Dáil Éireann debate -
Wednesday, 27 Nov 1940

Vol. 81 No. 5

Committee on Finance. - Electricity (Supply) (Amendment) Bill, 1940—Committee.

Section 1 agreed to.

SECTION 2.

(1) Sub-section (1) of Section 5 of the Liffey Reservoir Act, 1936 (No. 54 of 1936), is hereby repealed and in lieu thereof it is hereby enacted that the total amount of the sums advanced to the board under Section 3 of the Electricity (Supply) (Amendment) Act, 1931 (No. 32 of 1931), shall not exceed the sum of ten million, two hundred and fifty nine thousand pounds.

Mr. Cosgrave

On behalf of Deputy McGilligan I move amendment No. 1:—

In Sub-section (1), line 17, to delete the word "ten" and substitute therefor the word "eight."

The proposal here represents a fairly large increase in borrowing by the Electricity Supply Board, and the intention in putting down the amendment was to ensure that proposals would be brought before Parliament as required. During the next three or four years it might not be considered necessary to give the House any information other than the accounts of the undertaking. I am not exactly putting forward that suggestion for consideration as this organisation will come regularly before the House in the normal course, and it might be just as well that it should not be subject to too much investigation, regimentation, or interference, as then it might not get on with the work. There are, however, phases of the undertaking that are almost bound to require some notice. For example, there was the Minister's statement on the last occasion the matter was before the House, that the State was making some money out of the advances it made to the Electricity Supply Board. Personally I could find no justification whatever for that course. It is not easy to see what justification there would be for profit being made out of the undertaking. Of course, it is understandable that it might be next to impossible to strike a balance and to make sure that money was not being made. The House would be prepared to admit at once that if a balance was to be struck it ought to be a credit balance. For the last two or three years the balances have been favourable, amounting in the aggregate to something over a quarter of a million. Speaking from recollection I think the favourable balance the year before last was £260,000, and about £50,000 last year.

The principle upon which this undertaking was initiated and progressed for a number of years was that there were to be no profits. It is quite true that there is a school of thought, if such a description correctly describes it, which is in favour of making money out of municipal undertakings—and the Electricity Supply Board is a municipal undertaking within the meaning of that term—and that money so made could be devoted to other purposes. There is the other school of thought which takes the line that a large undertaking such as this, fulfilling a purpose of public utility, should not make money but should give value. On the Second Reading I asked, if money was being made, that it should be used for the purpose of extending benefits which are at present somewhat restricted for one cause or another. However, the view is that if it is making money the State is entitled to it, seeing that the State took the risk. There we have an entirely new set of circumstances, in which it might be advisable to consider the whole question anew.

If for no other reason than the one I indicated, we should get first-hand information about the profits being made by the Treasury Shylock or the Finance Shylock, and also as to whether the intention is to make this a money-making concern and to restrict its operations, so that it will be always a money-making undertaking. If for no other reason, then, there is a case for a reduction of the sum asked for. In the figures with which the Minister favoured the House there is a fairly considerable Civil Service round-off amounting to £342,650. Of course, these figures are balancing ones, and in this case amount very nearly to 9 per cent. of the sum involved. The restriction of the advance from £10,000,000 to £8,000,000 will not interfere with any work being undertaken at present, but may merely require an application for sanction of any increase. That would give the House an opportunity of getting further information about the developments which we first heard of when the Bill was before the House recently.

Mr. MacEntee

It would be most unfortunate if the House were to accept this proposition. I can assure the Deputy that one of the results would be to hamper very much the Electricity Supply Board in the very difficult circumstances in which it now finds itself. I am not sure whether, when this amendment was put down, the Deputy who was responsible for it had not in mind the thesis which he developed on the Second Reading of the Bill: that in some way or other the Electricity Supply Board had exceeded its authorised expenditure and that he felt it was necessary, in view of the statements of the Banking Commission, that something should be done by this House to exercise a more rigorous control over the board in its undertakings. In that connection, I should like to point out, first of all, that all this Bill does is to authorise the Exchequer to make advances to the Electricity Supply Board. If the Exchequer does not make those advances and if the Electricity Supply Board is not able, out of its own reserves and resources, to finance its future commitments — commitments which are now envisaged up to a date somewhere in 1942—the only result will be to prevent the Electricity Supply Board proceeding with the further development of an electricity supply in this country.

When the Second Reading of the Bill was before the House, we were exhorted from many quarters that more should be done to bring the benefits of an electrical supply to people living in the rural areas and living outside our larger centres of population. The board cannot do that without resources. I do not want the House to assume from that statement that the greater part of this money is required for the purpose of proceeding with schemes of rural electrification, but undoubtedly, whatever may be the intentions of the board in that regard at the moment, whatever tentative steps they may have made towards extending the electricity supply, they will have to bring those efforts to an end and have to leave their plans unrealised, if this amendment is passed.

In relation to the point which the Deputy has made, that the State has been making profits out of the board, I should like to say that, on the whole, I think a small profit has accrued to the State, as a result of its financial transactions with the board; but in that connection we have to remember that a number of critics of the policy of the Electricity Supply Board and of the policy of the Government in relation to the question of a more extended public electricity supply, advanced the argument that the country as a whole was paying for this undertaking, and that a large section of our people were getting nothing out of it in return for the sacrifices they were making and had made in order to provide this uniform electricity supply for the greater part of the 26 Counties. Now, the answer to that is one which, I think is incontrovertible; so far as the general bulk of our population is concerned, they have not been at any loss through the development of an electricity supply here; those who are non-users of electricity have not had to make any sacrifice in order to provide this electricity supply. On the contrary, in so far as profits have accrued to the Exchequer, there has been some gain to them.

Deputy Cosgrave coined a pictuesque phrase when he said that we ought not to allow the Treasury Shylock to make profits out of the Electricity Supply Board. At the same time, he admitted that it was next to impossible to strike that nice balance from year to year which would ensure that no profits would accrue to the Exchequer and at the same time that the Exchequer would suffer no loss. He also admitted that, if a balance had to be struck, it was better to err on the right side. That is my view too; I think that, when the question of the rates of interest charged by the Exchequer for the money advanced to the board is considered, one thing we have to be careful of is that, while we do not wish that the Exchequer should make an undue profit, at the same time the Exchequer—and the general public, whom the Exchequer represents in this matter—will not have to suffer any loss. Therefore, in fixing our rates of interest, account has to be taken of the risks which are inevitably associated with any engineering undertaking, no matter how sound, how long established, or how secure it may be in its monopoly.

