"That this House declines to give the Electricity (Supply) Bill, 1927, a Second Reading until it is satisfied that the Executive Council is unable to lease the Shannon works at a rent to cover interest and sinking fund on the capital cost."
If Mr. Winston Churchill came down to the House of Commons with a proposal to spend £400,000,000 on a scheme to acquire and operate the electricity supply in Great Britain, that would represent somewhere near the true financial perspective of this scheme, Perhaps, put in that way, the magnitude of the scheme would appeal more forcibly to the House, because I think we have still got the free-and-easy way of looking at millions as a result of the war inflation. If Mr. Winston Churchill further said he proposed to place the organisation that was to spend this money outside Parliamentary control, I do not know which Party would be the most concerned. No doubt the Labour Party would be quite glad if the £400,000,000 would be spent, but I do not think they would be so glad that it would be outside Parliamentary control. The Conservatives would not be glad to see £400,000,000 of the public money spent, but it would be a certain douceur to see that expenditure removed from Parliamentary control. But at any rate it would be a somewhat revolutionary proposal. The Second Reading of this Bill appears to be perfectly simple. The discussion round the Bill, however, has degenerated into parochialism. The whole thing seems to centre round the rights or vested interests of municipalities. To my mind that, however, is a very minor issue. The real principle in this Bill cuts right to the root of our whole economic structure, and also cuts right to the root of established Parliamentary practice. It is on these grounds that I would ask the House to reject this Bill and not to effect an improvement in the Bill in so far as certain vested and established interests are concerned. To my mind, it is not capable of redemption—I use the word "redemption" advisedly, as distinct from improvement—in Committee. Vicious principles are so worked and woven into the whole structure of this Bill that it ceases to be a Bill if you try to amend it in a manner amounting to redemption.
Certainly a criminal may be improved, but he still remains a criminal. You may make this a better Bill, but I do not see how, after any amendments, it would cease, to be a bad Bill. There are certain matters of consideration that have borne themselves down upon us during the last two years since the Shannon Electrification Act was passed. I am sure some of them at least have entered into the calculations of the Minister himself. I will deal with them as briefly as I can. When the Shannon Bill was being considered I am sure we all had an open mind, and the Minister said he had an open mind, as to the methods of distribution. I have not looked up my comments on that occasion, but I certainly felt puzzled as to how the distribution was to be carried out. I rather anticipated that the county councils would be called upon, in some cases at least, to carry out this work of taking the supply in bulk from some central body. I hoped that private enterprise might come in. But I have great difficulty in seeing how private enterprise could not come in with an over-riding Board which would impose conditions and make rates with the inevitable popular clamour against the making of profits. However, as time went on and as the matter received the consideration of the Government, and perhaps it has been considered in all its aspects, we are, faced at last with the proposition that the best method is the method proposed, and that is to trust the generation of electricity to a State Board, or, at all events, to the officials of a Board appointed or controlled by the State, right down even to the lamp of an individual consumer.
Now, the Minister, in arriving, no doubt, at the policy he has put before us, travelled through certain countries. He went to Canada, and I have no doubt that he discovered in Canada that Niagara loomed very large in Canadian politics. A book entitled "Niagara in Politics," by Professor Mavor, a professor in some university in Canada, has been published. It is not a very illuminating book, nor is it a very well documented book, nor is it supported by satisfactory figures. It deals largely with generalities, but it at least shows that Niagara is a very contentious matter in Canadian politics when a professor takes the trouble to write a book and to quote the particular discussions that have taken place around this question.
The Minister further discovered in Canada that rural electrification has made comparatively little progress there. Senators may remember that one of the great benefits we were to get from the Shannon scheme was that we were to have electricity in the countryside, and that it was to be used to relieve the drudgery in the lives of the small farmers and the housewives, and that it was to bring about that better civilisation that electricity is supposed to bring about. Senators all know that rural electrification in Canada is subsidised to the extent of fifty per cent. of the capital charge from a State grant, and yet with that subsidy electricity in Canada cannot be made an economic proposition. Senators will further discover, as the Minister has probably no doubt discovered, that in Canada there is the closest possible co-operation between the municipalities and the Hydro-Electrical Commission, which would practically correspond to the proposed board to be set up under this Act. The municipalities there pay the charges of the Hydro-Electrical Commission in thirteen monthly instalments, twelve being on an agreed figure and the thirteenth being brought in to clear up any deficit on the annual working.
