I welcome the Minister.
Water Services Bill 2014: Second Stage
Question proposed: "That the Bill be now read a Second Time."
I am delighted to be back in the Seanad again.
I would say the Minister is.
I have been here quite often of late. I have good affection for the Seanad. I was here for a few years and I found the debate in the Seanad was often the superior debate in the Houses of the Oireachtas.
Is that why the Minister campaigned against-----
The Senator should check the record.
Really. Did the Minister campaign for us?
We might have an off-site chat about it.
Very good.
We were supported by the Minister on it.
I made the same comment last night when I was here also.
Given the fact that we have a long and difficult day ahead, I suggest we cut to the chase.
Fair enough.
Is the Minister asking that we defer taking the Bill until January to give us plenty of time to consider it?
No, Senator, I am not, although I appreciate his sentiment.
Without being disruptive, will copies of the Minster's speech be available?
Yes, there will be. I am sure it is only a matter of time before they arrive.
I am pleased to bring the Water Services Bill 2014 before the Seanad today. I acknowledge that I am bringing the Bill into the House very late in the year. I appreciate that additional time has been allocated by the Seanad to consider the Bill before the House adjourns for the Christmas break. I acknowledge this and thank Members. I express my appreciation to everyone for organising the debate. In other circumstances, I would have preferred to have a less condensed schedule for the consideration of the Bill, but I will shortly outline the rationale for the Government’s efforts to enact it before the end of the year.
There were 40 hours of robust debate on the Bill in the Dáil. During the debate we had an extensive exchange of views from a large number of the Members both on the provisions of the Bill and wider issues surrounding both the water sector reforms and the funding model for Irish Water and various other issues. I will not say we had full agreement on many of the matters but I reflected on the contributions of Deputies and took on board what they said. I also reflected on the thoughts of Senators previously and the way in which we constructed the Bill. I am glad to be back here. To reflect some important issues raised during this debate, I brought forward two amendments on Report Stage which have been incorporated in the Bill passed by Dáil Éireann.
I would like to touch briefly on these two amendments before running through the Bill in its entirety. With regard to section 2, which provides for a plebiscite of the people, should a future Government propose to initiate legislation that would lead to the privatisation of Irish Water, which I do not believe is likely, I fully understand the views expressed by Deputies against the potential privatisation of Irish Water.
Is it possible to have a copy of the Minister's speech?
Yes.
I have asked for it already.
Yes, but we have not got it and the Minister is getting into his speech.
I think-----
In fairness, the spokespersons who are replying-----
I agree
I shall go and see about it.
Yes, if the Senator does not mind.
Perhaps we might let the Minister proceed slowly.
I know the process. In fairness, Members should have the speech. I accept that.
If the script is not available in three or four minutes, we will raise the issue again.
I do not mean to be critical, but I do like to follow it on paper as the Minister speaks in order that I can note various points. I do not mean to be awkward.
I shall go for it.
If the House is minded, in order not to cause confusion, we can suspend the sitting for five minutes
Please suspend the sitting.
With regard to section 2 which provides for a plebiscite of the people should a future Government propose to initiate legislation that would lead to the privatisation of Irish Water, which I think is very unlikely, I fully understand the views expressed by my colleagues in the Dáil against any potential privatisation of Irish Water. Based on the debate-----
I suggest the sitting be suspended for five minutes to allow us get copies of the script.
In the future there should be some communication from the office. It is not good enough that we have to copy speeches. Whichever Department is involved should arrive with copies of speeches.
I do not mind.
Perhaps Senator Jim Walsh is over-egging the case. There was a slight misunderstanding. If the Senator waits two minutes, we will have a copy of the speech.
This is very important legislation. It is well heralded and if there are Members who are unhappy that they do not have a copy of the speech, I suggest we suspend the sitting for five minutes.
I have no problem with that suggestion.
In the circumstances, as-----
I know the process in the House as I have been in long enough.
Will the Deputy Leader propose that the sitting be suspended until 12.30 p.m.
I propose a suspension of the sitting until 12.30 p.m.
Sitting suspended at 12.25 p.m. and resumed at 12.30 p.m.
I am pleased to bring the Bill before the Seanad today. It is good to be back in the Seanad, which is the House with the better debates, to be honest. I acknowledge that I am bringing the Bill to the House very late in the year. I very much appreciate the additional time which has been allocated, for which I thank everyone involved.
We had more than 40 hours of robust debate on the Bill in the Dáil. During the debate we had an extensive exchange of views on many different issues. It is fair to say we did not have full agreement, and that is being polite. However we had a good debate and many issues were raised. I reflected on these and as a result I tabled two amendments on Report Stage, which have been incorporated in the Bill as passed by Dáil Éireann. I will touch briefly on them.
With regard to section 2, which provides for a plebiscite of the people in the extremely unlikely event that a future Government proposes to initiate legislation that would lead to the privatisation of Irish Water, I fully understood the views and concerns expressed by Deputies. It is something I would abhor and there is no way on this earth I would tolerate the idea of such an event happening. Based on the debate, I introduced an amendment to section 2 to remove absolutely any doubt that a legislative proposal to privatise Irish Water or to otherwise sell any share held by the Government must - I emphasise "must" - be put before the people in a plebiscite.
A plebiscite is not worth a damn.
I am also aware of the proposal from the Seanad on the holding of a referendum on the ownership of Irish Water.
Yes.
I stress that I brought this directly to the Taoiseach, the Tánaiste and everyone in government, as I said I would,. It was carefully considered, and the argument of a constitutional amendment was considered in great detail. The Government believes the wording of such an amendment would be difficult to construct given the various categories of ownership of water services infrastructure in the State, when one considers, for example, the infrastructure funded by the State but operated by private group schemes or certain publically-owned infrastructure located on privately property. A multitude of issues arise in this regard which are not easily solvable.
As was suggested during the Dáil debates, a constitutional referendum on the ownership of Irish Water could lead to calls for similar referenda for other infrastructure considered to be of strategic importance or for other State-owned enterprises.
Good. Would not that be splendid?
I suggest legislation approved by the Houses of the Oireachtas is the appropriate way to address this matter. Senators must also take into consideration that during all of this I have borne in mind the advice we received from the Attorney General. I also had to take into consideration all of the issues relating to unintended consequences of putting such a provision into the Constitution. The Constitution is our document and bedrock and we must think very carefully before we make amendments to it. In this regard, I strongly believe the provisions contained in section 2 for a plebiscite are the appropriate way of ensuring that the views of the people are sought.
I also tabled an amendment to section 8, which deals with customer dispute resolution. This amendment was to clarify that the right of the customer to bring a dispute to the Commission for Energy Regulation could not be frustrated by any delay in Irish Water resolving its own dispute resolution. Section 32 of the Water Services (No. 2) Act 2013 provides that Irish Water is obliged to deal with any customer disputes in accordance with a code of practice to be approved by the Commission for Energy Regulation. However, I was happy to bring forward the amendment to reflect the limited but fair concerns of Deputies and bring full clarity on the application of section 8.
The Government’s objective is to make the new domestic water charges system simpler and fairer, providing more clarity to households and ensuring water charges are affordable for customers of Irish Water. The Government also wants to strengthen the legislative framework within which Irish Water will operate and to give people certainty that Irish Water will remain in public ownership. The Bill includes measures to address all of these objectives.
As the domestic meter programme has progressed and public discourse on the water reform progress has intensified, it has become apparent that the charging regime was not publically accepted. This created uncertainty and other concerns for customers regarding their bills in 2015 and beyond. I must accept this. As a result, the Government took time to reflect on the demanding reform programme being implemented to a challenging timescale. As I have often said in this regard, the scale of the project was underestimated and its timescale was certainly underestimated. Collectively we have listened to the people’s concerns and we have responded.
