I move:—
That a supplementary sum not exceeding £250,000 be granted to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1955, for the Salaries and Expenses of the Office of the Minister for Industry and Commerce, including certain Services administered by that Office, and for payment of certain Subsidies and sundry Grants-in-Aid.
This Supplementary Estimate is required to meet the increased costs of the flour and wheatenmeal subsidy, £372,000, and additional grants to Mianraí Teoranta for exploration work at Avoca, £15,000.
The purpose of the flour and wheatenmeal subsidy is to enable the millers to sell flour and wheatenmeal at controlled prices. In calculating the subsidy account is taken of receipts by the millers from sales of flour and wheatenmeal at these fixed prices and also of receipts from sales of wheaten offals which vary from time to time in accordance with changes in import prices.
It was originally calculated that the reduction in flour and bread prices as from the 1st May, 1954, would add approximately £900,000 to the bill for subsidy for the financial year 1954-55. In actual fact, the reduction will cost £927,000 against which, however, can be offset items amounting to about £555,000, leaving a balance of £372,000 to be provided for under this sub-head.
The chief offsetting items, of which I shall give details in a moment, are:—
(a) increased receipts by flour millers from sales of wheaten offals over and above the amount originally estimated;
(b) savings accruing from changes in the millers' grist; and,
(c) the fact that milling costs proved to be lower than was thought when the original Estimate was prepared.
Increases in the price of offals, from £20 to £23 per ton in September, 1954, to £24 10s. in December, 1954, and to £26 a ton in January, 1955, account for increased receipts by millers of approximately £170,000. These increases followed similar increases in the prices of imported offals reflecting changes in the world price. The changes in millers' grists, whereby more imported wheat than anticipated was used at various times during the financial year, account for savings of £260,000, because imported wheat costs less than native wheat. The third item, namely, the reduction in millers' costs, accounts for a further sum of about £120,000. In addition, a small item of £6,000 provided in the original Estimate to remunerate services to be rendered by the importer-distributors of wheat, will not now fall for payment in the financial year 1954-55.
The net result of the changes affecting subsidy in the course of the financial year 1954-55 is, therefore, to increase the cost of maintaining flour and bread at their present prices, from £7,681,000 to £8,053,000, an increase of £372,000.
For some years past Mianraí, Teoranta have been conducting a scheme of exploration on minerals deposits at Avoca, County Wicklow. The aim of the scheme was to establish the existence at Avoca of sufficient quantities of copper ore of a grade suitable for commercial development. This aim has now been achieved and negotiations are at present going on with a number of mining concerns to see whether they will be interested in undertaking the development of the deposits. It is too soon to say, at this stage, whether satisfactory arrangements can be made for development by a commercial concern but preliminary proposals have been received from one company of international repute. It has been decided to continue exploratory work at Avoca on the present scale until 30th June, 1955. It may be possible to make arrangements to have the deposits exploited commercially by that date, but, if not, the exploratory work will cease and the mine will be put on a care and maintenance basis.
When the original Estimate of £74,000 for grants to Mianraí, Teoranta, was being prepared it was visualised that the exploratory work would proceed on a decreasing scale and with a diminishing labour force during 1954-55. Furthermore, Mianraí, Teoranta had arranged that most of the exploratory work during 1954-55 should be by means of diamond drilling from the surface. This is a cheaper method of exploration than underground work. However, due to technical difficulties the company had to undertake more underground exploration than they had planned for, and there was no substantial reduction in the labour force during the year. As a result Mianraí, Teoranta had, by 31st December, 1954, incurred commitments for expenditure up to the voted limit of £74,000 and a further £15,000 is required to cover the cost of work between 1st January, 1955, and 31st March, 1955.
The gross total of the Supplementary Estimate for the two services is, therefor, £387,000. Savings amounting to £137,000 are available on other subheads of the Vote so that the net sum required is £250,000.