Dáil Éireann debate -
Tuesday, 5 Jul 1955

Vol. 152 No. 1

Committee on Finance. - Electricity (Supply) (Amendment) Bill, 1955—Second Stage.

Minister for Industry and Commerce (Mr. Norton)

I move that the Bill be now read a Second Time. The principal purposes of this Bill are (i) to authorise an increase from £16,000,000 to £25,000,000 in the statutory limit of expenditure which the E.S.B. may incur on rural electrification and to provide for the making of advances from the Central Fund accordingly; (ii) to extend the borrowing powers of the board so as to authorise it to obtain moneys required for rural electrification from sources other than the Central Fund; and (iii) to terminate the subsidy for rural electrification. The remaining provision is a minor amendment of the 1954 Act which is required to make it clear that a guarantee given by the Minister for Finance under Section 9 of that Act may extend to the payment of interest on, as well as to the capital repayment of, borrowings made under Section 4 of that Act.

Section 7 of the Electricity (Supply) (Amendment) Act, 1954, authorised an increase from £8,000,000 to £16,000,000 in the total of advances which could be made to the board from the Central Fund for rural electrification and at the time that Act was enacted, it was anticipated that the provision then made would suffice until about March, 1956. As a result, however, of the considerable increase in the rate of development which has taken place in the meantime, both expenditure and commitments incurred on the scheme have increased more rapidly than was anticipated. Within the existing limit of £16,000,000 the total already advanced to the board is £13,600,000 and in the year 1955-56 the board's requirements for rural electrification alone are expected to total £4,000,000. The board's total expenditure and commitments at the end of May, 1955, in respect of the scheme were £15,057,769.

It is clear that at the present rate of activity the total of expenditure and commitments on the scheme will have exceeded the existing statutory provision of £16,000,000 by the autumn of this year. It will be appreciated that the statutory provision at any particular time should be sufficient to cover not only expenditure actually incurred on the scheme but also commitments which have to be entered into in advance and which are inherent in the nature of the scheme. It is essential, therefore, that additional legislative provision should be made as soon as possible. Taking account of the balance of £2,400,000 still available, the additional amount of £9,000,000 which it is now proposed to provide, will, it is expected, be sufficient to cover expenditure and commitments until 1958.

The fact that it should be necessary to seek the approval of the Oireachtas for increased provision for rural electrification so much earlier than was originally anticipated is a reflection of the considerable increase in the rate of development which has taken place. In other words, development is now proceeding at a rate double that of two years ago. The following statistics illustrate the progress. In the year ended 31st March, 1953, 49 rural areas were completed; 60 were completed in 1953-54 and 75 in 1954-55. The estimate for 1955-56 is 100 areas. At 31st March, 1955, the number of rural areas completed since the inception of the scheme totalled 364.

In all, there are approximately 780 rural areas in the country and, as development in the current year and in future years is expected to proceed at the rate of 100 areas per annum, there is every prospect that the scheme will be extended to all areas by the 31st March, 1959. As further legislative provision will be required before that date the House will have an opportunity then of reviewing further the progress of the scheme. Even with the increased rate of development there is no evidence of a slackening in demand for extension of the scheme. In 1953-54 the average percentage of householders who agreed to take supply in the completed areas was 67 per cent. as compared with 65 per cent. in 1952-53 and 60 per cent. in 1951-52. The urgency of making additional provision now is therefore self-evident.

The Government have decided that the continuance of subsidy for rural electrification from State funds is no longer necessary or justifiable and sub-section (2) of Section 4 of this Bill is designed to give effect to that decision. There seems to have been a good deal of misunderstanding about the effects of this decision and in particular it has been asserted that it will result in either a slowing down of rural electrification development or an increase in rural charges or both. That, of course, is not the case. To clarify the position, I think it would be desirable that I should give the House an outline of the history of this subsidy provision and of the considerations on which the decision to withdraw it was based.

The problems of rural electrification were examined in a report prepared by the E.S.B. which was submitted to the Minister for Industry and Commerce towards the end of 1942. This report was published as a White Paper in 1944 and copies of it are available in the Oireachtas Library. In dealing with the economics of rural electrification it was estimated in the report that the annual capital charges, namely, interest on advances, the provision of a sinking fund to repay the advances together with provisions for depreciation of the assets and for other costs, such as maintenance, and supervision, would amount annually to 12 per cent. of the capital cost of providing supply.

On the best estimate that could be made at that time the annual revenue from fixed charges was expected not to be likely to exceed 9.7 per cent. of the capital cost. There would be, therefore, an annual deficit of 2.3 per cent. of the capital cost. Of the total annual charges of 12 per cent., interest and sinking fund charges were estimated to total 5.5 per cent. It will be appreciated that these interest and sinking fund charges would not arise if the State provided the capital required for the scheme as a non-repayable grant which would be the equivalent of a 100 per cent. subsidy. On the assumption that the capital required would, as in the case of capital for the board's general purposes, be provided by way of repayable interest-bearing advances from the Central Fund the measure of the subsidy required to make the scheme economic from the board's point of view was the deficit of 2.3 per cent. expressed as a percentage of the interest and sinking fund charges of 5.5 per cent. or 41.82 per cent.

The Government approved of the report from the E.S.B. in August, 1943, and decided that the scheme should be commenced as soon as materials became available and that the board should be recouped the amount by which the annual fixed charges fell short of the annual capital charges. Effect was given to this decision in Section 41 of the Electricity (Supply) (Amendment) Act, 1945, under which capital for the scheme was made available and which also provided that one moiety of the sums advanced to the board from the Central Fund for rural electrification should be repaid by the board and that the other moiety should be repaid out of moneys provided by the Oireachtas at such time or times as the Minister for Finance should direct. The subsidy was fixed at 50 per cent. instead of the 41.82 per cent. originally estimated in view of the increases in costs which had taken place in the meantime.

The scheme commenced in 1946-47 and it was arranged that one half of the sums advanced to the board in any calendar year should be repaid to the Central Fund from voted moneys in the succeeding financial year. This payment was charged to the Vote for Industry and Commerce and in the financial years 1948-49 and 1949-50 a total of £550,000, representing one-half of the advances obtained by the board in the calendar years 1947 and 1948 was repaid to the Central Fund from that Vote. In 1950 the Minister for Finance decided that the amount falling due for repayment to the Central Fund in the financial year 1950-51, and in succeeding years, should be funded and be repaid by way of an annuity payable half-yearly and extending over 50 years. These were the terms of repayment which applied to the moiety of advances which were repayable by the board and it was felt that the benefit of these terms should be extended to the taxpayer also. In 1952, the Minister for Finance decided to revert to the procedure of repaying the outstanding moiety to the Central Fund from voted moneys in one sum and, accordingly, in the financial years 1952-53 and 1953-54 one half of the amounts advanced to the board in the two preceding calendar years was repaid to the Central Fund in lump sums totalling £1,300,000.

In February, 1954, a further modification of the system of repayment was decided upon. The net result of the previous arrangements was that at the end of March, 1954, the total amount remaining outstanding in respect of the moiety repayable from voted moneys including the undischarged portions of annuities fixed to repay the 1949 and 1950 advances was £2,110,213 and it was decided that this should be repaid by way of simple instalments without interest over 25 years, and that this arrangement would also apply in future years. The present position is that the board has obtained a total of £13,600,000 by way of advances from the Central Fund and that of the moiety of £6,800,000 repayable from voted moneys a total of £1,974,400 has already been paid. In other words, rural electrification has been subsidised to that extent.

I think that, in considering this question of subsidy, it is essential that regard should be had to the circumstances which prevailed when it was originally decided on and to the considerable alteration which has taken place since then. In 1943, as a result of the unsettled conditions and the difficulties in securing supplies, the board was operating at a loss and in fact continued to operate at a loss right through the remaining war years. It was not until 1948-49 that the accumulated deficits of these years were finally wiped out. When the decision to provide a subsidy was taken in 1943, there was every indication that the difficulties under which the board was operating might become even greater and even with the return of peace might be aggravated by the necessity of overhauling, in an era of inflated costs, the arrears of construction which had accumulated during the war years. It was only natural, therefore, that the board should not be expected to undertake any operations, particularly rural electrification, the economics of which were then uncertain.

To-day, however, the position is vastly different. Since 1948-49 the board has been able to produce a surplus on its operations in every year with the exception of 1952-53 in which there was a deficit as a result of inflated fuel costs, and this has enabled it not only to make adequate provision for interest on advances, capital repayments and depreciation of its assets but also to provide other reserves which at 31st March, 1955, amounted to nearly £2,000,000. In the year ended 31st March, 1955, the gross surplus amounted to £928,659. The provision for interest and capital repayment on the moiety of advances for rural electrification for which the board was liable in that year amounted to £260,567. It will be evident, therefore, that the board could have borne the full charges for rural electrification in that year and still have shown a substantial surplus. It was in the light of these altered conditions that the Government decided that the continuance of subsidy was no longer either necessary or justifiable.

An important feature of the results of 1954-55 was that the rural revenue account showed a surplus of £44,130 as compared with deficits of £9,988 and £30,610 in the two previous years. The increased rate of development should result in a considerable expansion of sales of current in rural areas and it would be obviously absurd to continue to provide subsidy for a service on which there was every likelihood that surpluses would continue to be produced as long as the subsidy continued. The Government felt that the board had attained the position in which, taking its operations as a whole, it could not only bear all the charges on this service in the future, but could also take care of the undischarged liabilities. In this connection it is important to bear in mind that the board enjoys exceptionally favourable terms for repayment of its liabilities to the State as such repayment is spread over a period of 50 years.

Electricity development in this country has now reached the stage at which electricity consumers and taxpayers are largely the same persons. There would, therefore, be no point in arranging on the one hand, for a relatively slight reduction if any reduction were possible at all in the price of electricity to consumers and, on the other hand, imposing taxes on them to provide for a continuance of subsidy. The logical way to look at this is to regard the board's undertaking as one unit which by prudent management has reached the stage where it is self-supporting and can bear the full charges for rural electrification from the surpluses realised on its other activities.

Since in future there will be no distinction between capital required for general purposes and for rural development in so far as liability for repayment is concerned there is no longer any reason for the board to rely solely on the Central Fund for its rural capital requirements. Provision has, accordingly, been made in Section 3 of the Bill to authorise the board to borrow, from sources other than the Central Fund, moneys which they may require for rural development. This is an extension of the powers conferred on the board by Section 4 of the 1954 Act.

In case any doubts on the subject should still exist I should like to take this opportunity of assuring rural consumers that there will be no increase in electricity charges as a result of making the board bear the full cost of rural electrification nor will there be any reduction in the rate of progress in carrying out the scheme. In fact the position now is that, as a result of the increase in the rate of development, those who are still awaiting supply may expect to receive it all the earlier.

The speedy enactment of this Bill will ensure that the board can go ahead with rural development at the present greatly accelerated pace and will hasten the day when practically every member of the rural community will have available to him this modern amenity and aid to increased production. I think it will be agreed that the board deserves to be congratulated on its achievements in this field and on the success which has attended its efforts. I therefore confidently recommend the Bill for the approval of the House.

Mr. Lemass

The reasons given by the Minister why this Bill has to be rushed on to the Statute Book in the present session are completely misleading. This Bill is not needed in this session either to authorise an increase in the limit of the expenditure which the E.S.B. may undertake on rural electrification or to extend the borrowing powers of the board for that purpose. It is required now for entirely different reasons.

The first reason is that the Government owes the E.S.B. under the terms of existing legislation arrears of capital grant for the rural electrification scheme amounting to about £2,800,000; it has decided to default upon that obligation and one purpose of this Bill is to give the Government legal backing for that default. The second reason is that the Government has decided to put on the E.S.B. a liability to repay £4,825,000 which was already given to the board under the terms of legislation approved by the Dáil as a capital grant for the scheme and which was due under that legislation to be repaid to the Exchequer from moneys voted for the purpose by the Oireachtas; and the third reason, I suspect, is that the Minister is anxious to get this Bill through the Dáil before the E.S.B. accounts for 1954-55 are published.

The attitude of the Government to this question of subsidy for rural electrification is an extraordinary one. For some cause, apparently, the reasons for their decision have to be clouded in misleading statistics and in forecasts that are likely to prove in the event completely inaccurate. Even if it is correct that the amount of the additional charges which the Government has decided to put upon the E.S.B., and which will, from the information available from the E.S.B. accounts, produce a very substantial deficit in the board's rural revenue, might deter the public from subscribing to the issue of E.S.B. stock which is due in a few months' time without a Government guarantee of the interest of that stock as well as a guarantee of the principal, that situation could have been secured by a formal announcement of the Government's intentions. The mere circulation of this Bill would have met that position.

The reason why the Bill is being rushed now, as one of the limited number of measures to be passed before the Adjournment, does not lie there. The Electricity Supply Act of 1954 raised from £8,000,000 to £16,000,000 the amount which could be advanced through the Exchequer for the rural electrification scheme. That amount was estimated to be sufficient to meet the board's requirements until March, 1956, and, if the board does no better in this year, than it did last year in the matter of speeding up the rate of rural electrification development there will be a substantial surplus available, counting both expenditure and commitments, by next March.

