt an Seanadóir Ó Domhnaill, I will try to clarify the issue. Private infrastructure is not mentioned in the Bill. It is only infrastructure for which a local authority is accountable - in other words, water or sewerage infrastructure that a local authority is in charge of or owns. Anything outside of this is not the responsibility of the local authority or Irish Water. Unfinished estates are those on a list deemed to be unfinished according to particular criteria, some of which Senator Ó Clochartaigh enumerated. I believe there are three separate lists, but I do not have the details with me. The Minister of State, Deputy O'Sullivan, is dealing with these. If it is helpful I will get a list of them before Thursday and perhaps Senator Ó Clochartaigh can help me by providing me with a list of particular estates in his constituency and I will be happy to get an answer on them. I want to be as transparent as I can with my answers. There is no issue about Johnny Murphy in an estate that has not been taken in charge ringing Irish Water about a matter. The service level agreement is between the local authority and Uisce Éireann.
Maidir le na ceisteanna ón Seanadóir Ó Clochartaigh-----
Mar a dúirt mé, ní thuigim cén fáth go gcuirtear an cheist seo i dtaobh an Bhille seo. Tuigim go bhfuil fadhbanna faoi leith i gContae Dún na nGall. Má chuireann an Seanadóir na ceisteanna chuig an comhairle contae nó chugamsa, déanfaidh mé mo dhícheall freagra a thabhairt dó.
Maidir le na hargóintí a bhí ag an Seanadóir Ó Clochartaigh, tuigim an pointe polaitiúil atá á dhéanamh aige, ach an pointe bunúsach atá againne ná nach bhfuil aon phríomháidiú ar siúl anseo. Níl seans ar bith go mbeidh éinne in ann greim a thógaint ar an asset seo ná é a ghoid ó mhuintir na hÉireann. Tá an cumhacht ag imeacht ó na comhairlí contae agus na cathracha agus na bailte móra go Uisce Éireann, ach níl sé ag dul aon áit eile. Táimid ag treisiú an Bhille seo le leasú - sílim i leasú Uimhir 78 - agus beidh an Seanadóir in ann díriú ar an ábhar seo ag an am sin. Ná bíodh aon fhaitíos ar an Seanadóir amach as seo. Ní bheidh aon duine ná aon Rialtas in ann Uisce Éireann a phríomháidiú gan Bille nua a chur os comhair na Dála agus an tSeanaid agus gan an tromlach a bheith acu le athrú a dhéanamh. Is mar sin atá le gach rud eile mar seo. Táimid ag cur amendment nua sa Bhille anocht chun tuairim láidir an Rialtais ar seo a threisiú.
- Ivana Bacik
- Terry Brennan
- Colm Burke
- Deirdre Clune
- Eamonn Coghlan
- Michael Comiskey
- Martin Conway
- Maurice Cummins
- Jim D'Arcy
- Michael D'Arcy
- John Gilroy
- Aideen Hayden
- Lorraine Higgins
- Caít Keane
- John Kelly
- Denis Landy
- Fiach MacConghail
- Mary Moran
- Tony Mulcahy
- Michael Mullins
- Hildegarde Naughton
- Catherine Noone
- Marie Louise O'Donnell
- Susan O'Keeffe
- Pat O'Neill
- Tom Shehan
- Jillian van Turnhout
- John Whelan
I am sure the Members of the House would like to join me in welcoming a group of dignitaries and educationalists from Hong Kong. I extend a welcome to the distinguished visitors in the Gallery to Seanad Éireann.
Nílim chun scéal fada a dhéanamh as seo agus nílim chun an díospóireacht a tharraingt amach, ach ar na bun prionsabail céanna, ní ghlacaim leis na pointí atá déanta ag a n Aire Stáit. Níl muinín agam as an Rialtas seo ná as na gealltanais atá á tabhairt ag an Aire Stáit. Táim den tuairim gur céim ar gcúl é seo ó thaobh seirbhísí uisce de. Dá bhrí sin, ar an mbunús céanna le rannóg 6, táimid i gcoinne rannóg 7 chomh maith céanna.
As one knows, industries approach and negotiate with local authorities for a guaranteed supply of water. Must Irish Water take due regard of a local authority's development plans and functions in guaranteeing a water supply?
As the Senator knows, Irish Water must consult local authorities on their development plans and commitments that have been entered into. If an industry wanted to move to Waterford it would be important for it to know whether a commitment had been given. In some cases, funds might have been given to the local authority to provide special services to a particular industry. No matter where the industry is located, it is important that service continues and due regard is taken of the development plan. If a plan includes new infrastructure then it will form part of the Irish Water service plan. In bringing about such a plan, companies will talk to local authorities, discussing what they wants done, what the local authorities have committed to doing and so on. Irish Water intends to have better joined-up thinking. I hope my explanation has proved helpful.
I refer the Senators to section 26(1), which states:
The provision means that it must consult with everybody concerned. There is no concern about a lack of due and proper consultation or a capacity for people to make their views known, whether they are elected officials or councillors. Negotiation is part of the process of preparing a strategic plan for an area. It is critical that a plan is compiled through consultation. I will go into greater detail on the matter when we reach section 26. I hope I have been helpful.
Irish Water shall—(a) after consultation with the Commission, the Agency, each local authority and each regional body, and
(b) not later than such date as the Minister may direct,prepare and submit to the Minister a plan...
I move amendment No. 11:
The section deals with the transfer of property of water services authorities. Where it states that the Minister "may" do something, very often that refers to financial decisions. The section states:
In page 9, line 14, to delete “may” and substitute “shall”.
The Minister may, on or after the transfer day, from time to time, by order, appoint a day (in this Part referred to as a “property vesting day”) for the purposes of this section.I want to replace the word "may" with "shall." Using "may" will allow competing financial demands to be considered, leaving critical water infrastructure in limbo and in the hands of either a local authority, housing estate owners or house owners on housing estates. The provision could leave a local authority exposed. If an organisation such as Irish Water raises moneys on the international market and confidence is placed in the authority, then it is right that the authority fully fund upgrade works on public infrastructure in order to provide water or wastewater facilities. We have already referred to wastewater facilities. We want wastewater treatment systems on housing estates to be taken over as well.
I want the section amended in order to read that the Minister "shall" appoint a day. Using the term means the Minister's discretion remains intact. It does not just refer to the Minister of State. Any Minister in any government, on any given day, will be left with a ministerial decision about whether a piece of infrastructure will be transferred. Use of the word "may" implies uncertainty and I propose that it be replaced by "shall" so that the Minister is duty bound to transfer the pieces of infrastructure to Irish Water.
There is some confusion, and certainly in my mind, so it is important to clarify the matter. I understand, having read the legislation, that there will be a transfer date. Senator Cummins mentioned planning permission and development plans approved by the local authority, and a lot of reference has been made to sewerage treatment plants on private estates, etc. What happens when estates are taken over by local authorities? As we are all aware, that requires a process. A local authority cannot just say "Today we will take this over." It must undertake inspections, surveys, etc. Therefore, the legislation must contain a provision whereby Irish Water takes the function over from local authorities. Such a provision is already in place and the measure will be operated on an ongoing basis, but I seek clarity on the matter. It will cause concern. A housing estate, through no fault of residents, may not be ready on the transfer day for whatever reason. For example, a developer may have gone west, or no one might be in a position to offer the estate to a local authority. We must remember that an estate must be legally offered to the local authority. That is the law as it currently stands. A local authority must be in a position to take charge of an estate and when it reaches certain standards Irish Water will de facto take it over from then onwards. The matter needs to be clarified.
I do not believe residents living in these areas should be unduly concerned. My understanding of the legislation is that there is no ambiguity, but I would like the Minister of State to spell this out.
All I can say is the amendment is unnecessary because it is the stated intention of the Bill to provide for the transfer of water service property and assets. This is about transferring them but at the right time. Therefore, changing the word in the section would make no difference. The intention is to take them over, but the conditions must be right. We are talking about the assets and liabilities and they have to be clear legally on what they are doing. The other point, separate from what the Senator mentioned, is that there may be assets which have a public park or something else attached to them. We must have due process.
I move amendment No. 12:
This amendment seeks transparency. It relates to the transfer of property from councils or water service authorities to Irish Water and proposes that a comprehensive table of all moneys or infrastructure transferred to and expended by Irish Water for the purposes of the subsection be published annually providing a county by county breakdown. This would be appropriate from the point of view of transparency point of view. Perhaps the amendment might need to be tuned. There are serious questions about Irish Water being beyond scrutiny through freedom of information requests in its establishment phase. There is a requirement for local authorities, local authority members and the general public to be absolutely clear and aware of what is being transferred to Irish Water in order that Joe Murphy living on Main Street, Clonmel, Gortahork or Skibbereen can log on to a website annually at the end of the year to see what has been transferred and, therefore, what has been left within the local authority. Presumably after transfer day there will be other stuff to be transferred and we need transparency in that regard. I am not sure if the Minister of State is willing to accept the amendment, but as this is public infrastructure owned by the taxpayer which is being transferred, I do not see any issue in accepting it. I hope he will accept it, as it would provide for some level of scrutiny and clarity to allow us, as public representatives in the Oireachtas or any council chamber across the country, to scrutinise, question and hold to account in some way the new entity to be known as Uisce Éireann or Irish Water.
In page 10, between lines 4 and 5, to insert the following:"(9) That a full and comprehensive table of all monies transferred to and expended by Irish Water for the purposes of this subsection shall bepublished annually providing a county by county breakdown.".
I presume an inventory is being made of the assets and liabilities of each local authority. I also presume there will be a lot more liabilities than assets, but I am not sure of this. When can we learn what assets are being transferred? I do not know whether it is feasible to put a monetary value on these assets. In regard to the liabilities Irish Water will assume from local authorities, when will we know the extent of these liabilities and the value of the assets being transferred? When will we be in position to look at that inventory?
I agree with the thrust of the amendment which is practical. We all appear to be in agreement that we want to ensure transparency in the transfer of assets and moneys and an amendment of this type would, I hope, help that process. As elected representatives, once assets begin to be transferred, we will be asked questions about what assets have been transferred by local authorities to Uisce Éireann and their worth etc. I look forward to hearing the response of the Minister of State.
The issues being touched on are very important because it is important that the people know what is going on. An asset will be transferred by ministerial order and it will not be done quietly and silently. An order will be signed which anybody will be able to find and look at. What will be transferred will be visible and there will be nothing hidden about it. On the question of where the money will be spent - the point the Senator makes about accountability - the planning regulations provide that development contributions may be transferred, but they must be used in the local authority area in which they were collected. I presume local authority members will be more than anxious to make sure there is transparency. At the heart of the issue is the contact between Irish Water, local authority members, councils and the public in a transparent process. There is nothing to worry about in this regard because the transfer of assets requires a ministerial order and everybody will be able to see and examine what is in it.
I accept that the Minister of State is being genuine on the issue. Obviously, the development charges are being transferred. That is the reason I want a county by county breakdown. A ministerial order is required for the transfer. For the ordinary punter on the street, a ministerial order could be something from Mars. The information should be published annually and made available to the media. Some 50 or 150 signed ministerial orders which are buried somewhere may be available to those of us who can find them, but they are not readily available to the ordinary punter on the street. A comprehensive tabular statement to be published annually on Irish Water's website or that of the Department is what I am seeking.
All I can say is it is a commercial semi-State entity which will be fully self-financing. The subsection provides that water service development contributions collected by a local authority and transferred to Irish Water can only be expended within the functional area of that authority. While I understand the rationale behind the amendment, it is unnecessary as the company will only be permitted to spend the money in that functional area. The best judge of this is the Senator because he will make sure that that is what will happen. That is why it is important to have that level of contact with Irish Water or Uisce Éireann. I genuinely do not see a need for the amendment. All of the information will be on the website and one will be able to check it at any time.
I understand where the Minister of State is coming from, but I am disappointed. Whether we are public representatives of Joe Bloggs, we should not have to spend time digging through websites to find this information. It should be made available in tabular form and should be easy to find. I appreciate the Minister of State may not want to accept it, but I will press the amendment.
In an effort to be more helpful, perhaps we might ask Irish Water to publish the information in its annual report and the county council will do the same in its annual report. It could do it on a county by county basis or whatever way it wanted to do so, or else make it available on the website.
There is nothing being hidden from anybody at all. The information is accessible on the Internet. I do not have a problem with Irish Water doing as I describe. The county council would need to do so because the Senators' constituents will want to know what the money is being spent on. One will achieve accountability that way.
Based on what the Minister of State said, I am willing to be constructive. However, I want to see the provision in the Bill itself. If the Minister of State wants to propose on Report Stage a wording that will impose a statutory obligation on Irish Water to provide a breakdown, it would be useful. I could not accept anything less. If the Minister of State is willing to propose an amendment on Report Stage, I will certainly be willing to withdraw mine.
I do not have a problem talking to my Department and Irish Water to achieve a consensus with which people will be happy regarding the transparency of the transfer and the availability of the facts in regard to it. I will revert to the Senator on this. I cannot promise anything but will talk to the relevant officials about it.
