After months of confusion and retreat, the Government has come out with its final word on water charges. The question is whether it has come too late to limit the damage the controversy has done the Coalition.

The package announced in the Dáil yesterday by Minister for the Environment Alan Kelly was fairly described by Fianna Fáil environment spokesman Barry Cowen as “a massive climbdown”. In the circumstances, however, it was the only political option facing the Coalition.

The Minister has finally brought certainty to householders about the exact level of charges. He hopes that will be enough to persuade the vast majority of people to sign up for the scheme.

There is a danger that capping the charges at a low level could defeat the original purpose of encouraging people to conserve a scarce resource. But, given what has happened over the past few months, Kelly needed to provide certainty for people, and that he has done.

He insisted that up to half of all households will be able to pay even less than the capped charge once meters are installed, but that will obviously depend on whether or not they reduce their usage.

Relatively cheap Still, the maximum payment of €160 per household, when the €100 rebate is taken into account, will make Irish water the most affordable in western Europe. The relative cheapness and certainty are designed to persuade most people to register and pay for their water.

The introduction of the €100 rebate for those who register is the carrot to encourage them to pay up. The stick is that if they don’t register they won’t get the rebate – and that the bill will ultimately become a charge on the property.

This follows the template that has worked well for the second-home tax and the household charge. People who didn’t pay those charges thinking they would get away with it have found themselves penalised with large bills at the end of the day.

The Coalition has had to walk a delicate political line between bringing in a charge that most people would regard as reasonable while also providing some sanctions against those who won’t pay.

Up to now, about half of all households have signed up for the charges. That figure will need to increase substantially if the scheme is to work.

The Government will face the worst of all possible worlds if half of households refuse to pay as the other half will become increasingly angry at being saddled with having to subsidise their non-paying neighbours.

The mystery is why it took so long for both Government parties to absorb the lesson they received at the ballot box in the local and European elections back in May.

Fine Gael suffered a drubbing and Labour a complete collapse in those elections, and the water charges were the main issue on which they were being attacked.

Despite the scale of the rebuff, Ministers in both parties didn’t seem to get the message that the water charges had become a millstone around their neck.

Other concerns Instead, the Fine Gael and Labour parliamentary parties became preoccupied about pylon protests and the numbers coming to their clinics to complain about the attempt to limit the number of discretionary medical cards.

It wasn’t just the Government that underestimated the impact of the charges. Sinn Féin also found itself on the back foot when most of its TDs said they would sign up for the charges even though the party opposed their introduction.

By contrast, the Trotskyite TDs and other hard-left groups said they would not pay and proceeded to organise ever more vocal and ultimately violent protests against the Government. That prompted a U-turn by Sinn Féin, whose TDs said they were no longer prepared to pay the charges.

After yesterday’s announcement, most Government TDs were happy that enough had been done to assuage public anger. But some fear that the weakness shown in the face of the protests could prove as damaging.

The fact that people who have their own wells will qualify for the €100 conservation grant even though they won’t have to pay for water illustrates just how big the Government’s U-turn has been.

Since the beginning of the year, the Coalition has suffered a serious erosion of the reputation it had earned for competence during its first three years in office. Recovering that reputation is the immediate task it faces in the months ahead.