The electricity supply scheme here has been very fortunate. We have considerable sums invested in it, yet we never have had—so far as my information goes—a major break-down or a major accident. However, let us not fool ourselves that an undertaking of this magnitude is, or ever can be, immune from the physical risks which are always associated with large-scale engineering works of this kind. Apart from all the other considerations, when the Exchequer has to fix the rate for advances, it has to bear also two other things in mind: that the rate will not be excessive—that it will not be a rate which is designed to secure profits for the Exchequer— but that it must be a rate which in all reason is not going to involve the Exchequer—and, with the Exchequer, the ordinary common people—in any loss through the operations of the board. It is on that basis that the rate of interest charged on advances has been fixed. Because the undertaking has had a favourable history and has enjoyed comparative prosperity, I think—it is only an opinion, as the calculation would be a very difficult one—that, on the whole, the Exchequer has made some profit, and the public, as a whole, has suffered no loss, and any particular section of the community which does not use electricity has been at no loss either. Accordingly, the contention made here in the debate, that this section of the community was paying for the whole thing and getting no benefit out of it, is not a tenable one.

In regard to the amendment itself, I should like to say again that it would be very unfortunate if it were adopted by the House. If any fault is to be found with the fact that we are coming to the House asking for authority to make additional advances up to £4,000,000 instead of the customary figure of £2,000,000 or £2,500,000, which has been more usual and which has characterised most of the other Bills relating to this matter, that position is due to circumstances over which we have had very little control. It had been the intention to introduce, early in the financial year 1938-39, a Bill of this sort to make the necessary provision. Owing to the situation which was created in the autumn of that year and the growing tension in international affairs, it was difficult for the board or the Minister for Industry and Commerce or the Minister for Finance to envisage what the requirements would be ultimately. We tried to get down to a firm figure before bringing it here before the House.

In addition to that, we had negotiations in regard to the pension rights which the board was anxious to confer on some of its staff. We hoped to be able to bring in that as part of the measure which is now before the House. Because, therefore, we were not able to reconcile all the interests involved in that matter, and for the reasons arising out of the international situation which I have already mentioned, we were not able to get this Bill in form to submit it to the House until now. In the meantime, the board has had to proceed, and has been able to proceed, with a great deal of development work, to carry out its plans, not in defiance of the Dáil—because the commitments which the board has entered into were authorised by the Minister for Finance who would afterwards have to come and justify himself to the Dáil—but with the knowledge that, if it could finance these extensions until such time as we were able to come to the Dáil, then the Dáil would be asked, in due course, to make these authorised advances to the board. Now, if the board had not gone ahead it would simply have meant that it would be held up in relation to the Poulaphouca scheme and the extension of the networks which has taken place to meet the growing demand for electricity here, so that there would have been a general hold-up in electrical development which in present circumstances would have been proved to be very unfortunate. Fortunately, the board was able to utilise part of its reserves to undertake these extensions. But now the point comes, in the view of the board and in our view, when it would be better that the board should be put in a position of greater liquidity in regard to its reserves. The money which is now being asked will be utilised by the board to replenish its reserve fund and to reinvest it in liquid assets rather than in the fixed assets in which it is at the moment involved. If we do not give the board the amount which is necessary to do that, about £1,900,000, and to meet other commitments amounting to about £250,000 which are falling due: if we do not put the board in a position to do that and at the same time to provide for its programme over the next two years, I think it would be considered that we will have taken a very short-sighted view of the situation.

We are, therefore, in this position: that if the amendment is carried the board will have to make a very unfortunate choice; it will either have to decide not to proceed with any further development, or it will have to forgo putting its reserves in a liquid position. I think it would be very undesirable from any point of view to compel it to accept either course. Accordingly, I would ask the Deputy not to press this amendment. In doing so, I am not to be taken for a moment as suggesting that there is not something to be said for the point of view which was submitted to the House by Deputy McGilligan on the last occasion and by Deputy Cosgrave himself here this evening. I think it is a useful thing that, from time to time, the operations of this undertaking should be reviewed here in the Dáil. I have not any objection to that. It is, of course, fundamental that, so far as the transactions of the Exchequer and of the Electricity Supply Board are concerned, they should only take place under the authority of the Dáil, but, in the light of the past year or 18 months, I do submit that there is in this instance a case for extending consideration to the board, and, if the Deputy likes, to the Minister for Industry and Commerce.

Mr. Cosgrave

It would be much more pleasing to me if the regulations under which this particular body operates were laid down, and that we heard more than that it had carried out its duties and responsibilities in accordance with those regulations. I am not so sure that a big undertaking of this kind, if it is properly managed, efficiently run, and provides a competent public service, is improved in any way by having its business considered here in this House. On the other hand, there is the question of the waste of time that is involved in connection with these matters. All the reports on the running of the board go through, I suppose, various officials in the Minister's Department, ultimately reaching him with comments upon them. The kind of information given passes through the hands of practically every official, the files passing from one to another. I am against all that. That is all humbug, in my opinion. It is one of the excuses given for the existence of what is called a public service. Sooner or later, if ever there is another revolution in this country, this public service will, in my opinion, be suspended from the lamp posts— prior even to the Ministers.

But, to come back to the business of this, the Minister says there is a risk. The Minister either means that, or he does not. If there is a risk, where is his insurance? He is making a profit for the Exchequer. He is giving to the taxpayer and the ratepayer of to-day the public service which this board is providing. Current is being generated at a moderate price, but the Minister is making a profit on the money that is being lent to the board. Let us contrast that with the position on the day on which the risk is going to take place. If there is a risk, then the catastrophe is going to occur some time within the next five or ten years.