I wish to raise some issues and concerns. This section is overriding the democratic mandate that has been given to local councillors. We were suggesting that, before the transfer of assets, there would be a vote by councillors. We were told there would be an enduring partnership and that Uisce Éireann would be working with local authorities, etc., but we feel the transfer will seriously diminish the role of the elected councils and all but eliminate democratic accountability.
Another issue raised about Uisce Éireann is that since it is a semi-state organisation, there will not be the desired input from elected representatives and accountability will be lost. Perhaps on Report Stage, the Minister of State will need to consider an amendment of some kind to address this. We might table something similar, if it is ruled in order, on the democratic accountability of Uisce Éireann.
I share the concerns of Senator Trevor Ó Clochartaigh on this issue. Over recent months, we have seen a move away from the way democracy has been conducted because of the proposed abolition of town councils, the reduction in the powers of councillors and the loss of councillor input into local authority investment programmes for critical infrastructure for wastewater and public drinking water. This is a retrograde step. It is certainly a step to remove democratic accountability in respect of the services in question. Local authority members have worked diligently over the years to try to ensure they held local officials to account. They are currently obliged to do so under the Local Government Act 2001 in regard to public drinking water and wastewater. Unfortunately, if this legislation is passed, councillors will lose their powers after the transfer. We are removing powers from councillors, whether we like it or not. This is the wrong approach.
Someone with a burst water main in a very remote rural area will now have to ring a call centre in Cork. This is just like the position with the ESB in that one must ring the 1850 number in Cork. It is removing councillors and local input from the equation and creating something that is far removed from the burst pipe in the locality, which is wrong. We are doing this by transferring all the functions. One can argue, as was done on Second Stage, that there will be local engineers whom councillors can ring, but effectively what is happening is that all the functions are being transferred to a centralised body. We are centralising the system and removing democratic accountability and the capacity to hold those who make decisions to account. While councillors will have a role in regard to the strategic plan, they will have a consultative role as opposed to a decision-making role. This is where the difficulty lies. One can bring forward legislation and proclaim one is consulting elected representatives but ultimately the people making the decisions will do so irrespective of consultation because they will have a statutory responsibility and remit to do so if this legislation is passed. That is wrong. It is wrong to remove the voice closest to democracy, namely, the voice of the local councillor. Local councillors can give a voice to the local communities they represent when issues arise concerning public drinking water or wastewater. This function is now being removed and, unfortunately, there is centralisation of services. We do not know the ultimate position on the assets of Uisce Éireann but we know where it is going - that is, towards the removal of the current role of local authority members and local council officials. That is the wrong step to take and I fundamentally disagree with it.
The Minister of State and I have differing views. He may refer to the EU-IMF and troika deal as much as he wants but ultimately it must be acknowledged there was nothing in the troika deal to establish a semi-state organisation to roll out water services. There was no negotiation by the Government with the troika to make the point that Ireland wants to keep service provision localised because councillors and local officials have been doing the job in question and can continue to do so. What is being done is the wrong move. We are allowing centralisation of the fixing of the water charge because the Commission on Energy Regulation will be setting a charge. We know what it has done with electricity prices; it has allowed the ESB and other service providers to impose 15% increases year on year, thereby affecting every citizen. What will be done differently on this occasion? I submit nothing will be done except to allow the cost of water to increase year on year. In five or ten years, every politician on both sides of each House and in the local authorities will be criticising Irish Water and the Commission for Energy Regulation. It will then be too late, however, because the legislation will have been passed and the bills will have to be paid.
On Second Stage, the Minister of State made a commitment on the role of local authority members vis-à-vis their contact with Irish Water. I know he will stand over that and ensure that councillors will have specific contact with Irish Water as part of their role. When I heard the discussion some days ago on a former Tánaiste re-entering national politics, the commentary differentiated between Senator Ó Domhnaill and the former Tánaiste by contending that the Senator was living in the real world and had faced up to the issues.
The Senator is getting personal because he cannot stand up for his party's councillors. It is disgraceful that the Government is diluting the powers of councils and that Senator Landy is engaging in attacks across the Chamber. He should go an tell his party's councillors that their powers are being diluted. They do not all agree with what is being done.
I sometimes wonder whether the Government is too much in favour of centralisation. This Administration and its opinion pollsters, opinion formers, etc., received a very rude answer to the question relating to the proposed abolition of this House. It just might find that local authorities are much more popular than imagined. The decision to abolish the requirement with regard to electing the members of the board of Údarás na Gaeltachta was an incredibly bad one. None of the analysis relating to why our economy crashed attributes responsibility to the fact that we had too much democracy. The crash might, however, have been due to the fact that there was too great a concentration of power. For example, less than a handful of people made all the vital decisions in September 2008. It would be a pity if the Government were always to be against both local democracy and participation. I do not believe it was elected on such a mandate. As Senators on this side have noted, it is regrettable that the Government appears to have undue faith in quangos and always wants to abolish democratically elected bodies. This is the fourth successive occasion on which it has engaged in such an abolition. I am of the view that this is a mistake in the context of the quality of democracy in this country.
I reiterate the point I made in respect of earlier amendments and sections with regard to the role of local government and the powers of local government being removed. I am interested in what Senator Landy said regarding the commitment the Minister of State gave on Second Stage in respect of establishing a link between councils, elected local representatives and Irish Water. As the Minister of State is aware, I am concerned that removing the service is, in the first instance, a retrograde step. Leaving that aside, I am willing to listen to what he has to say. Perhaps he might explain what will be the exact nature of the link. I would argue that once the service is removed, whatever link remains will not be as strong as that which exists at present under the local government model. That is my view but I am interested in hearing the Minister of State's comments on the point made by Senator Landy regarding what has already been taken on board and on how everything will work in practice.
Following the debate on Second Stage, I sought reassurances - through my Department - that regional communicators have been appointed by Irish Water. Part of the task of those individuals is to contact all elected members in each area. Councillors will be able to communicate directly and discuss matters with these people at all times because they will know their names and telephone numbers. That is critical, particularly as it reflects the position which currently obtains in respect of the local authorities. I will request an update on this matter before Report Stage. I gave the commitment to which the Senator refers in good faith and I am assured that what I outlined is happening.
I do not want to become involved in a political row but I wish to make a particular point. The cost of water in County Wicklow is double that which obtains in County Kildare. One of the good things about synergies is that there will not be any significant difference. On average, the charge for water across the country is €2.52 per 1,000 litres. In some counties one would be obliged to pay almost double that, while in others the cost would be halved. The idea is to have equality throughout the country in terms of access to water and the costs involved. I will not discuss the matter in detail no but the synergies to which I refer will mean that counties which do not currently have the capacity to develop their own infrastructure - because they do not, and never will, have the money to do so - will, through Irish Water, be able to obtain new regional plans. The latter will be based on river basin districts, etc.
I am very confident that Irish Water will be extremely successful. I take the Senator's point on communication. I served as a county councillor for 27 years and I know what is involved. It is important that we should maintain and strengthen the link that exists, particularly in current circumstances.
These amendments are necessary in order to provide that any rights in addition to liability shall be transferred to Irish Water following the making of an order by the Minister. Accordingly, the order made under section 14 will provide for the transfer of rights and liabilities from local authorities to Irish Water. For example, contracts transferring to Irish Water would include both rights and liabilities. These amendments bring clarity in that regard.
Government amendment No. 18: In page 11, to delete lines 2 to 5 and substitute the following:“(3) Every right and liability transferred by subsection (1) to Irish Water may, on and after the day on which the right or liability stood transferred, be sued on, recovered or enforced by or against Irish Water in its own name, and it shall not be necessary for Irish Water or the water services authority concerned to give notice of its transfer to any person.”.
I wish to return to a point made by the Minister of State in respect of the previous section. Amendment No. 17, which relates to section 14, has been ruled out of order. I accept the point the Minister of State made with regard to Senator Landy's contribution and the question I asked about consultation with local councillors. There is a difference between consultation and having control over decision making, a matter to which I referred earlier. It is good that there will be consultation with local councillors. The fundamental issue relates to the democratic imperative in respect of the role and responsibilities of local government and control over decision making. In this instance that control is being taken away from democratically elected councillors and given to Irish Water. We are discussing a vitally important public utility, namely, water, and I am of the view that what is being done is a retrograde step. While I welcome the Minister of State's clarification in respect of consultation, etc., my point did not relate to that. It was a more fundamental point in respect of decision making and the powers local councillors should have in that regard.
I am seeking confirmation from the Minister of State that the terms and conditions of the staff who are to be transferred to Irish Water will not be diminished in any way. Will the relevant pension liabilities also transfer to Irish Water? Will staff who are transferring from local authorities to Irish Water lose out in any way? Perhaps the Minister of State will clarify the position in this regard.
In its report, the Commission on Energy Regulation foresaw the eventual replacement of local authorities and their staff by private contractors who will work directly for Irish Water. The Bill does not contain a reference to the guarantee of employment to 2026 that was agreed. In addition, there is no clarity in respect of superannuation. People have raised their concerns about these matters with Senators and perhaps the Minister of State might be able to allay them. Not only ourselves but also the staff involved are concerned about this issue. The points to which I refer are somewhat similar to those raised by Senator Cummins and I await the Minister of State's response to them.
On the transfer of staff, I questioned the Minister of State previously on this issue and have a transcript of our discussion. One of my questions on service level agreements was not answered. On the terms and conditions of staff once the 12 years have elapsed, is there a correlation between the period of the service level agreements and the security of tenure of staff? If so, what will be the position of staff after 12 years? SIPTU representatives have asked me to raise this important issue. Does the Minister of State understand my point?
Reference is made to the 12 year service level agreement being a period during which staff will bed in and decide whether to stay in situ. After 12 years, will their terms and conditions continue ad infinitum in Irish Water? What will be the position regarding security of tenure after 12 years?
The Minister of State may be able to address some of the questions I asked earlier in this section. Who will assume liability for the pensions of retired senior staff of local authority water services? This liability amounts to millions of euro. Will the Government or Irish Water be responsible for paying these pensions?
Under the new service level agreement, who will have responsibility for health and safety? I have been informed by a council that if a collapse were to occur, it could result in a fatality. Who will have responsibility in such circumstances, the council or Irish Water? The issue of liability in the event of an accident is one for all local authorities.
It is important to address the issue of pension liabilities. The Minister of State has clarified that local authorities and Irish Water will not have a redundancy liability. For example, in the case of a person who has been working for a county council for 15 years and enters into a 12 year sabbatical or service level agreement with Irish Water, there will be no redundancy liability at the point at which he or she departs from the local authority and any such redundancy liability will accumulate over the years and be paid at the end. I seek clarification on this point. I am not sure if I am making it clearly.
Senators have been discussing the transfer of staff from local authorities to Irish Water. I would prefer if these staff remained working in the water services or were given alternative employment, on the same terms, in the local authority sector. This would result in new jobs being created as a result of the establishment of Irish Water. Qualified individuals who are currently unemployed could then apply for the jobs and Irish people would work in Irish Water. I am not sure if only local authority staff will be transferred into roles of responsibility in Irish Water. While local authority staff have the experience required for the new positions, other individuals who are unemployed may also have the relevant experience and qualifications. Will all the positions be publicly advertised or will a specified number of them be ring-fenced for local authority staff to be transferred to Irish Water?
On the salary cap for staff of Irish Water, I understand the legislation provides, albeit in a different section-----
I will answer the questions to the best of my ability. On security of tenure, local authority employees are permanent staff. Transfers of local authority employees to Irish Water under a service level agreement will take place by agreement, in other words, the employees will continue to be employed by the local authority. However, they may also opt to transfer to Irish Water as employees of the new organisation.
On pensions, the local authority retains liabilities for the service the employee has accumulated while an employee of the local authority. If a person works for a local authority for the next ten years, the local authority will be liable for the pension accrued during that period. Moreover, employees who transfer under a service level agreement remain employees of the local authority. However, local authority staff who move to Irish Water as employees of the new organisation will be in a different scenario in respect of pension entitlements. I do not expect the terms of those pensions to be less favourable than those they currently enjoy as staff would have no reason to transfer to Irish Water if it would leave them worse off. I understand the issue of pensions is addressed in subsequent sections.
Irish Water will be responsible for health and safety, which is included in the service level agreements.
Government amendment No. 20: In page 11, between lines 36 and 37, to insert the following: “Definition in this Part 16. In this section “approved water charges plan” means a water charges plan approved under subsection (9) of section 17.”.This section provides that Irish Water shall charge each customer in receipt of water services. The charge to be levied under this section shall be calculated in accordance with the water charges plan, as set out in section 17. Subsection (4) provides that where a charge remains unpaid, it shall be recoverable by Irish Water as a contract debt. Subsection (7) provides powers for Irish Water to either reduce or disconnect the supply of a customer who has not paid a water bill. However, subsection (8) provides that a household cannot be disconnected for non-payment of a bill. Disconnections would, therefore, only occur in respect of non-domestic premises.
Given the importance of water for public and private health, I welcome the Government's decision that a household's water supply may not be disconnected for non-payment of a water bill. In such circumstances, who will be responsible for the payment of the bill? Who will pick up the tab if people cannot be disconnected for non-payment? A delicate balance must be struck on this matter. It is critical that water supplies are not cut off because we need water to live and for good health.
