When progress was reported I was dealing with the amount provided for under the Tourist Traffic Act, 1966, for resort development. The amount was £3.25 million. I had pointed out that the total State expenditure up to 31st March, 1969, was £1.9 million and that this will be accompanied by a further expenditure of £650,000 by local authorities and local development bodies. This expenditure was incurred under the first resort development programme. Counting expenditure by the State and by local authorities and local development bodies the complete programme will cost nearly £4.5 million.
Bord Fáilte are already planning a second resort development programme. That proposed programme will concentrate on the development of tourist areas with focal points rather than on specific resorts. The idea is that within each area development works will be carried out on facilities designed in particular to suit the needs of mobile visitors, e.g., access roads to shores, forest parks, national monuments. At the focal points in the selected areas action will be taken to provide facilities for indoor recreation and entertainment to supplement national and traditional attractions.
Under subhead F.3 I am proposing a provision of £800,000, which is an increase of £100,000 on the amount provided in 1967-68. This grant-in-aid provides funds to enable Bord Fáilte to give grants for the development of holiday accommodation. The expenditure of this sum would bring total expenditure on holiday accommodation grants above the £3 million statutory limit laid down in 1966 and accordingly the limit was raised to £5.5 million by the Tourist Traffic Act, 1968.
The increase of £100,000 under this subhead is attributable to the increased incentives for the development of holiday accommodation which I authorised Bord Fáilte to provide last year. The increased incentives have generated a substantial increase in investment in additional hotel accommodation. In 1967 there was a net increase of almost 1,300 bedrooms in registered accommodation. During 1968, 38 new hotels having 737 bedrooms came into operation. By the 1969 season a further ten hotels having 533 bedrooms are expected to be ready. The total capital investment involved in the 48 hotels is £4 million.
Bord Fáilte have complete discretion within certain specified maxima in administering the grant schemes so as to influence the type and location of new accommodation according to criteria based on tourist requirements. It is Bord Fáilte's policy to encourage developers to provide a range of holiday accommodation to cater for visitors of all income brackets.
The amount which I am proposing to provide under subhead F.4 is £100,000 which is the same as was provided in 1967/68 when this grant-in-aid was introduced. The purpose of this provision is to enable Bord Fáilte to give grants to assist the development of houses for holiday letting and the provision of supplementary holiday accommodation in private houses including farmhouses, in the western counties. Grants up to 66? per cent of the approved cost subject to a maximum of £500 are provided from this grant-in-aid.
The total amount which it is proposed to provide for tourism under the four Subheads I have mentioned is £4,400,000, an increase of £792,000 on the amount provided last year. I am satisfied that the increased expenditure is justified by the growth of tourist earnings over the past six or seven years and the prospects for further expansion in the future.
Earnings from tourism in 1967 amounted to £84.3 million which represented an increase of £6.6 million or 8.5 per cent on the 1966 receipts. Since 1960 when receipts amounted to £44.2 million tourist income has increased on average by 5.5 per cent a year at constant 1960 money values.
The Central Statistics Office has not yet compiled the official estimate of earnings from tourism in 1968. According to an unofficial estimate prepared by Bord Fáilte these earnings amounted to £92.5 million in 1968 which represents an increase of £8.2 million or about 10 per cent on the 1967 figure. If the Bord Fáilte estimate is confirmed by the official estimate the 1968 income figure will be very encouraging as our tourist industry encountered a number of obstacles last year. These were the foot-and-mouth restrictions on travel from Britain, the restrictions on travel abroad by French residents and the threat of restrictions on travel abroad by the U.S. authorities.
Tourism represents our largest single export and accounts for more than onesixth of our total overseas earnings. It plays a more important part in our national balance of payments than in the case of all other European countries with the exception of Spain and Austria.
Apart from its value as an earner of foreign currency, tourism is an important generator of economic activity within the country and in export terms is a most efficient method of selling Irish goods and services. This is of particular importance to a country with a surplus of agricultural products such as milk, butter, meat and eggs. Tourist traffic is generally attracted to less developed areas and thus helps to reverse the general trend in the flow of economic activity to large centres of population. Moreover, the diffusion of benefits throughout the country results in the greater spread of investment in tourist plant and facilities and encourages local authorities to extend their services in areas and to an extent that might not otherwise be justified.