The changes to the charging system as a result of the Bill will ensure the system is defined by four key attributes. There are certainty, as every household will know what its capped bills will be until the end of 2018; simplicity, as there will be only two charging structures and a water conservation grant; affordability, as the absolute maximum net cost is now just over €3 per week, and for single households it will be approximately €1.15 per week, which is much less than 1% of most people’s incomes or benefits and puts our water bills among the lowest in Europe; and conservation, as with a meter, households will have the opportunity to pay less than the capped bill and can use the water conservation grant to make changes to avail of lower charges.
I accept that many people are in financial difficulty and given my other areas of responsibility as a Minister, I probably know this more than most.
I will insist that Irish Water distinguishes between those who want to pay but cannot and those who simply refuse to pay. Those who want to pay but are in financial difficulty will be able to avail of easy-pay options and instalment plans, just as with any other utility. I was determined to ensure that was the case. Those who do not register and do not pay will not be able to avail of the water conservation grant and will be liable for a late payment fee.
The Bill also addresses a number of other concerns expressed by the public. It provides a robust additional safeguard against the danger of privatisation, specifically, the will of the people. In the unlikely event that any future Government should seek to sell Irish Water, we are ensuring the public must be consulted in a plebiscite and that a majority of those who vote must support the proposal. It provides for changes to strengthen Irish Water’s governance, part of a wider reorganisation of the corporate governance structures of Ervia and of Irish Water. The Government is putting in place a unitary board at Ervia, which will also be responsible for Irish Water and the gas networks subsidiary. The new board will provide for stronger governance and improved setting of strategic objectives for each of the component companies. Advertisements in relation to this are already in place on the new public appointments website, stateboards.ie, and I am sure many colleagues here have seen them.
The proposed public water forum will ensure that the voice of Irish Water’s customers is listened to, and is influential in the strategic direction of this utility. That is important. The proposed customer dispute resolution service, to be provided by the Commission for Energy Regulation, will have a legal basis, and will provide customers with the same access to resolution of unresolved complaints as energy customers currently have. These new structures will help Irish Water identify where its customer service needs improvement.
Many people, especially in this House, have expressed concern about Irish Water obtaining PPS numbers for the purposes of registration. This was a necessary underpinning of the former charging regime, which was based mainly on allowances rather than capped charges, but I have had to reflect on that issue. I reflected in great detail and the Government has decided that the new arrangements should be based on self-declaration and appropriate audit. Therefore, PPS numbers will not be required for registration.
The Government package announced last month also referred to a suite of measures which would apply if households did not pay. These will be brought forward in separate legislation in the new year and will be the subject of extensive stakeholder engagement and pre-legislative scrutiny.
The changes provided for in the Bill do not change the fundamentals of the Government’s water sector reform programme. Ireland’s public water system was and remains in need of changes to the way it operates, and the level of funding it receives. It needs a complete overhaul. The previous system of providing water services through local authorities was not working properly, despite the best efforts of the dedicated and experienced staff involved, and I must acknowledge these fantastic people, who have been doing fantastic work over many generations, sometimes in very difficult circumstances. It is through no fault of theirs that we must go down this route. We have to face the fact that local authorities were restricted in their ability to borrow, so they could not invest adequately in the system. The time taken to make decisions to invest was often slow and bureaucratic and at times it was inefficient. Planning for new water services largely, though not exclusively, stopped at the county boundary, so there was limited opportunity to achieve economies of scale on a regional or national basis.
We see the results of this fundamentally flawed approach in almost every city, town and county. There are major issues around the quality of water supply and the capacity of the existing system to supply treated water in the quantities needed by households, businesses and industry. For example, more than 22,000 people are on boil water notices and almost a million more depend on drinking water supplies that are at risk of falling below the required standards. Almost half the water treated – at significant cost – runs off in leaks and is unaccounted for. In addition - I use this only by way of example - 22 households are leaking a combined total of over 1 million litres a day into their driveways. That is enough to serve the needs in one day in the town of Gorey, with which some in this House would be very familiar. In Dublin, more than 800 km of pipe is over 100 years old and I cannot stand over this. There is insufficient supply for the greater Dublin area. Most major European cities have a spare capacity of 15% to 20%. Dublin has a surplus capacity of only 1% to 4%. We all know of the situation a few years ago, whereby restaurants in this city had restricted water supply during some very busy periods. We all know what happened with the fantastic event, the Web Summit, a few years ago, where so many people visited this city and were left in a situation where water supplies were restricted in hotels while they were visiting.
Overcharged hotels.
I could not agree more. As a former manager of Bord Fáilte and Fáilte Ireland, I could not agree more with the Senator, but from a tourism point of view that is huge. Tourism is critical to this country and we cannot continue to give that example to people. We must look forward and deal with this issue.
According to last week’s EPA report on wastewater treatment in 2013, there are 44 areas, including seven large urban areas, where largely untreated sewage is running into our rivers and seas, including popular seaside towns such as Cobh, Youghal and Bundoran. As the father of young kids, this is simply unacceptable and cannot continue. It is outrageous that this is continuing as we move into 2015.
Hear, hear.
I am glad the Senator agrees. It cannot be allowed to continue.
Nationally, our population is increasing, and that is to be welcomed. The economy is growing, and our climate is changing. I will return to the House in the new year to talk about that very important issue. These realities bring new demands and challenges for our water system, realities that a single national utility is best equipped to manage.
Ireland’s water challenges are not unique. Water demand is rising and supply is becoming less secure. By 2030, the world is expected to need 40% more water than will be available. We are distinct from most countries in the level of freshwater available, a benefit we can turn to our advantage by creating a world class water sector that can attract water intensive industries such as ICT, pharma-chem and agrifood to Ireland. These industries combined already sustain - I think this is a modest figure - well over 200,000 jobs between them. In order to have inward investment in this country, we must ensure that we have an adequate water supply. It is one of the questions that is asked of IDA Ireland when companies are looking at locating in this country. We often talk about the need for broadband in this country, and through my colleague, the Minister, Deputy Alex White, we are dealing with this. It is certainly an issue that has gone on way too long, but it is being dealt with. If we do not do something about water, however, broadband or other infrastructure issues will not be the first thing on people's list when they ask about Ireland. It will be water. We must face up to this.
By 2030, our river basin management plans will have been reviewed a further three times and the quality of our water bodies will have to have improved. Our rivers, lakes and other water bodies need greater protection not just for the protection of public health and our natural environment, but to ensure our thriving tourism industry can continue to prosper under the banner of Ireland’s image as a clean, green country. I doubt anyone will stand in front of the House who absolutely wants to ensure that happens. It is a passion of mine. Environmental and economic regulation of water services must be inter-linked. The Government’s water sector reforms are coherent responses to all these demands on our public water system. They are aimed at ensuring the country has security of clean, reliable water supply and adequate wastewater treatment - when I say "wastewater", I mean sewage, because that is what it is - in order that communities, the economy and the environment are served by a public water system fit for the 21st century.
Irish Water was established in July 2013 and assumed responsibility for water services functions on 1 January this year. It has already shown the difference a single, national utility can make in making services more efficient, cost effective and national-minded.
