For the third time the Minister has denied that his words bear the plain interpretation which anybody must put upon them. Let me remind the House of what the Minister did say on the Second Reading of the Bill, so late as yesterday. He said this:
The fact emerged that the Board did not consider that the sum of 2½ millions which they got from the Ministry of Finance included any undischarged liabilities which they took over from the municipal undertakings.
The Minister was stating the position which the Board had taken up in this matter. Then he went on to say:
He asked (that is, the Minister asked) that the undischarged liabilities, whatever they might be at the date of vesting of municipal undertakings, should be subtracted from the 2½ millions and that the residue should be what the Board might demand.
What is the plain and simple effect of that? Was it either that the Board, having authority from this House to demand, without reason stated, from the Minister for Finance the sum of £2,500,000, having made that demand, once it was honoured had to hand back £800,000 to the Minister for Finance in order, presumably, that he might discharge the liabilities of the undertakings transferred from local authorities? Is there any other interpretation to be placed on the statement of the Minister than that? He goes further and states that the only sum which the Board might demand for expenditure upon new capital works was the residue, the difference between the estimated total of the liabilities of the transferred undertakings and the £2,500,000 which the House had placed at the disposal of the Electricity Supply Board, had put at its disposal upon demand. That meant, if there is anything in the attitude which the Minister took up, in effect that the net sum which this House placed at the disposal of the Board was not 2½ millions but was £1,700,000.
Let me emphasise again that there is no difference between the Minister and the Board as to the obligation of the Board to discharge the liabilities of the transferred undertakings. The Board, so far as we can gather from the Minister's statement, are prepared to discharge them. They are prepared to discharge them in the way which is provided for in the Act itself. That is the difference between the Minister and the Board. The Minister, in the course of his statement, appeared to rely upon two sections of the Act. Section 12 provides that, subject to certain limitations, the Minister for Finance shall advance to the Board on demand certain sums.
The wording of the Act is mandatory upon the Minister. He has no power to inquire as to the purpose for which these moneys are being required. As a matter of fact I think that at the very inception of the Board when it had been constituted, when it was looking for a place to meet, when it decided that, in order to carry out the multifarious duties cast upon it by this Act, it would be necessary for it to have an office, tables and chairs, the Board presented a demand to the Minister for Finance for a sum of £1,000. That demand was returned to the Board by the Ministry of Finance, with a request that the Board should furnish a detailed statement to the Minister as to how this £1,000 of the Board's money, provided for the use of the Board by the Oireachtas, was to be spent. And this was the Board that was to be independent of all ministerial control! It was to be the Board that was to handle 2½ million pounds, and was to be independent not only of ministerial control, but independent even of the control of the Comptroller and Auditor-General. And when they asked for £1,000, the first thing that the Ministry of Finance required of them was a detailed statement as to how they proposed to spend that money. In point of fact, the attitude that the Ministry of Finance took up in regard to this matter at that time showed that, notwith- standing the promises given by the Minister for Industry and Commerce, there was a certain element in the Executive Council which was determined to bring this Board under Governmental control and influence so far as they could do it.
It was because the Board realised what was at stake, and it was because the Board realised that if they were to carry out the duties which were cast upon them by the Act, they must preserve their condition of independence, in order that they could secure the confidence and support of every section of this community, that they refused to furnish that detailed statement as to how they proposed to spend that £1,000 which the Ministry of Finance demanded of them. It is because of that, that the Board, from the very beginning, has kept itself strictly within the terms of the Act and has kept the Minister strictly within the terms of the Act. It was because of that, and not really because of the manner in which the Board should meet its liabilities with regard to the transferred undertakings, that the difference and dispute have arisen between the Minister or the Executive Council and the Board.
I was referring to Section 12, sub-section (3), the section which deals with the advances of £2,500,000. The words of that section are plain and clear and simple. They are as follows:
The total amount of the sums advanced to the Board under this section for any purpose other than to meet the liability and expenses mentioned in the foregoing sub-section shall not exceed the sum of two millions five hundred thousand pounds, and the total amount of the sums so advanced in any one half-year except in the half-year ending on the appointed day for any purpose other than as aforesaid shall not exceed the sum of four hundred thousand pounds.