What is the ratepayer and the taxpayer of that period going to get? He is going to get no profit, but will have to bear any loss that may arise from the breakdown of this undertaking. Even the Civil Service cannot justify these two cases. It cannot justify a profit on the one hand being put into the Treasury, the Shylock of to-day, and, at the same time, say to a man within the next five or ten years that he is going to run a risk and meet a catastrophe. If there is a risk give us an insurance, and put that into some fund that will be there when the time comes. But we have no right to be spending that money to-day. If there is a risk there must be on the part of somebody, either on the part of the board itself or of the Government, a sinking fund or a compensation fund to deal with that situation. But the Minister knows as well as I do, that there is no risk, and that there never was a risk, except in the mind of some befogged political humbugs, who were criticising it. The Minister knows them as well as I do. They were from the leader of his own Party down to the last man who came in, Deputy McCann, who did not know anything about the finances of the Dublin Corporation on the previous day here.

Mr. McCann

I did not mention the finances of the Dublin Corporation at all, if the Deputy is alluding to my references to the Pigeon House.

Mr. Cosgrave

I am. The Deputy said that the Dublin people were paying through the nose.

Mr. McCann

I think they are.

Mr. Cosgrave

That is quite understandable. That sort of thing is befogged political humbug.

Mr. McCann

Dublin takes 33 per cent. of the total load, and Dublin would have taken it if the Pigeon House had been left to go ahead as an individual station. That was my argument.

Mr. Cosgrave

That was the Deputy's statement, not his argument, because it is not an argument at all. The fact of the matter, if the Deputy wants to know, is that the people of Dublin put £50,000 out of the rates into the Pigeon House undertaking, the mains and all the rest of it, and sold to people who could buy electricity in Dublin over a period of 30 years, and when the Commissioners heard that the undertaking was to be taken over, they reduced the price and sold it at a lower price than ever it was sold at, and when the electricity undertaking took it over they sold it at a still lower price. It is through the pocket they are paying, not through the nose, and they never paid less.

Mr. McCann

They would be getting it cheaper now.

Mr. Cosgrave

They had 30 years' experience of high prices and five or ten years' experience of low prices, and they have the Deputy's promise that they would get it cheaper still. That is the advantage which every political humbug in this country has—he can always promise something.

Mr. McCann

You did your share of humbugging in your time.

Mr. Cosgrave

I showed results, something which the Deputy and his Party never showed and never will show——

Mr. McCann

Results which we will never forget.

Mr. Cosgrave

——if they were to live for a thousand years. If there is a risk we want to understand whether some sort of insurance is going to be made in respect of it, but the Minister, as I have said, knows that there is not. I suppose he probably knew more about this than other members of his Party, and he knew that all their talk and criticism in regard to the Ardnacrusha undertaking—the Shannon scheme, as it is called—was all bunk.

We come to the second point, that is, development and the advantages which the people who are not consuming electricity at present are going to get. There is none here. There are extensions provided for, but no particular provision is made in respect of the advances for what we call an uneconomic extension of the undertaking. I suggest to the Minister that a very good method of utilising these balances, which I expect are going to arise year after year, could be found in that direction, but there is no provision for it in the present undertaking. We are not going to hamper any extension at all by reason of passing this amendment. What we would do is probably defer this power station at Portarlington, which is on a different basis altogether from any consideration which agitated the minds of those who were concerned with electrical development here from the beginning.

Electrical development, as such, had one basis—low production costs and efficient and continuous production. This is a new thing altogether. It is something to justify, if we like to use the term, the activities of certain Ministers during the last few years in connection with peat. It is a matter which ought to stand on its own basis, which should be considered entirely apart from the normal electricity development of the country. It is not fair either to the consuming public or to the people who take in current for power that they should be saddled with whatever extra cost, if any, there is in respect of this. That, I should say, is the main purpose of Deputy McGilligan's amendment. If that particular sum were deducted, if the sum which I say is a purely Civil Service figure, £342,650, were taken out, you have the main portion of the £2,000,000 on production.

It is obvious, on reading through the whole list of money to be expended, that there is more than a year or two years in contemplation. They probably have gone as far as the third year, and even if the case is put up that you do want a third year, and that those two things should be deducted, that you should take off a million pounds, I should be satisfied, but I have no objection, so far as an experiment is concerned, to dealing with that matter if it is dealt with on its own basis. It is just about as sensible as—I suppose it is far more sensible than—the destruction of the calves. It is probably a better proposition than the industrial alcohol, but those two things stood on their own basis. They were provided for; we put down the money in the case of the calves and said: "We are prepared to pay for it and we know what it is." The Minister said he thought we were going to make a great thing out of it, and in regard to industrial alcohol we were told that, if a war came, we might not give a damn about petrol. We know exactly where we are in regard to them, and we ought to, because there is a certain amount of speculation, and the Minister appreciates as well as anybody else what a speculation is.

I am concerned with three main items. The first is the generation of electricity as efficiently and as cheaply as it is possible to make it, the contributory factor to that—the second item— being cheap money. The State, to my mind, has no right of any sort or kind to make a single sixpence out of lending the money. It was not contemplated originally that they should, and, as a matter of fact, most of the taxpaying community are electricity consumers and you are taxing them again if you are going to make money out of the money lent to the electricity undertaking. The third item, which I will admit at once is not on the same basis as the other two, is that there should be a gradual extension on a certain basis each year to the agricultural community of the benefits of the electricity undertaking, and that is justified on the ground that as there is an expectation each year of a certain balance, and as it is not possible so to regulate the exact fraction in the prices set down for current as to ensure that there will be a balance, an effort should be made to make a fair profit of £30,000, £40,000 or £50,000, and that that should be devoted towards extending the service.

There is a justification for that, although, at first glance, it looks as if it were a tax. Ultimately these people will be consumers and, ultimately, out of them some money will be made. At the moment, the costs of the extension to these people would not be covered by the revenue derivable from it, but in all circumstances the normal amenities to which people in the country are entitled ought to get special consideration. When an agriculturist comes to Dublin and gets the advantage of the lights we have on the streets, and then goes to his country town and possibly gets the same advantage there, there is no reason why, if, in the normal course, particularly when one cannot be too exact about the prices fraction that is going to be charged for units of electricity, that money should not be used in the way I have suggested.

If by reason of the extension of electric current to these people, agricultural production can be undertaken at a lower cost, there is an advantage to the community, even though they may not immediately share it. That is on a different basis from what the Minister has in contemplation when he says that the whole country benefits by whatever profit the Ministry of Finance makes by lending money. In this case, the extension makes the country still more attractive, and it enables people to make more profits in what is, perhaps, the least profitable of our activities at present. It, ultimately, has the advantage of bringing in the consumer on a profitable basis. If it were only for the purpose of getting the board's view on the third point, there is a case for this amendment. If the Minister will meet us by going half way—£9,000,000 instead of £10,000,000—perhaps we could find accommodation.