It has adopted a new approach to asset management which has resulted in a significant change of approach to infrastructural delivery. Central strategic planning is now based on accurate asset performance data and full control of all investment decisions. The utility is now planning investment consistently across the asset base rather than on large-scale, one-off investments, which we have seen previously. An example of this is the proposed Ringsend wastewater treatment plant upgrade, where an alternative approach to a treatment plant extension will save Irish Water €170 million in capital investment.
Rubbish.
We can talk about that matter later.
Where are the Senator's facts? It is not rubbish.
It simply is not rubbish. It is equivalent to the set-up costs of Irish Water. Basic mathematics shows that the figure put in for Ringsend wastewater treatment plant was €170 million more than what is now being expended. I would encourage the Senator to go down there and speak to the people there. Greater economies of scale, which are possible through having one national utility rather than 31 separate local authorities, has resulted in €12 million in procurement savings in the company’s first year alone. That is a fact. That is not debatable. In relation to how it procures the various chemicals, instead of being done in 31 local authorities, it is done centrally. Through the economies of scale, it has made huge savings.
What about all the redundant local authority employees who-----
Will the Senator, please, allow the Minister to speak? As everybody will have an opportunity to contribute, it is unfair to interrupt the Minister.
That is okay.
Is there any chance of getting a glass of water?
In fairness, I am used to this House. In the area of electricity supply, a major cost in the production of water, Irish Water’s current renewable and efficient energy initiatives aim to reduce costs by 33% by 2020. In April, Irish Water became the main contact point for customer queries and reports regarding water supply outages and water quality, through its customer call centre. This development was another milestone along the road to achieving a single, standardised national service throughout the country, with a greater focus on those who use the public services. Such progress would not have been possible without strong co-operation between Irish Water and local authorities, which have decades of experience of providing water and wastewater services with great care and dedication.
The 12-year service level agreements, now almost a year in existence, have proven to be a strong partnership between the local authorities’ expertise in operations and the considerable network and utility management experience within the Ervia Group. This was most evident during Storm Darwin in February this year, when the two parties collaborated effectively to address emergency situations and maintain clear lines of communication with each other and with the public during a time of pressure on the public water system. The service level agreements between the local authorities and Irish Water contain specific measures to support the move to a utility model by the end of 2017, and towards continuous improvement in the system. An example of this is the new, digital approach towards work and asset management, procurement and inventory management capability. Irish Water and the Water Services Transition Office, which represents the interests of local authorities in the reform programme, recently agreed on a 2014-17 transformation plan. The plan contains initiatives and measures to standardise and improve operations, asset management, customer service, procurement improvement, and assets data intelligence. This, too, marks progress.
A key component of domestic water charges, which is central to the new funding model, is metering. Without metering, one cannot have usage-based charging, which the OECD, among others, has agreed is the fairest form of charging. As well as facilitating usage-based charging, the metering programme is detecting customer side leakage. Irish Water estimates that up to 49% of the water produced is lost in leakage, of which 5% to 6% is on the customer side. The presence of meters is helping Irish Water identify leakage that can be fixed through the "first fix free" scheme, which will cover leaks from the boundary of the property to a point as close as possible to the dwelling. Meters will help customers to identify leaks for which they are responsible and will help Irish Water identify leakage in the water network. Over time, metering will help to reduce domestic usage significantly, providing both environmental benefit and a reduction in national water demand, allowing variations in capital expenditure as a result because there will be no need to upgrade other systems due to the savings that are made.
The scale of the roll-out of the metering programme has been particularly impressive, despite everything. By any measurement, the domestic metering programme has been a success. Unparalleled anywhere in scale or ambition, Irish Water has installed approximately 533,000 meters in just over 16 months, with on average a meter being installed somewhere in Ireland every 30 seconds. The utility has already surpassed its end of year target six weeks ahead of schedule, and is delivering a programme that is sustaining approximately 1,300 jobs throughout the country, providing the kind of economic stimulus we need. I am sure everybody in the House agrees with that. It is also worth noting that about 84% of these jobs have gone to people in one of three social inclusion categories, namely, the unemployed; employees of SMEs; or graduates, school leavers or apprentices. This far exceeds the Government’s original target of 25%.
I have made much commentary on this issue and have spoken much on Irish Water and I am not trying to suggest Irish Water has not had its problems - far from it. I will return to them. I accept that mistakes were made. I accept that mistakes were made by the Government. I accept that mistakes were made by Irish Water. I hold my hands up and have admitted to that in the past. However, it is only fair that we should acknowledge what it has achieved and what it has done well in such a short period. These achievements should set the bar for the other parts of the company which, dare I say it, may not yet have matched the same public expectations. That has to change.
The new funding model for water services, including the introduction of domestic water charges, has also seen progress through Irish Water’s moves towards accessing third party funding, as well as the Government’s decisions on subvention, designed to ensure Irish Water is classified as a market corporation, thereby allowing the utility’s expenditure to be classified as off-balance sheet. This is critical in ensuring Irish Water accesses the level of third party funding needed to increase investment in water infrastructure from circa €300 million invested last year to the €600 million per annum that is required. Access to external funding from capital markets will help pave the way for sustainable investment in our public water system. This is very important for addressing the deficiencies concerning leakage, quality, supply and wastewater treatment that I mentioned.
Independent, economic regulation is central to a well functioning public utility model and is essential if we are to ensure water customers are protected and that the new utility delivers value for money. The Commission for Energy Regulation has already made a number of major decisions in relation to the regulation of Irish Water, decisions underpinned by public consultation. We have got to respect the independence of the Commission for Energy Regulation and the decisions it has made. In September, the CER approved an overall allowed revenue for Irish Water for the period from 1 October 2014 to the end of 2016. This reflected a reduction in proposed operational costs by the end of 2016 through a 7% annual efficiency challenge, as well as a 7% annual capital efficiency challenge to non-committed capital costs, excluding capital maintenance.
The Government package to make charges more affordable and certain has not impacted on either the level of controllable operational costs or the capital spending approved by the CER. This is a very important point, as the independent review of Irish Water costs is at the heart of regulating our water sector and giving customers and taxpayers comfort that only efficient costs are being funded. The Government has made an adjustment to the manner in which commercial rates are treated, which I will come to shortly, but this is considered as a pass-through cost by the CER. These expenditure controls and efficiency targets are essential if we are to reduce the cost of delivering water services. Beyond the first interim revenue control period of 2014 to 2016, Irish Water will continue to submit its costs and capital plans to the CER in the future in order that the regulator sets the overall allowed revenue and approved capital investment levels.
The regulator has also made decisions about customer protections through publication of the customer handbook, and is due to announce a timeline for the establishment of an enduring tariff framework for non-domestic customers before the end of the year. This will provide greater clarity to the non-domestic sector on the future of tariffs.
There has been substantial progress towards creating a modern, fit-for-purpose water sector. This Bill marks another step along the journey to a full utility model and a sustainable financial model for water services.
I will now move on to the contents of the Bill, before summarising at the end. Before I set out the provisions of the Bill, I would like to address some matters which are not provided for in this Bill. The Government package announced last month also referred to a suite of measures which would apply if households did not pay. These will be brought forward in separate legislation in the new year and will be the subject of stakeholder engagement.
I will now outline the purpose and operation of each section of the Bill. Section 1 sets out the definitions of terms used in the Bill.
Section 2 provides for a plebiscite on the ownership of Irish Water. It provides that where a Government proposes to initiate legislation which amends the existing legislation setting out the ownership of shares in Irish Water, such a proposal cannot be initiated without a resolution from both Houses of the Oireachtas. Subject to such resolutions being passed, the Government would then be required to submit the proposal to a plebiscite of all the people eligible to vote in a referendum on a proposal for an amendment to the Constitution. This Government is committed to retaining Irish Water in public ownership and has already provided a statutory prohibition on its disposal. This section will ensure the people will have to be consulted if there is, at some time in the future, a Government that is minded to try to dispose of Irish Water, which is highly unlikely.