We need water to live and for good health, but we are about to introduce water charges, which means that people will have to pay. If we all to decide not to pay our bills in the knowledge we will not be cut off, what is the incentive to make us pay and how will the Government and, more to the point, Irish Water manage this?
On the approved water charges plan, the Minister of State very eloquently states in respect of amendment No. 12 that nothing will be hidden from anybody and that the process will be transparent. The same issue arises in this amendment. What is the approved water charges plan? We do not know how much water will cost or the amount of the free allowance that will be granted. I am not trying to make a wrong analogy, but a used car salesman has to tell his customers how much he is charging. The Government has been far too coy. It is time to put the numbers on the table in order that we can approve the water charges plan. In 2010 there were discussions with the Siemens company on its offer to install meters for nothing. More than three years later the dance of the seven veils has gone on for long enough. There is too much concealment and hugger mugger. Put the numbers on the table and let the people make their decision.
On the approved water charges plan, I agree with Senator Sean D. Barrett that we have been dancing around the issue for a long time. Will the plan include a standing charge for meters or providing the service? The ESB and other utility providers charge between €30 and €35 before a customer consumes a single unit. That is an absolute disgrace and I hope a similar standing charge is not included in the water charges plan. Even if one is not using gas or electricity, the bill will be €30 or €35 per month because of the standing charge. I hope that will not apply to Irish Water. I have no problem with people paying for water, but it will be difficult enough for them to pay for the water they use without also facing a standing charge. If meters can be purchased, whether for €50 or €400, people should be allowed to buy them rather than pay a standing charge in every bill.
Reference is made in the provision on the approved water charges plan to section 17(9) which states:
I am trying to understand that subsection and perhaps the Minister of State might clarify it for me. A plan will be put forward to the commission which will decide whether the charges set out in the plan are acceptable. I presume Irish Water will bring forward the plan for charges. I acknowledge the issue has not yet been addressed in the legislation and that amendments are being brought forward in this regard, but where does the plan go in the event of it being rejected by the commission?
The Commission may, having regard to the most recent investment plan provided to the Commission under subsection (8) of section 27-- (a) approve a plan under this section with or without modifications, or
(b) refuse to approve such a plan.
A number of fundamental issues arise with the amendments to this section which deals with water charges. The Minister of State will be aware that my party opposes the Bill partly on the basis of the proposal to introduce charges. People will be asking what all of the other taxes they pay are being used for. They are still coming to terms with the universal social charge, the purpose of which was never properly explained. That charge had a big impact on people's pay, but the rationale behind it remains unclear. The property tax or family home charge - whatever one wants to call it - was also imposed on them with the explanation that it would pay for local services. Now they are being asked to pay for water separately. We will end up with a situation where people will pay separately for waste collection, school books and transport, and household charges and property taxes for local services, while also paying water charges. At the same time, they are paying more than ever before in direct taxes, whether through PAYE or the universal social charge. They are concerned and frustrated about how they will be facing annual bills that will impact on their quality of life. It is not so much a question of whether people are going to be asked to pay a standing charge for the meter which will only compound the anger but whether this makes sense in the context of the property tax. Perhaps the Minister of State might dispel people's confusion about why we are paying all of these charges separately. What is the point of a property tax if we are paying separately for everything else?
How will the Government protect low income families from the burden of these charges? Leaving aside my opposition to water charges, I am concerned about how they will impact on people. I am sure these concerns have also been raised with Government Members. What measures will the Government put in place to ensure people do not end up in water poverty, as already happens in the case of fuel? I think the Minister of State addressed this question on Second Stage, but perhaps he might clarify the strategy in this regard. I do not want to delay the debate. I have made my political point and look forward to hearing the Minister of State's response.
I appreciate section 16 deals with the charges for water services. Like every service, water provision has always been paid for by somebody. It is not the case that water was provided free of charge for consumers. It was paid for in one shape or form through taxes. The Bill brings a new structure to paying for water. Senator David Cullinane has referred to the long list of charges which people are now paying, including property taxes and refuse charges. The only part of these islands with an even longer list of charges is Northern Ireland, where his colleagues are in government. No matter where one is or who is in government, services have to be paid for by somebody.
I am sure it is a very high rate. I am not aware that his party objected to it. When we conclude our debate on what charges should apply to water and refuse charges and property taxes, the next part of the equation is ensuring value for money. I have no difficulty with the amendment dealing with the poverty impact. We often table similar amendments. However, the other side of the coin is that when we collect taxpayer's money, we must be in a position to assure citizens that their money is being spent wisely and not wasted.
We all know there is a huge degree of waste in our water system as it is currently constituted.
The amendments deal with the charges. I accept that there will be a charge. Charges have always been paid in one form or another. We need to ensure that the price set for the charge that consumers will have to pay will be fair and reasonable and that the current faults within the system, which are producing such waste and loss of revenue and income, are tackled and that we have a top-class service. All of us appreciate that water is a key component of our economic activity. It must be provided for and it certainly must not be squandered. We need to ensure that there is a proper balance between the charge and the service, that value for money is provided and that wastage of water, and therefore wastage of money, is extinguished to the maximum extent possible.
There is quite a spectrum of views on the issue. I can understand where different political parties are coming from and I will leave it at that, rather than go through the usual points I might make.
The reality is that our water services cost €1.2 billion annually. Therefore, it costs €1.2 billion to supply water to every house and business in the country. Some €200 million of that comes from commercial returns. In other words, commercial companies pay €200 million, which leaves us to find the remaining €1 billion. We have to do that by reducing the cost of water if we can. That is what Irish Water is about. It is setting up new synergies between local authorities and getting a better deal for the consumer.
The is a difference in this respect. One way a charge could be taken from a worker's pocket is through direct taxation, and the way charges were taken through VAT on houses in previous years was a different way of raising funds. However, we did not have a sustainable way of funding the State and that is the reason we ran into difficulties with the troika and the reason we could not borrow money to pay for our schools, hospitals and everything else. That is reason we have ended up where we are. It is fairer that people who use water pay for it - that the users pay. That is a fair deal, provided that, in line with the key point that was made, consideration is given to low-income families, the issue of affordability, people with medical problems and so on. There will be transparency in this regard.
Senator Barrett asked that the figures be provided. That process has already started and the energy regulator has just finished a consultation document, covering a process spanning a month, on how these charges will be made up and what should and should not be in them. People's views have been sought, and the regulator will advise the Government, having listened to what they had to say, by the end of January. The ball will then be back in our court. While the charges will be implemented in the last quarter of next year, the first bill will not issue until January 2015. There is plenty of time to ensure there is the transparency and accountability that everybody here wants to enable them to query and challenge matters and talk to the regulator. As Members of the Oireachtas, Senators can ask an Oireachtas committee to request that the regulator come before it to explain matters. They can also request that Irish Water come before it to explain matters. Nothing is being rushed here. There is plenty of time for accountability and transparency.
On the question Senator Cummins raised about the standing charge, all utilities have a standing charge. It is not to cover the cost of having a meter but to cover the cost of providing the services to the meter. In orders words, it is to cover the cost of having the infrastructure in place to provide the supply of water to one's house. Whether one uses it is another matter. It covers the cost of bringing the water to that point but does not include the cost of water used by a household. The standing charge would cover the cost of repairing the leaks on the public road and the administration of that process. It is a separate charge from the consumption charge.
It will have to be in the plan. If I say I am against the imposition of standing charges, that is fine and that would be a popular thing to say. It would make for a great story, but the fact is that even if I do not use water I still have to pay the standing charge because it goes towards covering the cost of the other services that are provided to my meter.
On Senator Healy Eames's question about those who cannot pay the charge and those who will not pay it, she is right in that everybody has to pay, because if people do not pay for this who will pay for it? The debt owing will be recovered through a legal process. I travelled to the United Kingdom and saw how its system works there. Customers fall into two categories: those who cannot pay and those who will not pay. Those who cannot pay are in a different situation because they do not have the money and they may be in water poverty. We are dealing with that issue in terms of affordability issues, and that is important. The free allowance is important as well.
In the United Kingdom, those who can pay and those who will not pay are quickly identified and the authorities move directly to issue a civil bill for the amount owing. There is no messing over there. If one can pay the charge but does not pay it, one will find a charge against one's self. That is fair. However, it is not fair to cut off people's supply, because that can give rise to health and other issues. The practice as followed in the UK is the fairest way to proceed.
I do not know if I have answered all the questions, but the general thrust of the Bill is that we do not have a choice about bringing in water charges. They are in place in every country in the OECD except Ireland. I find that everywhere I go people pay water charges. I discovered that China, a good communist country, has water charges in place also. I am not saying that the Senators will be going there or anything like that.
-----I was writing his manifesto for him.
Water charges are a fact of life everywhere. They help reduce costs. They reduce the level of capital infrastructure, because less water is used, and ensure money is available to pay for the cost of the infrastructure. We cannot be left in the situation we were in when the troika came into the country and we had no money to pay for anything. The country was bust. We were in hock.
I thank the Minister of State for his answers. I have two or three questions on the issue of charges. The Minister of State mentioned that currently the State spends €1.2 billion on the provision of water services and that when commercial rates are removed a cost of €1 billion remains. That is considerable sum. We are already paying €1 billion in our taxes for the provision of water services. With the bringing in of water charges, on what will this tax sum be spent? I want to hear the answer to that question. Is it needed for this project or will that €1 billion be available for something else, in view of the fact that taxes are not being reduced?
My second question is about the onus the imposition of water charges places on families. I will be honest with the Minister of State about this. I believe water charges will be a bigger issue than the property tax for families across Ireland. With the property tax, people know what is involved. There is a flat fee once one agrees the value of one's home, but with water charges there will be a running bill. I know there will be a quota but we still do not have that. I am a mother of teenagers and it is difficult enough to monitor water usage in a household with young people. It takes, on average, based on the evidence given in health promotional material on habit changing, 18 months to change a habit. Eighteen months could wreck a families' finances in terms of water bills. I have great difficulty with an open-ended bill and I would prefer a flat charge. I know some families will get flat charges because they are in areas where meters are not yet in place. Can the Minister of State elaborate on this?
Has the matter been discussed? A serious information campaign will be required. The local authorities in Galway carried out a water conservation project. They concluded that the leakage on the private side of the meter would cost €50,000 in the case of some families. Therefore, a big information campaign is needed. I understand that under the Irish Water project, the first fix must be the responsibility of Irish Water. Who will pay the council for it? Will it be Irish Water?
I have asked the Minister of State many questions; one about where the tax bill of €1 billion is going and a second about my preference for a flat charge for families in order that everybody can plan ahead. One does not want to run people into civil bills, which is awful. The third question relates to the information campaign and the concerns about leakage on the private side of meters, of which families might be unaware until they receive a monstrous bill.
We have learned that at least. The Minister of State gave a figure of €1.2 billion. He has said €200 million comes from commercial rates, which is fair enough; the remainder is €1 billion, as if there is a shortfall, and the money does not come from anywhere. However, it does come from somewhere. It comes from what people pay in taxation, which was always the case; therefore, it is not fair to say people do not pay water charges. The Minister of State did not answer the fundamental question I put to him on the logic of paying a property tax. Reference has been made to the North, for example, where we have a rate.
I asked the Minister of State why we were paying a water charge. With respect to the Acting Chairman, we were told the purpose of the property tax was to pay for local services. We are now being told that one of these local services must be paid for separately, with all of the other local services people are being asked to pay for separately.
With respect to the charge, one of the problems – other than the fact the Minister of State will not answer the philosophical question about the property tax-----
One of the problems we have with the charge and the amendments to which we speak is that we have still not been told how the system will work. We still do not know how the charge will be calculated. We do not know the amount of the free allocation that will be granted to households.
The Minister of State referred to a figure of €1 billion and 1.35 million houses. That works out at €740 per year. If that is what we are being asked to impose, the Minister of State should make the information available. However, such a charge would cause severe concern. That is the amount I calculate based on the information given by the Minister of State.
As Senator David Cullinane said, we are talking about people who are paying their taxes. The Department seems to think that because it will get the money from the water charge people who pay income tax are some kind of scroungers. They are taxpayers who support the State and now they could have to pay €740 extra. It would be useful if we could factor such an amount into the debate. The Irish Examiner has stated the charge will be €500. The website, moneyguideireland.com, states it could be €740 based on the numbers from a few years ago. We might try to raise only €500 million, in which case the charge would be €370, but the lump sums mentioned are serious impositions on taxpayers. If the Minister of State were to say people would get €740 off their income tax and be charged for water, that would make matters much more efficient, but he is doing both. The Department has overlooked this. It wants the money from the water charges, but it will not tell the Minister for Finance, Deputy Michael Noonan, to take it easy on the income tax side.
The Minister of State referred to a loss of water. It cannot be in houses or one’s house would fill up with water and gardens would be flooded. The loss of water is a matter for the Department. The pipework in the public domain must be examined. The attempt to say consumers are wasting water does not hold any water. However, it has been the line from the Department that this is a new environmentalism or a new puritanism. It is obvious that the losses occur mostly in areas for which the Department already has control. The loss of water could not happen in houses. One’s upstairs bathroom would flood and destroy the house if that was where the leaks occurred or the garden would be flooded. I do not believe the leakages are predominantly or significantly in private property. If it is the case that we are talking about imposing an extra charge of €740 for water on top of all the taxes imposed recently, let us put the number up-front and be less coy about it.
