Electricity (Supply) (Amendment) Bill, 1972: Second and Subsequent Stages.

Minister for Labour (Mr. J. Brennan)

I move: "That the Bill be now read a Second Time."

The purposes of this Bill are:

(i) to extend to the ESB general staff an improvement in superannuation benefits already enjoyed by the board's manual staff.

(ii) to eliminate any doubt which might arise as to the powers of the ESB to accord equal rank to all their borrowings.

Before proceeding to the individual sections of the Bill, I should like to mention that the proposed amendments in sections 2 and 3 of the Bill are identical to those contained in sections 3 and 4 of the Electricity (Supply) (Amendment) Act, 1970, except that the two sections in the 1970 Act are in respect of manual employees while the two sections in the present Bill concern the general employees.

Section 2 of the Bill provides for the addition of a further subsection (subsection 9) to section 7 of the 1942 Act. The general employees superannuation scheme came into operation on 1st April, 1943. Where a general employee entered the board's service after 1st April, 1943 his service up to the date he was admitted to the scheme was not reckonable for superannuation purposes. Section 2 of the Bill defines this service as "previous service" and enables the board to reckon half of it for superannuation purposes.

Section 3 of the Bill enables the board to pay a supplementary allowance equal to the full pension value of the other half of a general employees previous service provided that the employees involved make a nominal contribution towards the cost of such an allowance.

Section 4 of the Bill refers to the borrowing powers of the ESB. Up to the time of the passing of the Electricity (Supply) (Amendment) Act, 1954 the board's capital requirements were borrowed from the Central Fund. All such borrowings under the Electricity (Supply) Act, 1927 and subsequent Acts carried with them either specific or floating charges on ESB property. Under section 4 of the Electricity (Supply) (Amendment) Act, 1954 the board were empowered to make their own arrangements for getting, direct from the public or otherwise, the capital required to finance their development and since then no money has been borrowed by the board from the Central Fund. Section 4, subsection (3) of the 1954 Act provided that the terms upon which capital is borrowed by the ESB may include provisions charging the moneys borrowed on the property of the board and also permitted the inclusion of provisions under which any charge in respect of money borrowed under the 1954 Act may rank before or equal with charges on the board's assets in respect of borrowings from the Central Fund.

In fact, however, the ESB did not give any charges on their property in respect of borrowings under the 1954 Act and they do not envisage the giving of such charges in respect of future borrowings. As a consequence, the board are now advised that technically these borrowings under the 1954 Act cannot be ranked equally with the loans from the Central Fund in respect of which, as I have stated, a specific or floating charge on the board's assets was created under the Electricity Supply Acts. It was, however, the intention of the board that moneys borrowed under the 1954 Act would rank equally with loans from the Central Fund and the purpose of section 4 is to establish this position in law.

Mr. Donegan

The purpose of this Bill is to bring our legislation up-to-date and thus it is not regarded as contentious. So far as this party are concerned, we will assist the Minister in every way to put this Bill through the House promptly.

The provisions regarding superannuation bring this matter up-to-date and extend to general staff improvements that were previously enjoyed by other grades. I am sure that this will be welcomed by the House. It is obvious that the ESB must continue to borrow. Capital expenditure on electricity supply will continue for many decades to come and we must realise that it will be necessary for the board to borrow the necessary funds. However, if any anomaly exists it is proper that we should get rid of it and, from that point of view, we do not object to this Bill. It does not seem there will be any great change in the manner in which funds will be available in the future to the ESB. We regard this Bill as necessary and we welcome it.

Mr. Kavanagh

As the previous speaker has pointed out, there is nothing contentious about this Bill. It merely regulates matters and corrects omissions in the 1970 Act in respect of superannuation for general workers. Section 2 of the Bill provides for the addition of a further subsection to section 7 of the 1942 Act. It might be asked why this was not done in 1970 since manual workers and general employees are specifically mentioned in the 1942 Act. The fact that this omission is being corrected is welcomed and now both grades are covered by the Superannuation Acts. Although a few individuals may have suffered because this was not done in 1970, nevertheless the correction was made quickly when the matter was brought to the notice of the ESB. For that reason we welcome the Bill.