Section 3 provides for amendments to the charges applying to domestic customers of Irish Water and the requirement for Irish Water to amend its water charges plan to address these amendments. This section also provides that Irish Water may not commence charges for water services to domestic customers before 1 January 2015. Arrangements for the charging for non-domestic customers and charges for connections as reflected in the water charges plan approved by the Commission for Energy Regulation are not impacted by this change. The provisions of this section will be deemed to be part of the water charges plan approved by the Commission for Energy Regulation on 30 September 2014. The section also provides for Irish Water to submit any consequential amendments, such as the reflection of provisions in quarterly bills, to the Commission for Energy Regulation for approval.
The main aspects of the amendments to charges are as follows: a capped maximum charge of €160 for a dwelling occupied by not more than one adult; a capped maximum charge of €260 for an unoccupied dwelling or a dwelling occupied by two or more adults; provision that only 50% of the maximum charges may be applied where a dwelling receives only one service from Irish Water, that is, only a water supply or sewage service; the automatic application of a charge of €260 for any dwelling that has not registered as a customer of Irish Water by a prescribed date; the setting of a maximum volumetric charge of not more than €1.85 per 1,000 litres of water or €3.70 for each 1,000 litres of water and sewage services provided – these volumetric charges will apply up to the capped maximum charges I outlined earlier; in the light of the approach of reduced volumetric charge and maximum charges, the removal of the household water allowance previously provided for; and confirmation that the child allowance provided under the approved water charges plan shall apply to all persons under the age of 18 years. This section provides that the amended charges shall apply for the period 1 January 2015 to 31 December 2018. It also provides that the Minister may, following consultation with the Minister for Public Expenditure and Reform, by order, set maximum charges for periods after 31 December 2018. That is a very important component.
Section 4 provides that where a customer has not paid their water charges and has not entered into a payment plan with Irish Water, Irish Water shall charge a late payment fee for each year the arrears remain unpaid. The late payment fees that will apply are of €30 for a dwelling occupied by not more than one adult or €60 for an unoccupied dwelling or a dwelling occupied by two or more adults. These fees will apply for each year that arrears remain unpaid.
Section 5 provides for eligible householders to be paid an annual water conservation grant, which they can use to assist with water conservation in their homes. The Government has decided that the annual grant should be €100 per household. The estimated cost of this grant in 2015 is €130 million, and will not be incurred by Irish Water or be funded by domestic water charges, but is a completely independent measure, to be funded by the Exchequer. The section provides that in 2015, to be eligible for a grant, a household shall have provided information on the water supply to their dwelling to Irish Water and any necessary information required by the Minister for Social Protection. The section provides for the Minister for the Environment, Community and Local Government to prescribe a date by which householders should register with Irish Water details of their water supply and wastewater treatment. The section also provides that a person resident in a nursing home or other residential care facility would be eligible to claim the grant in respect of his or her own house, provided the house is not rented to another person.
Section 6 provides for the prohibition on the reduction of a supply to a domestic dwelling. This is an amendment to the Water Services (No. 2) Act 2013 and provides that Irish Water shall be prohibited from either disconnecting or reducing the supply of water to a dwelling because of an unpaid bill. I announced this in Cork a few weeks ago and everyone in the House should welcome it. I wanted, when I took this job, to ensure that was announced as quickly as possible.
Section 7 provides for the establishment of a public water forum by the Commission for Energy Regulation. It is proposed that the forum would have at least 12 and not more than 60 members, who would be representative of the interests of all customers of Irish Water. The forum would have a broad role in reviewing and commenting on the various strategies and plans for Irish Water, including investment plans and water charges plans. There is provision for the Minister to make regulations in respect of the composition of this forum, but I will be taking on other views.
Section 8 provides for statutory powers for the Commission for Energy Regulation to provide a dispute resolution service for unresolved complaints of customers of Irish Water. The service would be similar to that operated by the commission for customers in the energy sector. It also provides that the commission would prepare an annual report on the number and types of complaints made under the section and, more generally, the service levels provided by Irish Water.
Section 9 provides for a number of technical amendments to the superannuation provisions contained in the Water Services (No. 2) Act 2013 and the Gas Act, 1976. These amendments are technical and they are necessary to clarify that Irish Water does not have financial liability for the past service of officers of the Minister or local authorities, other than the net effect of any increase in pensionable remuneration due to service with Irish Water. A separate scheme will cover the past service of such employees and this will remain funded by the State. It is something that the workers and the unions in Irish Water need as soon as possible.
Section 10 deals with loans taken out by local authorities to fund capital investment in water services. Intensive work has been under way during 2014 on preparing for asset and liability transfer and through this process the need for flexibility on some of the arrangements set out in the Water Services (No. 2) Act was highlighted. It is important to stress that the local authorities will not be left to carry any liabilities as a result of the proposals in this section. This section provides that where the Minister makes an order to provide that water services property is transferred from a local authority to Irish Water, any financial loans associated with the property are not automatically transferred to Irish Water.
Section 14 of the Water Services (No. 2) Act 2013 allows for any liabilities to be separately transferred. This simply allows for the two processes to be handled separately. For example, it is not proposed to transfer some of these loans issued by the Housing Finance Agency to Irish Water as they are already part of the Government debt and to do so would impact on Irish Water’s debt-raising capacity for new investment and would also potentially increase customer charges. However, to ensure the liability is not left with local authorities, subsection (3) of this section provides a mechanism to unwind the debt from a local authority perspective, by providing for the payment of up to €460 million from the Central Fund to local authorities for the purpose of repaying such loans to the Housing Finance Agency. It is really just moving money from one side of the State to the other. The section also provides that any transfer of property by the Minister shall not be treated as a disposal of property by a local authority. This is to ensure that there is no adverse impact on the financial standing of local authorities from the transfer of assets to Irish Water.
Section 11 provides for the abolition of the power of Irish Water to require the PPS numbers of its customers. The purpose of this section is to provide that Irish Water shall no longer have the power to request details of PPS numbers. The section, which makes amendments to the Social Welfare Consolidation Act, 2005 and the Social Welfare and Pensions Act 2014, will be commenced by the Minister for Social Protection following consultation with the Minister for the Environment, Community and Local Government. This deferred commencement is necessary to ensure Irish Water can complete the work of deleting any PPS information that it had previously been provided with. This exercise is under way and is being carried out in accordance with a protocol Irish Water developed in consultation with the Office of the Data Protection Commissioner. It is very necessary.
Section 12 provides that public water services property shall not be rateable. This section provides that land used for the provision of public water services is not rateable for the purposes of the Valuation Act, 2001.
This exemption will apply to Irish Water for the provision of water supply and waste water treatment and, importantly, to group water supplies. From a financial perspective the changes arising from the provisions in this Bill will involve a reduction in revenue for Irish Water of €21 million in 2015 and €56 million in 2016. However, Irish Water's costs will also be reduced as a result of the approach to the treatment of water infrastructure for commercial rates purposes, such that the subvention does not need to be paid to Irish Water to fund this cost. Equivalent support, of approximately €59 million, will be given directly to the local authorities through the local government und.