The Minister has put into this Bill the section which authorises the increase of expenditure on the rural electrification scheme from £16,000,000 to £25,000,000. No doubt some such legislative measure would have to be, passed by the Dáil before next March, but he goes on, in another section of the Bill, to authorise the board to secure that additional amount, not from the Exchequer but by the issue of its own stock. The Bill which was passed last year—the Bill which I a Minister proposed to the Dáil-authorised the E.S.B. to raise capital by the issue of stock to the public to the extent of £25,000,000 for purposes other than the rural electrification scheme.

The reason given to the Dáil for not enabling the board to raise capital by the issue of its own securities for the rural electrification scheme was the undesirability of asking the public to subscribe capital for a subsidised service. That objection will not now apply, although one might feel that there is equal objection to asking the public to subscribe capital for a losing service. But in any event, the £25,000,000 limit, put on the issue of stock by the E.S.B. was estimated to be sufficient, and no more than sufficient, to cover the board's actual expenditure upon developments other than rural electrification until March next. It was realised that the board's new commitments on capital account by March, 1956, would considerably exceed £25,000,000, the additional £25,000,000 provided by the 1954 Act. But the actual outgoings on capital account up to that date would be covered if the board got in £25,000,000 additional capital through the issue of its own securities.

There cannot, therefore, be any margin to spare to cover the capital requirements of the rural electrification scheme if the board's other developments are proceeding according to plan. It is only if the board has failed to carry through the new generation programme to the extent and at the rate contemplated in 1954 that there can be any margin available at all, under the 1954 Act, to obtain capital for the rural electrification scheme by the issue of its own stock.

There is no proposal in this Bill to raise the limit fixed in 1954 to the amount which could be obtained by the issue of its own stock. I do not know what the amount of the E.S.B. issue contemplated is likely to be; I know that the board has not yet used its power to obtain capital by the issue of its own securities, but it must get, in that way or in some other way, by March of next year £25,000,000 if its generation and other development programmes are proceeding according to plans made in 1953. The Bill appears to be hastily drafted if there is indeed any serious intention in the mind of the Minister that the board will raise capital for rural electrification through the issue of its own securities.

Let us turn to this main issue which arises from the Government's proposal as to whether or not this decision of theirs will affect the development of the rural electrification scheme or involve an increase in charges on electricity consumers. In that respect, I think the Minister has been far from frank with the House. He has explained that the Act of 1945, which was the Act which authorised and empowered the board to undertake the rural electrification scheme, provided for the giving of one-half of the capital requirements of that scheme to the board by way of an interest-free, non-repayable grant, the other half to be repaid by the board as requested by the Minister for Finance, constituting part of the board's total capital liability.

The main purpose of this Bill and the reason why Section 4 is incorporated in it is to make the whole of the balance of that money, in so far as it has not been already paid to the Exchequer by moneys voted by the Oireachtas now repayable by the E.S.B. The Minister has stated in the Dáil already, when this matter was discussed before, his view that the E.S.B. is not merely capable of carrying the State portion of the rural electrification bill but even of having a surplus after doing that and that consequently there is no justification for any increase in charges by the E.S.B.

Let us have a look at the accounts and try to relate the published accounts of the E.S.B. to these statements of the Minister. The board's rural revenue account as published in the 27th annual report for the year ending 31st March, 1934, showed a surplus in that year of £9,988 — the Minister stated to-day that the rural revenue account for 1954-55 may show a surplus of £44,000. There was charged on the debit side of that account £142,780 in respect of interest and £28,850 in respect of revenue repayments. By the date up to which this account was prepared, the 31st March, 1954, the board had spent £9,666,000 on the rural electrification scheme.

One half of that capital expenditure was free of interest and repayment obligation under the terms of the existing legislation. Under the Government's proposal the interest on £4,800,000 has now to be added to the debit side of the account. If we assume the board is paying interest at 5 per cent. or that the sum total of the interest and repayment obligations in regard to that new capital liability will amount to 5 per cent., as is proposed in the present Bill, then the total charges under these heads on the debit side of the board's rural revenue account will be increased, according to the information given to the House by the Minister for Finance, by £245,000 per year and, on the basis of the experience of the board in the year 1953-54, the rural revenue account will show a deficit of about £235,000, a somewhat smaller deficit if the surplus revenue in 1954-55 was, as stated by the Minister, £44,000. That deficit in the board's rural revenue account must, under the Government's proposals, increase year after year and must necessarily involve some increases in charges somewhere, if not upon rural consumers then upon electricity consumers elsewhere.

The suggestion in the Minister's statement, when this matter was first debated here, was that the board had last year in its accounts a surplus of revenue which would cancel out deficits in the rural revenue account and that, therefore, the board could easily carry out on its general income the increasing loss which is now going to arise on the rural electrification scheme.

I do not know what the board's accounts for 1954-55 may show but I know what their accounts for the year 1953-54 showed because they have been published. In the year ending 31st March, 1954, the board had on all those operations a surplus of £223,209. If one adds to that figure its profits upon merchandise trading the surplus was £242,677. It had, as the Minister stated, in the previous year a deficit of £488,213. It is clear, therefore, that the increased deficit which is likely to emerge because of the Government's proposals on the rural revenue account will wipe out the whole of the surplus on the board's accounts generally.

But let us turn to the board's report and find out how the surplus arose in 1953-54. The board stated that in the year 1953-54 expenditure on fuel was less than in the previous year by £537,508, mainly because of more favourable weather conditions. We know that the weather was equally favourable to the E.S.B. in 1954 and 1955 as it was in 1953, but we all hope that normal weather conditions will reappear here however unsatisfactory that may be from the point of view of the E.S.B.'s revenue and expenses. If there is, again, next year, normal weather experienced here, then the surplus which the board showed in 1953-54 and which it may show in 1954-55 will be wiped out because that saving on fuel costs — the saving of more than £500,000 experienced in 1953-54 — will disappear. Indeed, the costs of the board's fuel utilisation may be considerably higher than that because, as we know, the price of coal has increased since that year.

The position, therefore, is that, because of the Government's action in this matter, the board is inevitably facing a substantial deficit on its accounts — a deficit which will increase very considerably if we should experience a year of normal weather.

Mr. Norton

The Deputy will revise his view when he sees the accounts for March, 1955.

Mr. Lemass

I do not know what is delaying them. The accounts for 1953-54 were, according to this, presented on the 29th June, 1954. We will see the accounts for 1955 after this Bill has reached the Statute Book.

Mr. Norton

There is good news there everywhere.

Mr. Lemass

Maybe so. The weather was worse. This year we are also having good weather from the board's point of view.

Mr. McQuillan

The Shannon floods are there.

Mr. Lemass

Are we now going to saddle the board with a permanent liability which will amount to a very considerable annual sum because in a year which was exceptional from the point of weather it was able to show a revenue surplus due entirely to saving on fuel costs? The board itself said that its surplus revenue in 1953-54 was due entirely to that unanticipated saving on fuel costs. Let us be clear about this. The Minister is not proposing in this Bill to alter the board's obligations in regard to its rates of charge in any way whatever.

The obligation fixed on the E.S.B. by the Act of 1927 is very clear. The board is obliged by that Act to fix such rates of charges for electricity that, taking one year with another, the revenue derived from these charges will be sufficient, and only sufficient, to pay all the lawful outgoings of the board, the salaries, working expenses and outgoings properly chargeable to revenue, including payments on interest and sinking fund on advances. That Act also gave the board complete freedom in respect of the charges made by it, subject to that statutory direction.

The revenue derived from its charges must be sufficient to meet its outgoings. The Minister for Industry and Commerce is not proposing to alter or restrict the board's freedom of action in respect of charges. Time and again during the past few weeks, when Deputies asked questions in this House concerning charges for electricity to some particular class of consumers, the Minister's reply invariably was that charges are entirely a matter for the E.S.B. with which he has no power to interfere.

Mr. O'Leary

The Deputy often said the same.

Mr. Lemass

And I tried to keep it so. That is still the position. In any case, when the Minister spoke about seeing what could be done, if the board increased its charges, that was so much hot air. The Minister has no power to interfere with the charges made by the board for electricity and he is not proposing to take power to interfere. The statutory obligation on the board is still, as it always was, that it must fix these charges to yield a revenue equal to its outgoings. If there is a deficit, as I think I will prove conclusively that there must be a deficit on the board's accounts because of the Government's action, then the board is under statutory obligation to increase its charges to offset that deficit, unless the Government proposes by subsequent legislation to alter its obligations.

In my view, because of the obligations of the board and because of the whole approach of the board to this problem of rural electrification, the Government's decision to withdraw the rural electrification grants must slow down the rate of development. In fact, I want to suggest that it has already done so. I do not know that the House appreciates that this decision of the Government to withdraw the grant for rural electrification, although it was not revealed to the Dáil until the Book of Estimates for this year was published, must have been taken very shortly after the Government came into office. When the Government came into office, there was due to the E.S.B. on the 1st April, 1954, by way of arrears of grant, the sum of £1,178,000. The board referred to that in the report for that year. They said:—

"By reason of the delay in the enactment of legislation subsidies for rural development were temporarily not available, and consequently the interest charged to the rural account in the year was exceptionally high."

Now, it was merely an accident that the Electricity Act of 1954 was not passed by the Oireachtas until shortly before the election of that year. If it had been passed earlier as intended — it was in the programme of legislation for 1953—then these arrears of grant due to the E.S.B. in respect of the expenditure by it on the rural electrification scheme would have been paid. The money was due to the E.S.B. when the present Government came into office. They did not pay it and they have paid nothing since, the sum of the amount due to the board under the terms of existing legislation and not paid being approximately £2,800,000.

Therefore, this policy of the Government in holding back from the E.S.B. the capital grant they were entitled to under the 1945 Act has been in operation for two years and we can examine the effect of its operation on the rate of development of the rural electrification scheme. The Minister stated here to-day, as he stated in his speech on the Estimate for his Department, that the rate of development under the rural electrification scheme is double what it was two years ago. He repeated that twice during the debate on the Estimate as if he were claiming some credit for the increase in the rate of rural electrification network construction. The fact is that the decision to increase the rate of rural electrification was taken in 1953.

In that year, I met the directors of the E.S.B. and, being satisfied that the excuses previously given by them for the failure to speed up the rate of construction, namely, the scarcity of materials, and to some extent of skilled personnel, no longer held good, I told them that the rate of development had to be raised so that in October of 1953 the rate of construction would increase by 50 per cent. They were requested to achieve another 50 per cent. in the rate of construction in the year 1954-55. They conceded, without question, the practicability of expanding the rate of construction in 1954-55 to 100 areas completed in that year, and in their report for that year they stated—I am quoting from their report, page 68:—

"It is intended to effect a further increase in the course of the coming year bringing the rate of construction to 100 acres per annum."

Why did they not achieve a rate of construction of 100 areas per annum in 1954-55? Why did they, to the extent of 25 per cent., fail to reach the target which was set for them in 1953, and which in their report for the year 1953-54 they said they would be able to reach? I suggest that the reason for their failure to complete more than 75 areas in the year 1954-55 was the financial strain put upon them by the Government's failure to pay to them the amounts due in respect of the electrification grant under the terms of the existing legislation.

I do not know why the Minister stated here on the 21st April that construction was proceeding at the rate of 100 areas per year. He could not have had before him at that time any information from the E.S.B. except the record of their achievement in 1954-55, and it showed that the rate of development was not 100 areas but 75 areas. In the first quarter of this year 25 areas were completed. While that may suggest that 100 areas will be completed this year, it does not mean that, because the rate of construction is always much greater in the summer months than in the winter, and if there are to be 100 areas completed in the year 1955-56, then the board will have to do much better in the second summer quarter than it succeeded in doing in the first.

I am convinced that the slowing down of the rate of development under the rural electrification scheme, and of the board's failure to the extent of 25 per cent. to achieve the target set for them in 1953, a target which they said in that year they could achieve, is due entirely to the financial difficulties occasioned by the action of the Government in withholding the £2,800,000 due to them for the purposes of that scheme.

The original plan for the rural electrification scheme contemplated that the construction of the network would be completed in ten years. I remember that when I brought the 1945 Act to the House, I pointed out to the Dáil what a considerable achievement that would be, but, nevertheless, I assured the House that, in consultation with the officers of the board, I was satisfied that once the supply difficulties of the war period passed, a rate of development could be established which would enable the network to be fully completed within the ten years. Work was begun in 1947. It is true that in 1947, in 1948, 1949 and 1950, and indeed up to 1952, the rate of development was limited by the supply of materials and not by the plans of the board, but by 1953 that difficulty had passed. We have got, however, to face the fact to-day that it is eight years since the scheme came into operation and that at the 1954-55 rate of development it will take another six years to finish it. I hope that the Minister's estimate, that the construction of the network will be finished in March, 1959, will prove to be correct. That will mean that the board will want to do better from this on than they succeeded in doing last year.