I wish to make a few important points by way of clarification. I welcome the comments made by all Senators. Senator Fidelma Healy Eames has said the first fix is free. In other words, if there is a leak on the customer’s side, it will be fixed for free.
On the question posed by Senator Sean D. Barrett, the problem is that the leak is not necessarily in one’s house, it might be under it or from the pipe underground and not visible. The figure nationally is that approximately 42% of all water is unaccounted for; in other words, it never goes for human consumption. Nobody drinks it or uses it because it never gets to the tap. Members from rural areas will know best of all that if there is metering of water, less water will be used. There is clear evidence in that regard from this country and other places worldwide. First, following the installation of the meter, one will find out the location of the leak. I can supply the Senator with data that show significant wastage or unaccounted for water on the customer side. Depending on the age of the infrastructure – much of it is Victorian – wastage can amount to 30% or 40% on the customer side. That is backed up by evidence from other jurisdictions also.
The leaks are not in one’s house. A burst pipe on the road is the easiest leak to fix because everyone sees it. The vast majority of leaks are much smaller and more pernickety. I am aware of someone who had a significant leak under the house for more than 30 years. The foundations had practically been washed away and they never knew it. The leak was slow but continuous. The benefit of metering and dealing with unaccounted for water is positive. The other evidence is very clear. There is a group water scheme in Ballycroy, County Mayo. When meters were put in place, the savings in water use amounted to 60% to 70%. Metering has a significant impact in reducing the wastage of water.
Senator Sean D. Barrett brought some figures to the attention of the House. Let us deal with the facts as we know them. Everyone agrees that the cost of providing water is €1.2 billion. If €200 million comes in from the commercial sector, the State must find €1 billion. That does not mean that the figure of €1 billion is passed on to the householder. A key issue is the Government’s subvention, namely, what the Government will allocate to fund water services. Last year it was between €240 million and €250 million. The level of State subvention is important. Irish Water has the capacity to borrow money. In other words, it could borrow money for infrastructural projects. It would seek to borrow X amount of money and Y would be the return on the income. It is wrong to say the cost of €1 billion will fall on the householder because it definitely will not. One will have the borrowings of the company and the capital investment by the State.
To say that everybody should pay the same is patently wrong because a 90 year old living alone should not have to pay the same as a neighbour with several family members at home. People should pay as they go and the constructive way to deal with this is for people to change the way they use water. This is where the argument must go. The question of conservation has been missing from this debate tonight. We must future-proof the water resources in this State. We must ensure that Dublin has sufficient water to support industry in the region. Supply in Dublin will match demand by 2020, which means that if we do not augment the water supply in the greater Dublin area we will not be able to sustain employment and ensure high water quality in the region.
Conservation at household level includes the use of dual-flush cisterns, capturing rainwater and so forth. There is an awful lot people can do to reduce costs. The water that is pumped into houses is not the only water available for use. There are significant ways for people to reduce their water use at home. In Ireland the average person uses approximately 145 litres of water per day, which is the equivalent of two full bath-loads of water and way more than what is needed. We should be able to get that usage down. People will be able to control their bills by reducing their water consumption, which makes environmental sense.
It was suggested that a civil water bill is not acceptable. Either people pay for their water or they do not. If they choose not to pay and there is no way of getting the money from them, what do we do - sit at home, smoke a fag and say that is terrible? No, we go after people who can afford to pay but will not pay. It is a very quick process and from what I saw in England, it is very effective. I do not have a problem with that. The water company will not have to go to court. The bill will be put against a person's income and there is no big deal involved. We must change the debate, which in this forum has been too negative. We must broaden the scope of the debate and open it out into a discussion about the future of our country. We are a water-rich country and have great potential to attract water-intensive industries here. Parts of the United Kingdom suffer from drought a lot of the time. We have great potential to attract investment and create new jobs in agriculture and the food industry as well as in the technology and pharmaceutical industries, but we can only do that if we have a modern, state-of-the-art water infrastructure, and that is what this is all about.
On the question of information, we need a much more sustained public awareness campaign to get the message across to people about water use, conservation and other related issues. That will enable people to think about the broader issues and to have a vision for the future of our country. I hope that answers most of the questions raised.
The Minister of State has been very forthcoming with his answers where the information is available to him. On the question of standing charges, my understanding is that a meter is installed and is paid for over a certain period of time. Water is supplied and any water consumed over and above the free allocation is paid for by the litre. I understand from what the Minister of State said that the standing charge will go into a fund to pay for repairs to leaking pipes and so forth. Is that correct?
The standing charge associated with the water meter is for all of the services in the water system until the water reaches the consumer's door. The consumer pays for the water that goes through the meter and into the house so the standing charge will pay for everything outside of the home and for the meter itself. That is quite normal.
We still live in a democracy, in spite of what some people would like. In that context, Senator Gilroy might afford me the opportunity to ask a question and receive clarification from the Minister of State. Senator Sean Barrett, a world-renowned economist whom we are lucky to have in this House, has predicted that the average water bill will be approximately €740 per household per annum, based on the current cost of producing treated water. Surely that sum will more than pay for the cost of supplying the water being used in a household. Irish Water, I assume, will be a profit-making organisation, but for whom will it be making those profits? Surely those profits should be used to maintain the pipework and general water infrastructure rather than asking consumers to pay a standing charge on top of the charge for the water they use. If consumers are facing a bill of €740 plus a standing charge, are they are looking at a total of €1040 per annum? Is the Department fiddling with the figures? I cannot understand the logic behind this.
Senator Healy Eames is indicating that she wishes to ask a question, but I must emphasise that her question must be related to the amendment. The Minister of State has already responded to a lot of questions that, with respect, had no relevance whatsoever to the specific amendment before us. His response was related, in some instances, to other sections of the Bill dealing with investment and leaks, subjects which have nothing to do with the section we are supposed to be discussing now. I do not want Senators to be encouraging the Minister of State to stray into areas which are not relevant to the specific amendment we are dealing with now.
Sorry, but we are not talking about the charges right now. We are talking about who pays. That is all we are talking about - who pays. That is what this particular amendment deals with. The Senator can talk about the costs and charges when we get to the relevant section.
I hear the Acting Chairman, with respect, but the Minister of State referred to current costs of approximately €1.2 billion. Where will the extra €1 billion taken in taxes go? I ask him to answer that question.
I am not the Minister for Finance, but it is important to point out that we are still in a troika programme. While we are about to exit that programme, we still have significant cuts to public expenditure to make. What we are doing here is making sure we have an adequate water supply into the future. The money people pay for their water will go to Irish Water and not to the Government.
I wish to be very clear about a related issue. Senator Barrett came up with three or four different estimates for the charges, but the one he liked best was €750. I have no doubt that he is one of the best economists in the world and should, like Paul Krugman, be writing for The Irish Times and The New York Times on a daily basis. However, the fact is that those figures never passed my lips. I am saying, definitely and categorically, that the charge will be nowhere near the figure put forward by Senator Barrett.
The second point is that the Commission for Energy Regulation will debate the issue of the charges in a transparent way. There will be a second period of consultation before the charges are finalised. The attempt by Senator Wilson to put words in my mouth by saying that the charge will be €750-----
Government amendment No. 23: In page 12, to delete lines 2 to 6 and substitute the following:“(2) The amount of a charge under subsection (1) shall be calculated by Irish Water in accordance with the approved water charges plan or an approved agreement, as may be appropriate. (3) A charge under this section shall be payable on demand by the customer concerned in such manner and in respect of such period or periods as Irish Water shall determine in accordance with the approved water charges plan or an approved agreement, as may be appropriate.".
Government amendment No. 26: In page 12, to delete lines 13 to 16 and substitute the following:“(7) Subject to subsection (8), Irish Water may reduce or discontinue the supply of water to a premises where a charge under this section in respect of the premises remains wholly or partly unpaid for such period of time as may be specified in the approved water charges plan or an approved agreement, as may be appropriate.".
Many local authorities already have agreements in place with individual customers for the provision of water and waste water. These agreements have been critically important in facilitating economic investment and the creation of significant employment throughout the country. This amendment is intended to provide Irish Water with the power to enter into similar agreements with individual customers. This provision will ensure that Irish Water is able to support economic and commercial development and to engage with individual customers in that respect.
I move amendment No. 28:
Baineann an leasú seo le leasú eile a bhí os comhair an Tí. It is related to a previous amendment which we discussed. It requests that a full and comprehensive table of all moneys would be published annually, providing a county-by-county breakdown. The Minister of State indicated that he would have a look at this and come back on Report Stage to see if there is any way in which he could facilitate a statutory obligation being placed on Irish Water to do this. If the Minister of State extends that to this section and comes back on Report Stage with some changes, I would be willing to withdraw the amendment.
In page 12, between lines 25 and 26, to insert the following:"(10) That a full and comprehensive table of all monies transferred to and expended by Irish Water for the purposes of this subsection shall be published annually providing a
county by county breakdown.".
I cannot give that commitment. I undertook to contact Irish Water officials and see if they have any difficulty with the agency placing the data requested by the Senator on its website and putting it in its annual report. I do not think that is a statutory obligation. I will bring it to their attention, but I have no doubt that there is no issue with providing the information in the way I have just described.
I support the amendment. It requires Irish Water to give a full breakdown annually on a county by county basis of all moneys that are transferred and expended by Irish Water. If Deputies were to table a parliamentary question, they probably would get that response anyway. If that is the case, then why can we not just accept this and do it as a matter of proper transparency? If we are going to get the information anyway, surely it makes sense that Irish Water provide it on an annual basis. The Minister of State made a point earlier about county disparities, so if people could see where all the money was going, that would make sense. I do not see the logic in not accepting this amendment when the Government will be forced to provide this information anyway through parliamentary questions.
The issue is whether it is a legal obligation in the Act to do that. I believe Irish Water will do it anyway and I do not think there is a need to put it in the Act. I am happy to inform Irish Water of the Seanad's view. I do not have a problem at all with what the Senators are seeking, and I do not think Irish Water will have a problem with it. What the Senators are suggesting makes sense. It is transparent and accountable.
There will be an annual report from Uisce Éireann that will be placed before both Houses, so the Senators will have an opportunity to debate it at that stage. Every single constituency representative will seek to find out what is happening with the money in his or her constituency. That is a natural part of a two-way process. There is nothing secret or hidden in it. The moneys can only be used for the counties in which they were raised. There must be total accountability for that as well.
Perhaps I misunderstood the Minister of State earlier during debate on the other amendment. I do not see the difficulty here. If we are all in agreement, then it should be a statutory obligation, and not an obligation that the agency deems fit itself. We should not be giving Irish Water the choice. Informing Irish Water that we had this debate in the Seanad and what the Senators recommended is not in the legislation. I asked a Deputy recently to submit a parliamentary question to the HSE, but the HSE wrote back and stated that it could not provide the information. It was a very simple information on specific statistics from hospitals. The HSE referred the inquiry to the Irish Medical Organisation, which would not provide the answer either as it claimed it had no legal obligation to do so. On that basis, I would not be happy with simply asking Irish Water to provide the information. I believe it should be on a statutory basis, and clear and concise.
Every local authority member across the country and every citizen in this State deserves to know where the public infrastructure of the State is going to be vested, when it will be vested and in whose control it rests. We are transferring public infrastructure across to a semi-State organisation, and we are afraid to include a statutory provision for an annual tabular report on a county by county breakdown. Councillors could debate this at council meetings if they were or were not happy. That is what we are looking for. A councillor does not have the facility to ask a parliamentary question.
The Minister of State's earlier answer was about ministerial orders and so on, but then writing to Irish Water was to be discretional. We could end up with my recent experience with the HSE and the IMO. We have to be clear and concise. Ministers in the past may not have been that clear, including some of my own Ministers who established organisations which should have been under more scrutiny. Let us learn from that and at least introduce this level of scrutiny, especially since Irish Water is not included in FOI legislation in its establishment procedures.
No, currently. If I am reading the Minister of State correctly, he actually agrees with me. If there is a legal mechanism in finding a way, I am willing to withdraw the amendment until Thursday. I will resubmit the amendment and if he can provide a better amendment that we can support, then that is fine. I want to be constructive on this issue, but if the Minister of State is just going to ask Irish Water, based on an earlier debate in the Seanad, then I could not accept that in all conscience.
This is not rocket science. There will be an annual report. Anything that will be transferred from a county council clearly will be in the minutes of the council. What the Minister will sign is a public document, a memorandum. He must give his consent and the document will be available in the county council. I presume ministerial orders are available online and I am sure the stuff will be available in the annual report. I do not see why it should not be. This is no big deal. I have said I shall return on Thursday to discuss the matter. I do not have a problem with the provision. It is good to approach a body and say, "Listen, this is the Seanad's view on the matter; what is your view?" I do not see anything wrong with the provision, which is constructive. We know that the option is available to county councils and that a ministerial order is a public document. We also know that councils must have annual reports and that they must account for all of the moneys spent. We know that any money must be spent in the county where it was collected. There is total transparency in all of these matters.