The other main provision of the Bill is to regularise borrowing in accordance with the 1954 Act. It is stated that the ESB did not give any charges on their property in respect of borrowings under the 1954 Act. It is proper that the Bill be put through the House and that the position with regard to borrowings be amended in accordance with the provisions of this Bill.

In looking at this year's report and accounts of the ESB, one reads that capital expenditure in the year was financed by internal resources arising mainly from provisions for depreciation in capital contributions. I wonder if any of the borrowing covered by the 1954 Act is included in that category? Under the heading "capital borrowing" one can see that most of the money has been raised either from public stocks on the home market or from abroad. I wonder if any charges are still made under the 1954 Act which are included in the first category of borrowing?

Now that the Minister has introduced the Bill to regularise the position, the Labour Party will give it full support. It is most desirable that the provisions of the superannuation scheme and the borrowings of the board be on a proper footing. We welcome in particular the changes made for general workers.

Dr. O'Donovan

Before I deal with the relatively limited matters in the Bill, I should like to refer to the present position of the ESB in view of the refusal of the Government to allow them to increase charges for electricity——

An Ceann Comhairle

That does not arise on the Bill. As the Deputy correctly stated, this is a rather limited Bill.

Dr. O'Donovan

This Bill refers specifically to the ESB Acts of 1927 and 1971 and, therefore, I am entitled to speak about the ESB on the Bill and to speak about the manner in which the board functions. If the Government insist on spending enormous amounts of money—thus creating inflation— and, at the same time, clamp down on the very best of the semi-State companies, it is obvious that there will be serious difficulties created. There is no point in the Government clamping down on this particular body. They have always paid their way. They have always paid their way in full to the Government because the ESB have always paid interest on moneys borrowed from the Government. The ESB are the only semi-State body that have always paid their way. I realise it would be popular for me to say nothing can increase in price and that, above all other things, the ESB, who are strong financially, should be compelled to have a deficit in their accounts. That is bad financing. Strangely enough, this Bill has been brought in to rectify an error which was made by the Minister for Transport and Power, Deputy Lenihan, and myself when the 1970 Act was going through the House. I must plead guilty. I thought that in the amendments I proposed, and which the Minister accepted, I was putting the manual workers on the same basis as the general employees. It now appears that we put them above that level. I am delighted we did so. It was a great day for the country when manual workers were treated better than the officer classes. I have no objection to this error being rectified and the officer class being given equal treatment now. The leader of the Labour Party thanked the Minister for accepting the amendments. It had not been intended to treat the manual workers in the ESB better than the engineers, accountants and clerical staff. The amendments were intended to rectify what seems to me to be an anomaly under the pensions scheme. It now appears that we overdid it. I have no objection to the matter being rectified in this manner now. It is right and proper that this should be done. The Minister for Transport and Power and myself put the manual workers above the ordinary workers. This was a great sign for the better. It improved the social confidence of the community.

The other part of this Bill is connected with a technical financial matter. It is a legal rectification and of no real significance. The ESB borrow a great deal of their moneys abroad. The people whom they borrow from might be pleased to see this rectification. The explanatory memorandum sets out the conditions under which this position has come about. The board have raised their requirements of money from finance houses at home and abroad. They have raised money in Switzerland and Germany. The bankers have been in a better position to borrow than the Government. I am not suggesting that that is any reflection on the Government, but it is a reflection on the method of thinking which is prevalent among bankers. They like to have something concrete. They feel then they are helping to build something like Turlough Hill power station, which is one of the most modern stations in the world. They are pleased, therefore, when they see provisions such as are contained in this Bill being brought into force.