Let us have another examination of the effect of the Government's proposals on the costs of the rural electrification scheme. The Minister is quite correct in saying that the estimate prepared and published in the White Paper in 1944 indicated that, in order to break level on the costs of constructing the network, the board would have to get back from each area, in annual fixed charge revenue, 12 per cent. of the cost of constructing the network for that area.

The White Paper was prepared upon the basis of the experience gained in the actual construction of the rural network in four specially selected trial areas. It was introduced in advance of the preparation of the report in these four areas in different parts of the country and the preparation of the scheme and the planning of the networks were both based upon the experience gained in these four areas. That experience indicated that, if the rate of charge to rural consumers was the board's existing rural tariff rate, it was possible to anticipate that 69 per cent. of rural residents would accept the supply under the scheme. On that calculation it was, as the Minister has stated, discovered that the fixed charge revenue under the board's rural tariff rate would bring in 9.7 per cent. of the capital cost and that was the reason for the Government's decision to meet the difference by way of free capital grant — by giving half the capital cost free of interest and repayment of loan charges so that the board would be assured of the 12 per cent. of construction costs in revenue.

That was the reason that was given at that time. The Minister purported to-day to explain the considerations which led the Government of the day to decide upon giving this capital grant. I can talk with authority on that matter, at least, for I was Minister for Industry and Commerce at the time and it was my proposals that were accepted by the Government. We did not take into account the fact that the board was losing money in 1943 or in the war years as a whole but we did take into account the need to provide an electricity service for as many rural consumers as possible. We were anxious to raise the percentage of rural residents who would be able to take the supply by keeping the charge for the supply at the lowest possible level. We had regard to the fact that every other country in the world which operates a rural electrification scheme has given a subsidy out of State funds for the development and operation of that scheme. We knew that the loss which the board was incurring in the war years would easily be remedied when normal supplies of materials became available and normal production was resumed.

The rural electrification scheme was considered apart from the board's other operations. It was decided to provide a service which was essential for this country, more essential here than in any other country. Whatever basis there may be for the contention that the primary cause of emigration is economic there is a secondary cause and that is the absence in the rural areas of the amenities which are generally accepted as the normal features of life in towns. One of the amenities which we decided to provide for rural residents was an electricity supply and we decided to provide it at a cost to the consumer which it would be within his means to pay.

The fact is, however, and this is where the Minister's calculations are all wrong, that the board has never succeeded in getting from the rural areas developed under the scheme even the 9.7 per cent. of the cost of constructing the network, the revenue in fixed charges which it assumed it would get. The annual fixed charge revenue which the board is now obtaining falls short by £500,000 of the revenue it would need to get in in order to reach 9.7 per cent. of the capital cost of construction. To that extent rural electrification is already being subsidised out of the general funds of the board. We are not objecting to that but there is a limit and there is a strong objection to making this change upon the unsubstantiated contention that it does not necessarily involve higher charges either to rural consumers of electricity or to consumers generally.

The information which has been given to the House in reply to parliamentary questions shows that the board must get from its rural consumers exactly double the fixed charge revenue it is now obtaining if it is to avoid loss on the servicing of these areas.

Mr. Norton

The Deputy has not had regard to the fact that the board is now getting money at a lower rate of interest.

Mr. Lemass

What rate?

Mr. Norton

I assumed that the Deputy had examined that. That is an important matter for consideration.

Mr. Lemass

Does the Minister know? The White Paper mentioned 5 per cent.

Mr. Norton

It is a lower rate than 5 per cent.

Mr. Lemass

How much?

Mr. Norton

More than 1 per cent. less.

Mr. Lemass

Is the Minister suggesting that the Government is borrowing money at 4½ per cent. and lending it at less than 4 per cent.?

Mr. Norton

I did not say that at all.

Mr. Lemass

The Exchequer has always made a profit on its advances to the E.S.B.

Mr. Norton

The Government has borrowed money at 3½ per cent.

Mr. Lemass

When?

Mr. Norton

Long before the day when your Minister for Finance decided to pay 5 per cent. for it.

Mr. Lemass

Oh, yes. We floated a loan once at 2½ per cent. We did not control the market conditions then any more than you control them now. The Minister has stated that my calculations are inaccurate because the board is getting money now at less than 5 per cent. — he said more than 1 per cent. less. I do not believe it. It is an obvious mistake. On the basis of 5 per cent. interest rate on capital the board has to get double its present fixed revenue rates from each of its areas to avoid losing money.

I agree that we must consider the operations of the board as one unit. The Minister said that he was going to give an assurance to rural consumers that they would not have to pay more for their current. He might have saved his breath. The prospect of getting in sufficient money in increased charges from rural consumers is nil. It just could not be done. The rural electrification report, which Deputies opposite would be well advised to read again, stated that, even under the board's rural tariff, at the rate of charge which it was proposed to bring into operation, the average farmer would have to pay in fixed charges 80 per cent. more than the occupier of a similarly sized dwelling in a town. The report goes on to justify the higher fixed charges in the rural areas, having regard to the possibility of the rural consumer using electricity for production purposes which the urban house dweller cannot do, or if he does use electricity for industrial purposes he is charged for it at the industrial rate.

There could be no possibility of increasing that fixed charge, because, as I pointed out, the board has not yet succeeded in all the rural areas connected to date in getting 69 per cent. of the people to accept supply, the percentage of people which it was assumed would be willing to take supply at that price on the basis of their experience in the four trial areas. Because the number of consumers is less than the 69 per cent. assumed, because of the much higher cost of construction, there has been this failure to get in fixed charged revenue anything like the 9.7 per cent. which was required. In respect of the areas which were wired in 1954-55, the fixed charge revenue equalled only 6 per cent. of the cost of construction and if one adds in the 2½ per cent. capital subsidy, it is still far short of the revenue required by the board to avoid losses on the scheme.

Mr. Norton

Has the Deputy made any allowance for the increase in the use of electricity by the individual consumers?

Mr. Lemass

I have been talking entirely about fixed charge revenue. The cost of bringing the supply of electricity to a rural consumer comes under two headings. There is the cost of building up the network and maintaining the network. That cost remains the same one year with another no matter what quantity of electricity the individual consumers in that area may take. The board must, therefore, be sure of getting in its fixed annual charges 12 per cent. of that capital cost of construction irrespective of any rise or fall in the quantity of electricity consumed. That is why the charge to the rural consumer is in two parts, first the fixed annual sum which he must pay for having the wires brought to his house and then a unit charge in respect of the current consumed. He pays for the current as he uses it and pays only the amount appropriate to his user.

If the Minister's assurance to rural consumers was merely that their fixed annual charge would not be increased, then it is worth nothing. The loss on fixed charges has to be made good by an increase in the cost of current. Somebody will have to pay anyway and it does not matter whether he pays on one side of the account or the other. In my view there is no possibility of getting higher revenue under the rural electrification scheme because if you attempt to increase charges, then the percentage of the people that will accept supply will fall still lower and the economy of the scheme will be still further disorganised.

The deficiency in the fixed charge revenue of the board is mainly due to the fact that the costs of construction are higher but it is partly due to the board's inability so far to get the 69 per cent. connection in all rural areas on an average. But if the board does not get the higher revenue, which it must get, from the rural consumers, it must get it in some other way. Let me indicate again what that higher revenue must be in order to avoid losses upon the rural electrification scheme under the Government's proposals.

The board has got to get an additional £2,000 per year per area in revenue. If there are 100 additional areas completed in this year, as the Minister anticipates, then the board's revenue must be increased from some source by £200,000. We have just one half of the scheme completed and under these proposals by the time the scheme is completed the board must get an additional revenue of £1,000,000 a year from some source to make good the additional loss which is now going to be experienced under the rural electrification scheme. The board's total revenue in 1953-54 was £8,500,000 and the additional sum it has got to get in every year from some source on the completion of the rural electrification scheme under the board's proposals is roughly equivalent to 10 per cent. of this 1953-54 revenue.

The board must get money somewhere. If it does not get money to make good these losses from the electricity consumers, where is it going to get it? The expansion of revenue to the extent of £200,000 per year up to an expansion of revenue of £1,000,000 per year to make up increased losses under the rural electrification scheme must necessarily involve an increase in charges to some of the board's consumers. The board's statutory obligation is still to adjust its scale of charges in such a way as to ensure that its total revenue will, one year with another, be equivalent to its total outgoings. Its outgoings will be increased to £1,000,000. Where does the Minister think it is going to get that £1,000,000 except by increasing the cost of electricity if not to rural consumers then to urban consumers?

That is an appalling price to ask this country to pay so that the Government could come to the House with a Book of Estimates, show a purely nominal saving and take political credit for it. Surely this country is handicapped already in sufficient degree in its industrial development by the high cost of power? Some foolish Fine Gael Deputy intervened in a recent discussion on this matter to say that electric power costs less here than in any other European country. It costs more here than in any other European country. One of the handicaps of our industrial development is the high cost of power. Is this cost to be shoved up still more, by 10 per cent. possibly, so that the Government can make the pretence of having carried out some economy, an economy which ultimately will cost the country a great deal more, as all Coalition economies usually do?

There was a further suggestion in the Minister's speech on the Estimate on this subject that the board had accumulated reserves somewhere on which it could draw to meet rural electrification losses. That statement is equally untrue, equally misleading. The board's accounts for the year 1952-53 showed its total capital reserves at £17,873,000. Is the Minister under the impression that these represent liquid resources which can be used to offset revenue deficiencies? That sum is represented by fixed assets. Included in that £17,873,000 is this £4,800,000 which the Government is now going to ask the board to repay. That £4,800,000 will now appear as a capital liability of the board and will have to disappear from its capital reserves. Of the balance of £13,000,000 the board states in its report that it is an accumulated sum made available towards the replacement of fixed assets; the report also stated that of that sum £2,272,000 was utilised to wipe off the cost of plant withdrawn from service. Is it contemplated that the board is not now to make provision out of its reserves for the replacement of its fixed assets? The £11,000,000 which will appear in the board's accounts after this £4,800,000 has been deducted from its total capital reserves, and deleting £2,272,000 already used to wipe out plant that is no longer in use, represents 16 per cent. of the total cost of its fixed assets on the 31st March, 1954.

Mr. Norton

Has it not got certain reserves?

Mr. Lemass

Some trivial reserves.

Mr. Norton

Trivial? Is £2,000,000 trivial?

Mr. Lemass

Where is it?

Mr. Norton

£2,000,000 now is trivial?

Mr. Lemass

I did not say £2,000,000 was trivial. It certainly would not be trivial to me. They have some trivial reserves shown in their accounts. The only reserves worth talking about——

Mr. Norton

They had so much money that they had to create new reserves.

Mr. Lemass

——were a contingencies reserve of £700,000 and other reserves and provisions of £150,000.

Mr. Norton

More than that, now.

Mr. Lemass

That is what the board states in its report.

Mr. Norton

I know, but I think what I can show you will look much more cheerful.

Mr. Lemass

Here is the E.S.B.'s balance sheet for March 31st, 1954.

Mr. Norton

There has been a better Government since then.

Mr. Lemass

How much did the board put to reserve last year?

Mr. Norton

We will give the Deputy that afterwards.

Mr. Lemass

On the 31st March, 1954 they had capital liability of £65,000,000, sundry creditors, £3,000,000, loans from superannuation funds, £1,600,000, a contingencies reserve of £700,000 and other reserves and provisions, £150,000. That contingencies reserve is in my view inadequate having regard to the report. Remember that in 1952-53 they had a deficiency in their revenue account of £488,000. Another repetition of that situation and almost the whole of the contingencies reserve is wiped out. Their depreciation reserves represent 16 per cent. of the total of their present fixed assets and there is no business firm in the country in operation as long as the board who would consider that they had made proper provision for depreciation if in the end of that period they were only showing a depreciation reserve equivalent to 16 per cent. of their investment in buildings and plant. It is completely misleading to suggest that the reserves could be made available under any circumstances to meet the losses incurred under the rural electrification scheme.

My interest in this matter is because I believe that this rural electrification scheme was one of the best ideas yet conceived in this country for the improvement of conditions of life in rural Ireland and I do not want to see it sacrificed or slowed down merely to justify a bogus claim by the Government that they have carried out economies. This is not an economy; it still has to be paid by the people of this country and the effect of all this financial juggling that the Government has adopted is shown in the fact that instead of getting 100 areas completed in 1954-55, only 75 per cent. of that target was realised. If there is going to be a further diminution in the rate of progress because of this financial manoeuvring by the Government the people of this country are going to pay a very high price for the appearance of an alleged economy in the Government's accounts.