The Minister may not have discovered, or he may argue that I am wrong in stating that the Hydro-Electrical Commission is not paying its sinking fund, and that to the extent of 19,000,000 dollars it has drawn upon the resources of the State. My authority for that is an article, number 2820, in the publications of the Smithsonian Institution, and the Smithsonian Institution is an institution of very considerable merit, to whose publications considerable responsibility attaches. These are the figures given in that report. They are made up partly of the subsidy, to rural electrification and partly, of the alleged failure of the Hydro-Electrical Commission to discharge the sinking fund, which it should discharge in order to be free to redeem its capital charges on the appointed day. In Sweden, where I believe the Minister also visited, I have no doubt he has found that while there is in one portion something corresponding to State control, in Southern Sweden there is also a large enterprise of a private company which deals with a considerable portion of the generation and distribution of electricity in that State; but there is nothing at all to correspond to the entire taking over and absorption by the omnipotent State Board which he proposes to establish, with control of all the electricity undertakings in the country.
In all these discussions, certainly in the discussion in the Dáil on the Shannon scheme, the Minister always took refuge behind the experts' report. He occasionally came out behind the ramparts that the experts provided. When one put a point which one wanted to be answered it was a case of "I am standing on these European experts' report. You may be right, I do not propose to go into it; the experts said ‘this is our opinion,' and that is enough for me." Now we cannot stand on these experts, however eminent their reputation. We have to apply our own judgment to the facts. I am going to give you one or two figures which at least should cause apprehension in your minds as to whether the optimistic forecasts of the contractors and the experts are likely to be justified. All I can say is that we are entitled to an answer to the questions we put. If the answer is satisfactory, most naturally we can change our views. One very important factor in cheap electricity is the capital cost of installation. The next test applied is the maximum cost per k.w. at the power house. When you go beyond the power house and bring in the distribution costs, the figure you get is variable, because it will cost more where the country is sparsely populated than where the population is more dense. The costs I will give the House are the costs per k.w. of installation in the various countries. I have these costs on the authority of a very eminent consulting engineer. I have given them for what they are worth, and if they are not accurate they can be challenged by the array of experts behind the Minister.
In Canada seventy hydro-plants generating a maximum capacity of 746,000 horse-power costs £10.6 per kilowatt installed. These are pre-war figures. In Sweden 338 hydro-plants generating 695,000 horse-power cost £8.73 per kilowatt installed. The higher cost in the smaller plants goes as high as £20 per k.w. and in the larger plants this cost went down to £5 per k.w. In Scotland the estimates of the Waterpower Resources Committee pre-war was £18.6 per k.w. The Shannon scheme, on the figures I have got from the Siemens' Report, will cost £47 per k.w. installed compared with £10 pre-war in Canada and £8 pre-war in Sweden. I am further advised that the engineers do not add more than £25 on the pre-war figure. I am prepared to double that, and yet even at this figure the Shannon is much dearer in capital costs. Obviously, it would be dearer, because it is a river with a small fall which is harnessed at great cost in an artificial canal ten miles long, whereas in Canada you have got those natural falls, and in Sweden you have got those mountain rivers which can be harnessed very cheaply. That is a fact you have to bear in mind when we meet with the extraordinary cheap charges in those countries, where the harnessing of power is a comparatively cheap operation. Now I want to give some figures as to the cost of transmission. At one time of its existence the Hydro-Electrical Commission in Canada confined itself to buying current in bulk from the company that generated it at Niagara and in selling it in bulk to the municipalities. It did no more. It made no profits. It simply bought in bulk and sold in bulk. And these are the figures: For 121 miles transmission from Niagara to the Municipality of Stratford, something corresponding to the distance between Dublin and Limerick, the cost at Niagara was a unit of nine dollars per k.w. It was increased by the transmission costs of another nine dollars on the way, and it became 18 dollars when it arrived at Stratford. The transmission costs in the case of Windsor, a municipality 237 miles from Niagara, was increased to 29 dollars by the transmission costs. And yet we are told in the case of the Shannon that the cost of 42 of a penny at the power house in Limerick is only going to be .53 of a penny in Dublin and .84 of a penny at the lower tension net works further afield.
That wants to be answered. There may be a very good answer, but I have not been able to discover it. The authority for these figures is Mr. Kensit, who is a member of the staff of the Hydro-Electrical Commission. They were published in the "Electrical Times" on January 2nd, 1919. There is one small technical matter I would like to mention, and that is with regard to these masts which we see being put up. Anybody with a knowledge of the atmospherics of the country is aware that it is not a sound practice to bury iron masts in the ground in this damp climate. Having regard to the adverse trade balance, I think it would be better to have the people engaged in making these in reinforced concrete. That would cost a little more in the first instance, but it would give employment to local labour, and more local material would be used. Even the cost of painting these structures is likely to be substantial. With regard to the estimate for costs, the Minister, I venture to suggest, knows more than he is prepared to, or is justified, perhaps, in telling us, but it is, I think, unfortunate to have on three occasions rather disquieting utterances with regard to the cost. On the 28th of last month the Minister for the third time—and apparently there must be something behind it— referred to the possibility of coming to the Dáil, as of course he would have to, if he required it, for more money for the Shannon scheme. This is from the official report of the Dáil debates of the 28th April: "I have indicated that I am going to come to the Dáil as soon as I think it is necessary to reveal to them if there is to be an increase."
