ELECTRICITY (SUPPLY) BILL, 1927—COMMITTEE STAGE.
Section 1 agreed to.
SECTION 2—SUB-SECTION 3.
(3) The Board shall consist of a chairman and such number (not being less than two nor more than six) of other members as the Executive Council shall from time to time determine.
I move:—
Section 2, sub-section (3). To delete in line 5 the word "six" and to substitute therefor the word "four."
My amendment would substitute for the word "six" the word "four." That means that the possible maximum Board would be a Board of five. Everyone will recognise that the success of this great Shannon scheme will depend on the efficiency of the Board which will have charge of, probably, one of the most difficult and certainly one of the most important, business experiments that has ever been tried in this country. The difficulty will be to find the men for the Board. I am sure that none of us envy the Minister in his task of choosing the Board. The amendment is intended to help the Minister. In my opinion, a Board of seven is too large. The ideal Board would be a Board of one. That is to say, if you could get the kind of super-business man who would be capable of running this concern in the best possible way— a super-managing-director who would have the business capacity to do the whole thing himself. The next best thing would be a Board of three, which would be absolutely responsible for the scheme. My own ideal is a Board of three men, of the highest business capacity, really responsible, with the very best professional and technical advice. I do not know what the intentions of the Minister are and we cannot very well cross-examine him as to what they are. It might be that he would like to put two or three advisory members on the Board who would not be really there all the time and who would not be absolutely responsible for the everyday work of the concern. However, I think a Board of seven is too large. I suggest to the Minister that he should allow the sub-section to be altered by reducing the possible maximum to five.
I would like to support the amendment. In one or two cases that I know of, where the administration is very important, for instance, on the State railways of India, the Board consists of three individuals, and, as I am aware, it is extremely successful. I think the Minister might adopt such a precedent with advantage in the present case.
It is interesting to find this small Board recommended by the business representatives of this House, because it seems to run counter to the practice of business concerns as we know them. It would be interesting to know how many directors there are in Guinness's, in connection with the various distilleries, as well as other concerns such as the Great Southern Railways and the Bank of Ireland. In the main the number of directors of these concerns is large, and they are ostensibly, at all events, concerns run on strictly commercial principles and on good business lines. Personally I am not opposed to the amendment, but I feel that the business people in this House who support a small Board for this scheme, which is to be a business one, stand somewhat self-condemned in adopting and tolerating very large boards in connection with business concerns with which they are connected.
If I thought it were possible to get in this country three men who could run this undertaking I would vote immediately and be decisive for three and only three. I can conceive myself approaching a particular individual in whom I believe I would find qualities: (a) the ordinary business outlook, (b) that he has finance and accountancy experience, and (c) that he has some knowledge of one, two, or three of the matters the Board may have to deal with, such as the wiring of houses, the sale of appliances, or some knowledge of the running of a power station. If I could get one individual with these qualifications I believe that two others added would be quite a sufficient Board. I am all for a small Board as making towards efficiency, but having, as I might say, three or five people in mind, and hoping to get three out of five with the qualifications—I believe I would then have a competent and efficient Board—my whole plans might be shattered by the refusal of one to join the Board. We settled on this number, seven, as the maximum. We had before us the example of the Swedish Board. If I could enumerate all the qualities that I think it desirable to have in members of the Board and ask people to see how many persons I would have to put on the Board before I got my qualifications up to requirements, I think they will see the difficulty I have in cutting down the number, not to seven, but to five.
I have stated that I thought there should be on the Board, first and foremost, someone who has a keen appreciation of what the handling of public money means. If I could get someone with experience of municipal service in connection with such undertakings and the finances of it, or a retired civil servant who had that capacity for understanding what a conscientious regard for the use of public money might be, or, even if I could get a retired politician—if one could believe that politicians at times have regard for the spending of public money—that would be one essential of the Board. The great danger about this Board is that people on the Board will have before them ever and always the phrase, "The Government pays in the end." I want to get rid of that, and I want to have it their idea that the Government has placed a limitation on the period within which they will come to their assistance, and that the Board should make this undertaking a business success.
I would very much like to have on the Board a specialised accountant of a particular type. I think, essentially, there must be on the Board in the end an engineer who will have charge of the power house and the main transmission system. I think there would have to be on the Board, eventually, a technical man in connection with the distribution network. There must be also on the Board an individual who has knowledge of salesmanship and methods of attracting electricity consumers. I do not mean a man to attract new electricity customers, but one who might get consumption increased without necessarily increasing the number of customers. It might be necessary also to have a lawyer on the Board. The answer there may be that the lawyer will be on the staff and will be an employee. It was put to me by people that I met abroad, and particularly by the engineers who have control on the Swedish system, that a legal man on a Board has a particular way of looking at problems which saves an amount of trouble and expense, that the problems and details of the administrative work can be worked out by him. Though there may be the necessity to have a man with legal training on the Board, if I can get an individual who has three of these suggested qualifications, well and good, I am on the highway to have a small Board. But, supposing I cannot, and that I said there should be an accountant, a salesman, an electrical engineer or a technician in charge of the whole distribution, I could go through a list of qualifications which would run the Board up to fifteen. At one time I went through the list of qualifications and I was told that I had gone outside the number. It will not be the case that I will have to get an individual with each qualification. It may not be possible to get an all-round individual with two or three sets of qualifications. As far as the first Board is concerned, it is certainly my intention to keep the number as small as possible. I do not think there is very much harm in allowing a maximum of six in addition to the chairman, provided Senators understand the general point of view I would put to the Executive Council, when they come to the appointments, that the fewer—provided they are thoroughly experienced and enterprising and seemingly are the right people—the better.
Senator Brown has alluded to another matter. When we began to consider the Board I initiated a discussion with my colleagues as to the form the Board might take, and for some days we hesitated between a Board of five or six people, plus the chairman. Against that we had two other types of consideration. We had first that we might have a very small Board of one, two, or three, certainly a maximum of three and an advisory council. That was really objected to for this reason, that it would be better to give collective responsibility to the whole body instead of to three who would have the main responsibility with other people in an advisory capacity, whose advice might be preferred in a way that it would not be if they had been saddled with similar responsibility to the three main people.
We had another point of view, that we might have a Board of seven, three of whom would be charged with the main executive responsibility, and four others who would have collective responsibility but who would be distinguished from the other members of the Board by a difference in salary and by the number of meetings it would be obligatory on them to attend. They would be there as an addition to the Board definitely sharing responsibility with the three main members, but they would not have that direct share of executive responsibility that the other three members would have. In the end we could not decide these things without some advertence to the actual persons likely to be appointed, but there could be no approach to persons until one saw whether the Bill would be accepted or not. That being the case, we decided to leave it with a maximum of seven, and that under no consideration could we go beyond seven. We admit that the smaller the Board the more likely are we to get efficiency. That is the plea I make to the Seanad. I do not say that it would ruin the Board to accept the amendment, but I do say it would increase our difficulties and that it would be better to leave the maximum as provided in the Bill. Having stated my own point of view that I agree with the Senator, that the fewer the people with responsibility the better return are you going to get for that responsibility and the better appreciation of that small number to their duties, I would like the Seanad to consider the difficulty there is likely to be in choosing a limited number to fill the very onerous posts set up under the Bill.
The Minister's statement makes me rather apprehensive as to the outlook under the control of this Board. He evidently contemplates putting a number of technical persons on the Board, and he enumerates the number of people with technical qualifications he would like to have. I submit that this is an entirely wrong point of view, and that technical people should be connected with the Board solely in an advisory capacity. Technical people, with that personality and character that are so very necessary for a Board of this kind, are very hard to find. Take any business and you will find that there are very few technical people on the Board. People with a general business outlook and human understanding are most important for a Board of this kind. They have all these qualifications which you cannot enumerate or stereotype. They command in business very high salaries and they are able to coordinate and digest the advice and arguments of technical experts. I do suggest very strongly that there is a great danger in putting technical people on a Board of this kind, which has to deal with general questions of control. They are apt to acquire a stereotyped outlook and to be biassed by their technical beliefs and their special training. I think there is no danger in making the Board a small Board, but there is a great danger in making it too large, and a still greater danger if you put on that Board men with technical qualifications.
In view of the Minister's statement I do not think it would be wise to insert the amendment. I recognise that it is essential to leave a certain amount of latitude to the Government with regard to the appointment of the Board, but at the same time I find myself almost in entire agreement with the statement made by Senator Sir J. Keane. I doubt very much that a collection of persons with more or less technical knowledge, is really the best type of Board unless that Board is to undertake the whole-time management of the concern. For the sake of argument, suppose you will have an expert in accountancy on the Board. If he is to be a whole-time man and responsible for the whole of the book-keeping arrangements and the accountancy of the undertaking, I agree by all means, but if he is only to be a part-time man giving portion of his time to the work, I think the gain is very small indeed. It is better to have the best possible men in charge of the office arrangements of the whole concern. If one or two of the directors of the Board happen to be accountants it would certainly do them no harm, but that you should seek specifically to have an accountant on the Board seems to me to be a mistake.