I have a problem with the Minister of State's response on the issue of the annual report. It is my experience that annual reports can be very general and do not specifically provide a breakdown on a county by county basis, as sought in the amendment. We will receive an annual report from Uisce Éireann, but that does not necessarily mean what is being sought in the amendment will be included in it. Will the figures and breakdown we want be included in it? I do not think the Minister of State can give us that answer. Without his doing so we are not being prescriptive and not asking Irish Water to do what we want, even though we all agree that it would be the best outcome. The Minister of State's response is flawed. He hopes the details will be included in the annual report and says an annula report may or may not contain the information, but there is no guarantee that it will. That is why the amendment is important and I support the Senator who tabled it.
To be helpful, as I always am, the two questions we must ask ourselves about the amendment are: is the information required available and is the information required publicly available? The answer to both questions must be yes because we are dealing with public money. I can see what Senator Brian Ó Domhnaill is seeking in tabling the amendment. I sympathise with him 100% in his dealings with the HSE, but he has not compared like with like. It is wrong to compare the HSE with anything else in the world, especially when one seeks information. The amendment is unnecessary because the information is publicly available. Making it statutory for the new utility to make the information available would mean that the same could apply to CIE, Aer Lingus and Bus Éireann. There is no statutory requirement to compel these organisations to make their accounts publicly available. Their accounts are publicly available and easy to follow for those who know how to read them.
I have listened to the debate and agree with my Sinn Féin colleagues who have picked up on what it is I am seeking. I agree with Senator John Gilroy's comments. However, the difference between CIE, Iarnród Éireann and similar organisations is that they do not control a piece of public infrastructure that is a natural resource.
Water is essential for human and animal life and ahead of food. Therefore, we need to place the provision on a statutory footing. For too long leeway has been given to semi-State organisations to provide annual reports in which very important information tends to be buried. All I seek is a simplified breakdown. Let me give an example. There is a statutory requirement on some semi-State organisations to provide a breakdown of expenditure or job creation on a region or region or county by county basis. This means that a precedent has been set and I want this statutory requirement to be extended to Irish Water. I will accept nothing less than having it stipulated in the Bill. It does not matter whether it is the Minister of State, a future Minister or whoever else is involved-----
-----Irish Water will operate and have a chief executive. The Government may have the best of intentions in establishing Irish Water, but it could end up like a runaway train unless protocols are put in place to ensure total transparency on the assets owned, including their monetary value on transfer day. NAMA is accountable to no one, even though it is the largest property owner in the world. No one knows the identity of its 17% stakeholder and it might as well be an investor from Mars. Apparently, the Minister for Finance is unable to state who it is when asked parliamentary questions.
We need to be clear on this issue. We cannot give power to the CEO or senior officials in Irish Water to decide, "This year we are not going to bother. It is getting near Christmas and we are under pressure with the report, so we won't give the breakdown this year. We gave it last year and will give it again in five years time." We cannot that to happen. Irish Water must be duty bound under law to provide the information for the taxpayer. That is the very least it should provide for the taxpayer and it is the least I expect. My party will call votes unless there is a commitment to insert a statutory requirement either tonight or on Thursday. I am willing to wait until Thursday when we can retable the amendments on Report Stage.
Amendment No. 30 in the name of Senator Trevor Ó Clochartaigh has been ruled out of order as it is in conflict with the principles of the Bill, as read a Second Time, and involves a potential charge on the Exchequer.
I move amendment No. 31:
The section reads: "Irish Water may, from time to time, and shall when so directed by the Commission, prepare and submit to the Commission...". My amendment proposes the addition of "the National Consumer Agency and the Competition Authority" after the word "Commission." It must be agreed that in these matters consumers are extremely weak. In fact, the programme for Government contains a proposal to strengthen the Competition Authority and the National Consumer Agency and a merger is being contemplated by the Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton.
In page 12, line 28, after “Commission” to insert “, the National Consumer Agency and the Competition Authority,”.
Asking such a vital service to act at the behest of the Commission for Energy Regulation requires us to examine its track record. The aforementioned Mr. Colm McCarthy published an article in last Sunday's edition of The Sunday Independent that I did not see. On the previous Sunday he published an article on electricity prices in which the price for industry in Ireland was ranked at 141% of the EU average and the household price, 142%. I do not think the commission has done its job on behalf of the consumer. Issues have been raised here and at economic conferences up and down the country. Why is the head of the ESB paid three or four times what the Taoiseach is paid? The commission has not addressed the issue of the cost of electricity for industry in Ireland. I have great misgivings about allowing it, on its own, to do the same for the consumers of water. It owes us a lot of explanations for what it has done in the case of electricity. I wish the Minister for Communications, Energy and Natural Resources, Deputy Pat Rabbitte, was more active on behalf of consumers. The national dependence council has drawn attention to the matter. The National Consumer Agency needs representation in this regard. As for the Competition Authority, the ESB faces weak competition.
We need somebody who knows about competition to simulate a fair competitive price for electricity and a fair competitive price for water, and not to assume that we will end up paying 41% and 42% more than the EU average. Along that index, taking the EU as 100%, we are ranked one for one and one for two for industry and households, France was ranked at 82% and households 73%, Germany was ranked at 91% and households 109%, the UK was ranked at 121% but below our ranking. Therefore, we are not getting the bang for the buck in the regulation of energy nor do we get it from the other regulators either.
The National Transport Authority increased bus fares last week. The number of bus passengers is down more than 50 million and the number of train passengers is down about 7 million or 8 million since the recession began. We have lost 250,000 people out of the health insurance sector. The Commission for Aviation Regulation, by a directive of the then Minister, Noel Dempsey, before he left office, increased airport charges so much that we drove millions of people out of Irish airports. Only now with this budget and the removal of the airport tax are they starting to come back. Badly performing regulators or regulators who are captured by the sector they are supposed to regulate have done the country serious damage. For Report Stage the Minister of State should consider measures to deal with that regulatory capture. It has definitely happened in the case of energy and everybody is paying for it. I need a far more dynamic and active person on behalf of the consumer. That is the reason I seek the insertion of those two bodies.
I have mentioned the eminent economist, Mr. Colm McCarthy. Mr. Joe Stiglitz, Nobel Prize winner, writing on this issue said that regulatory bodies are always taken over by producers. For public choice theorists, regulatory capture occurs because groups or individuals with the high stakes interest in the outcome of policy or regulatory decisions can be expected to focus their resources and energies in an attempt to gain the policy outcomes they prefer while members of the public, each with only a tiny individual stake in the outcome, will ignore it altogether. Regulatory capture refers to actions by interest groups when this imbalance of focused resources, devoted to a particular policy outcome is successful at capturing influence with the staff or commission members of the regulatory agency so that the preferred policy outcomes of special interest groups are implemented.
There are scores of examples internationally. This is a serious problem. I think it is very naive of the Government to say that a pretty ineffectual electricity regulator will determine water bills. The reason I tabled amendment No. 31 was to have consumer representation and some competition representation also.
Amendment No. 39 seeks to amendment section 20(3) which reads, "The Minister shall not give a direction under this section without first consulting the Minister for Communications, Energy and Natural Resources." I cannot figure out the reason that subsection is in the Bill. It brought back echoes of the infamous incorporeal meeting of the Cabinet in 2008 when the Minister of State's predecessor, Mr. John Gormley, was not contacted. He was in Sandymount and Deputy Willie O'Dea was coming up from Limerick. Why does the Minister or his successor have to consult with the Minister, Deputy Rabbitte, or his successor? Should that not be a Cabinet decision? Should there not be consumer agency involvement? Should there not be a competition agency involvement? It seems very strange that two Ministers should get together and issue directions on the basis of two people. That is the reason I tabled amendment No. 39.
The next amendment in this grouping is No. 50, which refers to codes of practice. It seeks to amend section 25(1) which reads, "Irish Water shall, as soon as practicable after the transfer day, prepare and submit to the Commission a code or codes of practice in accordance with this section". I compliment the Minister of State on a very fine code of practice. However, it includes issues such as: billing by Irish Water of persons in respect of water services provided; methods of payment of water charges; the provision of information to consumers of Irish Water for the purposes of enabling customers to communicate with Irish Water; and the making of complaints. Those are classic issues where the National Consumer Agency should be involved.
Amendment No. 67 refers to section 31 which deals with the advisory role of the commission. The section reads, "The Commission shall advise the Minister in relation to the development and delivery of water services." I think that should be done jointly with the National Consumer Agency. It does not get much rights in our system and it do not get them very well represented by the Commission for Energy Regulation and I would like it to be involved. That is the reason I proposed the amendment.
Amendment No. 73 refers to section 33(4) which reads:
The Minister shall, before giving a direction under this section-My amendment seeks to insert the following at line seven, "(iii) the National Consumer Agency." Again, this has got to be a consumer friendly organisation and should have representation. What would happen is that those persons, including the National Consumer Agency, would be invited to make representations in writing in relation thereto within such period of not less than 30 days. The amendment seeks to include the National Consumer Agency.
(a) give a draft of the proposed direction to-
(i) the Commission, and
(ii) the Joint Committee referred to in paragraph 26 of Schedule 1 to the Electricity Regulation Act 1999. ...
The last amendment, No. 77, in this grouping refers to section 34(1) which reads, "The Commission may, from time to time, request Irish Water to provide the Commission with such information as the Commission may reasonably require to enable it to perform its functions under this Act." I ask that the National Consumer Agency be involved as well because it will have views. It has been neglected and not well served by some of those sectoral regulators who typically represent producers rather than consumers. There is a case for a much more rigorous regulation of this sector when we are starting. It has not applied in energy. Colm McCarthy's numbers showed how we ended up. It did not apply in banking, accounting, financial services or in credit unions. Every sector we failed to regulate properly seems to be in here seeking bailouts almost on a weekly basis and we have always sided with the Government to have stricter regulation. The regulation of the water industry by the Commission for Energy Regulation is too loose and lacking in power to speak out on behalf of the consumer. I ask the Minister of State to take some of those points on board on Report Stage. If it is like the highest priced electricity at 41% and 42% above the European average, people do not want that. We have a lot of regulatory agencies whose performance has been underwhelming, to say the least, and we do not want to add another one.
Maybe as the theory of regulatory capture says that the consumer group will become marginalised, the Competition Authority maybe has not been as strong but if they are not there they certainly will not be able to influence the cost of water in Ireland. It is such vital commodity as all the other Senators have said and we do need a stronger consumer voice.
I want to put on the record that the need for a consumer voice is very necessary. My understanding is that the National Consumer Agency will have exactly the same power to do what it does for every other sector and for the water sector. However, Irish Water will not have to submit its plan to the National Consumer Agency or the Competition Authority but the consumer will have a right to appeal to the authority in the event of a complaint and Irish Water will then have to examine that complaint.
Therefore, the consumer is protected by the National Consumer Agency against Irish Water as he or she is protected against any other utility company. I hope my understanding is correct. Irish Water does not have to submit the plan to the National Consumer Agency because this power is not provided for in the legislation.
With regard to the Competition Authority, Irish Water has no competition at present. There is only one Irish Water and I do not foresee the group schemes competing with it. We discussed privatisation, which will not happen. If an issue arose in this regard, there would be a dire need for a competition authority. As the Minister said, however, this has nothing to do with privatisation. The consumer will receive the same protection from abuses by Irish Water as from those of any comparable organisation.
I thank Senator Barrett for his comments. The primary function of the Commission for Energy Regulation will be to protect the interests of customers and to ensure that a consistent and appropriate level of services is provided to them. It will also be responsible for approving the water charges plan prepared by Uisce Éireann and the codes of practice that will apply to it in terms of standards governing the performance of its functions, billing and the methods of payments, the provision of information to customers, and standards of customer care. In line with the Government's policy on economic regulation, the commission shall be required to produce strategy statements. It will have a role in advising the Government on the development of water services. The Bill provides that the Minister may provide a policy direction to the commission in regard to the performance of its functions.
The section provides that Irish Water shall prepare the water charge plan setting out the manner and method for the water charges to be applied under section 16. This plan must be submitted to the Commission for Energy Regulation by Irish Water and the commission will have the power to approve or reject it. The water charges plan will contain the charges to be applied where they are based on the quantity of water as measured by a meter or assessed based on a formula to be set out in the plan. The plan must specify the charges to apply to different categories of customers and the different methods of payments. The section provides that water charges will apply to water supply to the premises and wastewater discharged from the premises. The section specifies that, unless agreed otherwise between Irish Water and the customer, the amount of wastewater discharged shall be equal to the amount of water supplied. The commission will be responsible for approving the plan. It is critical for the new funding structure that the commission be seen to be absolutely independent in fulfilling its function. It will undertake public consultation and has already done so. It will be fully transparent in how it conducts its business. All the submissions made to it will be on its website. Regardless of whether one is the Senator, Deputy or representative of a public body, one's submission will be transparently available. Obviously, if the National Consumer Agency made such a submission, I am quite sure it is at one's peril that one would ignore it. In other words, a rationale for action must be provided.
There is nothing to prevent the Oireachtas from debating a water charges plan before or after it has been approved by the commission. It is important that the Houses be able to discuss a plan. We have decided that the Commission for Energy Regulation will be the agency responsible for the regulation of water services, including all the matters I have raised. I will not be accepting the amendments but I appreciate the arguments that have been made. I hope I have responded to them.