Section 13 provides for an increase in membership of the board of Ervia. The purpose of this section is to provide for an increase in the maximum number of members who may be appointed to the board of Ervia. The measure is part of a reorganisation of the corporate governance structures of Ervia and of Irish Water. A single nonexecutive board at Ervia level will be responsible for the governance of both companies. The increase in the maximum number of members will ensure that the board has adequate water services experience and expertise. This is absolutely necessary. We need to bring in experts with experience in this area across a wide range of issues. That process is under way.
Section 14 is a standard provision that provides that the Minister may make regulations to prescribe any matter referred to in the Act as "prescribed" or "to be prescribed".
Section 15 is a standard provision providing that any expenses incurred by the Minister in the administration of the Act shall be paid out of moneys provided by the Oireachtas, subject to the sanction of the Minister of Public Expenditure and Reform.
Section 16 is a standard provision to provide for the Short Title and provide that the Water Services Acts 2007 to 2014 may be cited as such and construed together as one.
Significant progress has been achieved. The structures that have been put in place to date will serve to ensure we have clean, reliable water supplies for our communities and our economy, and adequate wastewater treatment to protect public health and our environment for the long term. The next step is the introduction of a fair and affordable system of water charges and a more robust governance structure for the company that we have entrusted with delivering such a vital public service. The Government recognises that charges must be simple, fair and affordable. People are entitled to clarity on how much their charges will be for the coming years while being given an incentive to conserve water. The package legislated for in the Bill achieves these objectives.
Over 950,000 households have responded to Irish Water's customer application campaign so far. The Government has sought to address the concerns of those who have registered and those who have yet to do so. We are simplifying the level and structure of domestic water charges and addressing the genuine public concerns about the governance, ownership and operations of Irish Water. I look forward to a valuable debate on this legislation.
I respect this House and the decisions it must make in the coming days on this Bill. I would not concur with comments of others who have said the Seanad has to make a certain defined decision or ensure this legislation is passed. We have to have a robust debate, including in this House, and I am here to take part in it. I respect the House and the decision it must make. Everyone in here has a mandate or has served his time here and I respect the fact that everyone has individual decisions to make as part of the process. As a result, we will have a robust debate and come to our conclusions in a fair manner. I look forward to the debate and will obviously be talking to the Senators later.
Before we move on to the first speaker, I welcome to the Visitors Gallery Mr. Valdis Liepins, a Member of the Latvian Parliament. He is most welcome. Everybody will be allowed to contribute on the Water Services Bill at some stage, but they should be aware that the Appropriation Bill, which was ordered for today, will be taken from 2 p.m. to 3.45 p.m.
The Health Insurance (Amendment) Bill.
There are to be two Bills taken in that time.
I am sorry. There are two Bills, but there will be a gap in the consideration of the Water Services Bill from 2 p.m. until 3.45 p.m. It could be 6 p.m. before a Senator gets to contribute, but everybody will get to do so. I reassure those who are concerned they may not get to contribute.
Cuirim fáilte ar ais roimh an Aire go dtí an Teach. Mar a dúirt sé féin, bhí sé ina Theachta sa Seanad ar feadh téarma amháin. Ansin, blianta ó shin, chuaigh sé go dtí Parlaimint na hEorpa. I welcome the Minister and thank him for what was a comprehensive outline of the difficulties he inherited when he entered office. I would like to start by repeating what I said on Second Stage of the Water Services (No. 2) Bill 2013 on 4 December 2013. It is illustrative of why the Minister is facing opposition and why a hornet's nest has been stirred up regarding this controversy. I said:
Our party is opposing the Bill for some of the reasons I mentioned. We are not alone in opposing this Bill. The Labour Party's election manifesto stated it did not favour water charges. On 18 February 2011, the Minister for Public Expenditure and Reform, Deputy Howlin, said the Labour Party did not favour water charges. On 28 June 2010, the [then] leader of Labour Party, the Tánaiste and Minister for Foreign Affairs and Trade, Deputy Gilmore, stated ... he was against water charges, that water was a necessity, that he always believed essential services like water should be delivered as a public service, that a flat household charge would be unfair as it would not discriminate between houses with five bathrooms or no bathroom, and that metering was unworkable. That comment was made by the Tánaiste three years ago.
Of course, the Labour Party was then in opposition. Therein lies the problem.
Now the Senator's party is in opposition.
Is it any wonder people are so enraged over such political cynicism. I understand that when the Water Services (No. 2) Bill was being debated in the Dáil, it was guillotined after three hours. Since the inception in 2011 of the Government of which the Minister, Deputy Kelly, is now a member, its hallmark has been the use of the guillotine on many occasions. Consequently, many issues that have arisen and come back to haunt the Government could have been anticipated had debates been allowed to continue, had there been respect and had the Government listened to what was said during the parliamentary process. That has not happened. It is interesting that every major issue of public concern regarding the legislation introduced last year was flagged during the debate this time last year. Let me outline where I stand personally. In 1983, Dick Spring, the then leader of the Labour Party, introduced domestic water charges for the first time. I was a member of Wexford County Council at the time. We would have had water charges within the rural area but never within the urban area. As I stated on the last occasion, I did not have a principled objection to a reasonable charge. While we had a majority on our town council, we agreed the charge should be effected by the local authority in the interest of providing revenue for the service. There was long-term opposition at the time among the public, particularly in Dublin, but it had almost petered out by 1996 when current Deputy Joe Higgins, who was probably the lone voice opposing water charges, did well in a by-election. My constituency colleague Deputy Brendan Howlin, who was Minister at the time, abolished the water charges. To some extent, I do not have sympathy for the Government over its predicament because it represents poetic justice. What was done was done for political reasons. This highlights that populist politics eventually comes back to bite one. While there might be a perceived short-term gain associated with the current policy, it is a foolish one to pursue in the medium to long term. I hope all parties will desist from this in the future.
During the debate last year I raised serious concerns about placing this in the stable of Bord Gáis. Bord Gáis is not, and certainly was not, a model of good corporate governance when it came to cost controls, cost-effectiveness and efficiencies. Why it was put in there is beyond me. Unfortunately, the Bill continues this process. It needs a much more commercially well run corporate focus than it will have. The Government came in on a promise of abolishing the proliferation of quangos which had been introduced over many decades. I certainly subscribe to this. However, here we have the introduction of a super-quango. In fact, it is the mother of all quangos.
One area the Minister should review is the structure which has been established. We not only attached Irish Water to Bord Gáis, but we overstaffed it from the beginning. We told the people who will be paying for it that the number of staff would correct itself by 2026 through natural wastage. In other words, they are to bear the cost for the next 12 years until it comes right, rather than structuring it in a cost-efficient way from the beginning. We have spent approximately €700 million on consultants and metering, and it is very difficult to say how this will be returned. It will take many years to recover the capital costs involved. At any stage last year or this year was a business plan prepared for Uisce Éireann which would illustrate to us the internal rate of return? It is standard practice for anyone in the private sector making an investment to work out initially the internal rate of return. Often the decision will be based on the outcome of this. I hope this has been done, but I would be pleasantly surprised if it was. Unfortunately, it is not how the public service works. While there is a lot of political flak with regard to this issue, when Ministers get themselves into difficulties, and I saw it with many of my colleagues when we were in government, it is not always the Ministers' fault. People on very high salaries do not fulfil the responsibilities they have. Covering for these people needs to be changed and examined.
With regard to regulation, I have no confidence in the Commission for Energy Regulation or others. None of them has proved to be champions of the consumer.
With regard to the plebiscite, did the Cabinet seek advice from the Attorney General on putting a referendum to the people on this and what was the outcome? I am not happy we have a public monopoly. A private monopoly would be a disaster. Sinn Féin in its budget submission a few months ago included in its figures the part-privatisation of Uisce Éireann to buttress some of its figures. Very little focus has been placed on this by the media or anybody else. It is a question that needs to be asked.
