I take this opportunity to speak on the Water Services Bill 2014, but it is with no pleasure that we are here discussing this. As everybody knows, earlier last year we had the Water Services Act 2013. The Government came in here full of gusto determined to charge water rates and to set up a new State quango, having spent the previous year saying it would abolish quangos. However, it went on to establish the biggest quango since the setting up of the ESB, something many of those on the Government side of the House now boast about.
This time last year, the Government came back with the Water Services (No. 2) Bill, through which it introduced the charges. Clearly, the Government did not know the charging mechanism when it brought in the Water Services Act 2013. We are now back with a third initiation of legislation, the Water Services Bill 2014, but before we even got it through Second Stage in the House, the Minister went on "Morning Ireland" this morning saying there will be another Bill in the new year because he has not worked out some of the details. He does not know what is to happen with rented property and must consult landlords and tenants. The Minister is introducing legislation here today, but an hour ago he said on our national airwaves that it was inadequate and did not deal with the issues.
A few weeks ago I heard the Minister speak about his legacy. His legacy has not lasted two weeks. The legacy he outlined that day in regard to the changes that would need to be made through this legislation has already been changed. The Minister has already scuppered his legacy. He has dropped sections from this legislation that were part of his press release. He knew there was a furore about making landlords collect unpaid bills. He had not thought the issue through or discussed the idea, but it was part of his legacy statement here. I watched him in the Chamber, and people around and behind him were skitting at him. A few months in the job and he was talking about his legacy. His legacy is three weeks old since that statement, but it is already in tatters, torn up by himself.
The Minister is now saying we will have more legislation next year on these issues. At the rate the Government is changing its position, there will more legislation again. We are just talking about another piece of the ongoing shambles created by the Government when it comes to water services. No proposal in this legislation has been properly thought through. Proposals have been thought up on the hoof. The Minister made his legacy statement, published the legislation and then went on "Morning Ireland" and said that this was not his full legacy and that he had more legacy issues to introduce next year. We can be sure that the Bill he introduces next spring will require further changes, because it will be inadequate even then.
How could anybody have any confidence in anything the Government proposes in regard to water services when it does not know what it is doing itself? The Minister makes his legacy statement, but two weeks later the legacy is torn up by the Government itself. We ask why people are fed up with what goes on in this Chamber and with politics. This is the reason. It is the cynical approach taken by Members of the Government. That is the reason people are furious and infuriated by the political system. Ministers make these statements and then they sneak off and come back after a couple of weeks with some amendments. Then they introduce new legislation after thinking through their legacy statements. It is no wonder the people are cynical. The way the Government is going about this does a disservice to the Irish political system. It promised to abolish quangos, but it set up the biggest quango in the history of the State. We are on the third round of legislation and the Minister has said it is not adequate yet. When we are on the fourth round, he will be promising more. I do not know how long this debacle will continue.
I could talk about the bonus culture, the super-quango and the waste of money, but I will deal instead with the legislation before us today. I have serious concerns in regard to a number of issues. The explanatory note on the legislation, published by the Department, states that the original Act provided that Irish Water should charge its customers for water services, subject to the approval of the regulator established by the water services within the Commission of Energy Regulation. Then the Government comes on and says that the Minister's legacy statement on 19 November will impact on certain provisions of the water charges approved by the CER. What is the commission there for? The Government has now undermined and made a joke of the commission. It has turned it into a little Mickey Mouse in-house consumer dispute resolution operation. That is what the commission has been relegated to in this legislation.
Section 8 of the Bill says the commission will deal with disputes between customers and Irish Water. If that is the Government's ambition for the regulator, it is making a joke of the regulator. Therefore, the Government should do the decent thing and abolish the regulator's role in this regard, because it is a farce. We have a regulator, but the Minister says his legacy statement of 19 November will have an impact on certain provisions and he must change the law. Therefore, any time the commission makes a decision the Minister does not like, he will do something that impacts on that decision and change the law. The commission does not even have a rubber stamp; it is just a waste of a stamp. I mean no disrespect to the individuals there, but the Minister has utterly undermined the function of the regulator in this area.
There should be a facility in any company for a proper dispute resolution mechanism. Somebody like the Ombudsman is more qualified to deal with people, as that office deals with people every day of the week across all public services. Dispute resolution, even if administered by Irish Water, cuts across the Department of Social Protection, which is in charge of administering the conservation grant. It also cuts across the Department of the Environment, Community and Local Government, which will technically administer the grant, but will probably ask the Department of Social Protection to provide the technical backup to do it. It will cut across the delivery and interaction between public service and local authority staff under the service level agreements for local authorities, and people will also have to deal with Irish Water over the telephone or by whatever other mechanism they can use to make contact.