In any case, the position of the board is not changed; it is still an independent authority set up as such by statute and it is not responsible to the Minister for its charges, or for any decision it may take regarding the rate of development under the rural electrification scheme. We know the board went in originally to minimise its anticipated losses on rural electrification by picking out for early development those areas in respect of which the revenue from fixed charge was likely to be highest. That process of determining the order of priority among the areas for development was changed by the board on my persuasion in 1953 when a new method was devised which gave due credit to the percentage of residents in an area willing to take the supply. If the board is now facing a situation where every additional area that it connects is going to prove an additional loss in its accounts of £2,000 per year the board will obviously be driven back to the policy of giving preference to those areas in respect of which the loss is least and of going slowly in the areas in which the loss is greatest and that will ultimately mean, I am certain, that the number of highly uneconomic areas in the country will not eventually be taken up at all. At any rate, progress generally is going to slow down.

I do not know whether this idea of withdrawing the rural electrification grant was conceived in the mind of the Minister for Industry and Commerce and suggested by him to the Minister for Finance or whether it was a bright idea of the Minister for Finance in which the Minister for Industry and Commerce acquiesced. I feel sure it was the latter. I think the Minister for Industry and Commerce is defaulting in his obligations and responsibilities in allowing himself to be pushed in this matter by the Department of Finance, anxious to make some show of spurious economies in the Estimates. I hope eventually that the Minister for Industry and Commerce will summon up the fortitude necessary to resist any further demand of the same kind from his colleague in Finance.

Mr. McQuillan

I want to make only a few remarks on this matter. Firstly, I should like to join with Deputy Lemass in his remarks on the importance and the value of rural electrification to our people. The air is thick these days with the lamentations of so-called experts on the evils of emigration and when we examine the proposals put forward in this House over a number of years to solve the problem of emigration and to make conditions in rural Ireland better for our people, I think we will agree that the greatest Act passed in this House in that respect was that which brought about the rural electrification scheme. Now, if I felt that there was a danger of slowing down the date of development in rural electrification I would have no hesitation in condemning this Government outside every chapel gate in my constituency. I feel, however, that the Minister is a man who has the interests of the rural people at heart and I am prepared to accept from him the assurance he has given that there will be no slowing down whatever of the rate of development of rural electrification.

Mr. Norton

It is going up.

Mr. McQuillan

I will deal with that in a moment. We all notice in the reports issued by various State and semi-State companies that very often they exceed the targets they originally laid out for themselves, and they then proceed to give themselves a clap on the back for having done so. We should examine their achievements with caution and we should understand that, when these targets were first laid out, they were deliberately laid out on a very cautious basis, so that at a later stage, if it was found possible to exceed the target, it would be of great advantage to the particular State company to be able to say: "Not alone have we achieved the target laid out, but we have actually passed it", when in the beginning, in my opinion, very often the actual target laid down should have been double what they achieved.

We have had reports by outside experts with regard to the work carried on by the E.S.B., Bord na Móna and other bodies, and we have had reports from American experts who had no bias one way or another and they have described the work of the E.S.B. and Bord na Móna as being painfully slow. I do not want to dwell on the actual benefits conferred on rural areas by the introduction of electricity for the various uses to which it is put, but I can assure the Minister that no other benefit conferred by any Government can compare with the good achieved in the rural areas by this amenity. It is good not alone in the social sense, but in the economic sense and rather than boast that the rate is not slowing down, the Minister should not accept the target of his predecessor, but should be more than anxious to beat that target during the period for which he holds office.

I understand from the Minister's opening statement that he expects that the rural electrification scheme will be completed in 1959. He expects —I should like the Minister to make sure that the programme will be completed and sewn up by 1959. We have had the reasons from the former Minister for the delay in getting the scheme going to full capacity. It was due mainly to lack of material and equipment which was experienced from 1946 until 1951 or 1952. No such excuse is available at present. There will be a number of difficulties in the way of the E.S.B. and it is important to remember that many of the areas now left for linking up will be the most difficult areas to deal with.

I urge the Minister to ensure that the E.S.B. take into account that many of the areas which yet face them in relation to supply of current will be the hardest areas they will have to face, because many of these areas are the poorest and most backward areas, and consequently there may be many awkward developments ahead of the E.S.B. in that regard. I would not like to think that any awkward development of this nature could be used as an excuse at a later stage for saying that the scheme had to slow down. I hold that the withdrawal of subsidy or grant from the rural electrification end of the E.S.B. is going to militate against a further expansion of that programme.

There is one point in connection with this matter to which I want to refer—the extra service charge imposed by the E.S.B. in the rural areas. We know that, in the setting up of their programme, specific areas are designed into which current is to be supplied and that houses outside a particular area must pay an extra service charge, if they are to be supplied. I think it is a most unfair system. Very often, we find two or three houses perhaps in a cluster half a mile away from the designed area, and, just because these unfortunate people are unlucky enough to be that half a mile away, they must pay heavily for the line and poles necessary to bring them within the scheme. I know it from experience in my own county and I am sure that Deputies on all sides will agree with me, having had similar experiences in their own constituencies.

According to the Constitution, all the people of the country are equal and equal rights should be made available to them, but why should a man just because he is unlucky enough to be outside the particular area laid out in respect of the installation of current, have to pay an extra service charge, when he is perhaps the poorest man in the parish? There is surely no incentive there to the poor people to take advantage of this very important amenity. Difficulty has been experienced in many areas in getting a sufficient percentage of people within the defined area to accept supply but much of it is due to the fact that our people are—I was about to say very backward — hesitant about signing to take in a supply because they have not experienced the benefits of rural electrification.

When an area is put to the bottom of the list because the percentage acceptance is not so high, the E.S.B. are acting foolishly, because very often, as I am sure they have found out, it is a wise move to install rural electrification in an area which at first sight appears to be rather hesitant about it, even though the percentage acceptance at the beginning is low, because, within perhaps a week of installation in the area, the other people who up to then have not signified their acceptance will come in in droves. All they are waiting for is to see it in operation and once they have seen the benefits to their neighbours, there will be no lack of applications for its installation in their own homes.

I want to impress on the Minister the necessity for getting rid of this extra service charge. I think a sum of £85,000 was handed back out of the rural electrification programme, and, while not being an expert mathematician, I feel sure that even a sum of £85,000 would go a long way all over the country to remove the extra charge now being imposed on the people who live outside the specified areas to which a supply is to be given and I urge the Minister, by further legislation, if necessary, to ensure that the E.S.B. will be given the power to cut out this extra service charge.

I do not know whether I would be in order, when this comes to the Committee Stage, in moving an amendment to that effect. If the Minister shows that he is sympathetic towards removing this hardship from those people who were unlucky enough to be outside the specified areas, I feel it would be unnecessary for me to introduce an amendment. I can assure him that if he shows that he has no intention of meeting the wishes of the majority of this House in that respect, then amendments will be put in before this measure goes through.

Micheál Ó Cinnéide

Baineann an Bille seo leis an mBórd Soláthair Leictreachis, agus tá cúpla rud le rá agam air.

I do not know whether this Bill divorces the E.S.B. from the State and sets it up as an independent body or whether it makes it a kind of in-and-out, semi-independent body, but subsidised all the time by the State and the State ultimately responsible for its finances. If that is so, if the ultimate responsibility for the proper running of the electricity supply devolves on the State and the Department of Finance and the Government, there are certain matters to which I wish to draw the attention of the House, that is, the inefficient and wasteful way the E.S.B. is run at present and the incompetence of it. We are looking at it there in the Midlands for a number of years.

Mr. Norton

Is this in order? I have no responsibility for the administration of the E.S.B.

Mr. Kennedy

I respectfully suggest——

Mr. Norton

I am asking for a ruling. If it is in order, the Deputy is most welcome.

Mr. Lemass

May I submit that the reason why the Dáil votes additional capital to the E.S.B. only on a two-yearly basis is to give Deputies an opportunity of saying what they like about the E.S.B. as these Bills come along? The E.S.B. must be at some stage subject to criticism.

Mr. Norton

The main way of doing that is on the annual report, which can be discussed. The Minister has no power to interfere in the day to day administration of the board and therefore cannot be asked to reply to these allegations of neglect and wastefulness which apparently Deputy Kennedy is going to make.

An Leas-Cheann Comhairle

Since the House is voting money, the House is certainly entitled to discuss the details, but not in very minute detail.

Mr. Lemass

Surely it is perfectly relevant for the Deputy to contend that the E.S.B. is wasting money?

Mr. Norton

If that is all, I do not mind. I thought he was going to give several instances and expect me to defend them. I have no power to defend them and I do not know anything about them.

Mr. Kennedy

I may say that I have drawn the attention of the E.S.B. to the facts that I am going to state here and have drawn it in detail. I have submitted a long statement to the manager of the E.S.B. about the waste of wire and fittings scattered all over the country with nobody apparently responsible for them, bits of this and that being taken by everybody into their own yards. I also drew the attention of the management to the fact that they were not putting in proper labour hours in rural electrification in the equipment of the villages and towns. My county council drew the attention of the E.S.B. to the fact that there were nights last winter when there were no lights in the rural towns. We also drew the attention of the E.S.B. to the fact that when places like Mullingar are lit up for fairs early in the morning, the lights are left on all the day.

If that is the pattern that we are to have in the future, it is a terrible waste of money to make the board into a quasi-private company and invite the public to subscribe millions of pounds to carry it on in this way. We should hesitate about giving that power to the board until they mend their hand and run their business as an ordinary business would be run. Ordinary business, if it is not run rightly, ends in the bankruptcy court; but this company, if it is not run rightly, comes to the Exchequer and saves itself every time. I avail myself of this opportunity to draw the attention of the House—as I have done already privately to the E.S.B. on more than one occasion—to the facts I am stating here now and which I stand over. The Minister and the Government should examine the whole thing. I am not going to annoy the Minister, as he seems not ready to receive any detailed complaints.

Mr. Norton

I have no power to interfere in the day to day management of the E.S.B. I was prevented from having this power by the Act passed through this House.

Mr. Kennedy

This particular Act, I submit, gives greater powers to the E.S.B. to carry on. It places more finance at their disposal.

Mr. Norton

Deputy Lemass complained that it is taking finance from them. You say it is giving them more.

Mr. Kennedy

I pointed out these things to Deputy Lemass and he told me it was my duty as a public representative to draw the attention of the public to them and I am drawing it now.

Mr. Norton

He says I am giving the E.S.B. less money.

Mr. Lemass

Oh, no.

Mr. Kennedy

I will not go into that crossword puzzle with the Minister now and will not be tripped up by things like that thrown across the House. Anyway, I have done what I considered my duty in drawing the attention of the House to these things.

Mr. Bartley

The Minister has posed a problem to the public in relation to the E.S.B. service that has left everyone puzzled particularly in my constituency. I cannot give the detail that Deputy Kennedy has given about wasteful practices, but perhaps the Minister would take note of them and pass them on, with a recommendation that the money saved in the elimination of these wasteful practices might very easily and very usefully be utilised to solve the problem Deputy McQuillan has mentioned. That is a very real problem in my constituency and I take it that it is a general experience in our rural areas.

Why should the E.S.B. go into an area and erect poles—where they are satisfied that the houses are sufficiently numerous or, if they are not, that the potential consumption is sufficient, to warrant connecting them—and leave a cluster of houses out for attention at a later stage? Is it suggested that the E.S.B. is going to save money by taking away its entire equipment, men and plant when it has its present programme done and in a year's time bringing back all that paraphernalia again to do these clusters now excepted?

Surely the E.S.B., being a big public utility, ought to take somewhat the same view as an ordinary public authority—which does not make any profits, just the same as the E.S.B. is supposed not to do? That public authority, when it comes with a water supply, will run it along the road. They will not compel beforehand a given number of potential users to sign along the dotted line. They will supply the service and let the public bring it into their houses if they choose but, in any event, it will be made available at sufficiently convenient points by way of pumps. I know you cannot pump electricity but I do suggest that, if the E.S.B. has gone into a district and if there are in that district a number of spurs which, on their present calculations, it would be uneconomic to connect, it is merely a case of adjusting the point of view in consideration of what they say themselves they eventually intend to do, namely, to come back again, having first cleared out bag and baggage. Taking what they are now doing and what they propose to do eventually as one operation in respect of the district to be served, I take it that it is a far more uneconomic proposition to do what they are doing now than it would be to put down the essential connecting services now that they are on the spot with their trucks, men and all the other equipment that they have transported into the area, to finish the area even if all the householders in that district will not connect up immediately.

That is the point that Deputy McQuillan was making. That is the point that every Deputy representing a rural area would make because that is the common experience of all of us.

At the moment the public are puzzled with regard to finances. The Minister suggests, by the way in which he has informed the public of the withdrawal of the subsidy, that the E.S.B. in fact had too much money and that they asked him to deprive them of some of it and that the Minister took the board at their word. The puzzle enters into the matter in those districts where the people are being denied the service unless they pay down an extra, special and very heavy charge to get the poles into the villages. They ask Deputies, if the E.S.B. are complaining that they have too much money, that their income is surplus to what the legislation permits them to have, why, in the name of common sense, will they not use this surplus money to serve people who cannot pay these heavy charges. These people maintain that they do not have to pay extra charges for water and so on and they ask why should the E.S.B. treat them differently from the way in which they are treated by other public utilities, whether under statutory bodies, elected bodies such as county councils or urban councils and corporations. These people further suggest that, if the board have a surplus, the people who are paying these very heavy extra charges beyond what the ordinary consumer has to pay have in fact contributed very considerably to that surplus of which the board seem to complain.

