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Last Updated: Wednesday, 11 August, 2004, 15:15 GMT 16:15 UK
Ebbs and flows of NI water policy

By Mark Devenport
BBC Northern Ireland political editor

All the parties in Northern Ireland say they are opposed to the introduction of water charges. However, the direct rule minister John Spellar says he is merely carrying forward policy initiated by the old Stormont Executive.

If you scan back through the debates of the old assembly, you can see that ministers were acutely aware that the Water Service represented not just a liquid, but a financial drain on their resources.

For example, on 25 September 2001, presenting his draft budget, the then finance minister, Mark Durkan, pointed out: "Proportionately, we raise much less revenue than in England, and we fund water and sewerage services from our departmental expenditure limit.

"The assembly should note that if we were to raise rate revenue and water charges roughly to their equivalent pattern in England, we would have approximately 300m of additional spending power for public services," said Mr Durkan.

It is clear from the debate on Wednesday, and in the months since Dr Farren made his remarks to the Confederation of British Industry (CBI), that it is an emotive issue

On 18 April 2002, Mr Durkan's successor as finance minister, Sean Farren, told guests at the CBI annual dinner that "any challenge (for more health money) will lead to strong pressure from the Treasury that we should pay our own way more fully".

"This will mean looking hard at the rates and at the financing of our water and sewerage services," he said.

In an assembly debate on 29 April 2002, the DUP's Willie Hay accused Sean Farren of favouring water metering.

'Advocated metering'

The minister's SDLP colleagues denied it.

Interestingly, Dr Farren also drew support from DUP Regional Development Minister Peter Robinson, who noted that "several members mentioned water charging".

"It is clear from the debate on Wednesday, and in the months since Dr Farren made his remarks to the Confederation of British Industry (CBI), that it is an emotive issue.

"I think that Dr Farren has been misunderstood. I am not aware of any occasion when he has advocated metering the water supply or charging on the basis of metering."

Mark Durkan:
Mark Durkan: "We raise much less revenue than in England"

"However, he has indicated that charging will be considered in the rating policy review..."

"The notion that people are currently not being charged for water should be done away with.

"Of course they are being charged. The issue is the method employed to charge them."

In May 2002, Dr Farren launched a public consultation document reviewing both rates and water charges.

Significantly, this executive document did not ask the Northern Ireland public whether they wanted water charges or not.

Instead it noted that "in almost all countries around the world, domestic consumers pay a direct charge for water".

Following consultation

It set out the requirement for 3bn worth of investment in the local water service over the next 20 years to comply with European Union rules.

It said "the combination of factors means that the assembly and the executive must examine fully all possible means of raising additional revenue to fund the Water Service".

After setting out the necessity for more revenue, the question the Finance Department paper asked the public was: "If following consultation, it is agreed by the executive and the assembly to move towards the introduction of water charges, how might any water and sewerage costs be distributed among domestic consumers?"

Despite the comments made by Sean Farren and Mark Durkan while in office, the SDLP's party submission to the review stated "water supply is a basic service... that we believe should be guaranteed to all and free at the point of use"

So people who responded were given the chance to choose between flat rate water charging or charges linked to the value of their property, not to reject the charge in principle.

The publication of this paper coincided with the high profile visit of Gordon Brown and Tony Blair to Belfast to launch the Reform and Reinvestment Initiative which enabled the executive to borrow billions to fund infrastructure projects.

A Stormont insider confirmed that at this stage "everyone in the executive knew the likely outcome in terms of water charges and higher rates as a quid pro quo for the new borrowing power".

'Favoured option'

The assembly and the executive were suspended in October 2002.

When the review of rating policy reported in December 2002, it noted that water charging would be controversial and acknowledged that among those who had responded "the view was that the Water Service had long been under funded and that the government should provide the required funding rather than seek to raise some of the necessary monies from taxpayers".

That said, the review said that in the event of charges being introduced, "water metering was the favoured option among many".
Peter Robinson noted
Peter Robinson noted "several members mentioned water charging"

It quoted the assembly's Committee for Finance and Personnel as saying "water metering is considered the fairest option to determine water usage and, therefore, the only way to ensure charges are based on consumption as with other utilities".

Despite the comments made by Sean Farren and Mark Durkan while in office, the SDLP's party submission to the review stated "water supply is a basic service... that we believe should be guaranteed to all and free at the point of use".

It added: "Funds for such essential services should be provided for out of the overall revenue gathered in by the state and levied on the basis of ability to pay, rather than a flat rate model."

By now the question of water charges was for direct rule ministers like Ian Pearson, Angela Smith and John Spellar to take forward.

In March 2003, Ms Smith came out in favour of water charges in principle.

Two months later, she argued they would enable the government to invest 300m more per year in public services in Northern Ireland - more or less repeating Mark Durkan's comments two years before.

This week, John Spellar announced the replacement of the water service with a new government-owned company.

In Donegal on holiday, the former Finance Minister Sean Farren told the BBC he disputed John Spellar's assertion that he was pursuing executive policy on water charges.

Dr Farren said the old executive never agreed water charges, and insisted he supported SDLP policy - which is that the operational cost of water should be recovered through a more transparent rating system based on ability to pay.

The executive certainly never announced a definite intention to introduce water charges, but in their May 2002 consultation document they did not give the public the option to say no.

All the Northern Ireland parties remain vehemently opposed.

But as we trace the way water has flowed through the political U-bend, is it too cynical to wonder whether some local politicians could be hoping that direct rule ministers wield the plunger now, so that a future executive does not have to deal with its troublesome financial blockage?

Job fears over water reform
11 Aug 04  |  Northern Ireland
Warning over water charges
12 Jun 04  |  Northern Ireland

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