Why is it necessary to say that if there is not some apprehension? How does that apprehension square with binding estimates? I remember the long argument we had about binding estimates, how we were assured that the contractor was working on binding estimates, and how binding estimates could not possibly give rise to any increase. I think everyone knows now that there are no such things as binding estimates, but there may be schedules and quantities which are binding. I think we have reason to complain that we have been kept so much in the dark about contract terms in the whole of these details. As Parliament provides the money it should be treated more frankly in this whole matter. I come to the estimates of profits and losses for this scheme. They have puzzled me, but the annual charges are going to come to about £517,000 on the partial scheme when in operation. That includes 15 per cent. to cover interest on the charges during the non-productive period. On several occasions it has been said that, roughly speaking, half the load will come from Dublin and the townships, and the other half from the towns and villages in the country. The quantity of consumption looked for to make the scheme productive is 110,000,000 k.w. The figure that has been frequently stated—the Minister may say it is not correct—is .534 of 1d. for Dublin. That is the figure on which all this battle is fought of the bulk supply in Dublin. If you take that 110,000,000 k.w., that comes to 123,000, and for the country 8d. has been stated. I am not so sure of this, but there again the Minister can challenge me. .8 has been stated, and on the basis of 123,000 that would give a total of £306,000 of revenue, leaving a deficit of £211,000. It is such a large deficit I presume the figures are too small and that they cannot be correct.
Possibly the figures given in Messrs. Siemens details are more correct, but here again we never received any information from the Government. We are guessing all the time as to the possible cost to the consumer. Supposing we take certain figures given by Siemens, on page 159, we get 2.27 for towns, and 2.8 for villages, and 3.38 for the country. I mention these figures as bearing upon those promises of cheap electricity. Possibly at .8 the Shannon scheme would be cheaper, or a good case might be made to show that it would cheapen local generation, but when you come to .53 for the country you get a totally different proposition. You are up against a claim made by local engineers that local generation can be done as cheaply as generation in a giant station and transmission. I am not prepared to say which school is right, but both schools are equally firm in their claims. Consulting engineers say with regard to steel and iron plants that the efficiency of these plants has so improved that there is no increase in cost on pre-war costs. The only possible way the matter can be tested is by competition. Let the localities, if they wish, instal steam plants, or oil plants, and let them be tried out against this hydro-plant of the Shannon scheme. In that way, and that way alone, can it be proved which is right, and can you really give the consumers the benefit of modern technique and management.
The Minister described how during his grand tour he had taken great pains to discover by listening to all that was said to him the best method of distribution, and it was only after a considerable time that he decided to reject the entrepreneur, the capitalist, the private enterprise man, because he said they go where the loads are good, they would not bother about rural electrification, and they would skim the cream of the enterprise. I ask the Minister to say whether he is going to go anywhere else than where the load is good, except he does so by State money? If he is going to give the rural consumer the benefit of cheap electricity on the basis of Canada—and I do not think there is any reason to doubt their experience—he will have to subsidise, and the taxpayer will have to pay for that benefit. Those reasons for the rejection of private offers are wholly inadequate. I have no doubt that certain of these facts, and possibly others of which the Minister has learned since 1925, and possibly he knows something we never learned, have all been borne upon him during these two years and made him increasingly anxious.
My reading as to his attitude about the Shannon scheme is: "All hands to the pump"; that if the scheme is to be saved it has to be saved by desperate methods, and these methods are included in this measure. Not the least of these methods is the audacious act of Socialism which is enshrined in this Bill. The proposal regarding the Board is an experiment in State control which, I would suggest is unprecedented in any country. A Board of this kind is removed from Parliamentary criticism, except what might be vouchsafed once a year by a report, and by such figures as the Minister may consider it necessary to give by an auditor appointed jointly by the Minister for Finance and the Minister for Industry and Commerce. I am not fond of this piece of eclecticism, with pieces drawn from the various methods the Minister has had brought to his notice in other countries, with something of his own added. That is the power to suppress municipalities. I can only resemble the powers of this Board to what goes on in the Conclave of Cardinals when they elect a Pope. The place is walled up, and no one knows what is going on until smoke is seen emerging from a chimney, and then it is known that a ballot has taken place and a Pope has been elected.