To think the job of the energy regulator is to offer a disputes resolution process as a part of it is a joke. The Office of the Ombudsman was established to deal with issues such as this and that is the procedure which should be used to deal with these issues.
The Government should withdraw the legislation. When it knows what it is doing, although we might still not agree with it, it should come back and tell us about it. It has stated it does not know what it is doing about several relevant aspects of the Bill and that it will have to bring forward more legislation next year. It should have the decency to withdraw this Bill and refer back to the House when it knows what it is doing. Otherwise, we will be dealing with water services legislation Mark 5, 6 and 7 before the organisation even collects a red cent. The Government fatally damaged the Irish Water project through its mismanagement of the process. It is nobody's fault but the Government's.
I feel sorry for the Labour Party because it is opposed to this measure. It is a Fine Gael invention that was cooked up many years ago in Cork with Bord Gáis, long before there was a general election. It was one of Fine Gael's red line issues and perhaps the Labour Party had to accept it as part of the price for getting into government. However, the Government cannot blame anybody else for this. It was a Fine Gael policy from beginning to end. The NewERA document even named the utility years before the last general election. It is a Fine Gael invention and it should be told to go away with it. Cleverly, however, it has handed the problem over to a Labour Party Minister. Watch Irish Water do the same damage to that Minister as it did to the Fine Gael Minister when he held that office.
As I have only 11 minutes left, I will have to be brief in dealing with the next aspect of the briefing note, although I could discuss the topic of financial implications for much longer. I do not believe these changes will only lead to a reduction of €21 million in 2015 and €56 million in 2016. The Minister says there will be cost savings as a result of the approach to the treatment of water infrastructure. I do not buy this at all. He will refer to the project in Ringsend, but whatever negotiations took place on that plant would and should have happened. I give zero credit to Irish Water for any of it. There are competent city managers in Dublin whose job was to deliver these changes. That did not happen just because Irish Water had arrived on the scene.
The issue of commercial rates is a complete joke. It is either a utility paying its way and its rates like any other commercial utility or it is not. This will be one of the tests it will face. I have written to EUROSTAT to check on these matters and whether this is valid. This is a State subvention for what is supposed to be an independent commercial organisation. I do not buy the idea that it should be treated in this way. If the Minister believes it is a commercial organisation, it should not be given this subsidy. EUROSTAT will also have so assess whether the €100 conservation grant for eligible households amounts to state aid. I will not go into further detail on it.
I will turn to the sections in the legislation. Section 2, which deals with the issue of a plebiscite on the ownership of Irish Water, is the biggest con ever in this House. It is a joke and a farce. There is one page of nonsense stating that if changes are proposed, they will be voted on in the Dáil and the Seanad and that they will be put to the people. However, the Government provided a trapdoor for itself to avoid all of this. The Bill provides that any change in the ownership of Irish Water will be subject to this provision, other than the changing of shares held by the Minister for Finance or that have been issued to Ervia for Irish Water "where it is proposed to transfer that share to either the Minister or the Minister for Finance". I presume the Minister concerned is the Minister for the Environment, Community and Local Government.
To avoid a plebiscite under the legislation, all the Government need do is transfer the share back to the Minister for Finance who can dispose of it in any way he or she likes through a privatisation mechanism. This section does nothing. It is a fig leaf and a con job, as the officials and the Minister know. There is no protection in the legislation to ensure Irish Water cannot be sold without it being subject to a plebiscite. That is what the section provides, but the additional line that allows the transfer of the share from Ervia to the Minister for Finance means that the Minister is off the hook because the Minister for Finance can do what he or she chooses with it after this. The matter must be clarified because the Minister has caused further confusion in that regard.
Section 4 refers to the late payments mechanism. Irish Water will charge a late payment fee for each year the charges remain unpaid. How much is the fee? Will there be interest and penalties? Who will collect the fee? Does Irish Water have a legal right to charge interest which is a financial transaction? In addition to supplying water, will Irish Water now be in the business of providing credit and charging interest like a commercial organisation? Does it have the legal authority to charge interest? As that is a financial issue, does the legislation to establish Irish Water allow it to charge interest and penalties? The legislation before us is incomplete because the Minister has not yet given us the details of the late payment fee. The legislation should be withdrawn because the Minister has included sections in it in which he has not included specific details.
Section 5 refers to the water conservation grant. The Minister says he is removing the requirement for people to provide their personal public service, PPS, number for Irish Water. That was a blunder in the previous legislation and the Government has copped on after listening to the people's views on it. Now, however, there is a double mechanism. The legislation provides that people will have to register with Irish Water and also have to provide any necessary information required by the Minister for Social Protection to process the payment. Two forms will have to be completed. One is for Irish Water to register as a household or relevant property. Second, the legislation provides that a person will have to provide information directly for the Department of Social Protection. The Minister is duplicating the work involved in order that people can receive this grant.