I am not happy. I thank the Minister of State, as always. A number of enterprises are charging prices way above the European average, particularly in the area of energy. I do not know why we chose to associate water with energy given people's bad experience with electricity and gas, but that was a choice that was made. We have the international record, including that of Nobel Prize winners, suggesting there is no great surprise associated with the fact that producers get to dominate the regulatory agencies. One could make a submission and Members of the Oireachtas could submit their views, but we cannot obtain the price of the water or the free allowance. That is why I tabled one of my amendments. It was ruled out of order.
The Oireachtas is not being taken into the Department's confidence in this matter. I would not give much for our rights with the Commission for Energy Regulation given that it has not been able or willing to address the cost structures, particularly that of the ESB. I disagree utterly with the practice that the head of the ESB should be paid multiples of the salary of the Taoiseach. I regard the Taoiseach as a far more important person than whoever runs the electricity monopoly. However, those concerned have gotten away with this and the regulator has been pretty powerless at representing the consumer. He is not the only one. Where airports, health insurance and the National Transport Authority are concerned, we have the same experience. We must learn that unless the consumer is represented in the decision-making process, the producers will dominate. There is a cosy relationship. I remember when Aer Lingus treated the Department responsible for transport as its downtown office. On the first day on which competition was opened up, fares fell by 54%. The regulators were, therefore, charging double the market price.
We must stimulate competition. I refer to Senator Keane's point and the purpose of competition. If this were a competitive industry, how much with the senior executives be earning? That should be taken off. If people are to be earning monopoly salaries and supported in that by an alleged regulatory body that does not act on behalf of the consumer, it does not serve us well in respect of the very vital commodity of water. To link water with energy when we have had such an unsatisfactory experience in regard to the latter is wrong.
On Report Stage, I ask the Minister of State to think about where he and the Minister, Deputy Rabbitte, consult on matters. Are the other views of the Cabinet not taken into account? The Minister for Jobs, Enterprise and Innovation, Deputy Bruton, and those Ministers representing consumers might want to express a view. It seems very strange that two members of the Cabinet came to the Oireachtas looking for power to consult each other to make decisions. The complaint heretofore was that four members of the Cabinet make all the decisions. It has reduced to two in this instance, and my amendment seeks to change this.
The consumer is not heard. I have the same figures as the Minister of State. Some 145 litres of water are used per person each day. My breakdown of this is that 32% is used for showers and baths, 28% for toilets and 22% for washing machines. This is 82% of the total. Is anybody making that point or are the Department's engineers just convinced that everyone is wasting water and that they should be charged up to €740 per year because it is their fault? The standing charge, if it is not related to use, will have no impact. It is just a tax. If somebody takes the Minister of State's advice and cuts down on consumption, he will still have to pay the standing charge. The economics of this concern me, as does the lack of consumer and competitiveness representation. I will be pressing the amendments. The governance of the sector is vital and we really need to amend the legislation on Report Stage.
Since the water charges plan is so important, it is important that we get it right. Section 17(10) states "the amount of waste water discharged from a premises is deemed to be equal to the amount of water supplied to that premises, unless Irish Water and the customer agree otherwise". I want the Minister to return to Irish Water to allow for a facility whereby the customer can agree with the company on the amount of water used. If a customer harvests water, the amount of water coming in will not be the same as that going out.
The water coming in will include rainfall and the water measured through the meter, while the water going out will be a combination of both.
The provision includes the words, "unless Irish Water and the customer agree otherwise". The customer and Irish Water should be required to agree as water harvesting will not be encouraged unless provision is made for it. This is a matter of vital importance. The Government plan includes water conservation and reduced consumption. Encouraging people to harvest water will reduce water bills. I ask the Minister of State to revert to me with a response before Thursday. Harvesting is not mentioned in the legislation which focuses on conservation and reduced consumption. One can use as much water as one wishes without paying for it if one collects rainwater. God knows, we get enough rain and we do not get very much for free, yet rainwater flows down the drain. I ask the Minister of State to produce a good plan for harvesting rainwater.
I concur with Senator Cáit Keane. In selling this new concept to members of the public, we must try to portray the benefits of water conservation and quality, improvements in economic activity and the need to secure a long-term asset for the country. Domestic consumers and householders must also see benefits. Senator Keane has outlined some useful proposals in that regard. Given the numbers in the House, the passing of the Bill is a fait accompli. I hope, however, that there is still room for manoeuvre in terms of new thinking on positive improvements to the legislation. Encouraging people to harvest water must not only be considered good economically or environmentally but must have some benefit for householders. For this reason, Senator Keane's suggestion should be taken on board.
Section 17 makes provision for the setting of charges and the methods for calculating and paying such charges. I ask the Minister of State to discuss with his officials and Irish Water the system of billing, including the notification of bills to consumers. I do so because among the limited number of people who currently pay water charges under a metering system, Members encounter cases of financial horror at local level where people suddenly realise, on receiving a large bill, that there is a leak in the system. Instead of paying perhaps hundreds of euro per annum, as is normal, their bill could amount to between €3,000 and €5,000. Local authorities have adopted a reasonable approach to dealing with such persons and will attempt to arrive at a fair solution on a once-off basis. If a leak occurs a second or third time, they will consider the problem to be one for the consumer.
If people form a habit of frequently checking their water meter, as they may do with an ESB or gas meter, and calculate how their bills will add up, it prevents bills going through the roof - please excuse the pun - as a result of leaks remaining undetected. We must encourage a billing system under which regular communications are made between Irish Water and consumers. A leak can be addressed without major financial losses if it is dealt with within one or two months. However, if a person pays a bill, a leak occurs shortly thereafter and the subsequent bill is not issued or the meter is not checked for almost a year, the consumer will argue that he or she was not aware of the leak, whereas the company will argue the matter is the responsibility of the consumer.
Whether the annual water charge to households will be €400, €500 or €600, the amount will be significant. If Irish Water communicates with customers two or three times per annum and obliges the householder to fill out a simple check list and return it by post, financial disaster could be avoided for many consumers as leaks would be detected through an out-of-kilter meter reading. They could then be dealt with at an early stage. While the Minister may not be able to write such a requirement into the legislation, he should encourage Irish Water to have ongoing written, text or e-mail communications with consumers, rather than engaging them with only once per annum. I have encountered too many cases, primarily in the area of agriculture, where people who have paid water charges for ten or 15 years without a problem suddenly receive large bills because a leak was not detected for 12 months. The Minister has an opportunity to place an onus on Irish Water to engage with consumers more than once per annum. The cost of a stamp, a text message or an e-mail could avoid major difficulties for consumers and the company. A stitch in time saves nine, while a timely check of a water meter could avoid significant waste and high bills.
The Senator is correct that a proactive relationship between Irish Water and consumers will work. There is nothing more important to consumers than bills and if a utility bill is increasing, it is important to intervene in an appropriate manner and to have a strategy in place for doing so. Drive-by meters will be installed which enable electronic communication from the meter to Irish Water on the volume being used. People will also be able to check the meter physically.
Under the current system of water charges, Louth County Council, my local authority, identifies from a bill that water usage is higher than usual and informs the company in question that its usage has increased significantly. While it is a matter for the user to fix the problem, it is helpful that the local authority informs users of a problem. County councils do not generally bill the total cost of the water used where they identify that there is a problem. While it is a matter for Irish Water to establish a policy on this matter, it is critical that it is a user-friendly and proactive policy under which the company makes use of all available tools, including texts and e-mails, to communicate effectively. In this way, it will be able to build a proper relationship with customers, one which meets their needs.
To return to the point made by Senator Barrett, for whom I have a great respect, the sole purpose of the Commission for Energy Regulation, CRE, is to protect consumers. Irish Water will be required to comply with direction issued by the commission, which will have sector specific powers that extend beyond the powers available to the National Consumer Agency. Senator Cáit Keane pointed out that the National Consumer Agency has the power and capacity to act on this issue within its remit. Notwithstanding the Senators' criticisms, the intentions and policies of the Commission on Energy Regulation are made clear in its consultative document. I do not know if the Senators read the document.
It will proceed to a second stage of consultation early in the new year. I will be happy to engage with the CER at that stage on the issues arising in order that it is more accountable to the Senator's views.
The reference to the Minister for Communications, Energy and Natural Resources is made simply because Bord Gáis is the vehicle establishing Irish Water.
I move amendment No. 32:
I agree wholeheartedly with Senator Sean D. Barrett on the previous amendment, which is along the same lines as amendment No. 32. These amendments would provide for accountability and protect consumers. Senator Sean D. Barrett sought to introduce accountability to the charging policy, including a consultation process, in order that the consumer would be protected and informed. That is what I am trying to do in this instance. Amendment No. 32 would require the water services plan to be laid before the Oireachtas, as well as the commission, in order that Members could discuss it on an annual basis. Amendment No. 33 has a similar aim.
In page 12, line 28, after “plan” to insert “that shall be laid before the Oireachtas”.
While the Commission for Energy Regulation will have responsibility for the water charges plan, the information provided by idt earlier this year referred to the establishment of an independent economic regulator for water services. This function is to be assigned to the commission and it is expected that the regulator will have a number of functions, including setting revenues, tariffs, charges, performance targets and efficient investments in the water network. In addition, it will ensure Irish Water can finance its operations, having regard to the level of ongoing Exchequer funding in the medium term. If the Government were to decide to cut the funding for Irish Water, the CER would have a statutory role in ensuring the service was self-financing. As Senator Sean D. Barrett noted, if the Government were to cut funding by €1 billion over a certain period, it would have to be made up by charges to households. That is why it is important that the Oireachtas which will be approving the subvention to Irish Water should also be able to debate the company's charging policies. Obviously the Department's Vote will be debated in the context of budgetary decisions, but we should also oversee the company's charging plan.
I agree with what has been said about the CER. It has proved to be ineffective and inefficient in combating the spiralling costs of energy for domestic households. People are under serious pressure in meeting their energy bills at a time when the commission has an obligation to protect consumer interests. I question its ability to do this. For that reason, it is important that we give the Oireachtas an oversight role.
In the debate on section 16 I attempted to raise issues relating to the water charges plan and was asked to wait until I could raise the issues in the context of these amendments. I sought clarification from the Minister of State on the amount of money that would potentially be raised through water charges and, while he outlined figures that were helpful to us, I am still unclear as to how much will be collected in water charges and how that will influence the water charges plan. He referred to a figure of €1.2 billion. He should correct me if I am wrong, but I understand from what he said that €200 million will come from commercial water charges. I assume the subvention from the Government is a capital investment of either €200 million or €250 million.
The Government has decided that the CER will be the economic regulator. Accordingly, the CER will be the agency responsible for approving charges to be levied on customers and setting the standards of customer care to be delivered. The Bill provides the CER with powers of direction with regard to the standards to be applied by Irish Water, which will be elaborated on in codes of practice. A number of Senators have been criticising the regulator, which is a popular thing to do. I do not know if it is fair, however, because the regulator operates in a transparent way. It prepared a consultation document on Irish Water which sought to develop a fair and reliable water system that would not involve excessive charges. The document set out questions to which it requested replies by 29 November. The commission will reflect on the responses before it communicates its advice to the Government. This will be followed by another stage of consultation. The process is transparent, open and accountable and I believe it will work fairly.
Government amendment No. 35: In page 12, to delete lines 38 to 40, and in page 13, to delete lines 1 to 5 and substitute the following:"(b) A water charges plan may, where the quantity of water supplied to a premises is not measurable by a meter, make provision for charges under section 16 to be calculated by reference to an assessment by Irish Water of—(i) the quantity of water supplied to the premises concerned, and (ii) the amount of waste water discharged from the premises concerned, determined in such manner and by the application of such formula as is specified in the plan.".
What does the Minister of State propose to do? I appreciate the dilemma he posed whereby the water supply to premises is not measurable by a meter. Will the consumption per head be estimated? What will be the pricing system where there is no meter?
Amendment No. 36 provides for different methods for different classes of customer. Does the Minister of State have details on that? He mentioned old people and social welfare households earlier. It beats a poll tax, but what will the different charges be based on if there is a long pipeline to a small number of houses? I will not necessarily oppose the amendments, but these are important questions. If the price was lower or the allowance more generous, the popularity of the Government might increase, particularly if these details were spelled out.
On a point of order, I was twice ruled out of order when I made general points about water charges. I bowed to the rulings of the two previous occupants of the Chair and I waited until the section was discussed. I hope I am not prevented from contributing when others raise similar points, as that would be unfair.
If the consumer is not satisfied with Irish Water's assessment, an appeal can be made. Will there not be a table of measurements for such appeals? Meters are easy to measure but assessments are difficult to conduct and different methodologies could be used. Will a methodology be laid down for assessments?
The amendment refers to a scenario in which the quantity of water supplied to a premises is not measurable by a meter. Surely the supply of water to an apartment or other premises is measurable by a meter. This can be done in every other country. Why can it not be done here, irrespective of the premises?
When we discussed this on Second Stage, the Minister of State pointed out on foot of a contribution by Senator Whelan that the majority of people in Europe, particularly central Europe, live in apartments as opposed to one-off housing and there was no reason every house could not be metered. Will he clarify when this will happen and what will happen in the meantime? I understand a mechanism will be used based on the water-in-water-out principle to which Senator Keane referred earlier. This means premises that are not metered initially will be measured. By the end of 2015, between 200,000 and 300,000 housing units will not be metered. How will they be charged prior to being metered? Will that be fair? Will the Minister of State give us an explanation? This is a valid issue because not all meters will be ready on the first day of 2015.
