asked the Minister for Industry and Commerce if he will state the total additional capital liability which will have to be undertaken by the E.S.B. if the rural electrification scheme is to be completed without further capital subsidy from the Exchequer, and the additional annual interest and amortisation charges on the board's revenue arising therefrom.
Ceisteanna—Questions. Oral Answers. - Rural Electrification—Completion.
Mr. Lemass
Mr. Lemass
asked the Minister for Industry and Commerce if he will state (a) the total of the capital grants made to date from the Exchequer to the E.S.B. for the rural electrification scheme, (b) whether the Government intends that the board should now repay these grants to the Exchequer, and, if not, if he will explain the exact effect of the proposal to make no provision in this year's Estimate for the repayment of advances for rural electrification, and (c) whether legislation is considered to be required to legalise the proposed arrangements.
With the permission of the Ceann Comhairle, I propose to take Questions Nos. 17 and 18 together.
Under Section 41 of the Electricity (Supply) (Amendment) Act, 1945, half of the moneys advanced to the board from the Central Fund for rural electrification is repayable to the Central Fund from the Vote for Industry and Commerce. The total amount of capital advanced from the Central Fund for rural electrification to date is £13,600,000. The E.S.B. was, hitherto, liable for the repayment of half of this sum, while the other half was repayable from voted moneys. Taking into account payments already made from voted moneys, the additional capital liability which the board will assume in respect of the latter half of the advances is £4,825,600. The annual interest and amortisation charge on this amount is £245,263 16s. 6d. I am not in a position to state what the final capital cost of rural electrification will be.
The exact effect of the proposal to terminate rural electrification subsidy is to make the board liable for the full charges on capital for rural electrification except on capital which has already been repaid to the Central Fund from voted moneys. Amending legislation will be required to give effect to this proposal and such legislation is in course of preparation.
Mr. Lemass
In effect, therefore, the E.S.B. is now being required to repay to the Exchequer the amounts already given to it by way of free grant for the rural electrification scheme?
The E.S.B. will be required in future to meet the full cost of rural electrification.
Mr. Lemass
I am not asking about the future but I am asking what is the position regarding the free grants already made?
I will explain to the Deputy. The E.S.B. was hitherto liable for the repayment of half this sum while the other half was repayable from voted moneys. Taking into account payments already made from voted moneys, the additional capital liability which the board will assume in respect of the latter half of the advances is £4,800,000 odd. The board will not be liable in respect of advances already made where the State has already paid half the cost; but, for the future, the board will be liable and there should be no difficulty in their meeting that liability in view of their prosperous financial position.
Mr. Lemass
I put this question down to the Minister for Finance and it has been transferred to the Minister for Industry and Commerce. There is no provision in the Estimate for this year for the payment of the annuity, which represents the repayment to the Exchequer of the amount of voted moneys advanced to the E.S.B. From what source will the Exchequer get repaid the advances made if it is not from the E.S.B. and not from voted money?
I assumed the Deputy's question was related to the future liability of the E.S.B. in respect of rural electrification advances.
Mr. Lemass
No, it is more than that. May I put the question again? Money was advanced to the E.S.B. to meet half the capital cost of the rural electrification scheme. That money was repaid to the Exchequer by way of an annuity voted each year by the Dáil when the Estimates were being passed. There is no provision for any annuity this year and that means that the Exchequer will not be repaid out of voted moneys in respect of moneys already advanced. From what source will the Exchequer be recouped if not from the E.S.B.?
I did not understand that to be the direction of the Deputy's question but, if he wishes to repeat the question, I will endeavour to have that information procured for him or, if he so wishes, I will send the information to him.
Mr. Lemass
There is a "hoofle" going on and I want to have it exposed, and it is the Minister for Finance who is "hoofling" and not the Minister for Industry and Commerce.
The transaction is a perfectly bona fide one: the E.S.B. finances are now in such a prosperous state that that body can meet this liability themselves.
Mr. Lemass
Is there not a statutory obligation on the E.S.B. so to arrange charges that, taking one year with another, that body will not have a surplus revenue? Am I to understand that the E.S.B. is ignoring that statutory obligation and will now produce a surplus revenue to meet obligations by law now placed on the Exchequer?
The white elephant is now a bit better than the Deputy thought it would be, and that is what is vexing him to his heart's core.
If that is what the Deputy is worrying about let me say that he has a good deal on his conscience because during the years in which he was Minister for Industry and Commerce the E.S.B. made a substantial surplus.
Mr. Lemass
And got authority to increase its charges on the undertaking that those increased charges would not produce a revenue surplus.
In each of the last six years during which the Deputy sat in Kildare Street as Minister for Industry and Commerce the E.S.B. yielded a surplus, as it yielded a surplus last year and as, I have no doubt, it will continue to yield in the future.
Mr. Lemass
Not every year.
I do not think that is an unhealthy situation but, if the Deputy is worried about it, there were six years during which he turned a blind eye to that development.
Mr. Lemass
What I am worried about is that I got from the E.S.B. an assurance in writing that increased charges which I sanctioned in 1953 would not produce a revenue surplus. Either I was misled or their calculations were wrong. The question that arises now is: Will this revenue surplus be given back to the people who created it, the electricity consumers, or be put to relieving an Exchequer liability? However, we will discuss it all later.
Will the Deputy not agree that with urban and metropolitan electrification developed to such an extent and rural electrification proceeding at its present rate, we have now reached a stage in which the taxpayer is no different from the E.S.B. because one is now virtually the same as the other, and in which the moneys paid by the State to the E.S.B. will have to come from the electricity consumer because he is now virtually identical with the taxpayer, and it does not matter which pocket one takes the money out of?
Mr. Lemass
Does the Minister agree that there is an agreement with the E.S.B. under which they undertake to sell electricity to rural consumers at less than its economic cost? The Government has unilaterally broken that agreement by leaving the E.S.B. free to take whatever action they think fit.
No, I told the Deputy that if a situation develops in which the board want to increase rural electrification charges, or to slow down rural electrification development that matter will be dealt with promptly——
Mr. Lemass
They are under obligation by law to do it.
The law is what we here in this House decide.
Mr. Lemass
But we have decided.
The white elephant is too well off.