Important changes are taking place in the concepts of Irish tourism. One trend which is already most evident is the increase in the number of motoring tourists resulting from the growth of car ownership and the development of modern car ferry vessels. It is expected that the mobile tourist will form a growing part of total traffic and will create new demands on accommodation, services and facilities. The increased mobility of tourists is helping to make the whole of Ireland a single tourist area. Particular attention is being given by Bord Fáilte to the accommodation needs of motoring visitors. The board are encouraging investors to provide motor inns or hotels offering medium range prices with the particular needs of motoring tourists in mind.
Traffic on car ferry services continues to expand. An idea of the tremendous growth which is taking place can be obtained from the fact that this traffic has doubled in the last two years. In 1968 92,000 cars were brought into the State on ferry services. This represented an increase of 36 per cent on the 1967 figure. Two additional car ferry services were introduced in 1968. These were the Dublin-Liverpool service operated by the British and Irish Steampacket Co. Ltd., and the Rosslare-Le Havre service operated by Normandy Ferries in which Irish Shipping Limited, is a partner. This year capacity will be increased on the existing Dublin-Liverpool, Dún Laoghaire-Holyhead, Rosslare-Fishguard and Rosslare-Le Havre service. Next May the B and I will introduce a drive-on-drive-off ferry service between Cork and Swansea. This will give Cork its first service of this type and help to develop still further the tourist potential of the South and South West. Bord Fáilte estimate that car ferry traffic will continue to grow and they estimate that by 1972 the number of cars entering through our car ferry ports will amount to 170,000. In addition an estimated 100,000 crosschannel cars entering through Northern Ireland are expected to cross the Border. On the basis of an average of three persons per car, the number of motoring visitors should reach a figure of 800,000 by 1972.
Another development is that tourists will tend to be younger, more affluent and better educated. They will want to participate rather than observe and this will increase the demand for active recreationary holidays. Parallel with these trends is the progressive development of inclusive charge holidays already playing an important part in attracting additional tourist traffic to Ireland.
A major obstacle to the growth of tourism is the shortness of the tourist season. This characteristic has serious adverse effects because it means that much of the employment given is seasonal and this reacts on the attractiveness of employment in the industry. It means also that costly tourist plant such as hotels, transport equipment and facilities and resort installations are under-utilised with adverse effects on the attractiveness of investment and on prices which must be charged when in use.
Efforts to extend the season have included the promotion of angling and shooting, the encouragement of festivals and special events, the development of conference business, special early and late season price incentives and the replacement of the Whit Monday holiday by the fixed June Holiday which takes place on the first Monday in June. The season in most areas is now much longer than it was five years ago but seasonality still remains a serious problem.
The further extension of the season, leading ultimately to year-round tourism, will be a major objective for the next few years and Bord Fáilte have already embarked on a marketing programme with this in view. A significant extension of the season would have far reaching economic benefits for all tourist enterprises and would provide increased year-round employment not only for hotel and guesthouse staffs but for all those concerned with the servicing of such establishments.
The eight regional tourism organisations are now firmly established and are providing tourist information and room reservation services through 100 offices throughout the country. It is intended that the organisations should extend their activities by providing encouragement and support to enterprises offering recreation, entertainment and other services for visitors at local level. The additional responsibilities of the regional organisations will entail considerably increased expenditure and efforts are being made to ensure that this expenditure will be financed by contributions from the business community. For enterprises which benefit directly or indirectly from tourist income, support for the regional organisations represents a sound investment.
In relation to north-south co-operation in tourism matters Bord Fáilte continued their discussions with the Northern Ireland Tourist Board and the British Travel Association. The tripartite meetings have led to co-operation and joint effort in such fields as publicity, sales campaigns, research, statistics, sponsored tours by visiting travel agents and journalists. The three bodies have between them produced two brochures for the purpose of the joint promotion of Ireland and Britain in the United States and Canada.
While the position of our tourist industry is encouraging and the indications are that the industry will continue to grow I must issue a warning that tourism does not grow of its own volition. Ireland is not the only country in which tourism is flourishing and other nations are deeply aware of the great economic advantages of the industry. International competition for tourist business is growing. My advice to travel agents, hoteliers, transport undertakings and all persons and bodies connected with the tourist trade is to adopt a "go and get it" approach rather than "sit and wait" for business.
The continuing increase in the demand for electricity was accelerated in 1967-68, total output at 4,246 million units, being over 10 per cent greater than 1966-67, which had shown an increase of less than 9 per cent over the preceding year. This, of course, reflects growing economic activity in the country and higher living standards generally. In fact, industrial demand showed the highest rate of increase, 13.7 per cent as compared with 10.6 per cent the previous year. The overall peak demand was 917 megawatts compared with 886 megawatts in 1966-67.