In the same manner, I believe in a small Board of experienced business men. If they are able to secure a competent staff, with competent men over the respective departments, that is the best type of management. If they cannot get competent men, I do not think any Board, small or large, can make a success of the scheme. I do not think that what is required on a Board is that one of the directors should be so qualified that he can go to a member of the staff and say to him: "You must not do this, because I know more than you do." What you require is a Board which, individually and collectively, has sufficient knowledge to say how far they will allow or tolerate certain work to be done in respective departments. I hope the Minister will not feel obliged, as a result of this section, to lay too much importance on examinations which members of the Board will have passed, but rather that he will strive to get men who are competent and trustworthy because of their standing in the country. If he secures men of that type, the technical men whom they will appoint will respect them and be a real guidance to them.
I may have unwittingly misled the House in what I stated. I believe there will have to be a full-time accountant, apart from the outside accountant who will come in to examine the books. There will have to be a full-time accountant in the employment of the Board. When I spoke of a man with a knowledge of accountancy on the Board, I did not mean that that man should be placed in charge of the whole accountancy side. I rather meant a man with a training in accountancy—that that would be a desirable feature in an individual who, having other qualifications, would be selected for the Board. The same thing would apply in regard to technical qualifications of members of the Board to which I referred, with two exceptions. I do not think it necessary that the engineer in charge of the power station should be appointed in the early years on the Board, because there will be no power station for which to make such an appointment. Neither will the transmission man nor the distribution man be required. I do think it will be necessary to have at every meeting of the Board, and not merely at every meeting but charged with every responsibility a member of the Board has, the two individuals I mentioned. I find myself there with examples from a number of other countries. The South African Board has definitely included in its personnel individuals of the type I mentioned. The Swedish Board, which is a Board very like what I am proposing to set up—I would not like to be too definite as to the number of members, I cannot be sure whether there are seven or eight—has two of its members engineers. The chairman is the civil engineer, who really directed the constructional work on part of the schemes, and the managing director is the electrical engineer. He is the technical expert in connection with all matters in relation to the electrical side. I do think it would be necessary to have these two eventually on the Board. For the rest, I am rather in favour of the general idea that has been expressed here, that provided there are one or two men who have what has been described as a specialised type of training, and who would also have general business qualifications, outside these men, the Board will be composed of men who have a real business outlook in regard to electricity or any other matter.
My amendment is intended more as a suggestion than as an amendment. It has led to what has been a very useful discussion, and I now desire to withdraw it.
Amendment, by leave, withdrawn.
I want to point out two matters in connection with the section before it is put. Might I suggest to the Minister that he is unduly hampering the Board by stating specifically in sub-section (6) that each member shall devote so much of his time to his duties as shall be prescribed by the Executive Council at the time of his appointment? I can quite conceive that further duties may be prescribed by the Executive Council during the term of the members' office. If these words were left out it would give a very desirable latitude. He might wish to revise that. They should not bar themselves from doing so.
Question—"That Sections 2, 3, 4, 5 and 6 stand part of the Bill"—put and agreed to.
SECTION 7.
(2) The accounts of the Board shall be audited annually by duly qualified auditors appointed for the purpose by the Minister with the consent of the Minister for Finance, and the fees of such auditors and the expenses generally of such audits shall be paid by the Board.
I move:—
Section 7, sub-section (2). To delete the sub-section and to substitute the following new sub-section therefor:—
"(2) The accounts of the Board shall be audited by the Comptroller and Auditor-General, and the cost of such audit shall be paid by the Board."
The object of this is to ensure that the accounts of the Board shall be audited by the Comptroller and Auditor-General. I ask the House to have very close regard to this function of audit. It will probably be the only independent check and means of knowledge they will have on the operation of this Board, and I think we have to get back to first principles on this question of audit. Although there may be no necessity now, in the light of development and experience for the independence of audit there was a very good reason for it in its origin, and the whole basis of Parliamentary audit is that the auditor should be independent of any Executive control. The Auditor-General, in his appointment and office is as independent of the Executive Council as the judges; he is appointed by Dáil Eireann and, I think, cannot be removed except by resolution of both Houses. If that independence is necessary for Parliamentary expenditure, which frequently comes under discussion and scrutiny, it is doubly important for expenditure of this kind, which will only come up rarely, and which is not wholly under Parliamentary scrutiny. Without suggesting that the auditor would in any way be bound up and hampered in his independence by the Executive Council, it is most important that the first principle of Parliamentary audit should be observed, and that this auditor should in no way be dependent for his position on the Executive Council. There will be a very important Parliamentary function which will have to be discharged by this auditor to see that the various sinking funds, as prescribed in the Act, and the various allocations are made in accordance with the law. I have heard it suggested that, admirable person as the Comptroller and Auditor-General may be, he is not suited for the technical work or the intricate accounting and auditing that this special business may involve. Perhaps he may not be suited to this, but, after all, he is only one of a large number; he is the general supervisor and controller and relies on his technical people largely on special points. There is nothing in that to prevent him taking on to his staff a highly-qualified specialist in these classes of accounts who will do the technical work for which the Comptroller and Auditor-General as a servant of the Dáil will be responsible.
I cannot see that the argument merely that he lacks qualifications and has not got experience of commercial auditing is a sufficient argument for departing from the basic principles on which Parliamentary auditors are appointed, and we are not justified in overthrowing the whole of that independent status of the Parliamentary auditor which we are asked to do in this Bill. After all, the Comptroller and Auditor-General has to audit commercial accounts, Post Office accounts and Post Office factories. He threw light only recently on certain doings of the Post Office. I only say that to show that he is competent to do commercial audits or that he can get certain people to do them. Parliament having given up so much of its power to this Board should retain that power. You can only do that by appointing the auditor directly.
I support the amendment. It seems to me all the more necessary because the Dáil has given up a great deal of its power over other matters. It is necessary, in my opinion, that there should be some link between the Electricity Department and the Government. I hope the Minister will acquiesce.
Colonel Moore wants some links. I suggest he has all the links that should be given as between this Board and the Oireachtas. With regard to the audit, he has this link, that the accounts have to be audited annually by duly qualified auditors appointed for the purpose by the Minister with the consent of the Minister for Finance. That can be queried at any time in the House, and if there is any dissatisfaction with the way the auditors carry out their work the point can be raised. I stand upon the fact that the Comptroller and Auditor-General's office has not been recruited for the purposes of this amendment and for commercial accounts, and is at this moment quite unsuitable. I say that without any disrespect, either intended or implied, towards that particular office. I was shown last year in Sweden the various audits of accounts to which the Board has to submit. I was brought down the report of the firm of commercial accountants who had to examine into the accounts, and there were set out questions and objections which one would expect in the auditing of accounts such as that. There was a statement with regard to the amount set to reserve and the amount set to renewals. If one took the previous year of a five-year period and the amount did not seem sufficient, explanations were asked. That explanation was provided and the auditors drew attention to the fact that they considered the explanations satisfactory. I asked was there no comment there from what corresponds to the Comptroller and Auditor-General. I was told with a certain amount of amusement that there was a special volume. The volume was produced for inspection and in that year when there were a number of serious points raised by the firm of auditors, there was a special point raised by what would correspond to the Comptroller and Auditor-General. It was that a manager had exempted himself on a certain day from duty to go to lunch with some visitors and in the evening had sent his official car to see them off to the railway station. It was queried solemnly whether that was or was not in order. The Board did not reply to that query.
I suggest that the auditor's office, as it is or may be recruited, is not suitable and it would be found difficult to enlarge it for the purpose of having specialists to deal with this when the specialists can be found in another way. That specialist can give proper attention to the accounts. One does not want the type of thing to which the Comptroller and Auditor-General calls attention. He is more concerned as to whether the parliamentary powers have been exceeded, whether there has been vouching done and so on, and not the things that one must have examined in regard to a concern of this sort. Senator Sir John Keane told me that an important duty would be to see that the proper amount was set aside for renewals, etcetera. I would like to have it pointed out where the Auditor-General would have that commented on at all. Section 21 states that the Board shall do various things and shall set aside such amounts as the Board may think it proper to set aside. I think the Comptroller and Auditor-General will find himself debarred from any comment on that because it is left to the discretion of the Board, but a firm of commercial auditors might say: "This is what the Board thinks fit to do, but we call attention to it and say that sufficient has not been set aside."