I do not want to say any more on this matter. This is the aspect of it that agitates me and the people whom I represent. I have put the matter sufficiently clearly to the Minister for him to be able to transmit to the board a real and very genuine grievance. These people say that they are being mulcted to create the surplus of which the board, apparently, are complaining.

Mr. P.J. Burke

I wish to protest strongly against the special charges that the E.S.B. are making in respect of a number of people in my constituency. Quite recently I put down a question in the House about these extra, special charges. I maintain that these charges are totally against the spirit of the Rural Electrification Act. It is completely wrong. I go further and say that these people should be refunded the money that they have been charged by way of special charges and that they should be put on the same basis of charge as applies in the case of other people who have availed of rural electrification. This discrimination is unfair and, as I have said, it is diametrically opposed to the spirit of the Rural Electrification Act that John Murphy will have his light at a reduced rate while Peter Murphy, merely because he was unlucky enough not to be connected by the E.S.B. when they were formerly supplying the area, must pay the special charge in perpetuity and that his children and grandchildren will have to pay it.

In the drafting of the Rural Electrification Act, the then Minister, Deputy Lemass, did not envisage any such extra charge. The idea in the Dáil at that time was that it was one of the finest pieces of legislation ever enacted and that it would give electricity to the people of rural Ireland at a reasonable cost, subsidised by the Dáil.

Now, there is this vicious practice. Certain people in my constituency are affected. I do not want to go into details, which would take up the time of the House. I have made representations to the E.S.B. I have asked questions in the House and got the usual stock reply, that the Minister could not interfere with the administration of the E.S.B. This is the only opportunity I have of raising the matter.

I do not think that Deputy Lemass or any of us who supported him at that time envisaged any such practice being adopted by the E.S.B. If there is to be equal treatment for all classes of our people we should see that not alone do we appear to be just but that we are just in every respect.

I do not blame the present Minister for this particular state of affairs one way or the other, but I do want to point out that a vicious practice has grown up in the administration of the Rural Electrification Act. I regard it as a vicious and unjust practice. In County Dublin I could pick out 20 groups of people who narrowly missed being included in the area arranged by the E.S.B. when they were connecting the area. I cannot believe, nor can any Deputy believe, that the Rural Electrification Act was intended to be used to penalise people. If the E.S.B., last year, had all the surplus money that they were supposed to have, why do they not refund the special charges which they demanded from these people over a period? I suggest that they should refund it now. I have read the Rural Electrification Act as first introduced to see if there was any section in it that would permit the board to make these extra, special charges. There is not one line in the Act giving them permission to do that. They could give some excuse at one time, but last year they stated that they had money over and there is no further justification.

I would like to see this Bill amended. I would like to see those people who had to meet extra charges, even though they were within the rural electrification network, getting a refund of those extra charges immediately or as soon as legislation to that effect can be introduced here. I press very hard for that because I think this is something which is wrong in principle and should never have been adopted. It is against the spirit of the Act. It is an injustice on certain sections of our community who are not in a position to defend themselves and are solely dependent on our defence of them here. I wonder what would be said if the same policy was adopted in connection with water charges, sewerage and the other amenities of which our people avail.

The purpose of this Bill is to facilitate our people in the rural areas. Unfortunately, somebody saw in this an opportunity for making special charges and now the present Minister states that the E.S.B. is able to carry on under its own steam, and so the glaring injustice continues day after day. If this is permitted the possibility is that we shall find ourselves up against more glaring injustices in the future. That is one of the points I want to make here and until the present position is rectified I will take every opportunity of pressing that point. I see no reason why certain people should have to pay special charges for a service that their nextdoor neighbours receive at a lower rate. I hope the Minister will take cognisance of that point.

Mr. Derrig

Deputy McQuillan has made the rather interesting suggestion that if we had amendments on the Committee Stage of this Bill we might be able to get more closely to grips with the problems associated with electricity development, and particularly with the problems associated with rural electrification.

It is a source of some satisfaction to find that the Minister for Industry and Commerce is able to do duty for the Minister for Finance. As the Minister for Finance has not intervened in this debate, it has fallen to the Tánaiste and Minister for Industry and Commerce to give the best account possible and he certainly has not let down the Minister for Finance, so to speak, in his treatment of the case for this Bill. It seems to me somewhat unusual perhaps that in this particular conjunction it is the Tánaiste and Minister for Industry and Commerce who is defending the withdrawal of a subsidy. Generally, he is advocating here and elsewhere throughout the country the extension of subsidies. Of course, all subsidies, as the present Minister for Agriculture reminded us on a celebrated occasion, have to be paid for, presumably by the taxpayer if not by the consumer. With regard to the general programme of electrical development the present Minister for Industry and Commerce and his predecessor, Deputy Lemass, are in a very fortunate position because on an occasion like this they can from their special knowledge treat of the problems in a way that is not possible to other members of this House.

We have, too, the interesting situation that this seems to be the only occasion, as the Chair has admitted, when the general work of the E.S.B. can be discussed. One would imagine from the Minister's attitude in relation to Deputy Kennedy's interpolation that this House was assembled for the sole purpose of according to the E.S.B., or any other State body, through the appropriate Minister of the day, whatever funds the board seeks and once the Minister for Finance, together with the Minister for Industry and Commerce, are satisfied, then presumably all that is necessary is that the Minister should come in here and state the requirements. The question arises, however, whether in the event of losses arising from the operations of such a body as the E.S.B. it is the community at large or the consuming public using electricity who will have to bear the loss and whether, if profits are accruing, it is the community in general that will benefit or the consumers of the commodity.

One can understand the anxiety of the Government, through the Minister for Finance, to escape any liabilities it possibly can. According to the Minister's opening statement it was the present Administration when they were in office on a former occasion which was responsible for transferring some of these obligations on to a refunding basis through the medium of which the annuity, the loss which would otherwise have had to be met, was put on a terminable annuity basis. I think the Minister mentioned a figure of £2,000,000 repayable over 20 years. Steps have been taken apparently to endeavour to relieve the Exchequer. I often wonder whether in the case of the particular device known as the terminable annuity what, in fact, is the amount of the actual relief to the taxpayer when he has to pay the interest charges and sinking fund on such an annuity for such a long period as 20 years. It seems an extraordinary way of financing a corporation which is supplying the public with a commodity which is in daily use in so many thousands of households.

The point has been made, and I think most people will agree with it, that while there may be something in the Minister's argument that the conditions obtaining in 1943, which were in the minds of the Administration of that day when they were making the arrangements in connection with the subsidy for rural electrification, may not be entirely applicable to the present time. Nevertheless, it is quite obvious that this is an endeavour on the part of the Exchequer to rid itself of the obligation in so far as that is possible which they at present have to bear for rural electrical development. The case has not been made here and could not, I think, be made unless a committee of this House had an opportunity of going into the matter in detail with members of the board to satisfy themselves, as to whether, in fact, the position is such that rural electrification has been so successful that we can apparently look forward to a progressive increase in revenue arising from further expansion.

We have no information from the board. No White Paper has been supplied with regard to the success of rural electrical development up to the present time although we are being asked to provide capital to the extent of £9,000,000. In addition to what the board have unexpended in their present limit of £2.4 million, the Minister has stated that a further £11.4 million is likely to be required up to 1958. The Tánaiste has stated that a further £11.4 million is likely to be required up to 1958. The House has no information from the board. As Deputy Lemass said, perhaps the exigencies of the Ministers who are anxious to get their holidays as soon as possible may have rendered it necessary to rush this legislation through, but I think it should have been possible in the event of the printed report not being available to members of the House to supply them with the main figures.

I must say that unless one had responsibility either for the Department of Finance or the Department of Industry and Commerce it would be difficult to get very much material in the accounts that are published as appendices to this report, but I think that where capital requirements to the extent of many millions of pounds have been sought, at least—whether we are going to have any further procedure in the way of examination of the affairs of this board by special committees or otherwise—I think we are entitled to get the fullest information.

It may be that it has not been the procedure in the past for specific memoranda supplied to the Minister by the board to be circulated to members of the House, but we are in the position really, that we are completely dependent for our information on what the Tánaiste said in introducing the debate here this afternoon.

In regard to certain of the Gaeltacht areas the board seemed to be flatly of opinion some years ago that they were so completely uneconomic that they just could not extend the supply to them. We all know that there must be a limit to what can be done. We have always been told that certain things are completely uneconomic, but we have not heard anything about that recently although some years ago we heard that the board had grave doubts about very many things which are now being done and for which a great deal of kudos is being sought and a great deal of publicity secured. That was not with regard to the extension of electricity into particular areas. That was in regard to the generation of electricity from native fuel.

I think it would have been a fair demand from the Minister to the board, without interfering with them unduly, to ask that over a period of years they should try as between one year and another to balance in each year the less economic areas with the better areas so that they would not be in the position—which I fear may be the case —that some of the least economic areas, a major proportion of these, may be left to the end of the programme. If that is so, it lends point to Deputy Lemass's argument that the present position with regard to revenue or the present percentage of return on the charges may not be the position when the final account is being made out.

It is a well-known fact that current has been refused in the hearts of certain areas and that isolated households have been left out because of the cost of connection. Whether later on the board will be able to say that they are able to connect these up with the rest possibly depends on the individual case. But the general question is whether at the latter end of the programme the board will not have a larger number than they had at the beginning of areas that are less economic and that the less densely populated areas will also figure more in the final stages of the programme. It is most likely, I think, in all these circumstances, that the final years of the rural electrification programme will be less economic and that the areas that will have to be done in the future may be described as more uneconomic.

The Tánaiste, in connection with the reference to terminating the subsidy in this particular case, advanced the axiom—which is rather a new one for the Tánaiste—that it would be better— I understood him to say, though these may not be his exact words—for the consumers to forgo a small reduction in the price of electricity rather than that they should have to bear the taxes to meet the costs which would otherwise arise. The question, therefore, that we would like to ask—and if the Chairman of the E.S.B. were here I am sure it is one of the first questions he would be asked—is whether, in fact, if the present measure does not mean an actual increase in charges at some time in the future that, at any rate, it may mean, as the Tánaiste's reference might seem to indicate, that some reduction which might have been possible to the consumers of electricity, would not be given. If we are to believe what the Tánaiste has told us about the very flourishing condition of the undertaking, one would imagine that it is the consumers who would be the first to benefit from that prosperity after the fixed charges and obligations have been met.

The Tánaiste told us that the accounts—I take it they were for the last year—are such that the Government is satisfied that all the liabilities can be taken over by the E.S.B.; that not only would they be able to pay the subsidy for rural electrification but that they would have a surplus. Where, may one ask, does the consumer come in if there had been a surplus? Is it likely that the Tánaiste will have any good word in connection with the rising cost of living in which he used to be so interested in the past? Would he tell the housewife he was happy to be able to inform her that there was a likelihood of a reduction sometime in the near future in regard to her electricity bill?

The Tánaiste seemed to suggest, in an exchange with Deputy Lemass, that the Exchequer was actually lending money to the E.S.B. at a less rate than they were borrowing. He spoke of Deputy MacEntee losing the ship for the ha'porth of tar. Of course, we have to take all the circumstances into consideration. I suppose, unless the Tánaiste were Minister for Finance, he would never see the problem and, perhaps, even then he would not be likely, having a different approach from Deputy MacEntee, to see it from Deputy MacEntee's point of view.

If we are enjoying a boom here largely as a result of conditions across the water it may be that, when the E.S.B. go to the country, they will be able to get money somewhat cheaper. Deputy MacEntee may be able to give some more information on that point. I am rather doubtful whether it is likely that interest charges, with the creeping inflation we are told is there all the time, are likely to recede but there, again, I am sure if the Tánaiste has any good words he will say them.

We remember when the Tánaiste was to take over the national credit of the country. The former Deputy, now Senator, Hickey and himself were to see that everything was made available for capital and other requirements at very little charge—in fact, at no charge at all. All you wanted presumably was the necessary machinery to produce the pounds.

I should like to know what the Tánaiste's reply will be to the point raised by Deputy Lemass that we can scarcely be satisfied that the position is never likely to arise again when the board may be faced with a loss due to some emergency condition but, leaving out the emergency condition altogether, there is the cost of the provision and the price of fuel. It was pointed out that in the year 1953 there was a loss. If during the year ending 31st March, 1954, which is the only year about which we have up-to-date information, and the year ended 31st March, 1955, the board got on so well that it was able to build up very large reserves, according to the Tánaiste, and is to be asked not alone to assume liability for the subsidy for rural electrification in the future but also to assume the past liabilities, one has a right to ask whether it is the opinion of the board that the position during the past two years—the last year was very much better, as the Tánaiste said, than any heretofore—is likely to continue and whether they have made allowances for the fuel situation and for any other circumstances that might militate against big profits?