The amendments widen the scope for applying charges to premises that have no meters. I agree with Senator Cummins. There will be a two-tier system until all the meters are installed. One group of people will pay based on usage while another group will pay a standing charge prescribed by Irish Water. That is unfair. Someone without a meter could use 5,000 litres of water a month while someone who is metered could use the same volume but pay a grossly different amount. I agree it is fairer to charge using a metering system but this should not be done until all of the meters have been installed. Surely logic and common sense should prevail in this regard. A three-year metering contract is being rolled out throughout the State. I am not sure when that is due to conclude - perhaps the end of 2015 - but according to the briefing given by departmental officials, bills for the final quarter of 2014 will issue in January 2015. When the first bills issue, how many of 1.36 million housing units in existence, according to the most recent census, will have a meter?
They relate to metering as well.
Amendment No. 35 includes the phrase, "A water charges plan may, where the quantity of the water supplied to a premises is not measurable by a meter, ...". This concerns metering versus charging without a meter being attached to the premises. It may be a technical issue but it is a reality for many people who will be charged for water not based on how much they use but due to the fact that they have a premises or home.
This is the Government amendment. With amendment No. 35 the Government is being allowed to charge people who do not have meters attached to their homes. That is grossly unfair. I put it to the Minister that nobody should get a bill until all the meters are installed as only then can we charge like with like. There would be two different prices for the same product. If one of the multinational supermarkets, such as Tesco, did that, the Government would seek to prevent such a practice. Nevertheless, the Government is looking to allow Irish Water to do it. Water is defined under European legislation as a food product and it will be charged based on quantity for some and for others the amount charged will be based on their connection to a public drinking water supply. Perhaps the Minister has some statistics that could further the debate.
Senators will be glad to hear that these Government amendments are technical drafting provisions and do not change the intent of the section. The issues raised by the Senator are very important. There may be a large commercial user of water, including major industry, that could be on a different tariff to somebody else. There may be different charges within a particular context.
A major industry could be a very significant user of water and it could have a different tariff from somebody who would not use the same volume. The tariffs have yet to be decided but households which are not metered may be charged on an assessed basis; the volume of water that might be used would be assessed based on the factors such as number of people in a household. In other words, the charge would not be based on the house but rather occupancy and so on. That will be included in the water charges plan to be approved by the Commission for Energy Regulation. In other words, the regulator will make a proposal, which will be debated here, and there will be a response. The assessed charge will represent the best proxy for usage, or the most accurate idea we can get. There will be no random or arbitrary charge so it will be based on criteria. I presume the number of people in the home will be a factor in the charge, as volumes of water differ in houses with fewer people.
One of the problems is that people will pay by volume and to measure volume there must be a meter, as Senators have correctly indicated. The first phase of houses to be metered have a direct connection to the mains and we know where that connection is. Along the street there are pipes going to the premises and the meter will go at the boundary box, and we know exactly where that is. With a significant number of homes - somebody mentioned there are 200,000 to 300,000 homes - we may not know where the pipes are or they cannot be found. The house I live in was built in the 1930s and in that case the water supply runs behind the houses rather than in the front, so it is not practical to dig up somebody's garden in order to install a meter. An economic decision would have to be made as to whether to put a new pipe at the front of the homes and below the public footpath, which would cost money, or find an alternative. There are studies in some parts of Ireland considering how to put a meter inside a home or in a location that is not necessarily at the preferred point outside. If a person lives in an apartment complex, in some countries there is a grouped meter outside. Depending on the number of apartments and occupancy, a fair and reasonable charge could be levied. I am sorry the Senator is not happy with that and perhaps I could provide further information on the matter before Thursday. In other examples two farms may have a shared connection. People live in different ways and nobody knows in some cases where water is coming from. The Senator may be aware of some such cases.
Government amendment No. 36: In page 13, to delete lines 9 to 12 and substitute the following:"(6) A water charges plan may specify—(a) different methods in relation to different classes of customer as respects the calculation of charges under section 16, (b) different rates of charge under that section as respects different classes of customer, and (c) different methods of payment in respect of charges under that section.”.
I move amendment No. 37:
This relates to an ability to pay. Under subsection (8):
In page 13, between lines 16 and 17, to insert the following:"(b) taking account of the ability to pay principle; and".
Irish Water shall, when preparing a water charges plan take account of the following matters:(a) the need to ensure that Irish Water performs its functions in a commercially viable manner;I am asking that Irish Water would be compelled to take into account the ability of people to pay as well. There must be a mechanism built in as many people are struggling currently, with over 100,000 in mortgage negative equity. People have lost their jobs through no fault of their own and are struggling to keep a roof over their heads. They are even struggling with the property tax but they are now being asked to pay for water. We do not know what the price will be and if there will be a difference depending on whether these people have a meter. If, as Senator Barrett suggests, Irish Water is to make up the shortfall of the €1 billion, the average will be approximately €750 per house. If that does not happen there will be subvention through the tax system, as is currently the case, and the Government will have to decide the level of general taxation going to Irish Water.
(b) the public utility nature of its functions; and
(c) the need to maintain a balance between the matters referred to in paragraphs (a) and (b).
Somewhere along the line, society will break down because people are forced into a corner and unable to pay. We can see it happening every day of the week with banks putting serious pressure on people. The bank issue may not be relevant here but the pressure felt by families is absolutely desperate, and I know every public representative, and not just those in the Opposition, shares that view.
There is the matter of those who can afford to pay versus those who cannot. Many people living on the bread line cannot afford to pay for water. One can consider the large number of people with medical cards, and to qualify for a card the income threshold is very low. If people are living on the bread line like this, should they be asked to pay an amount for water, especially if the same is being asked of people on a salary of €150,000? Is it fair to charge the same levels in that regard? That issue is not being brought to bear in this legislation.
Where an individual can demonstrate that they cannot afford to pay a water bill, what mechanism is available for them to write to Irish Water or make an appeal, stating reasons they cannot pay? Could there be some analysis of the individual's rationale for not being able to pay? In other words, the individual should be afforded the opportunity to deal with the issue through a prescribed form on the Irish Water website, for example, or in another manner.
Something must be built in for those who genuinely cannot afford to pay for their water. I accept that under the provisions of this legislation their supply will not be cut off, but it will be reduced. I disagree with that approach for those individuals who genuinely cannot afford to pay. I accept that some people who can afford to pay will not do so, and that is a different matter entirely. However, those individuals who cannot afford to pay should not be forced to pay or be penalised in terms of supply. Some element of compassion must be built into this and the ambition regarding what Irish Water can collect should be realistic. One cannot get blood from a stone and there are people out there who simply cannot afford to pay. These are the same people who have mortgages and whom the banks have squeezed against the wall. They have no protection whatsoever. They are under pressure. We meet them every day in our own clinics. I held a clinic last night and was depressed leaving it, having heard some of the stories of my constituents. These people are now facing another charge coming down the tracks. I am not making a political point here. I hope some mechanism can be built in for those who cannot afford to pay. Perhaps an arbitration or appeals system could be set up so they can lodge an appeal, set out their reasons for not paying, show their incomes and so forth, so that their debts to Irish Water could be written off.
We have had a very amiable discussion tonight, but this amendment goes to the crux of the issue. The Minister of State has said, according to his own figures, that there is a gap in funding for water services. The expenditure is €1.2 billion, with an income of €200 million derived from corporate sources, although there is an enormous level of under-collection in that area, which must be noted. There is also 34% wastage in the water system. The fact is that Joe and Mary Soap, listening to this debate and considering this issue, want to know what will happen to their bank balance at the end of the year. They are already contributing, through taxation, to the €1.2 billion that is being spent at present. That is not going to be reduced, according to the Minister of State's comments tonight. They will still be paying the same level of taxation, through the PAYE, PRSI and so forth, but they are now going to be asked to pay another charge. Whether that charge is higher or lower than what has been estimated here is not really the point; families will be facing an extra charge going into 2015. It is an extra tax really and to try to dress it up as a conservation issue and claim that the legislation is being introduced to save water and so forth is dishonest. This is a tax being brought in to cover the gap in our finances in the State. That is the crux of the matter here.
It is unacceptable that ability to pay is not being taken into account. We had the same debate in the context of the local property tax and we have seen how people reacted to the fact that income levels were not being taken into consideration. People out there are totally stretched. They are trying to pay the new property tax, some have lost their medical cards, and they are facing rising costs at every turn. I have met people in Galway who literally do not know how they will make ends meet. The Government is introducing another charge on top of all of the others. We have argued that the Government should use the money being spent on installing water meters to fix the leaks that are causing 34% of water produced to be wasted. That would save water and support the conservation agenda. The Government should also invest in schemes to enable people to install rainwater harvesting systems in their homes, thus further conserving water. If the Government is really serious about conserving water, it would use the money being used for water meter installation on conservation measures instead. A district metering system could have been used in certain areas, which would give us a sense of where water is being wasted.
The Minister of State is not convincing any of us on this side of the House that this is about water conservation. This is an extra tax being brought in to meet troika deadlines. It is the wrong way to go. Other options were available to the Government and my party is totally opposed to what the Minister of State is doing.
It could be third time lucky in the context of the figures and I might get an answer on this occasion. I hate repeating myself but I want to go back over the figures again so we are all clear about how much money the Government hopes to generate for the water system, because that will determine the charge. Whether an ability to pay clause is included in the legislation is a separate issue.
The figure the Minister of State gave earlier was €1.2 billion. He also made reference to €200 million coming from commercial water charges, although, as Senator Ó Clochartaigh said, not all of that is actually collected. A sum of €240 million comes from capital funding, according to the Minister of State, but capital funding has been cut consistently in this area in recent years. We have already seen a reduction in capital funding for water infrastructure. That leaves a shortfall of €760 million that must be collected or made up from somewhere. That figure is based on the assumption that the Government will continue with the current level of capital investment. However, that is not what happened with other charges that were introduced in the past. With bin charges, for example, the full cost of the service was eventually passed on to the customer and then the service was privatised.
I am raising these matters because they are connected to the charges and to the question of ability to pay. I insist that I be allowed to make my point this time, because that is only fair.
There is a real fear that what we saw with other charges will also happen in this case. Water charges will be brought in with a certain level of subvention for a period of time, but then the full cost will be levied on householders eventually. In reality, this is not a progressive charge. It is a tax but it is not a progressive one because there is no ability to pay clause linked to it. That is the fundamental reason for my opposition to this legislation. The same argument was had in the context of the household charge. The Government maintained that it would be fair and progressive, but it was based on the valuation of the property. Now we are being told the water charge will be based on how much water one uses. No consideration is being given to how many people are living in a household or to their income levels. There could be seven or eight people with low incomes in a single property paying exactly the same water charge as their neighbours with vastly higher incomes. That simply is not fair. We are moving away from fair, just and progressive taxation at central level towards a raft of individual, regressive charges like the household charge, bin charges and water charges. People are sick and tired of it. They are sick and tired of the unfairness of it and of the number of separate charges which are being imposed on them.
The Minister of State still has not given me a good reason for obliging people to pay both property tax and a water charge. He made the point himself earlier that in many countries people pay for water but they pay for it through a household rate that covers many different services.
I am simply making the point that this amendment relates to whether there will be an ability to pay element to this charge. We cannot have a discussion about this charge in isolation and not refer to all the other charges that people have been asked to pay by this and the previous Government. It is impossible. We must set the context for the introduction of this charge. The context is, as I have said to the Minister of State already, the introduction of the universal social charge, more direct taxation than ever before, the introduction of the property tax to pay for local services and now the water charge. Consideration has not been given to ability to pay at all.
The Minister of State made the point earlier that Irish Water can borrow money, which could make up some of the shortfall. However, that money will have to be paid back. Who will pay it back? That will come from the charge too.
We are discussing the ability to pay principle. There is a long list of Senators waiting to contribute to this discussion on ability to pay. I have put Senator Cullinane's name on the list of those who will speak generally on the section but I ask that he now deal specifically with the amendment.
I understand that, but I must say that in this debate, more than in any other Committee Stage debate in which I have participated, there has been an attempt by the Chair to confine debate, which is unhelpful. I do not believe it is possible to have a discussion on one charge in isolation from other charges or other issues. That does not make sense and has hampered our ability to have a constructive debate with the Minister of State on the issue.
I have made my general point and will finish by saying that ability to pay is only one element of this issue. What I would really like is for the Minister of State to address the core issue of why people are paying a property tax and water charges and why there is no ability to pay clause associated with either charge.
How is that fair or progressive?
Regardless of income, everyone must be aware of their responsibility to the environment. For sustainable development for our children, we must realise water is a finite commodity and we cannot give it for free to everyone who cannot afford to pay. What does that do for the environment? There will have to be a facility built into the ability-to-pay provision for those who use more water because of medical conditions or illness - for example, a child who may require four baths a day because of the need to change bandages due to a condition. If one is going to cut it off on a financial basis-----
These factors have to be written into the public utility plan. Everyone must be made aware that we all have an onus to preserve the environment. If we do not have that we will have nothing, because we will not have an environment.
