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Last week an Irish Minister of State announced that water meters may not all be installed before water charges are introduced and that it may be overly costly to install meters in some instances. I think that it is highly probable, and probable the most sensible approach, that water charges will be introduced in Ireland in advance of water meters; and possibly sooner rather than later.

In truth, and nobody will know this better than the IMF, you don’t need water meters to raise a bill. You just need a person to bill and a formula to calculate the amount. There is no reason why a bill could not be issued to each property on the 1st of January 2012 (or earlier).

A couple of weeks ago, at a conference in Dublin, I suggested how a standard water charge letter might be constructed in Ireland. These are the opening paragraphs:

“Dear ……

We believe that you are the occupier of [……] and that your property is connected to the public water supply and the public sewer. Accordingly, you are liable to pay the 2012 domestic water charge of €500.

If your property is not connected to either the public water supply or public sewer, then please sign the attached declaration and your case will be investigated. If your property is only connected to one or the other then your annual charge will be reduced by 40%.

If there are two people (or less) living permanently in your property, then you are entitled to be charged at the discounted rate of €300. If that is the case, then please sign the attached declaration and return to [….]. Please note the penalties applicable to a fraudulent declaration.

If you are in receipt of certain social welfare payments then you may be entitled to a full or partial discount. Please bring this letter to your local Social Welfare Office for further details.

………. etc.

Is mise le meas…”

The standard charge of €500 per annum is based on the presumption that the property is a typical family home, with 4 or 5 permanent occupants. Properties with three (3) or more occupants account for a little over half of the properties in the country. The reduced rate of €300 is based on the presumption of not more than two (2) permanent occupants. The rate has been derived from the existing average metered charge (€2.30/m3) paid by non-domestic customers in Ireland.

This standard rate of €500 is not set abnormally high to encourage people to scream for water meters; nor is it set abnormally low to ease people into the new charging regime.

The water charges should not be permitted to cause undue hardship to those in most need, i.e. therefore, those in receipt of certain (but not all) social welfare payments should be entitled to separate waivers administered through the Department of Social Protection. Recent figures have indicated that between 10% (urban) and 15% (rural) live below the poverty line in Ireland and these should be entitled to significant waiver.

Why should anybody respond to this letter? Why not ignore it? Well, I would argue first that it is only fair that everybody pays for the water that they use; not just those that are in group schemes or rely on a private well. As a society we have failed to address this basic inequality to date.

However, I would also propose that it is going to be to the advantage of the individual customer to respond to the letter and have their property details on the water register. Why? Well, for those who do engage, they should be given priority for any grant schemes made available for the improvement of private customer plumbing systems. There is mounting evidence that as much as half of the leakage in water systems is on the customer’s side of the connection; and outside the responsibility of the local water authority. Customers will want to get these leaks fixed, and lead pipes replaced, and leaking taps changed, before the water meters are installed in due course.

For those who choose not to pay and to ignore the letter, then they will run the risk of disconnection. If a water authority does not get a response to its letters, then they must reasonably assume that the property is vacant and must turn off the supply on grounds of water conservation and to prevent damage to the property.

This is a very basic idea of how a water pricing system might be introduced in Ireland. It is one of many approaches that could be used. It is not draconian; it is just the way it should always have been. Indeed, it should be part of a rebalancing of taxation and charges in Ireland; perhaps evidence of payment could be part-discounted against one’s universal social charge?