Question: "That the words proposed to be deleted stand"—put and declared carried.

Section 2 agreed to.

SECTION 3.

(1) For the purpose of removing doubts it is hereby declared that the powers and functions given to the Board by sub-section (3) of Section 20 of the Principal Act include the construction, maintenance, and operation of electric generating stations designed for using peat as fuel either alone or together with other kinds of fuel and every reference to the powers and functions of the board contained in the Electricity (Supply) Acts, 1927 to 1935, shall be construed and have effect accordingly.

An Leas-Cheann Comhairle

Amendment 2, by Deputy Norton, has been ruled out as being outside the scope of the amending Bill.

The following amendments were in the name of Deputy McGilligan:—

3. In sub-section (1) line 30, before the word "electric" to insert the word "such".

4. In sub-section (1), line 32, after the word "fuel" to insert the words "as the board may think fit".

5. In sub-section (1), line 34, to add at the end of the sub-section—"but not so as to take from the board its discretion as to whether and when the said powers and functions or any of them are to be exercised and its responsibility, and liability in connection therewith."

Mr. MacEntee

These three amendments were, probably, intended to be taken together.

Mr. Cosgrave

Yes. I move amendment No. 3, on behalf of Deputy McGilligan. The purpose of the amendments, if my interpretation is correct, is to make sure that, in the initiation of this new generating station for the purpose of utilising peat, the board's discretion will in no way be interfered with. A paragraph in the last report of the Electricity Supply Board leaves room for doubt as to whether or not the board has been satisfied regarding the efficiency of this scheme. We have no objection whatever to the Government bringing in a scheme for generating electricity in some other way than it has been done up to the present—that is, by water power or by the two steam undertakings at Cork and the Pigeon House. But there is an objection to suggesting from outside to the board that it should undertake the generation of electricity by some new method, if the board has not been completely satisfied regarding the efficiency of this method. The purpose of the amendments is to ensure that the board will be the responsible body. Once that is laid down, then the board can undertake the work at its own risk. If it is not satisfied that the proposition is economic, then it should not adopt it. It is open to the Government to proceed with the scheme in some other way and sell current to the Electricity Supply Board on terms and conditions to be agreed between them. In that way, everybody can be satisfied. If the Minister is satisfied that the new scheme is a sound one, it ought to be able to stand by itself. If on the other hand, it is a sound but expensive scheme, some body, other than the present consumers of electricity, should contribute towards it. Then it assumes the national mantle, and it can wrap the green flag around it with the money of the State in doing this work.

Mr. MacEntee

I am opposing those amendments, and am suggesting that they should not be pressed for the reason that they are not necessary. The section to which they refer is permissive only. It clarifies any doubts which may have existed as to the board's authority to proceed with the erection of a generating station of this particular type. It does not make it mandatory on the board to proceed with it. As I said, the effect is permissive only, and presumably if the board have any doubts or hesitations as to the wisdom of proceeding with the power station they will convey those doubts and hesitations in due form to the responsible Minister, and if that does not suffice make a reference in their annual report to the matter. I think it would be altogether unworthy of this House and certainly it would be a reflection on the board, to insert these amendments in the section.

Mr. D. Morrissey

I should like to ask the Minister a question. I take it that most of the experts on the matter in this country are at the disposal of the Electricity Supply Board—that their services are available to the board? Would the Minister say whether it was on a report from the Electricity Supply Board, fortified by reports from their experts, that this scheme was adopted, or was the scheme suggested by the Government to the board, and if so have the board had the scheme examined by their experts and have they made a report to the Government on that examination?

Mr. MacEntee

That is not the sort of question I can answer just pat.

Mr. Morrissey

Surely it is a very pertinent question.

Mr. MacEntee

The position in relation to this matter is that there has been a great deal of co-operation between the Electricity Supply Board, the Turf Development Board and the Department of Industry and Commerce generally with a view to seeing to what extent it would be possible to utilise our peat resources for the generation of electricity. As far back, I think, as four years ago a delegation consisting of representatives of the Turf Development Board and engineers of that board and of the Electricity Supply Board went to the Continent, investigated a number of electrical undertakings there which were using peat as fuel, investigated the method of winning peat, came back, and, as a result of that investigation, began to consider this problem. I gather that the Electricity Supply Board are satisfied, provided that the peat can be delivered to them in sufficient quantity, that the establishment of a generating station using peat as fuel is a practicable and economic proposition. That is the position, and that is all I can say on the matter.

Mr. Morrissey

Am I to take it from that that this scheme has in fact been examined by the experts of the Electricity Supply Board, and that those experts have reported in favour of it?

Mr. MacEntee

The position is that the Electricity Supply Board have examined the practicability of establishing a peat fuel generating station at Portarlington, and that they are satisfied that, provided the supply of peat on certain terms is assured, the establishment of such a station would be an economic proposition.

Mr. Morrissey

At the right price?

Mr. McGilligan

That is different from what the Minister said the other night; it was not merely a question of supply, but supply at a price.

Mr. Brennan

Is not that the position? That is our worry in the matter. From the experience this country has had of peat development, we certainly are not satisfied that there is any assurance whatever that the supply of peat at the price will be available. There is no assurance on that matter, and, as far as the taxpayers are concerned, apparently we have got to stand in in that regard. The Minister told us that on the last day when speaking on this Bill. As a matter of fact what the Minister said now is a repetition of what he said that last day—and that is quite true—that the Electricity Supply Board is satisfied, on certain premises, the premises being that the supply of peat fuel is available and available at a particular price.

Mr. MacEntee

In relation to the price of coal.