Mark, the only provision in that sub-section is as to the amount of money that shall be advanced to the Board for any purpose other than to meet the liability and expenses mentioned in the foregoing sub-section. The contention of the Minister is that that section is to be read as if it were that the total amount of the sum advanced to the Board under this section for the purpose of meeting new capital expenditure and providing for the liability of the transferred undertaking shall not exceed two and a half millions. But there is no such condition imposed by that section. There is nothing in that section to make it conditional upon the Board to discharge the liabilities of the transferred undertakings out of the two and a half millions which were to be provided under this sub-section which I have quoted.
The Minister not only relied, fallaciously relied, as I think, upon this section, but he relied also upon Section 39. Section 39, from the point of resolving this difference which has arisen between the Minister and the Board, is a very important section, because it deals with the liabilities not only of those undertakings which have been transferred from the local authorities, but also from those undertakings which have been transferred from private ownership, and it deals with them in two different ways. The difference in relation to this dispute is a very significant one. Let us see, first of all, how this section dealt with the liabilities of these undertakings which were transferred from private ownership to the Board. That is dealt with in sub-section (8) of Section 39, which is as follows:—
Whenever the former undertaker is not a local authority the new undertaker shall within three months after the date of the vesting order pay to the Board or, if the Board is itself the new undertaker, shall put to a separate account a sum equal to the fair value on the date of the vesting order of the undertaking (with all the property, assets, and liabilities thereof transferred to or imposed on the new undertaker by the vesting order) as a going concern and interest on such fair value from the date of the vesting order at the rate of five per cent. per annum ...
Mark what was to be done where the Board took over an electricity supply undertaking from a private owner. Under the sub-section which I have read the Board is bound to put to a separate account a sum equal to the fair value, including all its property, assets and liabilities, of the undertaking as transferred to the Board at the date of the vesting order, and, in addition, to put aside a sum to meet interest at five per cent. upon that capital value. That is how those undertakings transferred from private ownership were to be dealt with, and that is the obligation which was imposed upon the Board by this section.
Sub-section (6) of this section, on the other hand, deals with the undertakings which were transferred from local authorities, undertakings like the Dublin Corporation or the undertakings of the Rathmines or Pembroke Urban Councils. It deals with them, and they are dealt with in quite a different way. Sub-section (6) of Section 39 of the Electricity (Supply) Act of 1927 reads as follows:—
Whenever the former undertaker is a local authority the new undertaker shall, as on and from the date of the vesting order, become and be by virtue of this sub-section liable for and bound to indemnify and keep indemnified the former undertaker against all capital loans (including current bank overdraft) outstanding at the date of the vesting order...
In this case, the "new undertaker" is the Board, and the "former undertaker" is the local authority. Mark the difference between these two subsections. Sub-section (8) deals with the undertakings transferred from private owners, and there the obligation is imposed upon the Board to put certain sums to separate account in order to meet the liabilities of these transferred undertakings and to provide for the purchase of the properties and assets of these undertakings. But in the case of undertakings transferred from the public owners there is no obligation imposed on the Board to put any sums to a separate account. There is no obligation to earmark any portion of that two and a half million pounds to meet the liabilities of these transferred undertakings. Yet what is the issue raised by the Minister? It is this: that the public undertakings, the undertakings transferred from the public ownership, instead of being dealt with by the Board as the Board is permitted to deal with them in sub-section (6) of Section 39, should be dealt with by the Board as if they were undertakings transferred from private ownership, and accordingly dealt with as provided by sub-section (8). Is not that the difference?