In answer to the two objections raised to the Bill as it stands, first that there is no link, I say there is a definite link with regard to the appointment of the auditor. There is an administrative act which can be queried. If it is thought a man is appointed as auditor who would be agreeable to certain things being hidden, that can be queried. On the other hand, there is the question of either efficiency or impartiality. We have set out to get impartiality wherever we can. It can always be achieved by having this appointment and the auditing subject to criticism. With regard to efficiency, and without meaning any disrespect whatever to the Comptroller's office as we have it, I suggest it is not recruited for this purpose and will be found insufficient for this purpose.
Is it the intention under the Act that the auditors appointed by the Minister with the consent of the Minister for Finance shall report to the Dáil or merely to the Minister? In my opinion it is very important that they should report to the House in the same way as the Comptroller reports on other accounts.
I find myself in entire agreement with the Minister on this question. In my own opinion, having regard to experiments and the method by which this company is going to be controlled, we will find that the auditors, the method of auditing and their report, is going to be, perhaps, the most important portion of the whole provisions in this Bill. The Executive Council will not be able, in this Bill, to control this Board in detail. They will, at the same time, be responsible to the House annually for the Board. They will have to answer questions in the House as to why they did not dismiss the Board, or take certain action with regard to it. At the same time members of the Board would be in the same position as the directors of a company are with regard to their shareholders, in that they can manage the concern in the way they think best. It is essential, therefore, that we should have a detailed business audit, and that that should be not simply that the balance sheet has been found correct, but should be the kind of audit which competent commercial auditors give to companies at the moment. I think there has been a good deal of misunderstanding and discussion in the Press and elsewhere in regard to this. A number of people believe that the balance sheet usually published and signed as correct by the auditors represents the sum total of the work of a commercial auditor. That is not the case.
It is, therefore, customary, and I think essential, to have a detailed comparative report from the auditor. You get a report, for instance, drawing attention to the fact that a certain department has not done as well as in a previous year, or to the effect that the amount to be set aside for depreciation for a particular plant or machinery does not seem adequate. You get a report querying the total amount of expenditure in a Department, or as to whether the total turnover of the Department will bear that expenditure. It seems to me that that is the kind of report that will enable the Executive Council, and afterwards the Dáil, to understand and to criticise this Board for the accounts that come before them annually. It is that kind of information that enables shareholders of a company to ask questions.
The old kind of Parliamentary control, which I am glad to see this Bill proposes to do away with, was that which made the Minister responsible. You had a system of question and answer. Nowadays we know you have questions which the Minister regards as an attack upon him, and in reply to which the Minister makes a counter attack. You have that kind of thing, that is thoroughly undesirable and may destroy any hope of competent administration by a Department. That is being abolished, but we do not want to do away with enlightened discussion of the scheme.
The Comptroller and Auditor-General was set up under the Constitution for a totally different purpose. It is sought, if I may use the words, through him to protect the Dáil against the Ministers where necessary; that is done through his reports, which are made annually. The reports come before a Committee of the Dáil, the Public Accounts Committee, of which no Ministers are members. The Auditor-General reports not on the wisdom of the Minister, for that is not his function, but he reports as to whether the acts of the Minister have legal sanction or not. I suggest we want competent persons as auditors who will also report on the wisdom of the action of the Board, having regard to good finance, not just simply as to whether the acts done by the Board were in accordance with this Bill or any other legislative act of the House. I believe that can be achieved far better by the appointment of outside business auditors than in any other way. And while I do not want to make any reflection upon the auditors in this country, I am not sure whether if some Irish firm of auditors is appointed it will not find it best to bring over at least one man of experience in auditing electrical accounts to deal with this matter, so as to get the best possible results. I do not think that will be achieved by accepting the amendment.
I think Senator Douglas has largely answered the objections of the Minister. The Minister objects to the control of the Auditor-General particularly on account of the fact that his staff were never recruited for commercial work of that kind. A very eminent auditor admitted that there are no auditors in this country who have any experience of electricity work and that they will have to start from the beginning and learn it if they get the appointment. The result is that whoever appoints the auditor will have trouble in getting persons in Ireland with experience of that type. The Auditor-General naturally would look for persons who would be capable of transacting that sort of work just as the Minister would. The Auditor-General has representatives in the various departments and his report to the Public Accounts Committee is, I understand, full of valuable suggestions in regard to the manner in which economies can be effected. He does not confine his inquiry, exclusively, to ascertain whether public money has been spent for the purpose for which it was voted. The great value in this Bill in having the Auditor-General auditing the accounts is that the Auditor-General is an appointment independent of the Minister and that he cannot be removed from office except by a vote of both Houses.
Now the Board here is appointed by the Executive Council and can only be removed by them and it is proposed that the same thing should take place with regard to the auditor. The Minister says we can query the appointment of the auditor. That is true but one is naturally at the mercy of the report the auditor makes as to whether that report is of the sort that would be required or not. In the case of the auditor being independent of the Government and responsible only to the Oireachtas I think one might feel there was a greater safeguard to the public finance than there would be in the case of an auditor appointed by the Minister. It seems that the auditor is not going to be the only person to act on the behalf of the State. I think someone on the Board might be an expert, and a business expert. I do not know why the Government should concentrate so much upon the auditor. From my point of view he is to be looked upon as the public custodian of financial interests. But in regard to other business matters it might be necessary to appoint another type of person to see that the Board is carrying on the functions for which as a Board it is appointed.
Like Senator Douglas, I am in complete agreement with the Minister upon this matter, and therefore unable to support the amendment. It appears to me that the object of the amendment is to secure Parliamentary control. Parliamentary control will be secured through the Minister. Another point overlooked is that this proposed Board is to be essentially a commercial undertaking as distinct from an ordinary State undertaking. It would be very unfortunate if at the beginning of its life it was trammelled by what I describe, I hope without being offensive, as officialdom in any shape or form. It is a business undertaking in every sense of the word, and I think the ordinary firm of commercial auditors would do their best to secure that this company, if I may so call it, should be run on commercial lines. As Senator Douglas reminded us, the Auditor-General can only examine accounts in the light of Parliamentary sanction. I do not think, with all respect to Senator O'Farrell, that he can decide whether a thing is good or bad; he only decides whether it has legislative sanction. Therefore, it seems to me that the House would be well advised to leave the Bill as it is, and not to accept the amendment of Senator Sir John Keane.
I agree with what Senator Brady has just stated. If the Board is restricted by reason of any fears that its operations will be criticised by the Dáil or the Seanad that will prevent it from doing in a real sense what a Board of Directors would do, and they would be always explaining to the auditor. This is really a business proposition. It is not a matter merely of the control of public money. This Board is empowered to do the best it can for the promotion of the electrical undertaking. If it is handicapped by reason of restrictions as to questions of public money, it will not be able really to fulfil the functions for which it is appointed.
Speaking as a layman, Senator Douglas told us that the report the ordinary shareholder gets is not the auditor's report at all. He led us to understand that at the back of that report there is a mass of detailed information available for the managers of the concern. Reading sub-section (4) of Section 7, it is obvious that most of this information should be withheld from the public report of the auditor. If that is the intention, that a mass of detailed information given by the auditor can only be communicated to a certain portion of the staff, or in regard to certain matters connected with particular departments, and if that is to be withheld from the shareholders, then, I am strongly of opinion that the Auditor-General's report would be more advantageous to the State than an audit that might be called a biased audit, and setting forth no details but merely facts suggested. I may be all wrong in having stated that such a thing could be done. But one has some little knowledge of audits in which certain matters are withheld from the public, and if any such state of things could arise in an audit under sub-section (4) of Section 7, then I strongly think that the Auditor-General would be better. Perhaps the Minister would enlighten me upon this matter.
With regard to one statement of Senator Bennett, that any recognised public company auditor, at the suggestion of a board of directors, would withhold information, any such auditor would, if a member of any of the recognised societies, of which there are six or seven, be immediately removed from membership of that society, and that applies to one of those recognised societies.
What I implied was that the Senator said that what the shareholders see is not what the auditor supplies.
I did not say that was not the audit. I said it was not the whole audit.
Not the whole audit. What I meant to convey was that if the audit submitted by the Minister is not the whole audit it is of no advantage to the State.
I think we are getting a bit off the track. We are now discussing sub-section (4) of Section 7 in reference to accounts submitted by the auditor as prescribed by regulations. If we are going to discuss the regulations the Minister is to make as regards audit we will be here all night. What we really should discuss is whether the best audit would be by a public auditor or by the Auditor-General. I must say personally that I am very glad indeed to see that the Minister is going outside any Government official, and is going to employ an ordinary first-class business accountant to audit the accounts. It is what any person going into business would do. I do not know exactly the Auditor-General's methods of dealing with business. As far as one sees his audit of the accounts of governmental affairs, that audit is first-class. But that is not the class of accountant that any of us in business life would look to to audit our accounts. A public auditor is handling business accounts of every description all his life, his staff are auditing business accounts, and he and they will recognise at once the business methods of the particular trade or firm whose accounts he is auditing. I believe the public in Ireland will get far more enlightenment out of the reports given to them by an ordinary business auditor than if the accounts were audited by the Auditor-General. I think there is a great deal in what Senator Douglas said that in appointing an auditor the Minister should make it essential that on the firm appointed there should be some one individual who is thoroughly acquainted with the audit of electrical accounts as they are audited in Great Britain.