Mr. Brennan

Quite. What appears to me to be a very good reason for those amendments is that after all we must regard this as an experiment pure and simple, and it ought not to be mixed up with an undertaking like the Electricity Supply Board, which has its ordinary undertakings and which has its other responsibilities. Listening to the Minister speaking here the last day on this Bill, when he told us that if the Electricity Supply Board did not undertake this work the Government might be compelled to appoint another board to do it, I felt that the position is going to be that if there is a failure there is going to be a scapegoat. That is a very bad position, because if there is a failure the Government may make a scapegoat of the Electricity Supply Board, and the Electricity Supply Board may make a scapegoat of someone else. If you are going to have an "honest to God" transaction, you ought to avoid any possibility of a thing like that happening. Let them stand upon their experience and stand upon the character they will have to live up to afterwards, but let them not get away with saying: "We were never convinced that the thing was a good proposition but we went in on it". That is a bad position. This ought to be a separate transaction altogether. It is a very bad thing to mix it up with an undertaking like the Electricity Supply Board, which has its other undertakings, and so far has been a success. As Deputy Cosgrave has said, we are not opposing the development of peat fuel for the purpose, but we are opposing mixing it up with this other matter.

Mr. McGilligan

I notice that, when the Minister answers questions on this matter, he always brings in, as if they were inseparable twins, the question of the practicability of using peat as fuel and the question of making use of it. The two things are entirely distinct. I do not think there is anybody in this country foolish enough to say at this moment that peat cannot be burned and cannot be used as fuel for the generating of electricity, and emphasising its practicability to my mind is only a method of evading the general point, the general point being not whether peat fuel can be burned and electricity produced from it, but whether it can be produced economically. It is the economic side I want to stress. I notice again that the Minister has brought in the argument he brought in before, that the board wanted to have something in the nature of a guarantee that enough peat fuel could be supplied to it, and at a price. When the price is questioned the Minister always interjects the same formula, "comparable to the price of coal". Of course, the price of coal in recent months has varied, and we understand from the newspapers that it is to vary still more. If by any chance this country is put on the footing of the home market for coal it will vary considerably more. What is the standard that is being taken? Is it the extravagant standard of war conditions or is it the standard we hope to get back to in other conditions? Naturally, the answer to the question as to whether or not the thing will really be a working success will be entirely different according to the standard we choose. I put down three amendments to bring out in a very open and clear way what I thought was already contained in the Bill that is before us. The Bill that is before us says: "For the purpose of removing doubts it is hereby declared that the powers and functions given to the board by sub-section (3, of Section 20 of the Principal Act include the construction, maintenance and operation of electric generating stations designed for using peat as fuel." As I read sub-section (3) of Section 20, the very definite overriding consideration is contained in the last words, that is: "Subject to the provisions of this Act the board may construct, reconstruct, maintain, and operate electric generating stations, transformer stations... and operate such other lines and works as the board may think fit." If we read into this that whatever functions they have under sub-section (3) of Section 20 merely include the use of peat fuel generating stations, I imagine it has still to be read into the context of it that the board may maintain and operate "such other lines and works as the board may think fit". If that is the construction, it does not matter much whether the words I have sought to insert are put in or not.

I wanted to have it brought out here clearly—and I hope the Minister will tell us—what his idea is in having this Section 3 in the new Bill, whether it is to override the board's discretion or whether it still leaves it open to the board to say: "We do not think fit, on economic grounds, to operate these peat fuel generating stations and we will not do it". If that is the situation then, of course, no harm has been done, but I had understood from the Minister the last day a very contrary view. His line was that if the Government decide to construct stations, or rather to go on with peat development, then they are going to force their views on the board whether the board, on economic grounds, would be disposed to turn these suggestions down or not.

I had thought of putting down another amendment. I wonder would the Minister accept it. In 1927, when the main Act was under discussion, there was a great deal of trouble as to whether the board was to be put into the position to force people to take bulk supplies from it and, in the end, there was a clause put in which put the board in this position that they could insist on an undertaker taking bulk supply from the Shannon in certain conditions, but only in those conditions, and the conditions are set out in Section 56:—

"Whenever the board offers to an authorised undertaker or a statutory undertaker a supply of electricity in bulk to be supplied by the board or by another person at a rate of charge (including provision for any expenses necessarily incurred by such undertaker in taking such supply in bulk) which is equal to or less than the cost of generation by such undertaker..."

then there was compulsion, but not otherwise. Would the Minister like to impose that condition upon the board now—that the board must take a supply offered to it by a peat development concern if that peat development concern can offer the board a supply at a cost equal to or less than the cost of generation under the board's system generally? If he accepts that, then of course the situation is that the board have an economic point to meet. They simply say: "We have been offered peat fuel for use for the generation of electricity at such and such a rate. We think that would be higher than the cost of generation by our system. Therefore we reject it." If it is offered at a price equal to or less than the cost of generating on their own system then they are bound to take it. I suggest to the Minister that he should clarify the two points—(1) Is it right that notwithstanding Section 3 of the new Bill the board will still have its discretion as to rejecting the obligation to construct, maintain and operate peat fuel generating stations, and (2) will he accept as a principle that the board will not be put in the position to refuse any source of supply offered to them if the generating costs are not either lower than or equal to the cost of their own generating system?

Mr. MacEntee

With regard to the first point, I would like to say that as far as I am concerned, and as far as the statute is concerned, the board is fully free to represent to me that it is unwilling to proceed with this undertaking because it does not think it will be an economic one. I put it this way first of all, that as far as Section 3 of this Bill is concerned the sole purpose of it is to remove doubts which have been expressed by the board's legal adviser regarding the board's powers to erect generating stations. It does not impose any obligation upon the board as such to erect a generating station. If, in view of the discussion which has taken place, in view of the stage to which this project has been brought, the board wishes to make any representation to me in regard to this matter, I am perfectly prepared to listen to them. If as a result of that consideration the board thinks that it ought not to proceed with a peat fuel station at Portarlington then that is a matter which I naturally will have to take into account, and certainly the one thing I shall not try to do will be to get the board to proceed with a station of this sort against its better judgment, but—and this is the point which I think we must all bear in mind—if the board decides it should not proceed with an undertaking of this sort because of its experimental nature or of some other doubt which it may have, it will be necessary for me to come to the Dáil, I think, and to get power to constitute another authority which would proceed with the erection of a peat fuel station and —I think this would have to be part of the general provision—which would have the right to supply electricity to the board's networks at a price which would be subject to negotiation. In regard to that, the second point which the Deputy has made might arise and it would be a matter for discussion with the board, and perhaps ultimately here with the House, whether we should not have a section upon the lines of Section 56 of the Electricity Supply Act of 1927. But until that situation arises I certainly would not be prepared to bind myself by any undertaking in regard to such a provision at this stage. I hope it will not arise, because I think there is a great deal to be said for keeping the electricity supply system in this country under one hand and under one control. At any rate, the Deputy and the House may be quite easy, so far as Section 3 of this Bill is concerned; it does not bind or fetter the judgment of the Electricity Supply Board in any way. The section has been introduced simply because the board's own legal adviser said that it would be well to make it clear that the board had power to proceed with the erection of a peat fuel generating system.