I thank the Senator for pointing it out.
The Minister will respect the fact we will be extremely anxious to ensure this will not become a private monopoly. If we had gone down the route of trying to engender competition, it would control costs because this is generally the recipe for keeping costs right. A suggestion we made, which was not examined at all, obviously, was to have an overarching body which would have ensured efficiency in the local authority system and would have assessed and compared local authorities and ensured best practice applied across the board. I fully acknowledge there is need for investment in the infrastructure and the distribution system. Many local authorities are good exemplars of this, but many are not. The significant difference between those which are good and those which are not is that those which are good had good county managers but the others did not.
I acknowledge the Minister has made a good effort to try to resolve the issue. In the past he has shown good sports judgment and he has applied it to this.
I do not know about that any more. We are not winning too many.
If this had been done at the start, we would not have had the uproar we do among the public, who have been burdened with so many costs.
Continuing the campaign on water charges is totally misguided. The most unfair tax we have is the universal social charge. When it was introduced, the Fianna Fáil Minister at the time stated that when the fiscal position improved, it would be the first to be tackled and removed. I get indications from the Government that it is cementing it into the process.
I welcome the Minister, Deputy Alan Kelly, for this very important debate on the establishment of Irish Water and the water measures announced recently by him. We are here for what I hope will be a very rational and calm discussion on the very important issue of how we will ensure we have a safe, clean and adequate supply of water to serve the country's needs in the years to come. To ensure we have a customer-centred focus, the Government has listened to the people and committed to establishing a public forum on a statutory basis to ensure that from now on, everybody will have an input on how safe, clean and adequate water is provided.
Fear of the unknown and uncertainty led to many of the problems we have faced in the establishment of Irish Water, particularly the uncertainty about affordability. The Government has listened and this has been addressed. I compliment the Minister on this.
The Bill provides for introduction of a water conservation grant of €100. This is aimed at enabling people to purchase water-saving devices and will ease the burden. I am always harping on about water harvesting and perhaps the Minister will go down this road another day. The Minister has outlined the affordable charges of €60 per year for a single household and €160 for others. This is €1.15 or €3 per week, which is quite affordable. We are considered a green and clean nation and we want to ensure we remain so. Everybody in Ireland should consider this when considering water and pollution. We have much to offer. A total of 950,000 people have recognised this and have signed up to Irish Water. There are two months to go before the deadline and I ask people to consider every aspect. I believe in paying for water. I believe in having a clean supply. More than many, I suffered at the doors in Dublin South-West. I listened to the people and the issue of uncertainty was raised at many doors. This has now been addressed.
The neglect of our water infrastructure has been absolutely disgraceful. Celtic tiger, how are you. We should have invested then. We do not have the choice now. It should have been done long ago. We should have invested in our water infrastructure. The question is how we fund it now. The Government has turned the country around from going to the wall. It is now taking on the responsible attitude of funding water. The solution for those on the left is to raise taxes on working people, not on rich people but on working people earning the average industrial wage. A total of €600 million must be invested annually in water to ensure we have a clean supply. It must also be kept off the books to ensure we reach the troika target of a 3% deficit by the end of the year. With regard to Fianna Fáil and the troika-----
And the Progressive Democrats. Do not forget them.
This is what was signed up to by the previous Government in case they forget:
The Commission for Energy Regulation (CER) will carry out consultations to determine the framework for household water charges with a view to starting charging by the end of the EU-IMF programme period. The CER will also conduct consultations in due course to determine the pricing methodology for the non-domestic sector.
The Government will publish the General Scheme of a Water Services Bill with the aim of defining the regulatory framework for the water sector under a national public utility, setting and providing for the establishment of Irish Water in its final form.
That is a fact. That is the agreement made by the previous Government. The agreed figure was €400 per household.
Fiction. That is not correct.
We cannot argue with what is written down. It is a fact. As we have heard negatives all the time about Irish Water, we should hear some of the positives also. The Minister has outlined some of the positives about the setting up of Irish Water.
The Senator is reading a manifesto.
May I have the protection of the Chair, as other speakers have had?
The Chair was in transition but we will do our best to protect the Senator.
As a nation and a planet, we will reach a stage where we will use 40% more water than will be available. In this country we have plenty of water but it costs a lot of money to treat it and we cannot just take it from the sky and drink it. We must ensure that we encourage the economic well being of the country and bring people to it. As the Minister has indicated, we need to bring information and technology companies and those involved with the web to replace those which have closed. We do not want to send out the wrong message. We are at 98% capacity in our water usage in Dublin and most European countries have 15% capacity left. We are teetering on the edge of disaster, which could come if there is one major problem affecting 4% of total capacity. I ask people to please use our national resources constructively for the benefit of the people.
The establishment of Irish Water is the best model to ensure a sustainable water infrastructure and security of supply. In his speech, the Minister set out some of the benefits. Nevertheless, Irish Water has been criticised from the right, left and centre; rightly so in some instances, particularly with regard to communication and how it dealt with people's uncertainty. As the Minister indicated, it has installed 533,000 meters in a little over 16 months, with much interruption.
We do not need them.
There is a meter installed in the equivalent of every 30 seconds.
They are ornaments.
Think of how many people are employed in that process. All of that must be taken into consideration. The income tax change in the last budget will ensure €396 will go back into every person's pocket and the point at which the universal social charge is implemented was also raised from approximately €10,000 to €12,000. Even after paying the €160 in water charges, people on the minimum wage will be €236 better off. This Government will ensure those people will be much better off next year.
We would chop a load off that.
We will have a much cleaner supply of water. The affordability will underpin all future Government policy in this regard and the affordability level has been demonstrated by the Minister. Deputies on big salaries say they are not paying this but perhaps if everybody on €80,000 such as the leaders of unions like Mr. Ogle-----
Do not start on the unions, please.
Perhaps if they paid their fair share, everybody else would pay much less.
I remind the Senator that she should not name people who are not in the House.
Okay. I withdraw the name. Elected representatives who are chosen to govern should lead by example and not by saying they have been elected to break the law. These people should be courageous. A previous speaker mentioned populism and localism but we should think of our people and what is good for the country. They should tell the truth about what makes water clean and affordable in a fair way. They should not pretend the position is otherwise.
Section 2 allows for a plebiscite, and that means Irish Water will never be privatised. Replacing the word "may" with "shall" ensures it will not be privatised.
That amendment is not worth the paper it is written on.
A plebiscite is-----
Shares cannot be transferred or sold without the proposal being put to the people.
It changes nothing.
It is a fix. That is very evident.
It surely is a fix.
Metering will decrease leakage and help people reduce consumption by between 10% and 15%. It is estimated that approximately half of households will be able to beat the cap and receive lower bills by having a meter.
Ridiculous.
People resident in nursing homes or residential care facilities will be eligible to claim the grant, provided the property in question is not rented out. Only people who sign up will be able to claim the grant.
The customer resolution dispute process is very important as we will be able to see what types of complaints are being made. It is only by knowing this that the system can be corrected. We cannot do everything in one day or year. There will be flaws, as we have admitted, and there have been flaws in the past. There will be other issues but the Government is committed, by listening to the Commission for Energy Regulation and any complaints made, to deal with any complaints of a reasonable nature.
The Minister mentioned non-payment and it is only fair that people who can pay should do so. The Minister will bring forward regulations in that regard. The question was asked why should anybody pay if the people who can afford to do so walk away. There will always be people who cannot afford to pay and they must always be helped. There is no doubt they will be helped. There are easy payment methods even for people at the pin of the collar.