Let us imagine the costs involved. Everybody must complete one form for Irish Water and another for the Department, with any necessary information required by the Minister for Social Protection. Let us imagine the cost of setting up a new information technology, IT, system to deal with every household and dwelling in the country, process two separate information or application processes and then issue the cheque. People will probably have to prove they have paid the account also. Given the amount of information that will have to be provided, not only will each grant cost €100 of taxpayers' money, it will also cost the Government the same amount again to process the system. I wish to see a cost for these duplicate applications that people will have to provide.
I have already said the issue of disputes resolution should be dealt with by the Ombudsman.
Section 9 tidies up the superannuation provision. Again, it must be included in this legislation because the Minister did not get it right on the first occasion. Why is it included in this third legislative measure? The Minister wishes to ensure there will be no doubt that a separate scheme will be established to cover the past service of employees who are transferring to Ervia. Why was that issue not adequately dealt with in the previous legislation? It should have been. It was a phenomenal omission by a Minister.
With regard to section 10, I tabled a number of parliamentary questions before the summer on the liabilities of Irish Water. I tabled them to the Minister for Finance because he was a shareholder and the Minister for the Environment, Community and Local Government. I received the same replies from both, that a due diligence study was being conducted of the transfer of assets. My questions were about the associated loans taken out by local authorities to fund these assets. These loans are on the books of the local authorities. Some of them are public private partnership, PPP, arrangements relating to projects in Ringsend, Portlaoise and several other towns where the relevant local authority has an ongoing bill of €1 million to pay in respect of the PPP. These liabilities must be taken into account, but 11 months after Irish Water became legally responsible for them, it does not owe them because they have not yet been transferred. The reason they have not been transferred is that the Government does not know the figure.
I question the governance of Ervia. How can the board of Ervia hold a meeting today and not know the assets and liabilities of the company? It is a breach of every corporate governance rule that was ever in place. It does not know its assets or its liabilities, but it is legally responsible. It should be closed down immediately in respect of its Irish Water activities.
Irish Water should be closed down and dismantled. Eleven months on, it does not know its assets and liabilities. This section is very bad legislation and is very bad for local government. The section says the Government will transfer the assets of local authorities to Irish Water, but the financial loans associated with the property are not automatically transferred. The Government is taking assets from the local authorities but leaving the debts associated with the assets. The Government will transfer the assets - raid the local authorities of assets - and, having engaged in asset-stripping, send these assets to Irish Water while leaving the liabilities and associated loans with the local authorities. Some of them might transfer at a future date but the Government does not know the liabilities. It has specifically included provision that the liabilities do not automatically transfer. The Government has further weakened the role of elected members on local authorities on this issue. One of the basic functions that local authority elected members have is to approve the disposal of assets of any local authority. It must be an agenda item. As anyone who was ever a Member of this House, or anyone in the Department knows, even if they are selling off 100 sq. ft. of land at the back of a garden, it is an agenda item. A local authority cannot dispose of its assets without a resolution of the members. Everyone in local government knows this. But what is the Government doing? It is going to ensure that does not happen. It will make sure the assets are transferred under legislation. The Government is taking more powers from elected members. These are assets that were borrowed for by local authorities and developed by them - water and sewage treatment plants, reservoirs and so on - and there is no automatic provision for the liabilities to transfer. I accept the Government intends to transfer them, but it should not be doing so until it knows what it is doing.
Before we finish the debate on the legislation, can the Minister tell me the exact value of the liabilities being transferred from local authorities to Irish Water and the exact value of the assets that are being transferred? When we have the figure, we will respond to it. My colleague, Deputy Barry Cowen, tabled a similar parliamentary question on the same topic. The information is not available and, when we do not have the information available on the assets and liabilities of a company being set up, the Government should not be going ahead with it until it knows what it is doing.
With regard to the rates issue, I do not believe it will stand the EUROSTAT test. It will be seen as a State subsidy to what is allegedly a commercial organisation. Who will value these assets? Do Members know how long it takes the Valuation Office to get around to valuing office property? Valuing every local authority asset will close down the Valuation Office for the next five years. They have not been valued up to now, and doing so will take the office years. No other organisation will be able to get its property valued. What are the implications for the Valuation Office?
I have only touched on some of the topics. This is the third version of flawed legislation. The fourth has been promised in January and it will also be flawed. The Government does not know what it is doing and it should go back to the drawing board.