Mr. McGilligan

I take it the gist of the Minister's answer to me is that the board's discretion and responsibility and liability still remain?

Mr. MacEntee

Still remain.

Mr. McGilligan

Very good. I want to have that made clear for this reason, that, year by year, their annual report is the only thing we get from the board as their return for the immense volume of public credit put at their disposal. I want to have it made clear to the board that they are bound to revert to this business in forthcoming reports. If they remain silent on it we are entitled, and the Minister would be entitled to say: "Very good; they have accepted this peat scheme as an economic proposition." If they do not, I expect to see some reference to it in the next report.

Mr. MacEntee

They had a reference to it in the last report.

Mr. McGilligan

And I know what they said. It was the most meagre reference. If that is considered the blessing of the scheme, the chill of death is already on the scheme.

Mr. MacEntee

I am not suggesting it is a blessing of the scheme.

Mr. McGilligan

Nobody could. "The availability of adequate supplies of peat will be an important factor in the economic operation of the station." Listen to this for a shifting of responsibility: "The Department of Industry and Commerce has assured the board that the production of the Clonsast Bog will be increased to meet the large demands of a generating station, and on the basis of these assurances..."—there is the board saying: "This is not our principle; it is the Department of Industry and Commerce"—"...on the basis of these assurances a suitable site has been selected." It is very anonymous. It does not say by whom the site has been selected. I read into that: "Not by us, the board."

Mr. MacEntee

I do not think the Deputy would be justified in reading that into it.

Mr. McGilligan

At any rate I am entitled to say it is impersonal. They do not say: "On the basis of these assurances the board has selected a suitable site." Look at the next phrase. It is sandwiched in between the assurance of the Department of Industry and Commerce and that steps are being taken to empower the board to proceed with this project. So that, on the one hand we have the Minister for Industry and Commerce giving assurances. On the other side we have the Government going to move the Dáil to give them these powers, and in between we have the impersonal phrase: "On the basis of these assurances a suitable site has been selected. I read that as meaning the board's warning to the public: "If the Clonsast development scheme is insisted on we are not responsible at the moment." They may become responsible afterwards, but I do want to have it clear from the Minister that the board have full discretion and, that being so, full liability and, that being so, they have a definite obligation under the conditions under which they were set up, to reveal to the public in the next report whether they think it is a sound scheme or not.

Mr. MacEntee

I do not question that at all.

Mr. McGilligan

I am made a little bit anxious when I look back on the debate here on the 6th November, reported in No. 3, of Volume 81, column 478. The Minister mentioned that the board's independence had been tampered with, and they had asked for a report on that matter. I then interjected: "And it was open to them to reject the suggestion of a peat fuel station?" There was in that a request for an answer, and the Minister replied: "Quite frankly, if they had said: ‘We are going to continue to depend on Welsh coal in future, without giving this matter a serious trial', I am not prepared to say that I would come to the House and ask it to endorse the policy of the board in that regard. I feel that I am entitled to represent to the board that, in present circumstances and in such circumstances as we may see for a reasonable period in future"—I took that to refer to the dear price of coal—"it would be better if the board could rely on native resources rather than on imported fuel." I then asked: "And the Minister, no doubt, made them aware of that feeling of his?" The Minister answered: "I have not expressed myself in those terms to the board, but I assume that the board are aware of the general Government policy in the matter."

Take that in conjunction with the very lukewarm phrase in the report made by the board, add these things together, and they would seem to indicate that the board do not want to handle this thing at all, as they are at present advised, and they are merely following it up on assurances given them by the Department of Industry and Commerce that certain steps would be taken to give them adequate power. In giving them such power they say they are not taking away from the board's discretion or its liabilities. The Minister has used certain phrases which will, no doubt, help them to form their judgment. I have no doubt that they are slightly coercive. I suggest that it would be far better if a second authority were set up, and if they were to be given the same prohibition as were the board in 1927.

If we had some opportunity of judging the generating costs of the board over the whole system, that would put the matter on a perfectly fair plane. If the Minister would say: "We want peat fuel developed and, as the Turf Development Board cannot hope to generate electricity from peat in sufficient quantity to supply the board at the rate at which they require it, we will add the necessary amount in order to bring prices down," then we would know where we are. It is a bad thing for a board that is finding its feet to hamper it with something that it does not want. If it does not want it, give it an opportunity of making clear that it does not want it.

An Ceann Comhairle

Does the Deputy wish to press the amendment?

Mr. McGilligan

In view of the interpretation of the section given by the Minister, I do not desire to press it.

Amendment No. 3, by leave, withdrawn.

Amendments Nos. 4 and 5 not moved.

Mr. McGilligan

I move amendment No. 6:—

At the end of the section to add a new sub-section as follows:—

(4) Separate and distinct accounts shall be kept under Section 7 of the Principal Act in relation to such electric generating stations designed for using peat as fuel either alone or together with other kinds of fuel as may be constructed, maintained or operated by the Board, and shall be subject to all the provisions of Section 7 of the Principal Act.

This amendment is put down in order to give the Minister an opportunity of dealing with the point I raised on the Second Reading. My submission is that separate and distinct accounts should be kept in relation to such electric generating stations as may be constructed, maintained or operated by the board—that is, peat fuel generating stations. The phraseology of the amendment is taken from the Fisheries Act.

Mr. MacEntee

Full particulars as to the generating costs at Portarlington will be published in the board's accounts.

Mr. McGilligan

Will they be published in such a way that it will be possible to make a contrast with the generating costs over the rest of the system?

Mr. MacEntee

Yes, with the other generating stations on the system.

Amendment, by leave, withdrawn.

Section 3 agreed to.

SECTION 4.

The board may invest any sum set aside under sub-section (2) of Section 21 of the Principal Act or accumulated by the board as a reserve for any purpose in such securities as may from time to time be approved in that behalf by the Minister for Finance.