I thank the people of Ireland for saving this country. No Government saved it but instead it was the people of Ireland. We are working with those people to put a few bob back in their pocket and ensure that the people who can pay are helped along the line.
The Senator was going grand up until that point.
The Minister has committed to doing that.
There is no money.
I welcome the Minister and thank him for his respectful comments. Two days after the recent national water protest on the streets of Dublin, when a substantial number of citizens and residents exercised their right to free assembly, the Economic and Social Research Institute published a paper entitled Distributional Impact of Tax, Welfare and Public Service Pay Policies: Budget 2015 and Budgets 2009-2015. The paper examines the impact of budget 2015 on households at different income levels. These eminent social scientists conclude that budget 2015 will have its greatest impact on the 10% of households with the lowest incomes. These households take in approximately €8,700; their net household income - net of income and the revised water charges, inclusive of the conservation grant - will reduce by 1% or approximately €87. Smaller losses will be experienced by most middle income households, with small percentage gains for higher income households. The greatest gain will be close to 0.5% for the top 10% of households, which take in approximately €159,000. That means they will gain approximately €795. When the ESRI professors analyse the combined budgetary effects of 2008 to 2015, they find that households with incomes in the middle, or approximately €35,000, had substantial losses from budgetary action at between 10% and 11%, or approximately €3,500.
That is the evidence. I do not find it surprising that the people I witnessed and spoke with on the 10 December protest were deeply concerned about the affordability of water charges and their ability to pay. As the Minister and Senators are aware, much of the mobilisation of protestors is based on a belief in "the right to water". I am not a member of the Right2Water campaign because I do not agree with its entire platform but the right to water and sanitation are included in the United Nations interpretation of economic, social and cultural rights. The right to water does not mean that we should not pay for it but it does mean that charges which control access to water and sanitation should be affordable and fair. I suggest that if the Government is genuinely committed to affordability and fairness, it should accept the recommendation of the Constitutional Convention that our Constitution should be amended to strengthen the protection of economic, social and cultural rights. If the Government is not willing to put a referendum to the people to make a choice to guarantee public ownership of water - our collective natural resource - the next best action would be for the Government to accept the convention's recommendation on economic, social and cultural rights. I was very disappointed that "strengthening economic, social and cultural rights" was not chosen this week by the Cabinet as another referendum to put to the people.
Many critics of the Government's establishment of Irish Water call it a quango. We have already heard the word this afternoon. That is a derogatory term, although one definition indicates that a quango is simply an organisation that is financed by a government but acts independently of it. How can we transform a quango into a public utility that provides people's right to water in a fair, affordable, efficient and effective manner? It can be done in this Bill but not without some further amendments. I am not of the view that we need to abolish Irish Water and as lawmakers we have in our power the ability to transform it. I hope the Minister and Senators will grasp that opportunity.
I have two primary concerns about the Water Services Bill 2014. The first is the public ownership of Irish Water. The Minister has said that the Bill before us, in its new form as well as in its earlier form, as introduced in the Dáil, gives people certainty that Irish Water will remain in public ownership. I do not agree with that assertion. However, I am in agreement with the Minister that in this law the Government should give people such certainty. Public ownership is the best way to protect our collective natural resource and to ensure the right to water and sanitation. Many Deputies on both sides of the other House spoke and many Senators, I am sure, will speak eloquently about this. What I want to say is that public ownership, and only public ownership, will guarantee that charges are fair and affordable. Only public ownership will require transparent and ethical governance. Only public ownership will insist on efficient management free of cronyism and an unacceptable bonus culture, and only public ownership will provide structured customer engagement and influence in setting the charges and maintaining an ethical form of governance and an effective management.
The plebiscite as framed within this Bill is a proposal that asks the people if they would agree to privatisation. It is not a plebiscite that asks the people if they would agree to public ownership. That is how it is framed in the Bill. It is a plebiscite framed to ask the people would they agree to privatisation. Therefore, a plebiscite framed in this way simply does not guarantee public ownership of Irish Water. Why is this? Under Article 10 of the Irish Constitution, the Oireachtas is empowered to enact legislation for the purpose of regulating the alienation, whether temporary or permanent, of lands, mines, minerals and water. What does that mean? In a nutshell, it means that our Constitution allows for the Oireachtas to pass law that sells, transfers, leases or gives away our natural resources. Our Constitution, as it is currently framed, allows lawmakers to transfer natural resources from the State's ownership to someone else. Therefore, the promise of a plebiscite to the people to ask them if they agree with an Oireachtas proposal to privatise or to alienate hardly provides an adequate guarantee. Even if this law is enacted in its present form, the constitutional guarantee will continue to be that lawmakers can transfer natural resources from the State's ownership to someone else. Only a referendum could change that foundational constitutional guarantee to elected representatives that they can make law to privatise water.
I heard some of the Minister's comments on why the Government is not going for a referendum. I heard, "We cannot do it; it is too complex", or: "We will not do it; it is too complex." I heard, "We will not do it", and not: "We cannot do it because it is too complex."
My second primary concern is fairness and ability to pay. All of us in this House know that the capped charges are an interim measure that responds to the crisis of public trust in politics. Many of us are concerned that the revenue raised from households as suggested in this Bill will not sustain Irish Water financially and, hence, these charges will have to be raised in 2019. The people who protested on the streets of Tallaght and throughout the country know this as well. They do not trust the promises made by Government that the water charges will remain affordable until 2019 when the charges regime provided for in this Bill expires. People need financial certainty and this Bill does not provide it beyond 2018. Water charges need to be affordable and fair for the people. They need to promote water conservation and be economically sustainable, both for the utility and the State. It is vital that Irish Water passes the market corporation test in April, because the reverse would have serious consequences for the economy. Hence, the economic as much as the political sustainability of the fee structure needs to be considered.
I do not believe it is fair, cost-effective or practical for the State to subsidise the water bills of the nation's top earners for the same value as the low income groups. My positive proposal is that households will not pay more than 0.5% of their net household income on water charges, neither now nor after 31 December 2018. The charging regime set out by this Bill for the three-year period provides this guarantee for households earning more than €34,000 a year. In other words, it provides a guarantee that they will not pay more than 0.5% of their net income, but it does not provide a guarantee for those earning under €34,000, even when taking the water conservation grant into consideration. Therefore, it does not provide a guarantee that those earning under €34,000 will pay only 0.5% of their net income. I will be bringing forward amendments, therefore, that will ensure the cap in the water charges is linked to 0.5% of the household's net income when that is lower than the flat charge. This will start to bring more fairness and ensure affordability in the charges regime.
I welcome the Minister and thank him for his opening statement which brought more clarity to the situation and to the intent of this Bill. It is true to say, as has been said by Senator Jim Walsh, that we had a major debate on the issue of water in this House last year. It is also true to say that it is very good that the Seanad has been retained by the people because the changes that have occurred also bring into focus the importance of the debate that was held in this House. It is also important that this House was retained because what we did successfully as Members of the House is see to it that many of the issues that we raised in the House are being dealt with in this Bill. Many of the issues raised at the Committee on Environment, Culture and the Gaeltacht are dealt with in the Bill. I have spent the past half an hour looking at my own contributions, both at the committee and in this House, on the previous Bill and since then. Practically all of the issues I raised during that time are now dealt with in this Bill. For that reason, the people were very wise when they retained the Seanad - not because of my contribution but because of all of them.