The ESB's long-term programme of generating plant construction is related to an average annual increase in demand of 9 per cent but the programme is, of course, kept under constant review in the light of the trend of demand. The board's generating capacity at 31st March, 1968, was 1,230 MW. Since then 30 MW of old plant at the Pigeon House has been retired and 60 MW of new plant has been added at Great Island. The Board's construction programme for the period up to 1974-75 provides for the addition of another 788 MW of new capacity. The programme includes 480 MW conventional thermal capacity, and two 14 MW gas turbine generating units which will be in commission in Pigeon House "B" by 1972. These units will contribute to the security of the supply and will be available to meet peak loads. The pumped storage scheme at Lough Nahanagan, County Wicklow, to which I referred when introducing last year's estimates, is scheduled for completion by 1974-75. By that time, allowing for the retirement of a further 60 MW of old plant at the Pigeon House, total installed capacity will be 1,988 MW. Work on the north-south inter-connection, which will make a substantial contribution to plant economy, is proceeding and the scheduled commissioning date is 1971.
The amount to be voted this year for repayment of the subsidy advanced from the Central Fund for rural electrification is £801,000.
During 1967-68 a total of 8,075 new rural consumers were connected compared with 4,742 in the preceding year. At 31st March, 1968 about 87 per cent or 334,000 rural homes were connected.
Because of the high cost of connection the ESB had to quote very high special service charges to some rural householders seeking connection. The Government—concerned that, within practical limits, electricity is available to the maximum number at reasonable charges—reviewed the situation last year and arranged that the higher special service charges would be reduced. The reductions benefit all those who, on the basis of previous charges, were liable for special service charges of more than 50 per cent of the normal charges benefit.
There may be some householders, however, in areas isolated from the board's network who will consider even the reduced charges still too high. For those people I have increased the subsidy for the installation of bottled gas to £35. The former subsidy of £10 was intended to provide only a basic installation; the higher subsidy will pay for a more complete installation. It is available to all whose special service charges for electricity under the revised terms would still be more than the normal charges.
The Electricity (Supply) (Amendment) Act, 1968 authorised the increase to £50 million of the former limit of £42 million on the expenditure which the board may incur on extending electricity to rural areas. The increase of the limit to £50 million was to enable the board to complete the rural electrification post-development scheme, and, also, to go back over the areas already covered by the post-development scheme, so that all householders would have an opportunity of taking supply at the improved terms. It was expected that this would take until 1973. The improved terms have, however, proved very popular and many more householders than had been expected are now taking supply.
The ESB are doing their utmost to cope with the increased demand. They have increased their budget for rural electrification and have also increased their rate of connection but, even so, the progress of the scheme, in terms of areas completed, is now behind schedule. The scheme will be completed in most of the board's districts by 1973 but there will be some districts where completion of the scheme will take longer. The £50 million limit to which I referred earlier will also be inadequate and the question of amending legislation will arise in the next few years.
The total fixed capital invested by the board at 31st March, 1968, was in the region of £190 million of which £41 million was in rural electrification. The ESB's spring stock issue in 1968, for £7 million 7¼ per cent at 98, was again very successful.
There were a number of strikes in the ESB during the year but as labour relations are a matter for the Minister for Labour, discussion would not be appropriate. I should mention, though, that the interim report of the committee on industrial relations in the board, which the Minister for Labour set up, is being carefully examined.
Weather conditions during the 1967/68 season, although a considerable improvement on recent years, were still unfavourable for Bord na Móna operations. While target production figures were not achieved, total production was nevertheless higher than in any previous year. Milled peat production, at about 2,500,000 tons, was 500,000 tons up on the previous year but about 11 per cent below the target. Sod turf production, 870,000 tons, was up about 120,000 tons on the previous year but was still about 2 per cent below target. Briquette production was almost 250,000 tons, a slight increase on last year, but 21 per cent short of target. Moss peat production, at over 470,000 tons, although an increase of nearly 40,000 tons on 1966/67, was 12 per cent below target. Production of briquettes and moss peat was adversely affected by labour stoppages during the year. The overall level of sales was also affected by the labour stoppages—loss of sales is estimated by the board at about 12 per cent in the case of sod turf and 15 per cent in the case of briquettes.