Mr. McGilligan

I move amendment No. 7:—

In line 7, after the word "in" to delete the word "such" and substitute therefor the words "trustee securities or, at the option of the board, in such other".

The object of this amendment is to give the board the choice in regard to the securities in which they wish to invest. The section sets out that the board may invest any sum accumulated as a reserve for any purpose in such securities as may from time to time be approved by the Minister for Finance. The board are not always given power to invest in trustee securities. I want to ensure that the power to invest in ordinary recognised trustee securities will not be taken from them.

Mr. MacEntee

The whole position in this State in relation to trustee securities is very obscure and involved. The Department of Finance have been for many years trying to get a Bill drafted to clarify that matter. I do not know that the veto of the Minister for Finance in regard to any security would be exercised in a way that would be detrimental to the board. We may take it that virtually all the investments which the board would seek to make would be in trustee securities and there would be no unreasonable objection on the part of the Minister to the board investing in any of them. Not all of them, however, might be suitable for the purpose.

I do not know if it would be wise to put this phrase in the section, because the position in relation to trustee securities in this country is somewhat unsatisfactory, is very involved, and, as the list of trustee securities is liable to change at short notice, the board might find themselves holding undesirable securities simply because it might happen that at the time the investments were made those securities were on the list. I have, more or less, an open mind about this amendment, but I understand the Department of Finance do not like it, and I would not like to accept the amendment against their wishes.

Mr. McGilligan

If the matter of trustee securities has been gone into, and the list is likely to be changed, then if this phrase is brought into this Bill it will be all the more applicable. I do not want to see the board forced to invest their money in, let us say, the Turf Development Board.

Mr. MacEntee

This is the real gist of the matter, that there may be securities on the trustee list which the Minister for Finance might think ought not to be approved of. There are some which might not be approved of and, if we insert the proposed words in the section in accordance with the Deputy's wishes, it would mean that so long as the securities were on the trustee list, whether they might be desirable or not, the Minister could not withhold his approval.

Mr. McGilligan

It would be open to the board to invest their money in either trustee securities or other securities. The board would have the whole responsibility. I do not want the Minister to have the power, by making a restricted list, to force the board to invest in some fund which he might approve of but which would not meet with their approval.

Mr. MacEntee

Of course, the Minister would have a big interest in this matter.

Mr. McGilligan

My point is that we may likely see how the whole scheme of the development of an electricity supply can be warped because of a subordinate matter such as the Turf Development Board. I do not want to give the Minister power to regard certain securities as approved securities for the investment of the board's money. If the Minister say: "These are approved securities for the investment of all moneys", that would be one thing.

Mr. MacEntee

Perhaps the Deputy would consider these words in substitution for those suggested in the amendment—"Trustee securities approved by the Minister for Finance".

Mr. McGilligan

Then again the limitation may operate. The Minister may so restrict them that the board may be forced to invest in non-trustee securities of a type they do not like.

Mr. MacEntee

I think we may take it that if the securities were on the trustee list, the board would have a wide range of choice. The only question would be whether the Minister for Finance, with the knowledge which he would have in relation to these securities, should have the right to point out that there are some of these securities which are rather precariously on the trustee list.

Mr. Hickey

Does Deputy McGilligan want the board to be free from any interference by the House?

Mr. McGilligan

I want them to be free from interference by the Minister for Finance. When we get a statement of the securities at the end of the year, the board will be open to the criticism of the House for having invested in these, but once this clause passes they are free from that criticism by the House, because the board can say: "We invested in securities selected by the Minister for Finance".

Mr. MacEntee

If the Deputy will withdraw the amendment at this stage, I shall look into the matter between now and the Report Stage.

Amendment, by leave, withdrawn.

Section 4 ordered to stand part of the Bill.

SECTION 5.

Sub-section (1) of Section 98 of the Principal Act is hereby amended by the addition at the end of the said sub-section of the words "or with the survey, erection or laying of any such electric wires" and the said sub-section and sub-sections (2) and (3) of the said Section 98 shall be construed and have effect accordingly.

Mr. McGilligan

I move amendment No. 8:—

In line 11, to delete the word "survey".

I put this amendment down in order to get some clarification as to the meaning of the section. What does the word "survey" mean when you take it in the phrase "survey, erection or laying of any such electric wires"? I understand what the erection or the laying of a wire means, but I do not know what the surveying of a wire means.

Mr. MacEntee

I think it is the survey of the route.

Mr. McGilligan

Grammatically it is wrong.

Mr. MacEntee

If we leave the matter over until the next stage I shall have it examined.

Mr. McGilligan

It may be that the electrical engineers understand the term.

Mr. MacEntee

It is a survey of the route over which the line is laid.

Mr. McGilligan

It is interlocked with a section dealing with the knocking of trees.

Amendment, by leave, withdrawn.

Section 5 ordered to stand part of the Bill.

SECTION 6.

Question proposed: "That Section 6 stand part of the Bill."

Mr. McGilligan

We are going to have all these Acts cited together and included in these Acts are various Electricity Finance Acts. We are here asked to vote a sum of £10,259,000. I think when I canvassed this matter on the previous Stage, the Minister told me that I need not be worried because the board had in fact £2,000,000 on hands. That is a loose version of what he said, but it amounted to that.

An Ceann Comhairle

Might I point out to the Deputy that Section 6 is the Short Title?

Mr. McGilligan

It deals with the citation of the various Acts. I admit that it is a rather tight rope on which I am walking.

An Ceann Comhairle

Very taut indeed.

Mr. McGilligan

Perhaps, with your permission, Sir, I might be allowed to seek some clarification.

An Ceann Comhairle

Might not the Deputy reserve his remarks for the Report or Fifth Stage?

Mr. McGilligan

I intervene, as I say, only to get some clarification on certain points. As reported in No. 3, volume 81, page 458 of the Official Report, the Minister stated, in reply to some remarks of mine: "Under the various statutes which have been passed by the House from time to time, advances up to a sum of £9,289,000 have been actually authorised, and the sum actually advanced totals £7,043,000, so that it would appear, even from these figures, that the board had unutilised authority to the extent of over £2,000,000." If that is right, why do we re-vote them £2,000,000 in the sum that is now being voted?