The contingency fund they have built up is not a very large one having regard to the size of the undertaking. I take it that some share of the pension liability in the future will fall upon the revenue of the board. If the superannuation scheme is entirely self-supporting that, of course, means that there is no obligation.

The total reserves are not out of proportion—in fact, I think they are scarcely adequate having regard to the size of the undertaking. Because of the fact that it is so widely scattered, that it is subject to accidents of storm, breakdown and so on, no one can say what the trend or the position may be or what further heavy capital expenditure may be required in years to come. The Tánaiste suggested in his opening statement that, when this Bill goes through, we are not likely to hear from the board again. That is to say, they will not come to this House again looking for a further extension of the limit of their finances. In any case, I think he mentioned the year 1959 and that we could let the situation develop until 1959 conscious that the programme of rural electrification had been accelerated and that by that year it would have been completed. But it is rather a long time and there is no other machinery available to members of the House by which they can get information regarding the board's undertakings, the programmes they have in mind and have at present in operation. There is no other method by which we can get information as to how in actual fact the rural electrification policy is working out, what the percentage of loss is on particular schemes, at what point a scheme becomes completely uneconomic, and whether the small increase in the percentage of those taking the electricity—from 60 per cent. some years ago to 69 per cent.—is more than compensation for the additional costs of extending the scheme further into more remote and less economic areas. All these are points about which we have no information.

Mr. MacEntee

If a stranger were to walk into this House the first and most remarkable fact which would strike him and press upon his vision would be, I think, the vast desert of benches that would normally be occupied by members of the Labour Party and the Clann na Talmhan Party. I think that is something which we ought to call attention to because these two Parties purport to represent the interests which will be most vitally affected by this Bill, and yet they are not here even to hear the Tánaiste defend the Bill, and they are not here even to make a protest on behalf of the special interests which they represent and which will be most directly affected by the Bill. One can only say that they have been forcibly fed with it in committee: they are fed up with this Bill, they have got a surfeit of it and dare not come in here to reply to the criticisms which can very properly be directed against it.

We have outside this House bodies which pretend to represent public opinion. When the price of bacon goes up or comes down, when there is any alteration made in the price of any day to day commodity, these organisations become very vocal. There is, for instance, the Housewives' Association, and there is the Association of Irish Industries, and yet here is a Bill which affects all of us whether we are householders, whether we are employers, or whether we are employees, whether we are trying to make things or grow things in this country. I have not seen —at least I may not have read the papers with sufficient care—any examination of the effect of this Bill upon any one of the interests which are vitally concerned with it.

Normally I would not intervene in a debate of this sort, but I think we should try to see what is going to be the effect of this Bill upon the cost of living, what is going to be the effect of this Bill on production costs in industry and on distribution costs, what is going to be the effect of it on the worker and the labourer, what is going to be the effect of it on the housewives, and what is going to be the effect of it in every household in which electricity is used for lighting, cooking or cleaning, whether that household be the household of a labourer, a shopkeeper, a farmer or a manufacturer.

I think it indicates an appalling apathy on the part of the public, and particularly of those organisations which pretend to represent special interests in this country, that this Bill should be allowed to have reached this stage of debate in the House without any particular attention being directed to it. The whole time of this House, for days on end, was occupied by a Bill which is designed to do the impossible: to curb the ordinary human desire to make easy money but which does not affect anything so far as the economic life of the country is concerned, a Bill which will not affect by one iota the money which goes out of one pocket and into another, and which is probably spent wisely or unwisely in buying things; but here is a Bill which is going to affect the cost of everything that is grown and of everything that is made in this country, which is going to affect the cost of everything that is sold in this country whether it is made here or grown here or is imported.

Mr. A. Barry

Is the Deputy serious?

Mr. MacEntee

I am, because the main purpose of this Bill, which has been very carefully concealed, is to compel the E.S.B. to raise the charges on consumers of electricity: on the man, for instance, who uses electricity in his workshop, on the man who uses electricity to light his business premises, on the person who uses electricity in the home for cooking or in a vacuum cleaner, a washing machine, or an iron. This Bill, let me repeat, affects every user of electricity in this country no matter in what capacity he or she may use it. The whole purpose of the Bill is to compel the E.S.B. to raise the charges on the consumer, and, incidentally, to slow down rural electrification.

We have, in this House, Deputies who purport to represent the special interests of farmers, and particularly the special interests of farmers in isolated areas. What classes was the rural electrification designed to benefit most? Surely those who are living in these isolated areas, the small farmer and the housewife. There was a social purpose behind the rural electrification scheme. It was to provide for those who dwell in our rural areas, for those who are the backbone of our economy; it was an endeavour to provide for them some of the amenities which are enjoyed by those who live in our cities.

That is why the scheme is uneconomic. Rural electrification can never be carried out on the basis that the revenue derived from the units of electricity sold in the rural areas will cover all the charges arising in bringing an electricity supply to rural areas. That is why, when the Fianna Fáil Government introduced this scheme, I had to come here to this House to secure a modification of the then existing Supply Acts—to enable the E.S.B. to sell electricity at a loss in rural areas because, under the Acts as originally devised by the present Attorney-General, the then Minister for Industry and Commerce, Deputy McGilligan, the E.S.B. could not sell electricity unless the full cost of that electricity was recovered by the charges made on the consumer.

The reason why we have had to subsidise rural electrification is because in this country, in no conceivable circumstances, would it be possible to supply electricity to the ordinary dweller in the country districts at a price which he could pay. Therefore, we had to decide that, as there were social advantages to be derived from an extension of the electricity supply network to the rural areas, as it was our purpose to try and induce people to remain on the land and to work on the land and as it was our purpose to enable them to produce at the lowest possible cost, it was therefore advantageous to supply them with a ready, easy and convenient source of power for use in their agricultural industry and we had to ask that this charge should not be borne by the general body of electricity users but should be borne by the community as a whole.

Mr. A. Barry

It is the same thing.

Mr. MacEntee

No, it is not the same thing, and that is just the point, because not everybody in this country takes his electricity from the E.S.B. There are people who still are in a position to supply electricity out of their own resources for themselves. There are others who have not the advantage of being able to take their requirements from the public electrical undertaking. Therefore, we said, just as it was found necessary during the war to grant subsidies for several purposes, that because there is a social purpose behind rural electrification it is proper that the Government should contribute some part of the cost of that scheme. Mark what I have said, some part of the cost of that scheme, not the whole cost.

Mr. Norton

You mean the taxpayer.

Mr. MacEntee

Yes, the taxpayer. We said some part of the cost and the cost I gather is in the order of £1,000,000 a year but the total amount paid in subsidy is not of the order of £1,000,000 a year but just about half that sum. We have now the position that the ordinary consumer of electricity, the general body of users, are providing half the cost of the subsidy and the Government is providing the other half. I could not think of a more equitable distribution as between the two interests as that is. There are still people who long ago paid their share of the capital cost of the plant and the network and who are still paying. There are people in this country using electricity for 40 or 50 years and they are still paying as if they had just come on the network as new consumers this year. They are subsidising, to an even greater degree than the average consumer, the supply of electricity in rural areas. We do not quarrel with that because in these things there has to be a degree of give and take.

It was the policy of the Government when setting up the rural electrification scheme to see that the most good was done to the greatest possible number and therefore it is unfair and unjust that the whole burden of providing electricity for these rural areas should now be transferred to the shoulders of the ordinary consumers of electricity who live in Dublin, Cork or any one of the other towns and villages where electricity has been an economic proposition almost from the start. That is the purpose of this Bill. That is what this Bill is going to do. It is going to compel the E.S.B. to raise its charges to the ordinary general consumer in order that the board may pay the capital cost and interest of the network which it has already erected and erected under a pledge given by the Government that the Government would contribute a substantial moiety of that capital cost and those interest charges. That is the purpose of the Bill. Certainly then, the effect of the Bill will be to increase the charges to users of electricity very substantially.

Mr. A. Barry

Very substantially?

Mr. MacEntee

Yes and I will show you how substantially. The Deputy has apparently not considered this matter very carefully. It will increase the charges very considerably in the future and it will slow down the progress of rural electrification in this country. Are those Deputies who are supporting the Tánaiste in favour of that? Do they think that our farmers are as well equipped as those in Belgium and Holland in regard to the supply of power? I do not think they are—not by a long way. It is one of the great handicaps under which our agricultural industry labours that our competitors, the Danes, the Dutch and the Belgians, who have as ready access to the British market as we have, have cheaper transport and cheaper electricity and cheaper fertilisers. One of the purposes of this Bill is to add an additional handicap to the efforts of the Irish farmer.

I apologise to the Tánaiste that I was not able to be here to listen to his speech, but I gather that he suggested that the E.S.B. is rolling in money and that in the year 1953-54, it made £233,000 and that this year the surplus will be much more. Who is entitled to the benefit of that surplus? The original Act laid down that the board should so regulate its charges as merely to cover its outgoings and to make provision for contingencies and reserves. I think the board must be far-sighted and prudent in these matters because if an accident happened, and there is no safeguard against a catastrophic failure in relation to any of these big public undertakings, if a dam was to fail what position would the board be in? We know that these accidents can happen and in that event the board would find itself the loser to the extent of millions of pounds.

Mr. A. Barry

All of us would be the losers.

Mr. MacEntee

We are talking of the board which is responsible for operating and maintaining it. If that were to happen the reserves of the board, which are large and ample, would probably cover it, but they would not be found disproportionate to the risk that could then be run. I am not suggesting that there is any likelihood that we should have such a catastrophic failure in this country but it has happened elsewhere and what has happened elsewhere might happen here.

Mr. O'Donovan

Are you referring to middle eastern utilities?

Mr. MacEntee

The Parliamentary Secretary knows a lot about cattle but he does not know much about this, so will he please be quiet. It is not so many years ago since an accident did happen on the Shannon scheme when an embankment began to give way. It just shows you the dangers that the E.S.B. has to provide against and the point I am making is that it is not fair to the board or to this House or to the taxpayer and to the consumer to expect the board to run on its bare poles, as it were. The board must have a lot of reserves and there is no use in coming to this House and saying that the board made £233,000 for the year ending 31st March, 1954, and that it will make much more for the year just passed. Those were two exceptional years. We had entirely abnormal rainfall for this country in those years and I remember when we had abnormally dry years in this country. I remember when we had abnormally dry years and when in 1934 and 1935 we had actually to try to retain some ships to use their engines as prime movers to generate electricity to make good the deficiency in the water from the Shannon. The Deputy may gibe at this if he likes. He is not interested in the same way as people who have to work and produce in the rural areas.

Mr. A. Barry

We are all in the same boat.

Mr. MacEntee

We are not all in the same boat by any means. The person who uses a few units of electricity a year in an office is not in the same boat as the man who may have to use 10,000, 20,000 or 50,000 units a year in his workshop, in his industry. This is a very serious matter from the point of view of those who are trying to build up and maintain Irish industries.

Mr. Norton

That is a very Cassandra-like mood. There will be no industries left if you do not finish quickly. We will have the end of the world.

Mr. MacEntee

I know the Tánaiste is not able to contain himself; his native courtesy will break out. The Tánaiste is like a shrew of a woman. His tongue must rattle, rattle all the time.

Mr. O'Donovan

What about the Deputy's.

Mr. MacEntee

I am in possession. It is the privilege of Deputies to speak in this House. That is what we are here for. We are sent here to express points of view.

Mr. Norton

We know what we have to put up with.

Mr. MacEntee

It may be uncomfortable for the Tánaiste and I may be getting under the skin of the Tánaiste's supporters but the real fact of this matter is that this Bill will impose a very heavy burden upon every consumer of electricity.

Mr. A. Barry

Rubbish.

Mr. Norton

The Deputy takes himself too seriously.

Mr. MacEntee

I cannot bandy words with people who will interject in that way. If the Deputy thinks it is rubbish. let him stand up and show it is rubbish. Do not use the Tánaiste as a mouthpiece. The Deputy has shown he can vocalise on occasions in this House. Let him stand up and refute what I am saying if he can. If the Deputy can do so and convince me that he is right and I am wrong, I shall be able to admit that he has a better understanding of this problem than I have, but I do not think he has. I may be conceited and I may be self-opinionated but I do not think he has.

Let us try to get back to this question. I was pointing out that 1953-54 and 1954-55 were two abnormal years in this country, years when there was altogether abnormal rainfall, a phenomenal rainfall, as they said, something which did not occur for a great many years. Naturally the farmers were not able to take much advantage of the rain but the E.S.B. were and they had a very heavy surplus in 1953-54, amounting to £233,000. I have not got any later figures than those but I gather the year which ended on the 31st March last will probably show even better figures. So far so good, two good years. In one year the E.S.B. made £233,000; the following year it may even have made more. But what about the year before 1953-54? In the year which ended on the 31st March, 1953, the E.S.B. did not make any money at all. It did not make £233,000 but lost nearly £500,000. To be exact, it lost according to the board's own figures, £488,000. That is the deficiency which the board's accounts showed for the year ended 31st March, 1952.