The Minister said that the undischarged liabilities, whatever they might be at the date of the vesting of the municipal undertakings, should be subtracted from the £2,500,000, and that the residue should be what the Board might demand. What is that, in effect, except to say that the £800,000 should be put to separate account, and that the Board, presumably, if it were to act strictly in accordance with Section 39 (8), should pay additional interest at the rate of five per cent. upon that £800,000? There is nothing in the Act which compels the Board to do that. The fact that sub-section (6) has been included in Section 39, and enables the Board to deal with these municipal undertakings in a different way to those which were transferred from private ownership, would seem to indicate that the Minister and the Oireachtas, when this Act was going through, contemplated that the Board, in relation to the undertakings transferred from municipal ownership, would act exactly as the Board has acted, despite the Minister.
If, however, notwithstanding the opinions of the former Chairman and late Managing Director of the Board and their colleagues who have been on the Board from the start, notwithstanding the advice which the legal advisers to the Board have given as to the proper interpretation of these sections, the House still decides to support the attitude which the Minister has taken up, in what position will these undertakings which have been transferred to the Electricity Supply Board be in, in so far as their undischarged liabilities are concerned? According to the statement which the Minister made yesterday, he does not propose to discharge these liabilities out of hand. According to his statement, in so far as we on this side of the House could understand it, he proposes to do what the Board has hitherto done; that is, to provide for the sinking fund and interest, to provide for the capital charges on these transferred liabilities as they fall due from year to year. Presumably, he proposes to do as the Board had intended to do and was actually doing. He proposes to provide for these charges out of the revenue accruing to the Board, as a result of its operations from year to year. That is what the Board, has been doing and that is what the Minister proposes to do. If the Board has been doing that, and the Minister still proposes to do it, what real substance is there in the dispute which the Minister alleges has arisen between him and the Board in regard to an important question of principle?
If the Minister proposes to do exactly as the Board has been doing— to provide for these liabilities out of revenue—what justification is there for him to come to this House and ask it to grant to him—no longer to grant to the Board—and to place at his disposal the sum of £800,000 in order to provide for these undischarged liabilities? It may be said that one of the obligations imposed upon the Board by sub-section (6) is the obligation of keeping the former undertakers indemnified. Who are to be the judges of the validity of the indemnity which the Board offers? Who, but the former undertakers themselves? So far as I know, none of the former undertakers, the municipal authorities, the former owners of the undertakings which were taken over by the Board, has objected to the policy which the Board has pursued. If they have objected, the Minister has not disclosed the fact to the House. They have been, so far as I know, content, knowing the progress which the Board was making, knowing, according to the Minister, that the development of the national electricity supply undertaking had been so phenomenal that in less than two years they succeeded in doing what the experts originally estimated could scarcely be done in four years.
So far as I am aware, and so far as the House has been informed by the Minister, no municipal authority in this country has objected to the manner in which the Electricity Supply Board was providing for capital charges and interest on loans and mortgages connected with the transferred undertakings. If I am incorrect in that statement, it is because the Minister, in his opening address, concealed the fact from the House. Possibly it is not the only fact which he has concealed in relation to the undertaking. The point, however, which I am leading up to is that if the Minister is going to do exactly as the Electricity Supply Board was doing in regard to these transferred liabilities; if he is going to provide for them out of the yearly revenue of the Board, then what is the reason, what is the purpose, and what is the need for the House to vote £800,000 to provide for the liabilities of those transferred undertakings?
I do not know whether at this point I should remind the House of what I said last night. I said that if there was any question as to the powers of or the rights of the Board as laid down in Section 39 (6) to provide for these liabilities in a particular way, or if there was doubt that the Board had not been directly empowered by the Electricity Supply Act to do what it has done, and if the Minister had been empowered to intervene in the matter and to say that these liabilities should be provided for in the specific way in which he wants it to be done; and if, as against that, the Board had the right to provide for them in the way they have done without being specifically empowered to do that by the Act, as between the two methods of discharging the liabilities, what choice would any business man make?