I would not like to see the Auditor-General get someone into his staff to deal with that particular business. It would not be the right thing to do. My fear in a great deal of this Bill has arisen from what one has seen of government appointees running a big business show like this. We all know it very seldom succeeds. When I saw that outside sources of information and supervision were going to be brought in, I was very much pleased. I was pleased because I saw that that was a departure from pure governmental control. I disagree with my friend, Senator Sir John Keane. I think that when we see reports from the public auditor, and see the accounts submitted by him in accordance with the regulations prescribed in the Bill, it will be our business when we see anything calling for observations from us, or anything that we do not like, or when we find there is anything on which we would want further information, to go ahead and ask for that information; but it will not be from the Auditor-General we can get that information. We will get it from a first-class accountant who is well up in all sorts of business matters, and who is an expert in dealing with business accounts.
A good deal of the arguments that have been used in connection with this amendment have come down to the question of the difficulty of procuring an auditor of the standard capable of doing the particular work that will be required of whoever is to audit these accounts of the Electricity Board. Senators Douglas and Jameson agreed so far as to say that we would have to send out of the country to procure an auditor who would have previous experience of auditing accounts of this particular type. It has just occurred to me that the only people in the country with previous experience of the auditing of accounts of a large electricity undertaking are people who are already in the service of the State. The Department of Local Government and Public Health send round their auditors to audit the accounts of the local authorities, some of whom, like the Corporation of Dublin, run large municipal enterprises with regard to electrical undertakings. If one department of the Government can procure auditors with sufficient experience to audit the accounts of the Dublin municipal electrical undertaking, I do not see why the same department would not be in a position to provide men to audit the accounts of the new Board. There are already in the service of the Local Government Department auditors with previous experience of auditing electricity undertakings whose ability to do that work is beyond question. I have no doubt that the auditors who have been found competent to audit for so many years the accounts of the Dublin municipal undertaking have sufficient ability and experience to do work of the class that will be required of the auditor who will be appointed by this Board. For that reason I do not think there is any necessity for sending out of the country for auditors, because I believe such auditors already exist here in the service of the State.
There is no reason why the Auditor-General's Department could not have these men transferred and set to do, in that department, the work that these same men have been doing for the past twenty years. Senator Jameson has made a statement, and that statement has been also made by others, to the effect that the Auditor-General has not enough previous experience of the kind that will be required for this work and that we require people with business training to do it. Surely it is not fair to say that. We all know that the present Auditor-General got his experience in the establishment of the largest firm of auditors in this city. He had that experience before he was appointed Auditor-General. He was not appointed Auditor-General because of any other reason than because of his ability to discharge this sort of work, high-class accountancy work. He is a man who had been engaged all his life in accountancy work. That is the reason why he was appointed to his present position, the duties of which he has discharged with credit to himself and to those who appointed him.
The Auditor-General is the most competent person that could be appointed to act as auditor to the Board. His experience makes him a more suitable man than either the Minister for Finance or the Minister for Industry and Commerce. I think it is desirable that there should be some parliamentary check on the expenditure of this Board. It will be a serious thing, in my opinion it would be rather an insult to the Auditor-General, if he is ignored in the appointment of an auditor. I think the matter might be met in this way by the Minister if he were to insert in the section the words: "That the auditor should be appointed in consultation with the Auditor-General." I think that would be satisfactory and would to some extent meet the case.
There seems to be very great justification for placing this Board in a position of absolute independence. This is a commercial undertaking but it must be remembered that it is a commercial undertaking with no bankruptcy court to face and with the whole resources of the State to fall back upon. For that reason to compare it to a commercial undertaking is a false analogy. When one hears Senator Dowdall saying that this is a commercial undertaking and that it must be run as a commercial undertaking one cannot agree with him. It cannot be run as a commercial undertaking because the same conditions do not apply as in an ordinary commercial undertaking. If all our business undertakings were free from bankruptcy and free from the necessity of finance, then there might be some parallel between this Board and commercial undertakings. This is a Government Department placed in a position of independence with all the conditions of a Government Department. You have got the plums of the commercial position and none of the drawbacks. When we come to the question of the Board we are told we are going to get all these things from the new auditor and we are to get his expert information and expert scrutiny. But we find that nowhere in the Bill is there provision made for that being embodied in the auditor's report. It is not prescribed in this Bill. Senator Jameson says that we will see the regulations under which the auditor will work and that if we are not satisfied with these regulations that then we will have an opportunity of criticising the regulations. I see no regulations. I do not see that they are going to be laid on the Table. These regulations may be entirely confined to departmental circles.
This is a choice of evils. The whole Bill is a choice of evils. The selection of the Board is a choice of evils; we are trying to make the best of a bad job. I know that Senators do not agree with me, because otherwise they would not have passed the Second Reading. This now narrows itself down to two points. The first is the question of an expert auditor. Senator Farren spoke of the auditing of the Dublin electricity accounts. I do not think that the Dublin municipal electricity accounts are very big. I know a little about auditing, to speak not with authority, but to speak with a certain knowledge. You can very much over-rate the expert side of it. A far more important side of it is the independence and integrity of the auditor. I have to use these words. The independence of the auditor is all important, and this auditor is going to be entirely dependent on the Government. I do not mean for a moment that a professional man is going to be influenced by that. But there are subtle differences between the man appointed by the Dáil and the man who is dependent on the Minister—people who appoint him for the continuance of his office. To my mind, that is a matter that over-rides the issue. You cannot over-stress the vital necessity for independence in the tenure of his office. Nobody suggests that a temporary judge is liable to venality, but why do we take all this trouble to make our judges independent of the Executive Council's control? It is simply a proposal which in the past has been found necessary, and for all we know it may be found necessary in the future again. The Minister suggests that the Dáil will discover if the auditor is hiding things. How is the Dáil to discover anything? It does not possess the faculty of being able to see in the dark like a cat.
But if there is any understanding at all between the auditor and the Executive Council it will be a serious matter. It may be a question in which the scales might be tipped. It is just a question of what complexion you put on it, how you word the report. The balance might easily be tipped in favour of the political situation at the moment, giving the most favourable interpretation; whereas the report of the Auditor-General would be made, presumably, to the Dáil, and would come before the Public Accounts Committee. If the thing is all right, what is there to fear? I am strongly in favour of passing the amendment.
I have just one word to say. Some Senators have stated that it is the duty of the Auditor-General to say whether a certain expenditure is right or not, whether it is legal or not. But anyone who has read the papers lately will notice another aspect; for instance he may go into the question of whether people are making bicycles properly or not, and it is rather hard on Ministers when he makes these reports. Anybody in this House or in the other House will know about the difficulty of getting financial information at all. A great deal of pressure has had to be exerted to get very little information from the Ministers, and this is true both of the Dáil and Seanad. We do not know half the things that occur. The other day we saw that agreements for millions of money had been kept secret for seven or eight months from the Dáil and Seanad. It is bad enough as it is with the Auditor-General to audit the accounts. But what would it be with secret arrangements between some Minister and his auditor in the electricity business? It would be very serious, indeed.
I wish I had the simplicity of Senator Sir John Keane. We get the statement made that because the Senator has a certain point of view about this electricity undertaking that therefore the world must be of his opinion that we are trying to make the best of a bad job. I am trying to make the Senator avoid trying to make the worst of a very good job. I have not been able to get him to see the unsoundness of his argument. I have been able to show that in two points his arithmetic was unsound. Probably that will come when Senator Col. Moore begins to understand the millions he is talking about. The information is given to both, but the lack is not the lack of information, but the lack of understanding. Colonel Moore has had the millions explained to him several times, but I see by his motion on the Order Paper that it is too much for his understanding; he is throwing upon lack of information what should be charged to his lack of understanding. Senator Guinness has raised a point about the report. Section 7 and Section 32 must be read together. Section 7 (3) prescribes that certain regulations must be made. Sub-section 4 of Section 7 says that "The Board shall send to the Minister a copy of the balance sheet of profit and loss accounts," and copies of such accounts submitted to the auditor "as are prescribed in that behalf by regulations made under this section, or may be specially called for by the Minister." And then you come to Section 32, which prescribes that "The Board shall in each year at such date and in such form as the Minister may prescribe, make to the Minister a report of its proceedings." Then the Minister must lay before the Oireachtas such returns as are in his opinion necessary to the proper understanding of the report.