In the year 1967-68, Bord na Móna had a loss of £821,744. The accumulated losses of the board at 31st March, 1968, amounted to just over £4.8 million, the general reserve of £120,000 having being transferred to the profit and loss account in reduction of the accumulated deficit. Two changes in accounting practice had the effect of reducing the year's deficit by over £½ million—if treated in the manner hitherto adopted, the 1967-68 losses would be almost £1.4 million and the accumulated deficit nearly £5.4 million.
As a result of accumulating losses Bord na Móna have been unable, since the 1st April, 1967, to meet their obligations for interest on and repayment of State advanced capital. The total amount outstanding at 1st October, 1968, was about £3½ million. In the case of loan capital raised by the board from sources other than the State, the board have, of course, continued to meet their obligations in full.
In view of the heavy and continuing losses suffered by the board during most of the last decade, I thought it very necessary to have a new and searching look at the overall operations of the board, and I arranged for the appointment of a firm of consultants to examine the turf production programme both from the engineering and financial standpoints, and to assess the likely results of future operations. While Bord na Móna have themselves employed consultants on various occasions to examine and report on different facets of their operations, the new investigation will be concerned with the totality of the board's operations. When the results of this investigation are available it should be possible to decide on the most appropriate financial structure of the board for future years and so ensure the continuation of the board's activities on a sound basis and preserve employment and other benefits in areas which otherwise provide very few opportunities.
However, some immediate financial relief for Bord na Móna in their present financial difficulties was essential and, to this end, the Turf Development Act, 1968, was enacted by the Oireachtas just before the summer recess. The Act empowers the Minister for Finance by order, to waive, in whole or in part, payments of interest due for four years from 1st April, 1967, and to defer, in whole or in part, repayments of capital due during the same period. The Minister for Finance is to take a decision on the extent of the relief in respect of each year after examination of the board's financial position and consultation with me. As a result of an examination of the board's financial position it was decided to waive interest, amounting to £2½ million approximately, due by Bord na Móna to the Minister for Finance in respect of the years 1967/68 and 1968/69 and to defer to 31st March, 1969 repayments of capital—amounting to over £900,000—in respect of the years 1967/ 68 and 1968/69.
The necessary Order entitled Bord na Móna (Waiver of Interest and Deferment of Repayment of Advances) Order, 1968, has been made by the Minister for Finance. The financial relief envisaged by the Act is designed to give Bord na Móna some breathing space during the period while the consultants are carrying out their investigations and their report is being examined.
On a brighter note, the weather conditions during the 1969 harvesting season were the most favourable experienced in the present decade, especially for milled peat production. Sod peat production exceeded the target of 892,000 tons by 15,000 tons. Milled peat and "Fóidín" turf production together yielded 3.65 million tons compared with a target of 2.8 million tons. Fóidín production alone amounted to 294,000 tons. The Fóidín system—a new method of milled peat production which I described in my speech on last year's estimates—is still on a development basis.
Coal consumption in 1967 in terms of net imports plus home production was about 1.4 million tons. This was about 100,000 tons less than in 1966. The lower consumption may have been due to less severe weather, but there is, of course, a general trend away from solid fuel. The consumption of anthracite was about 155,000 tons, of which about 65,000 tons had to be met by imports. The ESB, with an intake of 44,000 tons, continued to absorb the bulk of the production of semibituminous coal in the Arigna Coalfield during 1967.
The fact that this country is very much dependent on imported fuel makes it important from the point of view of the national economy to ensure that it is used efficiently, particularly in industry. For some years past my Department have been operating a scheme under which grants of 50 per cent are payable towards the cost of engaging consultants to survey industrial boiler plants with a view to improving their performance. At the end of 1968 grants amounting to £24,000 had been approved for 107 surveys. I am satisfied that these surveys are producing worthwhile results and I am most anxious to have an increase in the number of firms participating in the scheme.
Consumption of energy in this country continues to increase. In terms of coal equivalent, primary energy consumption in 1967 was about 7½ million tons. While native energy sources (coal, peat and hydro power) are exploited as far as possible, they cover a steadily diminishing proportion of our total energy requirements leading to an increasing dependence on imported fuels. This trend was again evident in 1967 when imports of oil accounted for 51 per cent of our total energy requirements.
The time has not yet come when a nuclear electricity generating plant would be economical in our circumstances. Our increasing dependence on imported oil for electricity generation, however, makes it desirable that we should consider nuclear plant as soon as possible. The ESB are fully alert to this situation and are having a number of their engineers trained abroad in the skills required for the planning and operation of nuclear power plants.
I hope to introduce a Bill shortly which will empower me to set up a board which will keep itself informed and be a source of advice on the implications for this country of developments generally in the nuclear field.