Mr. O'Donovan

1953.

Mr. MacEntee

All right. 1953. I am sorry.

Mr. O'Donovan

It is important. There is a connection.

Mr. MacEntee

It is not important. It is a great pity that the Parliamentary Secretary has not yet outgrown the debating society in which he cut his wisdom teeth.

Mr. Norton

It is a pity the Deputy has not done it, too.

Mr. MacEntee

In the year ending 31st March, 1953, the E.S.B. lost £488,000. That is almost £500,000, more than twice what the board made the following year and almost as much as I gather the board made in the year which ended on the 31st March of this year. What about the year before? In case anyone thinks that these were exceptional years let us take the year before. For the year which ended on 31st March, 1952, the board did not make a profit of £500,000, or of £200,000 or of even £1,000. The board just broke even with a profit of £962—a profit of £962 derived from sales amounting to £6,500,000. That is what happened to the board in 1952 and on the basis of those figures there is no justification whatsoever for what the Tánaiste is proposing to do now because the inevitable effect of this Bill, on the basis of the figures which I have quoted, will be to compel, as I have said already, the E.S.B. to raise charges to the consumer.

Mr. A. Barry

What about expanding sales?

Mr. MacEntee

Expanding sales do not matter if the cost of fuel is going up and it is going up. The Deputy cannot teach me anything about economics in relation to the E.S.B. and he may make up his mind about that. However, that is not germane to the debate. There is something very peculiar about the reports as they have been presented to us. We have here figures which show the average number of units sold, the average price in pence per unit sold, the total number of consumers, the revenue derived from sales to those consumers and the proportion which sales users of industrial power bear to the whole. Therefore, looking at it roughly—and I am speaking very roughly—I would say the number of units sold to the users of industrial power amounts to about 30 per cent. of the total sales of the E.S.B. Let us consider that just for a moment. Under this Bill the whole cost of the subsidy which has heretofore been paid to the E.S.B. for expanding the rural electrification network will fall on the consumers of electricity as a whole.

We have no figures—and that is the significant omission from these accounts—showing what revenue is derived by the board from sales of motive power, and therefore we are not in a position to calculate what would be the average price to the manufacturer, to the industrial user of electricity; we are not in a position to calculate what the average price per unit for electricity is to the industrial user. Of course we can make a rough and ready shot. We know from experience, at any rate, that electricity costs the industrial user between 2d. and 3d. a unit. A great number of factors enter into what the final price will be, but it is within that range of 2d. to 3d. per unit. Therefore everyone engaged in industry and who uses a great deal of electricity for power purposes can judge what the position is.

What is the position in Great Britain? The position is that on the average the British manufacturer pays only 1d. per unit for his electricity supply. Therefore he is to that extent in a very much better position than the Irish industrialist must be, than the Irish industrialist is. That is bad enough, but what is going to be the position if this Bill is passed? It is not possible to make anything like an exact calculation, but if the £500,000 which the Government heretofore has been finding for the purposes of rural electrification is now to be passed on to the general consumer the effect of it will be, I think, to increase the cost of electricity to the industrial user by ? of 1d., and it is going to put him under a very severe handicap as compared with, say, his counterpart on the other side of the Irish Sea.

It is certainly going to be the last straw which will prevent him from getting any sort of foothold on any export market for his products. We have established a concern for the special purpose of trying to develop Irish industrial exports. It was originally designed to try and exploit the American market and to sell our produce for dollars but was subsequently widened to embrace the whole earth, and here the Minister tells us about the future of the Shannon which they were decrying six or eight years ago and about the efforts to develop Irish industry and to find markets abroad for our produce.

Here we have a Bill the only purpose of which is to load the dice more heavily against the Irish manufacturer. Despite the fact that we have two or three organisations supposedly looking after the interests of the Irish manufacturer, there has not been one of them assigned to examine this Bill or express an opinion as to what the likely effects of it would be in so far as Irish industry is concerned. But any manufacturer who reads this Bill and looks at the accounts, and looks at his own accounts from the E.S.B., can form a very shrewd idea of how much it is going to cost him year in, year out, if the Bill is passed.

Let nobody think it is going to be the manufacturer only who will be affected by this Bill. As I have already said the shopkeeper is going to be affected, the farmer is going to be affected, the employee as well as the employer is going to be affected. There is not a household in this country using electricity that is not going to be compelled by this Bill to pay more for electricity than they have been paying heretofore. It is not the only contingency which they may have to contend with because if the cost of fuel and other costs go up they will have to pay more again for their electricity because if wages and fuel go up, naturally, under the terms of the Act, the E.S.B. will have to pass these charges on to the consumers.

That is inevitable under the terms of the E.S.B. covenant with the Government and the people. But this Bill is gratuitous and unnecessary— something which cannot be explained. After all the Minister and his Party are the people who set themselves up as wanting to raise the standards of the worker. The Minister and his Party were the people who said that the whole purpose of their political life was to raise the standard of living of the worker. Is it going to raise the worker's standard of living to be asked to pay ? of 1d. or perhaps a farthing more for his electricity —for the electricity he uses for heat, for cooking, if his wife has an iron, if the family has a radiator in a bedroom or if the family has a clothes washer worked by electricity? Is it going to raise their standard of living to compel them to pay more for this electricity as the Bill proposes? The Minister for Industry and Commerce knows the effects of the Bill and there is no use in piping down about it because he will not be allowed to do so.

Neither is there any use in the Labour Party boycotting the debate by absenting themselves from the House nor for the Party which set themselves up as representing the farmers being conspicuous by their absence also, because there are 400,000 users of electricity in this country and every one of them will be adversely affected by this Bill. They are more numerous— and the Minister, a good politician, knows this—than the old age pensioners and he may have given something to the old age pensioners. But do not forget that he is taking £500,000 a year at least out of the pockets of the consumers and the users of electricity in this country. He is not going to be allowed to forget that and we will not allow him to forget it either.

Mr. Norton

If anybody listening to Deputy MacEntee believes about 10 per cent. of what he said, the only obvious course for him is to get out of the country immediately because Deputy MacEntee has forecast more gloom and misery here in the course of his three-quarter hour speech than I have ever heard from any one dejected Deputy. He was in his most Cassandra-like mood this evening. Whatever about any other part of the world, according to Deputy MacEntee this country was certainly racing to its abysmal end. The poor Deputy was haunted, while speaking, about shortages of water at one stage and the bursting of the Shannon banks at another stage. In his daft creation he continued to chill his own blood and if the Deputy got any consolation out of that physical exercise I do not suppose the House will begrudge it to him. But the mistake the House and the country could make would be to take seriously what Deputy MacEntee said, because quite clearly his effort this evening was nothing but a tenth-rate pantomime show which deceives nobody, particularly anybody who knows Deputy MacEntee.

But I want to get down to the facts of the Bill now before the House. Here are the plain facts of the situation and of the issues involved. I think this is the starting point of the discussion or the starting point of our approach to the problem: is the E.S.B. to be as far as possible a self-supporting organisation or is it to be self-supporting in respect of three-quarters of its activities and even be entitled to earn a surplus in that field while in respect of the other quarter of its activities it gets a subsidy from the ordinary taxpayer, even though in respect of the other 75 per cent. it needs no subsidy and has a surplus that could more than meet what is necessary to make it solvent in respect of the other 25 per cent. of its activities?

Deputy Lemass said frankly that he had no objection in principle to the E.S.B. being regarded as a body which was quite entitled to balance its budget, as a single organisation. The only question he asked was: what is the best way of doing it? He took one view and this Bill takes another view. The simple position is that, when this original rural electrification scheme was first conceived, it was conceived by people who had no previous experience of rural electrification, and the plan for giving effect to it was worked out by a Government which had no previous experience of rural electrification. In a very large measure, because of the absence of previous experience, it was a case of giving hostages to fortune to see how things would work out. The scheme has been in operation since 1947 and we are entitled in 1955 to see what way the scheme has operated since it was first introduced in 1947.

In 1947, the approach was that rural electrification must always be subsidised and that approach was made on the assumption that the fixed revenue charges would only amount to so much and that the outgoings would amount to so much, so that there would be a gap to be bridged and that a subsidy from the taxpayer was necessary to bridge that gap. I want to show, as indeed I have already shown in my opening speech, that the need for this artificial respiration, this financial artificial respiration, for the E.S.B. no longer exists. So far as that organisation is concerned, it can now stand on its own feet and more than stand on its own feet. It is, in fact, one of the most thriving economic organisations in the country and its financial position is one of the soundest in the country.

Why, therefore, should we continue, in the face of clear evidence of there being no need to do so, to subsidise an organisation whose financial position is exceptionally satisfactory, whose financial position to-day is better than it has ever been in its long history? The truth of the matter is that you cannot keep the E.S.B. from making progress. It is making progress more rapidly now than it has ever made it before and I want to put some figures on the record to prove that.

In the year ended March, 1954, the E.S.B. erected approximately 68,000 poles; in the financial year which ended last March, they erected 91,000 poles. In the financial year ended March, 1954, they strung out 3,700 miles of wire; in the financial year just ended, they strung out almost 5,000 miles, of wire. In the year ending March, 1954, they connected up 23,000 odd new consumers; in the financial year ended March, 1955, they connected 29,000—almost 30,000—new consumers.

Look at the production and the units sold. In 1954, they generated approximately 1,300 million units; in 1955, up to March, 1955, they generated 1,460 million units. In the year ended March, 1954, they sold electricity to rural consumers to the value of £1,400,000 and in the year ended March, 1955, they sold £1,800,000 worth of current to rural users. In other words, in a single year, they sold an additional £400,000 worth of units of electricity to rural users. In the non-rural areas, they sold £7,100,000 worth of current in the year ended March, 1954, and, in the year ended March, 1955, they sold £7,700,000 worth of current to non-rural users. It is clear from these figures that the board is not only able to generate an increasing number of units, but is selling to-day a greater number of units at a profit than it ever sold before.

Mr. Lemass

It is just the normal increase. The same increase has taken place for the past 30 years.

Mr. Norton

It is much more. Do not let Deputy MacEntee infect you.

Mr. Lemass

I have the figures here.

Mr. Norton

The Deputy is normally optimistic and I do not want him to get Deputy MacEntee's virus. In the year ended March, 1954, the board employed a total staff of 1,881, on the rural electrification scheme and in the year ended March, 1955, that increased to 2,580—all clear evidence of the manner in which the E.S.B. is continuing to make progress.

Mr. Lemass

Why did they not get the 100 areas completed which they said they would?

Mr. Norton

They told you that and apparently it is a matter between you and them.

Mr. Lemass

They said it in their published report.

Mr. Norton

I do not know what your relations were and I do not care. What I am telling the Deputy now is that, for the first time, under this Government, they are going to get 100 areas.

Mr. Lemass

When? They said in this report that they would get that figure last year.

Mr. Norton

They wrote that report when you were in office and what they said in it to you when you were in office is a matter between you and them.

Mr. Lemass

They published it when you were in office. Does that make it any better?

Mr. Norton

It only recorded what they said to you.

Mr. Lemass

Why did they not do it?

Mr. Norton

I am telling you that they are doing it now and I will produce the evidence in a few minutes.

Mr. Lemass

Can the Dáil get the information as to why they did not do it last year?

Mr. Norton

If you are specially interested, I will ask them why they did not keep their promise to you.

Mr. Lemass

And to the public, in their report.

Mr. Norton

But they are keeping the one they made to me, you notice. Deputy MacEntee went to great pains to say that there was a catastrophe for the E.S.B. funds in 1953 when they lost £488,000. He said they had only a small surplus in 1952. The actual surplus was about £45,000. What he did not tell you—and this was clearly deliberate suppression—were the previous figures. He did not go back to 1951, when the surplus was £546,000, or to 1950 when it was £262,000, or to 1949 when it was £240,000, or to 1948 when it was £102,000, or to 1947 when it was £265,000, or to 1946 when it was £152,000. Deputy MacEntee deliberately suppressed those figures, all of which go to show that between 1946 and 1955 the board made a surplus in every year but one—and that one was due to unprecedented causes in 1953. In every other single year it has made a surplus and in these years it could have carried the cost of rural electrification without imposing any burden on consumers.

Mr. Lemass

It could not.

Mr. Norton

The position is this year that the board has yielded a surplus that it never previously dreamt of. The surplus on the board's account this year will be in the vicinity of £928,000. Is there any sane man or woman in this country who says that a board which has a surplus of £928,000 is the kind of board which should be subsidised? If Deputy Lemass had these figures, would he want to subsidise the board?

Mr. Lemass

That is not enough to cover the losses.

Mr. Norton

We will come to that in a second. Last year's surplus was £242,000. They could have carried rural electrification on that last year.

Mr. Lemass

No. The interest on the arrears alone is £245,000, according to the Minister for Finance.

Mr. Norton

One second.

Mr. Lemass

They want another £1,000,000 as a surplus if they are going to carry rural electrification.

Mr. Norton

This year the board has yielded a surplus of £928,000 approximately, the biggest in its history, and this is the year in which it is suggested we should continue to subsidise rural electrification.