Is the report of the auditor to be submitted to the House? I ask that because the section does not cover it. It does not make it clear that it will be so submitted.
CATHAOIRLEACH
The position is that the report prepared in accordance with the regulations prescribed by the Minister will be submitted to the Oireachtas.
When I spoke in the Dáil on this matter I said that I wanted these two sections read together, and that I wanted it to be understood that my counter to the control of the Auditor-General was to be the fullest possible publicity, which was to be achieved by these two ways: the publication of certain things and the presentation of the report, including any or all of these matters which the House might determine should be included. It seems from what Senator Douglas has referred to that not merely the accounts, but the auditor's report on the accounts should be presented with the report of the Board. I am willing to accept that. My whole attitude has been to give all the publicity necessary, and to have certain things submitted annually to the House and fully discussed there. I am prepared to amend the section if people say that the auditor's report should be included as well as the Board's report. Senator Sir John Keane referred to the regulations. Suppose they are not to be published, and not tabled, then when the first auditor's report comes forward one of the first questions to be answered is: "Are these made in accordance with the regulations?" What are the regulations? The making of regulations is an administrative act and can be criticised, and criticism would follow on the regulations as to whether they are good and sufficient. As I have said, it is an administrative act of the Minister which can be criticised and brought into the full light of day.
Has the Minister any objection to laying the regulations beforehand?
I would like to discuss that. I do not think there is much virtue in it. I think we should wait until we have a criticism of the regulations and we see if the regulations are sufficient. They will come up on Report and the form in which the accounts are presented will then be seen. They have to be presented in the form prescribed by the regulations, and when presented can be criticised. If there is an amendment put down on the Report Stage with regard to tabling the regulations we can see what arguments can be brought forward for or against such an amendment. Senator Farren referred to auditors of the Local Government Department. What they have to determine is whether money has been legally expended; they have to decide that and nothing else. There was an auditor with regard to Dublin, and he took up another attitude, but that attitude has not been persevered in. It is recognised that an audit as carried on by the Local Government Department could be beaten back to a particular point. Certain matters such as tenders could be criticised, but generally the matter he has to determine is—is there authority for the expenditure of certain money? I think the Ministry of Finance in relation to matters dealing with revenue and income tax has much more association with auditors than the Local Government Department. I wish to say again that my main attitude in this is publicity of the fullest in regard to the accounts of the Board and the report to be submitted by them. If there are specific items that people think ought to be detailed and brought forward, I am willing to have these brought forward and discussed. I would consider it good business even to spend 7s. 6d. a pound for grapes if the Board could make a good business deal over it.
In view of the Minister's desire that as much publicity as possible should be given, I would suggest that he should introduce some amendment to Section 32 providing for the auditor's report to be submitted to the Oireachtas.
CATHAOIRLEACH
I think the Minister has gone as far as that already.
That is the only point on this stage to be met. There may be other points Senators would like brought forward. I cannot be expected to know what is in people's minds unless they give an indication.
Amendment put, and negatived.
I move:—
Section 7, sub-section (2). After the word "appointed" in line 14 to insert the word "annually."
The object of the amendment is to have the auditor appointed annually. I quite recognise the magnitude of the auditor's work in auditing the accounts of this great concern, and I quite recognise that no really high-class or efficient auditor would undertake the work unless he was fairly certain of being continued at it. If an auditor is doing his work efficiently and well he will of course be continued, but on the other hand if he happens not to be doing his work efficiently and well it would be very awkward if you had appointed him for a period to have to get rid of him. As long as you get a really efficient man he will be continued as a matter of course. My submission is that it would be a wise thing for the Minister to have control in his hands, so that he can keep a good man if he gets him and can get rid of an inefficient man without actually having to discharge him.
I had some doubts about this amendment at the beginning. I had the idea that the auditing of the accounts of the Board will be a work of such magnitude that it would be difficult to get a firm to take it up unless the firm were assured of continuous business for a number of years. I think that could be met in the way Senator Brown has suggested by appointing the firm for a year, and if they prove a success then reappoint them for another year.
CATHAOIRLEACH
Would it not be better instead of "annually" appearing twice to have "should be audited in each year by duly certified auditors annually appointed."
I am accepting the spirit of the amendment, and I will leave it to the draftsman to put it into proper words.
Amendment by leave withdrawn.
Question—"That Sections 7, 8 and 9 stand part of the Bill"—put and agreed to.
SECTION 10.
10.—A member of the Board who has any interest in any company or concern with which the Board proposes to make any contract shall disclose to the Board the fact of such interest and the nature thereof, and such member shall take no part in any deliberation or decision of the Board relating to such contract, and such disclosure shall be recorded in the minutes of the Board.
I move—
Section 10. To add at the end of the section a new sub-section as follows:—
"(2) A person shall be disqualified from being appointed or elected or continuing to be a member of the Board if he is concerned in any bargain or contract entered into with the Board, or participates in the profit of any such bargain or contract or of any work done under the authority of the Board."
I think the Minister should have no difficulty in accepting this amendment. It is in regard to certain circumstances that would disqualify a person from being appointed a member of the Board, or, having been appointed, remaining a member of the Board. It looks as if Section 10 and the subsequent section refer almost entirely to capitalistic interests—that is, investment interest in any particular concern. It seems to me that the section does not prohibit a person from being an agent of some person who would be having a contract with the Board and being in a position to reap profit from that contract. I have taken this amendment from the Act under which the Port of London Authority was set up. I think if the Port of London Authority found it necessary to have this in their Act, it seems equally desirable that a similar one should be inserted in this Bill.
As I pointed out in the other House, this would mean that no member of the Board could have electric light in his house. In getting electric light he would be concerned in a bargain or contract entered into with the Board. For that reason, even if it is merely that it is too widely drafted, I object to this amendment. The Senator made the point that what he is really anxious to prevent is that any member of the Board having something which is not covered by the phrase "shares in any electrical undertaking" shall not remain on the Board. That is one of the points we had in our minds, and it is included in the last two lines of Section 11.—"and includes any share or interest in any unincorporated undertaking similarly engaged." The amendment would prevent members of the Board being concerned in an agreement for the purchase of electricity.
That is only in regard to an electricity undertaking. The Board will have other contracts that may not be termed electrical. A person may be interested in one of these, and still become a member of the Board.
Which is described as being concerned "in the generation, distribution or supply of electricity, or the manufacture of or wholesale or retail dealing in electrical apparatus." Let us have a concrete case of what other contracts the Board might have an interest in, and not be covered by that definition. We may enlarge that sub-section, but not to the point of saying "being concerned in any bargain or contract entered into with the Board."
There would be building, drainage works, and works now being done by the Board of Works.
And which would still continue to be done by the Board of Works.
You propose to hand these works over to the Shannon Board. A person could also be interested in a building contractor. He might have no shares in the firm, but he might be a sort of commission agent for it.
I cannot see yet why a person interested, say, in the building trade, should be prevented from being a member of the Board unless there is to be a lot of building done under the auspices of the Board. If that is so, what we are setting out to say is in the British Bill, that such interest shall be disclosed, and that a member shall take no part in the deliberations of the Board relating to such contract. In other words, we say: in the main things the Board have to deal with—electricity, generation, transmission and distribution, and anything to do with electrical apparatus—a member of the Board shall be completely debarred from having any share or interest in a body corporate or incorporate dealing with these matters. Then you say, on a contract being made the share must be disclosed and the member so disclosing shall take no part in the deliberations or decisions relating to such contract.
He could remain on the Board.
Certainly. If any man is to be prevented from going on the Board who may have a share or a financial interest in some matter which may at some time come before the Board—if such a man is to be disqualified—I do not think that is a right position to ask the House to adopt.
It is very difficult to draw the line in a matter of this kind. Section 10 is practically verbatim the section which is put into every article of association of a company. When defining the qualifications of a director a section is put in which is practically word for word with this section and it has been found to work well. If you go beyond that you get into all kinds of trouble, as the Minister has pointed out.
Might I ask the Minister if the holder of a few shares in the Calcutta Electrical Power Company would be thereby precluded from being a member of the Board—not that I aspire to it?
I am afraid the answer would be "yes."
If that is so I think the section is far too wide.
The Senator would have the alternative of selling his few shares.
All I can say is that it is surprising if the Port of London Authority which has been quoted by a number of business people as the sort of Board that might have been set up in regard to this matter, thought it necessary to include such a sub-section. I do not see why the Minister should go so much out of his way to oppose it. He goes to the ridiculous extent of saying that a member of the Board could not buy an electric lamp from the Board if the amendment were put in. It might as well be said that a ticket could not be purchased from the Port of London Authority. In my opinion the amendment leaves the matter somewhat open. I do not say this opening would be availed of, but certainly it is not sufficiently protected.
