Water row not as clear-cut as Labour would have us believe
After more than two weeks of inter-government squabbling and bickering, progress on how much homeowners will expect to pay for water emerged last night. Labour Party demands for the elimination of the €50 standing charge from the tariffs levied on homeowners have been acceded to by Fine Gael.
On the surface, this may appear to be a victory for the public. However, given the complexity of the introduction of water charges from October 1, the decision is not quite the victory Eamon Gilmore's party will claim it is.
While Labour will argue that their insistence of a usage-based system is fairer for lower paid workers and pensioners, it will mean higher charges for middle and higher income households.
Government sources have conceded the scrapping of the standing charge will mean higher charges, but insist such increases will be "marginal".
But there are also other concerns which need to be considered.
Irish Water for its part wanted a standing charge, as it would give it a guaranteed revenue stream. Now, Irish Water will be less attractive to international investors who will charge a higher interest rate to lend money to it. Also, a real concern for taxpayers is that the absence of a standing charge means the Government subvention of Irish Water will likely remain in place for much longer. It appears that short-term political pressures have held sway over commercial necessity.
This is not good news. While Labour was correct to demand more time to get the water charges right, the jury is out on whether the scrapping of the standing charge was the right thing to do.