Here was £800,000—not all of it, but certainly a considerable portion of it, advanced to public authorities at a very reasonable rate of interest, advanced possibly at a lower rate of interest and upon easier terms of repayment than either the Board itself, which, as the Minister said, had no borrowing power, or the Minister for Finance, who might act as the Board's agent, could borrow. £800,000 was there in the Board's hands invested in generating plant and equipment, invested in earning assets, and the Board had that £800,000 at a lower rate of interest and upon more favourable terms as regards repayment than it could raise a similar amount in present-day circumstances.
The Minister says the right thing for the Board to do, the business-like thing for the Board to do, was to take the £800,000 which it would borrow upon very onerous terms, and redeem the £800,000 of capital fruitfully invested, which had been borrowed upon more favourable terms. He says that because the Board did not do that, did not do what no business man in his senses would have done, the Board, is to be criticised, but the chairman of the Board, a public financier of wide experience, and the managing director of the Board, to whom all credit has been given by the Minister, and everyone in this House for the inception of the Shannon scheme, for the enthusiasm which drove it through, are to be virtually dismissed from their offices because, having the interests of the undertaking at heart, being just as anxious to see that undertaking succeed as the Minister, they had the temerity to differ from him as to the way in which this £800,000 was to be used, and differ from him in exactly the way in which an acute, keen, conscientous, earnest, business man would differ from him if he had to choose between the two propositions, the proposition put up by the Board, and the proposition put up by the Minister. Merely upon business grounds alone, if upon no other, I think the Board is justified in the action which it took so far as this £800,000 of transferred liabilities was concerned.
There is just one other point before we leave this. If the Board's contention is correct that it was empowered under the Act to provide for the liabilities of the transferred undertakings out of capital, then the Board has not overspent one penny piece. The Board has entered into capital commitments to the very limit of its £2,500,000, exclusive of working capital. It has entered into commitments for new plant and equipment up to the extent of £2,500,000. That is what we actually provided. Not being at all biased in favour of the Board, or against the Minister, having read the Minister's statement and the Act, and listened to the speeches made in this House, I have come to the conclusion that in providing for that expenditure of £2,500,000 the Board was acting within its rights in the matter, and that so acting within its rights in the matter it has not overspent one penny piece. If it has not overspent one penny piece, what is the reason why the Minister virtually demanded the resignation of the former managing director and the former chairman of the Board? Surely there must be something else behind it.
I should like the House to bear in mind that the Minister has not challenged the action of the Board in regard to its relations with labour, in regard to the manner in which it has conducted a considerable number of ordinary trading activities outside of and apart from the generation and transmission and local distribution of electricity. He has not questioned its conduct under any one of these heads, so far as we know. He dare not question its conduct, because whatever the Board did, either in relation to labour or in its relations with ordinary private traders in this country, the Minister upheld and sustained it on every occasion. Deputy Briscoe, acting, as he was entitled to act and was bound to act, on behalf of a number of his constituents, on many occasions put questions in this House to the Minister as to the manner in which the Board was conducting its business. I do not think that on a single occasion he got a civil reply from the Minister. Whenever the various collateral and amending Bills to the main Electricity Supply Act were before the House, whenever a member of the House, whether a member of this party, or of the Labour Party, or an Independent member, endeavoured to get any information from the Minister as to the conduct and affairs of the Board, invariably he was treated by the Minister with the utmost discourtesy, until it became painful to sit in the House when any business in relation to the Shannon electricity undertaking was under discussion. Is not that a fact? If, as a result of all this, the Minister has now come to the conclusion that the Electricity Supply Board cannot make a success of the Shannon undertaking, if he has come to the conclusion that things have not been done properly inside the organisation of the Electricity Supply Board, surely he ought to come to the House and put his cards on the table and give to the House at long last the information which he has denied it during the past three years. Even if the Minister's contention in regard to the £800,000 of transferred liabilities was the correct one, surely the Minister cannot wash his hands of all responsibility for the position in which the Electricity Supply Board and this House now find themselves. He has stated that this question became an issue between him and the Board in 1928. He stated that early in December it became clear that the liabilities of the Board had already exceeded the £2,500,000 granted by this House. In June he had not any doubt about it.