I think we can all appreciate Senator O'Farrell's point that the section would mean that a person had an illicit interest in some company. The Senator wants to make it clear that a man may not have an interest in a contract. I think if the words "or any interest in such contract" were added, after the word "contract," on line 3, it would meet the case.
CATHAOIRLEACH
You propose the addition of these new words. We had better dispose of the other amendment first, and then if you care, you can move yours as a substantive amendment. Your amendment does not alter or affect the first one.
Amendment put and declared lost.
I move that the words "or any interest in such contract" be inserted in Section 10, line 3. If the Minister will not accept the amendment, I do not want to press it.
CATHAOIRLEACH
There is nothing in Section 10 to penalise any person on the Board who has an interest in a contract under the Board.
I think there is in the first line.
CATHAOIRLEACH
I cannot find it. It is a matter of opinion.
The matter could be brought up on Report Stage.
CATHAOIRLEACH
The section speaks for itself. A member of the Board may have an interest in a company or concern, but he may have no interest in the contract. On the other hand, he may have no interest in the company or concern, and may be interested in the contract.
If the Senator leaves it over for further consideration, it can be brought forward on the next Stage for approval or rejection.
Amendment deferred until the next Stage.
Question—"That Section 10 stand part of the Bill"—put and agreed to.
Section 11 ordered to stand part of the Bill.
SECTION 12.
(1) The Minister for Finance shall, subject to the limitations imposed by this section, advance out of the Central Fund or the growing produce thereof to the Board as and when requested so to do by the Board all such sums as the Board shall from time to time, but not later than the 31st day of December, 1932, request the said Minister to advance to it.
(2) The total amount of the sums advanced to the Board under this section to meet the liability of the Board under this Act in respect of interest and arrears of interest on sums advanced out of the Central Fund under the Shannon Electricity Act, 1925 (No. 26 of 1925) to the separate fund established under Section 11 of that Act and the expenses incurred by the Board in the operation, maintenance, and repair of the Shannon works under this Act shall not exceed such sum as with the said sums advanced whether before or after the passing of this Act to the said separate fund out of the Central Fund under Section 11 of the Shannon Electricity Act, 1925 (No. 26 of 1925) amounts to the sum of five millions, two hundred and ten thousand pounds, and, subject to that limitation, shall not exceed the sum of six hundred thousand pounds, and the total amount of the sums so advanced in any one half-year to meet the said liability and expenses shall not exceed the sum of one hundred and fifty thousand pounds.
(3) The total amount of the sums advanced to the Board under this section for any purpose other than to meet the liability and expenses mentioned in the foregoing sub-section shall not exceed the sum of two millions, five hundred thousand pounds, and the total amount of the sums so advanced in any one half-year except in the half-year ending 31st December 1932, for any purpose other than as aforesaid shall not exceed the sum of four hundred thousand pounds.
(4) The Minister for Finance may, for the purpose of providing for the advance of sums out of the Central Fund under this section, or for the repayment to that Fund of all or any part of the sums so advanced or for paying off any securities issued under this section so far as such payment is not otherwise provided for, borrow money by means of the issue of such securities as he thinks proper, and all sums so borrowed shall be paid into the Exchequer.
(5) The principal of and interest on all securities issued under this section shall be charged on and payable out of the Central Fund or the growing produce thereof.
(6) The sums to be advanced under this section shall be advanced by the Minister for Finance, and shall be expended by the Board solely for the purpose of the exercise and performance of the powers and functions conferred on the Board by this Act.
There are several amendments to Section 12 in my name.
CATHAOIRLEACH
And if you succeed in No. 7 amendment, the others will be more or less consequential.
Yes, they centre round Section 12. Amendment No. 7 is as follows:—
Section 12. To add at the end of the section three new sub-sections as follows:—
"(7) In this section the expression ‘the appointed day' means the 31st day of December, 1932, or such later date as the Minister, after consultation with the Board, may by order made under this section appoint.
(8) The Minister may by order made with the consent of the Minister for Finance before the 31st day of December, 1932, appoint such date subsequent to the said 31st day of December, 1932, as with the consent aforesaid he thinks proper to be the appointed day.
Every order made under this sub-section shall be laid before each House of the Oireachtas as soon as may be after it is made, and if either such House shall, within one month after the first day on which such House sits after such order is laid before it, pass a resolution annulling such order, such order shall be annulled accordingly without prejudice to the validity of anything previously done thereunder.
(9) If the Minister appoints under the foregoing sub-section a day subsequent to the 31st day of December, 1932, to be the appointed day, the Minister may by order made with the consent of the Minister for Finance increase by such respective amounts as with such consent as aforesaid he thinks fit the limits of five millions, two hundred and ten thousand pounds, six hundred thousand pounds, and two millions, five hundred thousand pounds respectively, and if any such order is so made this section shall have effect as if the said several limits as increased by such order were substituted for the said limits as respectively stated in this section.
Every order made under this sub-section shall be laid before Dáil Eireann as soon as may be after it is made and if Dáil Eireann shall within one month after the first day on which it sits after such order is laid before it pass a resolution annulling such order, such order shall be annulled accordingly without prejudice to the validity of anything previously done thereunder."
I sincerely trust that the Seanad will view these amendments not as in any way intended to add difficulties in the working of the Shannon scheme, but to remove difficulties out of the way of the Electricity Supply Board. As a matter of fact I am endeavouring to make the Bill, if possible, more workable on behalf of the Board. That is my sole object. This group of amendments centres really on Section 21 of the Bill, whose marginal note reads: "Fixing of rates and scales of charges for electricity." Section 21 as it stands in the Bill appears to me to place insuperable difficulties in the way of the Board. It is divided into two sub-sections.
Sub-section (2), prescribes that:—
"All charges made by the Board after the 31st December 1932 for electricity (whether derived from the Shannon or otherwise) sold by it in bulk or direct to consumers... shall be fixed at such rates and on such scales that the revenue derived in any one year by the Board from such scales and services together with its revenue (if any) in such year from any other sources will be sufficient and only sufficient to pay all salaries, working expenses and other outgoings of the Board properly chargeable to income in that year (including the payments falling to be made in such year by the Board to the Minister for Finance in respect of interest and sinking fund payments on advances out of the Central Fund) and such sums as the Board may think proper to set aside in that year for reserve fund, extensions, renewals, depreciation, loans and other like purposes."
The first sub-section enacts that:—
All charges made by the Board on or before the 31st December, 1932, for electricity (whether derived from the Shannon works or otherwise) sold by it in bulk or direct to consumer... shall be fixed at such rate and on such scale as are in the opinion of the Board most conducive to the Board being from and after the 31st day of December, 1932, in a position to comply with the next following sub-section (2) of this section.
The strict interpretation of this would seem to be that the Board prior to the 31st December 1932 should supply electricity at lower rates to attract customers and draw them into the spider's web and on the 1st of January suddenly raise rates to such an extent as to cover all working charges. Such a proposition is in my opinion utterly unworkable, and I scarcely think that any self-respecting man would take office on the Board with such a condition to be complied with. It is perfectly certain that the public, knowing these conditions, would not be eager to apply for an electrical supply, nor would the Board be in a position to determine the price. It would result in checking the demand for current and a consequent increase in price and a direct incentive to traders to set up private installations for industrial purposes. The essential need with the Shannon scheme is that the lowest possible rates be charged for current so that the maximum output from the present partial scheme may be reached at the earliest moment.
The alterations proposed by the amendments will, I believe, remove the insuperable difficulties involved in this section of the Bill. The amendments give the necessary elasticity to fixing the date upon which the rates for electricity shall be fixed on a paying basis, and leaves it to be fixed by the Minister after consultation with the Board. Thus, whether the period is short as the Minister hopes, or long as I expect, the machinery is available for meeting either contingency.
As the Bill stands it appears to me that no working capital is provided for the Board from the 1st of January, 1933; no advances from the Central Fund can be obtained after the 31st of December, 1932; no revenue will be available from rates until late in the year, 1933, that is after the first collection of rates. It may be said that the Board have some of the £600,000 and the £2,500,000 at their disposal. These funds are all ear-marked and the Board have no authority to spend these funds for any other purpose than those specified in the Bill.
It will be in the recollection of Senators that sub-section (1) of Section 12 reads:—
The Minister for Finance shall, subject to the limitations imposed by this section, advance out of the Central Fund or the growing produce thereof to the Board as and when requested so to do by the Board all such sums as the Board shall from time to time, but not later than the 31st day of December, 1932, request the said Minister to advance to it.