We have had 20 hours of debate on water in this House. It has been successful. We see that the Minister has enshrined in this legislation that the people will decide if and when, if ever, Irish Water is to be privatised. What amuses and amazes me are the concerns of certain elements - they do not accept democracy in all its forms - because nobody, that I am aware of, in either House, has expressed a view, publicly at least, that Irish Water or that water should be privatised. Nobody elected to this House or the Lower House that I am aware of has expressed that publicly.
Fine Gael would sell it tomorrow if it could.
No one has expressed it publicly. I repeat what I say. We are in a situation where we have another issue causing concern to the public and being aired daily. The cost has been reduced so greatly by the Minister in this legislation that most reasonable people that I have met accept that water is being supplied at the lowest possible level of charge. We have therefore also resolved the issue of cost for most reasonable people in this country. We have dealt with the privatisation issue and the billing issue and we have brought certainty into the charges. No one can be sure what is going to happen in ten years time on any issue. So far as it can be done, we have brought certainty by setting out the schedule for charging. We have brought simplicity to the billing system.
We will see a situation where people can pay €5 a week, or whatever other sum they like, towards their water costs in their local post offices.
If they have post offices.
Indeed.
Many of the issues that were raised here at the time have been dealt with. We have made the whole billing system simpler. We have also dealt with a concern I expressed when the legislation was discussed last year. I refer to the extent to which the service provider could be contacted by the public and by elected representatives at local level, namely, councillors. I have to say it started off extremely badly. When I checked with a number of councillors across the country this morning, all of them told me that the level of service from Irish Water is excellent now. Responses to e-mails are being received on the same day. Work is being carried out within days of representations being made. That was a major issue for me and for elected councillors across the country after this responsibility was removed from the local authorities. That has been dealt with very well. I commend the Minister. I know he put personal work into that because I discussed it with him on several occasions.
The removal of PPS numbers, which is a major concern for reasonable people in this country, is an issue that will be dealt with as a result of this legislation. We have dealt with their reasonable and fair concerns by removing the appropriate provision from the Bill. I would like to compliment the Minister again. I have given him so many compliments today that he will be getting a little concerned.
Does the Senator think the Minister is going to be the leader of his party soon?
I want to compliment him specifically on one issue.
It is a Tipperary thing.
The issue to which I refer is the transfer of staff to Irish Water from local authorities. I want to put it on the record of this House again that local authority staff were approached by the Department of the Environment, Community and Local Government and asked to enter into discussions and negotiations. Contrary to what has been suggested here previously, it did not happen the other way around. SIPTU is the main union that represents staff working on the ground, who earn between €35,000 and €40,000 per annum. We are not talking about the people who were subsequently taken on. I will deal with them in one minute.
What happened to their bonuses?
I am talking about staff who have been brought across to Irish Water. The certainty of their employment has been assured in service level agreements. The bonus issue will be dealt with by the Labour Relations Commission because what was being done was disgraceful. It was part of their payscale, which was then an incremental system. I understand from my discussions with the union involved that this will be dealt with in the coming weeks. I welcome that. While this is a side issue, it is a very important one for people on relatively low salaries. I am glad this is being brought into the system. People maligned and attacked the staff for negotiating on their own behalf and getting service level agreements that guaranteed them their employment. I commend the staff and their union on doing that. Nothing less should be expected. Of course, some people like to malign public sector workers. I completely and totally oppose the concept and the idea that someone in the private sector is a better being than someone in the public sector.
Hear, hear.
I have always opposed it. I would like to examine the logic of the argument that we should do nothing and just let the system sail on. In such circumstances, raw sewage will continue to flow into the rivers that go through 42 towns in this country. Lakes will continue to be contaminated. Some 20,000 people in Roscommon will continue to be on boil water notices, with nothing being done about it. That was the attitude of previous Administrations. Nothing was done about it. In my area of County Tipperary, the Fethard-Burncourt improvement scheme was on the books for approximately 25 years until this Government took it on and provided the funding.
Hear, hear.
Nothing was done. All of the money was spent in other directions. Now the same people are expressing concern about what needs to be done in the system. I will not even mention who they are. I will not go there in this debate.
We will point out where the Senator is wrong in a few minutes.
With the greatest of respect to the Minister - this did not happen on his watch - I have to say that the establishment of Irish Water left much to be desired.
The Labour Party voted for it.
While I accept that savings will be made, I emphasise that a great deal of money has been spent and wasted. During our discussions with Irish Water at the Joint Committee on Environment, Culture and the Gaeltacht, a figure of €86 million was mentioned with regard to consultancies. As part of the tendering process, the company that tendered for what is now Irish Water, Bord Gáis, assured the Government that it had in-house expertise. When it got the contract, the consultants suddenly had to be taken on. That is wrong. There is no point in saying otherwise. It should not have happened. I also-----
The Senator's time is up.
Thank you. I will leave it at that.
I would like to share my time equally with Senator Gerard P. Craughwell.
Is that agreed? Agreed.
I sympathise with the Minister, Deputy Alan Kelly, who is a decent and intelligent man who was handed a really poisoned chalice. Some of us have been raising the issue of water in this House for many years. I remember speaking about the campylobacter infection in the water and the whole question of raw sewage going in. Absolutely nobody in any Government listened. They did not give a damn.
I would like to make the point that up to now, we have paid for water services out of general taxation. Now that a specific water tax is being introduced, there is no proposal to reduce the general levels of taxation. It is absolutely clear that we are now paying for water twice. The logic of that statement is undeniable. Why are we doing it? We are doing it to pay off the gambling debts of the German and French banks. Everybody knows that is why we are doing it. I will remind the House of how we are being treated in return. This country was regarded with contempt by the European Central Bank when it asked the bank to send a representative here to explain its position, its letters and the way it held a gun to the head of this country. The banks said "no, we are not going to bother, what about you?".
I know it is not diplomatic to say I am sick to my back teeth of members of the Government bouncing around like turkey cocks on the plinth and expostulating about their awful difficulties - what they are going to do about the water charges and all this kind of thing. I know I should be sucking up to them and trying to wheedle them over here, but I am fed up with that because it does not work. They are happy, bouncing around and hoping to the lord God that they will actually survive the coming culling.
I would like to ask the Minister about the water conservation grant, which is a right turkey. What is it conserving? How is it conserving anything? What has it got to do with conservation?
Nothing.
Could we have an answer to that question? I presume the metering is still going on. I want to know why Irish Water did not take the trouble to put in a three-way meter that would register electricity, gas and water, particularly since the gas company is doing it. When I suggested this in the House previously, the Minister who was here at the time nodded.
I would like to refer to section 4(1) of this badly drafted Bill, which sets out what happens if "a customer of Irish Water has not paid any charges ... and has not entered into a payment plan with Irish Water and which the customer complies with for payment of the charges by such date". At the beginning of that sentence we are told that it relates to a non-compliant customer, but the end of the sentence refers to what happens if "the customer complies". I ask the Minister to get the draftspeople to look at that again. I suggest the reference should be to "meeting the conditions". If they are complying with it, grammatically that means they are paying for it.
With regard to the question of a plebiscite, I emphasise that a plebiscite is a just a consultation with the people. It is not binding. There is a pretence in this Bill that it is binding, but it is not. In any case, the Government can simply amend the legislation ex post facto. In such circumstances, we will still be left with this. It is important that we recognise the value of our national assets. We ignored the fish, we ignored the oil and we ignored the gas. Now we are going to do the same to water, which is a national asset. Everybody knows we have to pay for the transport and treatment of water, but it is a national asset.
Debate adjourned.