Deputy Kavanagh has given me the statement of repayable capital and redemption as at 31st March, 1972. The Minister for Finance, under the Electricity (Supply) Acts and the Shannon Fisheries Act, 1935, advanced £68,450,236. Stocks were issued as follows:

Electricity Supply Board Stocks:

	£
5% redeemable 1966-75	10,000,000
6% redeemable 1968-78	5,000,000
6% redeemable 1982-87	12,000,000
6% redeemable 1984-89	16,500,000
7% redeemable 1986-91	13,000,000
7¼% redeemable 1988-93	7,000,000
9½% redeemable 1985-90	9,250,000
6% Premium, redeemable 1975 (repayable at 20% premium)	3,250,000
6% premium redeemable 1976 (repayable at 20% premium)	2,80,000
9% redeemable 1992-1995	12,000,000

Funded Loans:

	£
New Ireland Assurance Co. Ltd. repayable by half-yearly instalments, 1962-87	500,000
German Banks 6¾% —repayable by annual instalments 1975-84	5,994,011
German Banks 7¾% —repayable by annual instalments, 1975-84	8,991,356
Central Bank of Ireland 7¼% repayable by half-yearly instalments, 1972-87	14,865,000

The figure for the Central Bank shows a very decided change in the attitude of the Central Bank of Ireland. When Dr. Joe Brennan was in charge the only stocks he invested in were 1% Treasury Bonds renewable every three months. This did not suggest that Dr. Joseph Brennan had too much faith in anybody.

Mr. J. Brennan

The Deputy is referring to a different Joseph Brennan, I hope.

Dr. O'Donovan

I might be more free with Dr. Joseph Brennan, although I have not met him for a long time. To go back to the table—

International Bank for Reconstruction and Development 6½% —repayable by half-yearly instalments, 1974-94	4,475,337
International Bank for Reconstruction and Development 7¼% —repayable by half-yearly instalments, 1976-87	446,703
15,000,000 European Units of Account 8¼% —repayable by annual instalments, 1972-86	6,202,704

I would like to know from the Minister what is the meaning of that last item. It is probably some form of international currency of which I have never heard. Deputy Kavanagh suggests that it may be some sort of EEC money. It certainly is not "Euratoms" or other things which have been suggested. The total of that is £200,725,347, of which a large amount in recent years was obtained abroad. Apparently the ESB can borrow abroad more effectively than the Government can.

There are corresponding items on the other side of the balance sheet. Out of the £200,725,347 loans and stocks fully redeemed account for £756,021. This is why the Government are able to clamp down on the ESB in regard to increases to meet current costs. The ESB has been very well managed down through the years. No plea can be made that the cost of electricity is more in this country than it should be. These figures suggest that the ESB is an extremely well-run organisation. Not alone is it as well run technically as other semi-State bodies are but it has paid its way, unlike many of the other semi-State bodies, who are very fond of advertising themselves all over the place and who have never paid their way.

I welcome this amendment of the law in both categories. Since the necessity for this amendment was discovered I am all in favour of putting it in.

As regards the amendment to the part of the 1970 Act dealing with superannuation, I am all in favour of that too. I believe that all men are equal, absolutely. I do not believe that some men are more equal than others. Therefore, if by accident the Minister for Transport and Power and myself made the manual workers somewhat better off, I can assure the present Minister that it was an accident. It was not my intention. My intention was simply to bring them up and make them even, to put them all on the same level. It is an interesting change in society to find that the officer class in an organisation have to have their pensions improved so that they may be made equal to the ordinary worker.

Mr. J. Brennan

As all speakers have admitted this is a non-controversial Bill clearing up a few omissions or anomalies in the previous Bill and brings the general employees in line, for superannuation purposes, with the manual workers. The terms are quite favourable and agreed. Nobody is at any loss. It was not done before because the ESB has to await submissions from its employees before it can undertake to do a particular thing.

The borrowings referred to are understandable. This refers only to money borrowed directly from the Exchequer before the 1954 Act gave them authority to borrow elsewhere. It is really putting all borrowings on equal terms.

I do not think it is necessary to say anything further about it at this stage. I would like to get all Stages. It is completely non-controversial and is making good omissions one might say were overdue.

Dáil Éireann debate - Tuesday, 7 Nov 1972

Dáil Éireann debate -
Tuesday, 7 Nov 1972