It appears to me the fixing of the date for the change over as it were to the 31st December, 1932, fettered the action of the Board to such an extent that I am particularly anxious that elasticity should be given and that that elasticity should be in the hands of the Minister and of the Board generally. In a few years the Board or the Minister will be in a position to say whether it is possible to fix a rate to cover all the charges. I do not think in the early stage any such opinion could be given and it would lead in all probability to having to approach the Dáil again for an extension of these funds or permission to advance funds after that date. It is with that view I propose the amendment and I hope the Minister will not only accept it, but see his way to support that view in the Dáil.
I do not think the House should accept this amendment. We have got an array of experts who have told us that this scheme should be productive and self-supporting in 1932. We have that point impressed upon us with all the optimism of which the Minister is so well capable.
Not what the Senator is saying.
We were told that it was going to pay from 1932.
The experts did not say that.
The Minister said it, and after all, if he is so well advised, I have no doubt that he has good grounds for saying so. In all this matter we have a sort of orientation of mentality. We are simply going into a new sphere of thought, what might be called the economics of socialism. We are putting ourselves away from all long established checks and balances of private enterprise. Rightly or wrongly, this private enterprise system has grown up on certain safeguards and checks, and on certain impelling factors. One factor is profit. It is profit that makes us work eighteen hours a day in our own business. There are certain other compelling factors in ordinary business, the fear of the bankruptcy court, for instance. You have cut away all these things under this scheme, and you have substituted a very partial check. The scheme has to be a paying proposition by 1932.
The psychological value of that is important inasmuch as the Board will feel that a limitation is fixed on the period during which the scheme can draw from public funds. Once this limitation is removed you destroy the driving force, which makes people try to succeed. The driving force in this Bill is that you fix a date on which the scheme is going to pay. If you take away that and if there is any tendency in this Government institution to lethargy, you are going to encourage that, by saying to the Board: "You have got an all-round Minister behind you." Senator Sir John Griffith seems to think that there is a terrible objection to the Board coming back to the Dáil in 1932 for a further grant for the scheme, but after all, we must safeguard the taxpayer. Are we to take the view that so long as everybody gets cheap electricity the taxpayer does not matter? If that is the view, by all means accept this amendment, but if the taxpayer is going to be safeguarded, I fail to see why the consumer of electricity should be placed in a privileged position. There are other citizens who are just as important and their rights should be safeguarded. This is one real check in the Bill, and it should be retained.
I desire to support the amendment. I share the Minister's belief in the success of the Shannon scheme, but I feel that the measure of that success will depend on the efforts of the Board during this period, when they have not necessity to make both ends meet. I agree with Senator Sir John Griffith that it might be very difficult to get the right sort of man to risk his reputation and to make this concern an absolutely paying concern at the end of this period in 1932. It is most important that you should get the right type of men for the job. You might not get them if they were weighted with this perhaps most difficult task of making it pay by that date. The advantage of Senator Sir John Griffith's amendment is that it makes the period an elastic one. It will not be extended if the Board do what we all hope it will do, and if they get sufficient demand for electricity to make this a paying concern, so that they can take up the burden that is cast upon them by Section 21. For this reason I hope the Seanad will accept the amendment.
I find myself in strange company. I am thoroughly in accord with Senator Sir John Keane in his opposition to this. I do not think a man who is sufficiently big to act on the Board is likely to be deterred by reason of his not being able to make absolutely good on the date fixed in the Bill. A man sufficiently big for the task is a man who will take it up in the hope that he will be able to make good at that date, and he will be sufficiently big also in case he does not make good by that date to give reasonable reasons for not having been able to do so. If we really are going to leave an indeterminate date in the hope that a complacent Minister may yield to such facts and considerations as are put before him, I do not know how the Board are likely to achieve success within a reasonable time. This Bill has been framed and drawn on the advice of experts, and has been given due consideration, and all the facts were taken into account by the Department and the Minister. The date, as a result of this consideration, has been inserted in the Bill. We know that the Bill is not as immutable as the laws of the Medes and Persians, but it is better to have something definite to work for. I think it is better to have a date fixed so that the Board may be able to achieve success within that time. I have very little doubt myself that success will be achieved even before that date.
I hope the Minister will accept the amendment. I think the last part of Senator Dowdall's remarks is an argument very largely in favour of the amendment. This amendment does not do away with the date of 1932, but if it is found desirable to alter that date or to provide additional money—which might well be the case, having regard to the hope that most of us have that the scheme will be even larger than that provided for in the Bill—I think it is wise to give a certain amount of elasticity. The date is still left as 1932 under the amendment, but if it is found necessary by the Minister after consultation with the Board, he can, by an Order which will be placed on the Tables of both Houses, extend the date. Under the amendment the usual period of one clear month is allowed in which the House can object.
May I point out that the amendment says: "or such later date as the Minister after consultation with the Board may appoint"?
There are just two points in connection with Senator Sir John Griffith's amendment that I would like to refer to. There is no necessity to go into all the points again. Let me just give my opinion for what it is worth—that the Electricity Board will find it possible in 1929 or 1930 to reduce charges for electricity all over the country, and yet by the revenue that they will then get from the number of units sold make the scheme advance to be a paying proposition by 1932. Senator Sir John Keane has made another point.
On that particular point, I think there has been a certain amount of misunderstanding. Will the Minister state definitely if he still believes that the 5½ millions maximum will cover the work provided for in the Bill?
I am always rather in a difficulty in trying to answer this question, and I do not like to go further than what I can honestly state at a particular moment. There are certain factors that are yet vague to me, certain orders yet to be placed, and what may happen to these things I cannot determine at the moment. I want to be taken as answering the question put to me by Senator Douglas in a very general way. The Senator has talked of 5½ millions provided. In fact, £5,200,000 has been provided, but let me take the figure his tongue has slipped upon.
I see no reason to doubt this scheme being carried out, facing even the contingency I am facing at the moment, at a price exceeding five and a half millions. In other words, the margin I am giving myself is £300,000. I am speaking of every side of the contract. I hope that will dissipate all the foul rumours that this contract will cost £10,000,000, £8,000,000 or even £7,000,000. I am standing in the region of guess-work. There are certain things not known to me, but if the contract advances beyond five and a half millions it will be a surprise to me. Let me not be understood as saying that it will go even to five and a half millions. As to the other point made by Senator Sir John Griffith, with regard to the working expenses of the Board, by 1932 the Board will have been in existence about five years. It will have the revenue of the working of the Shannon scheme for the years 1929, 1930, 1931 and 1932. There ought to be some money on hands for working capital. If the Senator means what money is going to be given to the Board next month for working expenses, he knows that that will have to be provided in the section we are dealing with. I have met this amendment three times. It was first put up to me in black pessimism. It seems to me that the pessimist in the Dáil drew out the years from 1932 to 1952. Senator Sir John Keane says this is not going to pay the losses and tried to make it up to 1932. I object to the attitude whether it is going to result in an amendment of 1942 or 1952 or result in Senator Sir John Keane's idea. The amendment was proposed on the second occasion in the Dáil by Deputy Johnson who brought it forward in the mode that he believed the scheme could be made successful, showing decreased charges for electricity and could make both ends meet by 1932 but he believed it was not good business to have that done. All he wanted was that electricity should be looked upon as an essential service, that it should be laid on to houses and that people should be asked to pay cheap rates for it. All that was asked was to extend the date from 1932 to 1939 and I pointed out that extending the date was no good unless extra financial provision was made to carry on the Board after the Board's subvention had ceased. It would be driven to that course; it must make both ends meet because there were no further renewals of money. This amendment is completely different. It says, keep the date at 1932 and leave permission to change at some later date. On the other hand, that is what Senator Douglas pointed out to Senator Dowdall, the date 1932 is mentioned as the date on which the Board ought to work.
You may get that date put back a little bit. Financial provision is being made with regard to Senator Sir John Griffith's amendment that the Order made before Dáil Eireann with regard to increasing the limit to the other sum mentioned should contain the necessary enlargement of the moneys. I am in a peculiar position with regard to this amendment. I still believe that the scheme will cost us near the figures stated in the experts' report, that experts' prices will be able to apply and that then undoubtedly there will be a great cheapening of electricity rates in this country. That being so if I were asked was there necessity for this amendment I would say no. I see no harm in the amendments put up. The amendment states:
"In this section the expression ‘the appointed day' means the 31st day of December, 1932, or such later date as the Minister, after consultation with the Board, may by order made under this section appoint."