The ability-to-pay principle is important. This is a tax. In the tax system we have a tax free allowance, a standard rate and then a higher rate. If we are substituting water charges for taxation, these principles should be taken into account.
The €740 figure for water charges comes from the website www.moneyguideireland.ie. The Government stated it would be a smaller charge of €370 in the 2012 IMF review and that it hoped to earn €500 million, not €1 billion. The Minister claims we could invest money to bring the charge down. It would take a quick turnaround. For example, one can invest in larger aircraft to reduce fares. I do not know what timeframe we have in mind over which investment in the water infrastructure would immediately result in a reduction of charges below the €740 mark.
The ability-to-pay provision is an attempt by Senator Ó Domhnaill to genuinely introduce an element of humanity to this legislation. It is unfortunate, again, that we have chosen the electricity pricing model. Every Member has a complaint about the electricity industry’s prices and policies on pylons. It is essentially not big on public or human relations. We have to take account of ability to pay. If Irish Water is not constrained to take account of people’s needs, on top of all the extra taxation they have borne over the past several years, it will ride roughshod over them.
Will the Minister consider a similar amendment on Report Stage? Another poll tax will drive people to the brink.
This is leading to the amendment. If this is a fair test, then it should take account of ability to pay. Water runs and, accordingly, it could be quite costly, with bills for households being open-ended. The Minister spoke about an information campaign, with which I agree, because we are going to have to teach the public about behavioural change and water conservation.
I have concerns about the uncertainty of the size of water charges. I accept that it is proposed to meter water usage, while in cases in which it cannot be metered there will be a flat charge. I would see greater certainty in a flat charge according to family size. If the option of a metered charge or a flat charge were in place, families would be better positioned in terms of ability to pay. Will that choice be made available to people?
I also have concerns about people’s ability to pay. They have one bill on top of the other and ability to pay must be taken into consideration. With all due respect, we are putting the cart before the horse. We should have the water services plan before us to know how people’s inability to pay water charges will be dealt with.
As Senator Healy Eames stated, this plan is going to the regulator. As I said on Second Stage, who regulates the regulator? Will Members have a say in amending the plan, or will the regulator have the final say, as he has with other utilities? We need to know how those who cannot pay their water charges will be treated, particularly at this point when we are dealing with the legislation. I am concerned that when we are finished with this legislation, down the road we will have no say on whether the regulator decides the charge will be €370 or €740.
I cannot see any sense in Senator Cullinane’s proposal. Is he talking about paying separately for bin collection, water and property charges? Does he want to do what they are doing in Northern Ireland - namely, paying £1,500 straight out their pockets, irrespective of whether they can pay? I do not want that system down here.
Yes, but both figures are based on statistics. It is important that this does not head off into orbit, with the public being made to believe that these will be the exact charges. There needs to be some sense of how the charges will be arrived at by Report Stage. It is not fair that these figures are being put out there. If they are not counteracted they will grow legs and people will believe them, causing further concern.
I accept what Senator Ó Domhnaill said about people’s concerns about these charges. We are all public representatives and we meet people every day who are at the pin of their collars to pay their bills. We do not want to give them any further undue concern about water charges. I would appreciate if the Minister could put this charge into context by Thursday’s Report Stage.
We have gone over a lot of old ground and there is no new wine that I can see. The Bill provides that the primary function of the Commission for Energy Regulation is to protect the best interests of the customers of Irish Water and I have no doubt that will be the case. I have referred to the document it placed in the public domain and there will be a second in which it will identify the issues it thinks will be important. Irish Water's plan must be agreed by the commission. Whatever view it might have, the commission must put Irish Water's plan out for public consultation and communicate its intentions. There will be total transparency around the charges and how they are arrived at.
For those who may not have had the benefit of reading it, we are talking about not just the operating costs of Irish Water today but also the plan for the next five years or longer. We must identify where there are deficits in the water supply. Everybody agrees that in the greater Dublin area there is a major water deficit. There are issues in Cork and with wastewater treatment plants. There are towns where water is boiled. While the number of boil notices is declining, it is a significant issue. All of these things must be included in the equation. The equation is simple in that one must examine the plans of the councils in County Waterford, County Tipperary or County Donegal for the development of their communities. It is not just a matter of the water coming from one's tap but the infrastructure behind it. There will be total transparency and the Members will be able to argue and discuss the issue in the Houses. In this Bill the Minister has the power to direct Irish Water to do whatever he directs it to do.
Regarding the questions raised, I will not be political but factual. From where did all this come? I accept the conservation arguments, as no doubt others here do. Fianna Fáil, in the programme for Government in 2009, stated it would introduce water charges. The deal it made with the troika was that it would introduce water charges in 2011, not 2014, as we are doing. The Senator's arguments are based on the fact that his party brought us into this mess in the first place and we are cleaning it up. That is a fact. All of the arguments he can make are like water off-----
I did not interrupt the Senator; I have treated him with respect. Hard as it might be, I ask him to listen to me.
There are two facets to the household charge or its equivalent in the North: the regional charge and the national charge. Belfast City Council fixes the regional charge and the record shows that last year every one of the Sinn Féin's people in Belfast voted to increase it by 2% in the context of an average household payment of €1,200. Sinn Féin can be against things in this jurisdiction, but in the other jurisdiction it is a different story. If one builds even a small shed to improve one's house in Belfast, it adds to the tax one pays.
We have a situation which must be dealt with properly and fairly and where we must look to future employment prospects in our region and country to make Ireland a place in which to do business. I have said there are water shortages in many countries. Owing to climate change there will be increasing changes across the world. We are in the lucky position that we are water-rich. If we can have the infrastructure to supply water to the people who need it and when they need it for their employment projects, this will be a centre of investment. We can do this only if we have the infrastructure in place and we can only do it if we have the money, part of which is raising funds.
Senator Denis Landy mentioned two figures, neither of which was mentioned by me.
This side of the House refutes the figures, as does the Senator. There is clarity on the issue provided by me and Senator Maurice Cummins. Let us not play games. This is the real business of improving water infrastructure, creating jobs and providing for transparency in the process. Let us go to the core of the issues raised. Government policy is clear that every household will have a free water allowance. People will be able to control the amount of water they use and reduce it, if they can. As Senator Cáit Keane said, if there is a medical issue, it can be dealt with in that context. There is no issue about there being a free allowance for every house in the country. There are no affordability issues. There is no issue regarding health and those who have significant problems. All of these issues will be dealt with. I, therefore, refute and reject the arguments made.
Sinn Féin has asked what is the point of installing meters and why we do not spend the money in repairing pipes. There is evidence from across the world where water meters are installed that there is very significant water loss on the customer side. I have various figures. A figure of 25% is not unusual and I have seen figures of 40% and 50%. People in County Mayo are talking about figures of 70% and 80% in some cases. I ask every Senator to talk to people in the group water schemes in their counties and they will tell them exactly what is going on. They will tell them how to conserve water and about the importance and effectiveness of metering. They understand better than anybody else the cost of supplying water and know what is happening.
The other Sinn Féin question was why we had to pay for a service. We pay because we are receiving services. The household charge is to pay for the services the local authority provides. It provides for footpaths, lighting, street cleaning, parks, libraries and other facilities. The water service is separate. I have a son in England who lives in a third floor flat and everybody pays £60 per month for water and other local services.
Multiply that figure by 12. That is the combined charge paid in the heart of London. This is not something new coming out of the air to be imposed on mother Ireland. We must do this and the system must be seen to be fair, transparent and accountable. All the marks of transparency and accountability can be seen. That is why I am happy to reaffirm that there will be capacity to take on board low-income families or families with health issues. Every household will have a free allowance and it will be up to everybody to reduce his or her water use.
It is unfortunate that the Minister of State is unwilling to take this issue into consideration or have a wider debate on the charging policy.
It is wrong to give exclusive remit for the charging policy to Irish Water in consultation with the Commission for Energy Regulation without a scrutiny role for the Oireachtas whereby we can debate and make a decision based on our experience as public representatives. The charge can be thrown that a four-year plan was agreed with the troika but this is the easy way of stating one inherited a problem. Had the agreement not been in place there would have been no funding for the programme for Government for which the Minister of State is claiming credit. If it were the case the Government was in disagreement with the policy of charging for water why was no effort whatsoever made to re-negotiate this element of the programme with the EU or the IMF?
Yes there was. We met troika officials when they were in Dublin and it was one of the questions we put to them. They stated it was a matter for the Irish Government but no effort was made or request put to the troika about water charges.
Charging for water was in the programme for Government and a commitment was made with regard to free allowances. What will these free allowances be? Why was Senator Barrett's very thoughtful and purposeful amendment ruled out of order? He proposed a 100 litre allowance for every individual.
I accept this. It was not the only amendment ruled out of order questionably, but this is a matter for another day.
The figures we are debating are not being thrown about by any of us. Senator Barrett brought forward figures from independent sources. On numerous occasions I quoted figures from the Oireachtas Library and Research Service which received praise from the Minister on Second Stage. According to its figures, if we were to take the average European rate Ireland would charge €1.91 per 1,000 litres, leading to an annual figure of €87.67 per person. According to the CSO the average number of people living in each house is 2.78 and if we multiply €87 by 2.78 the figure arrived at is approximately €270. Generating €500 million would require a household charge of €360. It is not clear whether the Government's ambition is to derive the full cost of water from consumers. If this is the case it would involve the €1 billion spoken about by Senator Barrett and the €740 mentioned by the Oireachtas Library and Research Service. The Oireachtas Library and Research Service backs up what Senator Barrett stated.
Recently we learned the Minister of the Environment, Community and Local Government, Deputy Hogan, is examining transferring €500 million from councillors in the local government fund to Irish Water, or at least making provision to do so under local government legislation. Perhaps this is from where some of the money will come. It is a debate we can have when discussing the local government Bill.
There must be an ability to pay clause. One cannot force people to give money which they do not have. People will be criminalised for not paying or they will be turned into debtors to the State if they cannot pay. It is regrettable to force people into such a position. The vast majority of Irish people want to pay their bills. When they are not in a position to do so we in opposition must stand up because it is our job to protect them as best we can. I know it is not easy to be in government and introduce new legislation, but where legislation on charging and taxation is introduced it must be progressive. Allowances must be made for those who cannot afford to pay, and an avenue to have the charge written off must be available to people who can demonstrate they are not in a position to pay. This must be built in to the legislation.
No independent arm is included the legislation whereby someone can write to an organisation, a Department, a local authority or Irish Water regarding ability to pay. I suggest local authorities would be given such a remit to make representations to Irish Water on behalf of families who cannot pay. The local authority could research the situation, based on information gathered from working closely with the Department of Social Protection, and make the case to Irish Water. This should be considered. It might alleviate the burden and provide a platform for people to genuinely make a case where they cannot afford to pay. The Minister of State should give it serious consideration.
It was a bit disingenuous of the Minister of State to claim people are playing games when the Government is asking us to buy a pig in a poke. We do not know exactly what the level of the charge will be. We do not know whether there will be an ability to pay clause. We know it is the intention of the Government, as Senator Ó Domhnaill stated, to apply over time the full cost of water services to domestic users. This will have a significant impact on people. From listening to Senator Cummins there is confusion about the meaning of the ability to pay clause. It is not about whether people can pay and how to get the money from them if they cannot do so; it is about how to calculate the charge in the first instance. A fairness element is built in with regard to ability to pay. It is based on income.
I reject completely the partitionist comment from the Leader of the House when he stated "down here", as if the North of Ireland is not part of our country.
I did not state what we want is exactly what is in the North. I stated we will end up with a raft of individual charges, all regressive, not based on ability to pay and moving away from direct taxation which I believe is deeply unfair.
The Minister of State also spoke about unaccounted for water which is a problem. He also spoke about where the meter will be placed. He stated only the first leak will be paid for by Irish Water. On top of paying the charge, if there is a problem the householder will be expected to pay to fix it. This is appalling. People will be asked to pay the tax itself and will then be told the first problem will be paid for but then they will have to paddle their own canoe.
The Minister of State mentioned the huge cost of water charges in the North. Let there be no doubt once the concept of a charge is introduced it only goes one way, which is up. People will pay comparable rates to those paid in the UK after a very short time. This concerns many people because it goes to the heart of the argument I make, that the full cost of water services will be passed on to the customer, the customer being the household. A cash register will be placed outside their front doors in the form of a meter and they will be charged for the full cost. It will be intolerable for many families who simply will not be able to pay. The Government has no intention of introducing an ability to pay element. It will not be based on income.
We heard the same about the household charge when we were also asked to buy a pig in a poke. I remember the debate we had on the household charge. The Government thought it would sail through, that as it was only €100 or €200 people would not resist it. There was much opposition to it. There will be far more opposition to the unfairness of the water charge because the Government is not taking into account ability to pay. It will charge people for a basic and required resource on the back of an EU directive and the troika diktat and not because it is the right thing to do for the people of the State.
I seek answers to the two questions I put to the Minister of State. What will be the fairness test applied by the energy regulator when the water charges plan is presented by Irish Water?
Can a choice be given to homeowners between a flat charge or a metered charge? I feel that a flat charge will provide certainty and then they will know whether they genuinely can pay. An open-ended meter charge could put many families in jeopardy.