Mr. Lemass

It is the year in which the 1953 increase in charges should be revoked.

Mr. Norton

The increased charges you put on?

Mr. Lemass

Yes.

Mr. Norton

Is this another job you are giving us to do for you?

Mr. Lemass

That is what I said was going to happen.

Mr. Norton

The trouble is that you have been a most discordant team on this Bill. Deputy Lemass says you should bring down the charges for electricity.

Mr. Lemass

I said they would come down.

Mr. Norton

Two seats away from him, Deputy MacEntee says that charges are going to go up.

Mr. Lemass

They will—because of this Bill.

Mr. Norton

They will not. I am putting on record now that they will not go up. I have said already that they will not go up. There is no justification for their going up. Do not get infected with Deputy MacEntee's gloom, whatever else happens. As a matter of fact, the board has been doing so well that this is its position as far as reserves are concerned. The board has reserves provided for depreciation, renewal of its physical assets, at 31st March, amounting to £12,700,000.

Mr. Lemass

16 per cent.

Mr. Norton

In addition to that— and that is not all—the board have the following reserves. They have a contingencies reserve of £1,000,000— and that £1,000,000 was got by adding £300,000 to that reserve fund this year. They have a fuel cost equalisation reserve of £500,000. They have an income-tax reserve of £100,000 and other reserves and provisions amounting to £263,000. The deficit in 1952-53 was met from the contingencies reserve which had been re-established in 1948-49. This reduced the reserve to £500,000, but with the surpluses produced in 1953-54 and 1954-55 it has been possible to increase this reserve to its present level of £1,000,000 and in addition to create two new reserves, namely, the income-tax reserve and the fuel cost equalisation reserve, as well as increasing the other reserves and provisions from the 1953-54 level of £150,000 odd to the current figure of £263,000 odd. In other words, the E.S.B. has more reserves than it ever had and more reserve funds than it ever had and it has reserve funds now for purposes that it never had them for before.

Mr. O'Leary

That is what is annoying him.

Mr. Norton

I do not mind Deputy MacEntee walking into that, but I cannot understand Deputy Lemass's line-up on it.

Mr. Lemass

May I ask the Minister did the board charge up in these accounts its new liability under this Bill?

Mr. Norton

The board knows that it is getting no more money for rural electrification——

Mr. Lemass

Did it charge that up?

Mr. Norton

——for the simple reason that there is no purpose in throwing apples into an orchard— which is what we have been doing up to now.

Mr. Lemass

Did it charge that in the accounts?

Mr. Norton

I have not gone through the accounts, but the board has known for many months past that it is not getting any more money for rural electrification—because it does not need it.

Mr. Lemass

I will take a bet that it is not charged in the accounts.

Mr. Norton

I do not like to gamble imprudently on these things, but I think you will find that the board has taken note that there is no further subsidisation.

Mr. Lemass

When you let the accounts out, we will see.

Mr. Norton

If the Deputy had waited until these other figures had come out before he made his speech——

Mr. Lemass

Why did you rush the Bill before they came out?

Mr. Norton

Rush the Bill? It is on the stocks for the last two months.

Mr. Lemass

It is not wanted before next March.

Mr. Norton

I think it is, in some respects, although I travel a certain distance with the Deputy on that. I think it is wanted in some respects. Here are some more heartening figures. I asked the board to let me know what they have done about the months of April and May, from the point of view of erecting poles and stringing wire. There are only two months' figures available. Last year, in erecting poles, their record up to the end of March was 91,000. They are now proceeding at a rate which, taking the two months April and May, and if that rate is maintained will result at the end of the year in 112,000 poles being erected.

Mr. Lemass

They did 25 areas in the first quarter. I got the figures in reply to a parliamentary question. That is not enough to do 100 a year.

Mr. Norton

The number of miles strung, in the year ending March last, was 5,000. This year, if the progress is maintained as in April and May, it will be close on 6,500. In these two months they have completed a further 16 areas. It you multiply that by six over the year you will see they are on the 100 a year target.

Mr. Lemass

They do double the rate in summer that they do in the winter.

Mr. Norton

All that is clear evidence that the board is marching on at a rapid pace. If we can accelerate this pace we should do so, but there is no reason for despondency in these figures. These are heartening figures, enthusing figures, figures which will make people have confidence in an organisation such as this. Further evidence of how well the E.S.B. is selling its wares is to be found in the way in which they are selling electricity to rural dwellers to-day as compared with the average number of units consumed by them when they got electricity first. The extent to which consumption is increasing in areas which were developed in the early period of the scheme may be seen from the following figures, which show the average annual consumption per consumer in representative areas connected during the earlier years.

In 1949 the average consumption of units was 509; in 1951 it was 905; in 1953 it was 1,119; in 1954 it was 1,238, and in 1955 it was 1,334. Therefore, the consumer who was using an average of 509 units in 1949 is now using 1,334. That is clear evidence that rural electrification is popular, that rural electrification has come to stay and that the rural dweller is looking for and using more and more electricity. You cannot stop rural electrification from making progress; you cannot now prevent the people from wanting it more and more.

Mr. Lemass

That has been happening since it started. Half the questions in the Dáil were directed to speeding it up.

Mr. Norton

Deputy Lemass talked about acceptances, the difficulty in getting 69 per cent. acceptances. The average acceptances in 1951-52 were 60 per cent. That increased to 67 per cent. in 1953-54 and to-day in a great many cases the acceptances are running between 80 and 90 per cent. Is not that most satisfactory progress? Why is there any need for despair?

Mr. Lemass

Not at all. I foretold all that in 1944.

Mr. A. Barry

Why did you not tell Deputy MacEntee? He does not believe it.

Mr. Norton

Deputy Lemass has had the advantage—I say "advantage" advisedly—of not having heard Deputy MacEntee, who was in his bluest and most miserable mood this evening.

Mr. Lemass

That all happened under the original scheme. You are changing that scheme now.

Mr. Norton

Deputy MacEntee this evening almost fixed the date on which the E.S.B. would die. He was in his most despondent mood and had everybody in complete dejection.

Mr. Lemass

Nobody with a monopoly like the E.S.B. can die.

Mr. Norton

Even Deputy MacEntee forecast its early death this evening. He was engulfed in banks breaking, the Shannon drying and a whole lot of other difficulties. He was talking about shunting ships to the Shannon and other fairy tales of that kind with which he regaled himself in a most interesting fashion.

Let us talk on the question of sales. Deputy Lemass was on sales. So far as the E.S.B. sales are concerned, the board are able to report, I think, this year that the increase in the sales of electricity in the year ended March, 1955, is up by over £1,000,000 as compared with last year.

Mr. Lemass

They were up £1,000,000 in the two previous years. They have been going up by £1,000,000 a year for years.

Mr. Norton

I think the Deputy will acknowledge that both its sales and its surplus this year are a record——

Mr. Lemass

Sales have been increasing by £1,000,000 a year for five years.

Mr. Norton

——and that the number of areas developed is a record. I do not want the Deputy to rejoice about these figures if he wants to be despondent but the country is entitled to know what progress the E.S.B. is making and the fact that it is making such steady progress and that it has such a substantial surplus to its credit and such adequate reserves to its credit is all the more reason why it should not be subsidised any longer by the ordinary taxpayer.

Deputy McQuillan, Deputy Bartley and Deputy Kennedy made some complaints which totted up to allegations of waste and inefficiency against the E.S.B. I will see that these complaints are brought to the notice of the board for investigation.

Deputy Burke complained about the special charges. The special charge for the isolated household in a rural area, even an area covered by a rural electrification scheme, has been a feature of the scheme since it was first introduced.

Mr. Lemass

That was only because the scheme was trying to pay its way. Now that you have thrown that by the board, you can throw the subsidy by the board.

Mr. Norton

From the beginning, the E.S.B. was getting a subsidy. How can you talk of its paying its way if it was getting a subsidy?

Mr. Lemass

With the subsidy it was paying its way.

Mr. Norton

With the subsidy it was paying its way.

Mr. Lemass

Now you say it does not matter whether it pays its way or not, why not get rid of this special charge?

Mr. Norton

The position is that from the beginning of the scheme the E.S.B. charged special rates where they extended the electricity to isolated houses or farmhouses.

Mr. Lemass

With all the surplus they have now, they do not have to do it now.

Mr. Norton

Deputy Burke says that he has been complaining down through the years about this. I notice that he did not complain that these charges were being imposed when the Fianna Fáil Party were in office and the bulk of these charges were imposed when Fianna Fáil were in office. Deputy Burke then maintained a majestic silence. He has now got the liberty to open his mouth and he comes in here as if he had heard only yesterday about these electricity charges. That is not honest. That deceives nobody. That is just trying to cash-in on a belief that the fellow outside is just as stupid as Deputy Burke prefers to assume he is for the purpose of soaking up what Deputy Burke says.

Mr. Lemass

If you abolished them it would not increase its loss by 5 per cent. It will lose £1,000,000. You may as well lose £1,050,000.

Mr. Norton

What will lose?

Mr. Lemass

Rural electrification.

Mr. Norton

Not at all. Take note of what I am saying to-day: Next year the board will have another surplus and what they are being asked to do to-day will not prevent them taking on that liability which is now being borne by the ordinary taxpayer because, in so far as the Government provides the subsidy, the money to pay the subsidy has to be raised by the taxpayer and I understood the Deputy was concerned about the taxpayer. When the Finance Bill was under discussion here he moved a whole lot of amendments to give back to the taxpayer what he himself had taken out of the taxpayer's pocket.

Mr. Lemass

That was not the real motive for moving the amendments.

Mr. Norton

Most people believe it was, that there were qualms of conscience and that the Deputy moved amendments to the Finance Bill to give back to the people what he took in 1952.

Mr. Lemass

I was trying to provoke qualms of conscience.

Mr. Norton

The Deputy had inoculated himself against qualms of conscience—is that it? Only a month ago the Deputy was pleading for the interest of the taxpayer, that he must get some relief from the crushing burden, that it was unfair to put all this burden on him and both he and Deputy MacEntee were breast high a couple of months ago to do something about the unfortunate taxpayer.

We are now taking this burden off the taxpayer's back. We are relieving him of the responsibility of paying the subsidy to the board. We are saying to the taxpayer: "You do not need to pay that subsidy any more. We will see that the board will stand as a unit and that out of the surplus which it has it will pay the entire cost of generating and supplying electricity to urban and rural dwellers without putting its hands in your pocket for any further subsidy." That is a simple position.

Deputy Lemass says that he does not object in principle to the E.S.B. being conceived as one unit and balancing its rural liabilities with its urban inheritances. That is what this Bill is doing. It is amalgamating the rural and the urban. It is bringing them together and making sure that the accounts of the E.S.B. will be organised in such a way that the rural electrification scheme will not be subsidised by the general taxpayer who ought not to be asked to pay money to the E.S.B. when it has a surplus on this year's account, on last year's account and on every other year's account, except one, in the last ten years. There is no need for the subsidy and this Bill is designed to make sure that the consumer will not be asked to give money to an organisation which clearly does not need it on its own account.

Some suggestions have been made here that the Minister for Industry and Commerce should make the E.S.B. pay the extra charges in rural areas. That requires a decision on the broad question of policy and is a matter, if you like, that could be discussed in the House, but the position is that under the Electricity Bill of 1927 there are certain statutory provisions which give the E.S.B. the responsibility so to adjust its charges that its revenue in any one year shall be sufficient, and only sufficient, to meet all its outgoings. Another section of that Bill empowers the board to make scales fixing the methods of charge and the rates of charge for electricity and to revise or revoke these scales or any part thereof whenever the board thinks fit. Another sub-section provides that the scales so fixed may apply to the whole of the country or to any part thereof or to any one or more classes of consumers. Another section prohibits the grant of preferential treatment to consumers within the same area of supply.

The traditional line taken by a variety and succession of Ministers has been that that is an E.S.B. function and that the Minister as Minister ought not to direct the board to do something contrary to the provisions of the statute. I think, in the long run, there is a good case to be made for allowing this board to function as the controlling organisation of our national electricity undertaking, to allow it to fix the charges in the light of its own requirements.

I think it would be a bad thing for the Minister to have the power to intervene in fixing the charges because that is capable of manipulation in times of difficulty or times of emergency for a political Party. I think it is better for the board to fix it. The board can be informed from time to time as to what the view of this House is as expressed in public debate here but I think it would be wrong for the Minister, as such, to dictate to the board in such manner as to interfere with its functions under the 1927 Act.

There is just one other matter. I said, and I want to repeat again, that this Bill will not result in any slowing down of rural electrification. Rural electrification will be accelerated this year and next year to a pace which it never previously attained. Secondly, there is no reason in the world why there should be any increase in electricity charges as a result of this Bill. The board's finances can carry the cost of rural electrification without any difficulty and without any obligation to increase on that account its charges for electricity either in rural or urban areas.

Question put and agreed to.

Committee Stage ordered for Tuesday, 12th July.