Mr. MacEntee

I do not think the Deputy can take that expression of mine out of its context. After all, he accused the board of exceeding its authority earlier in his speech, to the tune of £2,000,000. I think perhaps we are both a little at cross-purposes. I have read the Electricity Supply Acts and I have not seen where any limitation is imposed upon the board in regard to its spendings. I have read the Acts carefully. There is a limitation imposed upon the Minister for Finance as regards the amount of advances which he may make to the board, but the suggestion which the Deputy made in his Second Reading speech was that the board had exceeded its authority and entered into commitments without having statutory authority. I do not see in the Acts, so far as I have read through them, any limitation on the board in regard to this matter. I do not see where they are bound, before they enter into commitments, to come to the Dáil for authority. There is a provision relating to certain expenditure for which they must get the authority of the Minister for Finance, but they did in this case get the authority of the Minister for Finance to enter into certain commitments, commitments which, if they had not been able to finance them from their own resources, would have meant that they would have had to rely on borrowed money but they were warned in that regard. The position in relation to the extent to which the board had had to call on the Minister for Finance to make advances to them is, as I have said, that the Minister has authority from the House to make advances up to the sum I mentioned, £9,289,000 and the sum actually advanced totalled £7,043,000. There is one reservation in connection with that sum which I should have mentioned, namely, that a sum of approximately £530,000 is specifically ear-marked for the extension of storage on the Shannon lakes. The rest of the authorisation granted by the House related to moneys required for the general purposes of the board. There has always been a fair margin between the amount actually advanced to the board and the amount which the Minister for Finance has been authorised to advance, and it is considered by the Minister for Finance that that margin should always remain on hands. Accordingly, so far as the board is concerned, they were not guilty of the over-spending which the Deputy ascribed to them. So far as the Minister is concerned, he is protected by the authority which he has already been given. It is felt that that authority should be there, because the Dáil cannot always be requested in due time to deal with these matters. For that reason I think that the position is not at all as irregular or as objectionable as Deputy McGilligan suggested it was.

Mr. McGilligan

I was misled——

An Ceann Comhairle

Surely the Deputy does not intend to originate a debate at this stage on all these matters?

Mr. McGilligan

Having raised it at all, I prefer to finish it now rather than leave it over. However, I am in the hands of the Chair. On the Second Reading I was presented with a White Paper, the second paragraph of which states:

"Under Section 5 (1) of the Liffey Reservoir Act, 1936 (No. 54 of 1936), advances to the board as authorised by Section 3 of the Electricity (Supply) (Amendment) Act, 1931, were limited to £6,259,000, and it is now proposed that an additional sum of £4,000,000 should be made available for the purposes of which details are appended."

There was a simple statement: the advances to the board as authorised were limited to £6,259,000 and we want £4,000,000 more. I questioned that and I was told that under the various statutes passed advances up to a sum of £9,289,000 have been authorised. That paper says that £6,000,000 was the limit. The Minister, in any event, said that the sum really advanced totalled £7,000,000 odd. The board have unutilised authority to the extent of over £2,000,000. If they have, then let us see what the limit of their unutilised authority will give as against this £4,000,000 here. Let us add that £2,000,000 to the already limited figure of £6,000,000 and we get £8,000,000. The board are a statutory authority. They have no power except such as is derived from the Acts. I look at Section 12 of the original Act of 1927 and I find that the Minister is there empowered to advance authorised sums and there is a limitation on the total amount of the sums that may be advanced to such-and-such. There is nowhere in any Act power given to the board to borrow. If they cannot borrow, they must live entirely by the advances made by the Minister. If they have engaged in commitments ahead of the Minister's authority, then they have done wrong. That is my simple proposition. I do not know whether they have or not.

Mr. MacEntee

I want to make it clear that they have not.

Mr. McGilligan

I was told that, so far was that from being the case, they had £2,000,000 in hands.

Mr. MacEntee

No. I think if the Deputy will read my statement he will find that he was not told that the board had £2,000,000 in hands. He was told that advances up to a certain figure had been authorised but had not been availed of.

Mr. McGilligan

They could only be authorised if the statutory authority was there for that. There was, therefore, statutory authority to advance money to the extent of £9,289,000. Advances to that amount had been authorised, but the board had not utilised those—they had fallen short by about £2,000,000. We are now giving further authority for £4,000,000, and leaving an unutilised £2,000,000 still in reserve. If we are, I object to that.

Mr. MacEntee

Not at this stage.

Mr. McGilligan

There is £2,000,000 floating around, and I hate to think of such a big sum as that being vaguely floating around.

Mr. MacEntee

If the Deputy will read what I said to Deputy Cosgrave he will find——

Mr. McGilligan

To-day?

Mr. MacEntee

Yes. I think he will find it made clear.

Mr. McGilligan

I want to say that one serious thing has emerged, and that is that the Minister apparently feels that the board has a right to make commitments in advance even of Ministerial authority.

Mr. MacEntee

I have not stated that.

Mr. McGilligan

Let us get away from the phrase used. It is clear that the Minister is convinced that the board have no such authority, and that the board should not make commitments in advance of Ministerial sanction.

Mr. MacEntee

That is so.

Mr. McGilligan

I take it from the Minister's precise words that the board have not erred in that matter.

Mr. MacEntee

They have not.

Mr. McGilligan

They have not even committed themselves to the extent of a five pound note ahead of Ministerial authority?

Mr. MacEntee

So far as I know they have not.

Mr. McGilligan

They have not certainly committed themselves to the extent of £100,000 in advance of Ministerial authority?

Mr. MacEntee

I think not. I have no reason to believe that they have. I know that they have received Ministerial authority for commitments to the extent of £2,150,000. I assume that when they asked for authority to that extent they have not gone and spent £100,000 in excess of that.

Mr. McGilligan

It is only assumption.

Mr. MacEntee

What else can it be until the auditors tell us?

Mr. McGilligan

We had the Minister's statement as to the unutilised moneys, the fact that we were told the advances were limited to £6,000,000, and that they wanted £4,000,000. I put these two things together and I reached this conclusion, that they had in some way or another got in advance of the Minister by something short of £2,000,000.

Mr. MacEntee

They have not.

Mr. McGilligan

Then I will read what was said on Section 2.

Question put and agreed to.

Title put and agreed to.

Bill reported without amendment.

Report Stage ordered for Wednesday, 11th December.