The Board is still being given that indication, 1932 if possible, but we show you that if it is the wish of both Houses you can get that period extended if you show good cause. I hold it would be the duty of the Minister, if after consultation with the Board he should appoint a later date, to give his reasons. We are still aiming at '32 but with permission to go beyond it. I am swayed in my attitude. I have had consultations with business people who had a favourable attitude towards this scheme and had all the enthusiasm I am supposed to have in regard to it and yet their attitude was that it is bad business to tie down your Board to 1932. Assuming that your scheme was not going to be complete until 1939 are not your plans with regard to the making of your scheme remunerative by 1932 to be recast in that emergency? My answer was I shall not face that emergency until it has arisen. I see no reason why the delivery of current should be later than 1929 and there is the further answer that the experts said five years after the current has been delivered, that is to say, 1934. At first we changed the date to 1932 and after certain consideration I was inclined to think that it might have been fairer to the Board to make it 1934.
I still think that it could be done in 1932, but a group of business people have put it up to me that it is bad business to insist rigidly on that date. I think that the psychological effect of this on the Board is the important thing. They should be told that that is what they should aim at, and that is what they would be judged by, on the other hand giving them time still. We give them the further indication that we believe that there are circumstances which would warrant their asking for a later date, but that those circumstances will have to be revealed when a later date is appointed. Consequently the amendment now being put up in the spirit in which it is, and being definitely watertight in the matter of the enlargement of the finances and seeing that there is still the assumption that they are tied to the date of 1932, making allowance for this contingency, I am disposed to ask the House to view it with sympathy, and if it does, I shall ask the Dáil to do it in the same way.
CATHAOIRLEACH
If amendment 7 is agreed to, it will follow that a number of other amendments will be passed as consequential.
What is the position in regard to any further financial provision?
CATHAOIRLEACH
I think that is provided in one of the new sub-sections to Section 12, which we have just passed.
Amendment put and, on a show of hands, declared carried.
On Clause 12 I want to ask the Minister whether under sub-section (2) there is any possibility that some of that £600,000, if it is not used as a sinking fund, could be diverted to capital and other expenditure without the authority of the Dáil, or rather supposing the Board paid portion of those charges out of further moneys, do they still remain a statutory obligation; can they be spent or are they automatically surrendered to the Minister for Finance?
It is difficult to reply to this offhand. As far as my memory goes, £5,200,000 was voted, as one sum, for the purposes of this Act. It was understood that there was to be a division. We always spoke of £4,600,000, and an additional £600,000, which was to pay interest and to meet the charges and losses during the unremunerative years. £600,000 was spoken of as a clear and distinct sum that would have to be expended for the purposes of the 1925 Act or such portions of that sum, as were explained by me should be handed over to the Board for those purposes. I intended sub-section (2) to be watertight in that matter. I will have to make some examination to see that it carries out the intention. We think it would be quite possible under the 1925 Act to carry forward this sum under sub-section (2) of Section 12, if, say, interest and loss only amounted to £500,000, and to hand over the other £100,000 to the Board for other purposes. I do not know whether it is considered that that is very undesirable.
Well, if it is it would be possible. It would be possible to have a certain sum of money, if it is not availed of by the Board by way of interest and unremunerative working, handed over to the Board for some special purposes.
I will bring in an amendment on Report with a view to altering that situation.
Section 12, as amended, agreed to.
SECTION 13, SUB-SECTION (3).
Any interest payable by the Board to the Minister for Finance under this section on or before the 31st day of December, 1932, may be paid by the Board out of the moneys advanced to the Board out of the Central Fund under this Act.
I beg to move amendment No. 8:—
"Section 13, sub-section (3). To delete in lines 23-24 the words and figures ‘31st day of December, 1932,' and to substitute therefor the words ‘appointed day.'"
Amendment agreed to.
Section 13, as amended, agreed to.
Section 14 agreed to.
SECTION 15, SUB-SECTION (8).
Any interests payable by the Board to the Minister for Finance under this section on or before the 31st day of December, 1932, may be paid by the Board out of moneys advanced to the Board out of the Central Fund under this Act.
I beg to move amendment No. 9:—
Section 15, sub-section (8). "To delete in lines 67-68 the words and figures ‘31st day of December, 1932,' and to substitute therefor the words ‘appointed day.' "
Amendment agreed to.
Section 15, as amended, agreed to.
SECTION 16. (CHARGES ON SHANNON WORKS.)
Question proposed: "That Section 16 stand part of the Bill."
On that question I want to ask the Minister whether it is provided in the Act, or implicit, that the Board shall pay income tax on property under Schedule A and rates on the various works. One of the criticisms on the Ontario Bill is that it does not pay income tax, and, therefore, the electricity consumers have a further preference over other sections of the community. If we are to have a comparable and fair test, it is that the Board should pay their fair share of the taxes. I ask is that so?
If the Senator wishes to achieve that purpose he will have to put down an amendment.
Is the Minister not prepared to put down an amendment himself? Has he considered the matter?
Yes, the Bill represents my point of view.
Then I will bring in an amendment dealing with this matter on Report.
Section 16 agreed to.
Sections 17 and 18 agreed to.
SECTION 19.
It shall be the duty of the Board...
(c) to distribute, utilise and sell the electricity generated by the Board in the Shannon works, to promote and encourage the purchase and use of such electricity, and...
I beg to move amendment 10:—
After the word "electricity" in line 54 to insert the words "including the erection of factories consuming the same."
If language means anything, nothing could be more explicit than the assurance given, from the first introduction of the Shannon scheme, that it was intended to foster the growth of new industries in the Free State. These assurances are being continued to-day. We need only refer to the last weekend speeches of responsible Ministers in their election campaign throughout the country. One Minister, speaking in the West, is reported as saying: "The Government, by harnessing the Shannon, has killed for ever the story that the Free State could never be an industrial country." Industries are not mushrooms that, unaided and unencouraged, grow up in a night. I have searched this Bill from cover to cover, but failed to find any clause directly empowering the Electricity Supply Board to foster the creation of new industries. The nearest I can find is Section 19, sub-head (c), which does authorise them to promote and encourage the purchase and use of electricity, but it stops there, and I suggest the addition of the words "including the erection of factories consuming the same." This does not necessarily mean that they should erect such factories themselves, but that they should be placed in a position to offer facilities to manufacturers sufficient, along with the supply of cheap electricity, to induce them to come in and erect the factories. To make my meaning clear I would like to allude here to the consequential amendment I have stated to Section 83, which enables the Minister to acquire lands compulsorily for the erection of barracks which I propose to extend to lands for factories which would be at least as useful.
If we arm the Board with power, in the first place, to negotiate with manufacturers with a view, in the words of Section 19, "To promote and encourage the purchase and sale of such electricity" by the erection of factories consuming same, and, in the second place, enable them, through the Minister, to obtain suitable sites on reasonable terms for such factories, we shall have done something to redeem the promises made to the country. I want Senators to bear clearly in mind the undoubted fact that the unit of electricity sold to a new industry is worth to the country, by reason of the employment and other things afforded, ten times as much as a unit sold for lighting or for the amelioration of the conditions of life, and that that is the way, and the only way, of preventing our young people from leaving the country, by affording them suitable and remunerative employment at home, under as decent and attractive conditions as they can obtain abroad. The only way to do this is by the establishment of new industry.
Someone may suggest that such amendments as mine are unnecessary for this purpose. A moment's thought will show the absurdity of such a suggestion. No one will come here to establish industries unless we can offer as good conditions as are obtainable elsewhere. They will not come into our cities where sites, often unsuitable, are dear, and subject themselves to the local rates option, 23s. in the £, and where their employees will have to pay exorbitant prices for accommodation which is frequently undesirable and insanitary. Such factories, to succeed, must be situated on navigable waterways to permit of the cheap delivery of raw material and the export of the finished article. They must have ample land for development and for housing their employees, and they must not be subject to our crushing town rates. And when we bear in mind that the electrical energy must be supplied at as low a cost as is practicable, such sites must be situated as near as possible to the generating station. As to the supply of power, on the expert figures for a factory 500 h.p. can be given, within a reasonable distance of the generating station, for £3,000 a year less than if the factory was 100 or 120 miles away. It will be obvious, therefore, that such factories must be erected as close as possible to the station. We hear a lot of eloquent speeches about the emigrant ship. I deplore the emigrant ship, and I deplore the fact that our people are going away from the country, but they will never stay at home if you do not give them as good a chance of employment and a chance of as decent a living here as they will get abroad. I hope that Senators who hold those views and express them frequently will support this amendment.
I entertain similar views to those so well expressed by the Senator, but I would like to ask whether the amendment is not outside the scope of the Bill?
CATHAOIRLEACH
I was considering that while the Senator was speaking. Seeing that the Bill does provide and gives facilities for the distribution and use and sale of electricity, I cannot hold that the erection of factories to be run by electricity would not come within that.
It is a rather interesting contrast that occurs to me that in Russia we see a new economic policy which has reversion from methods of super-state control which have failed, and here, in this House, we see a new economic policy of a steady progressive move towards State and socialistic undertakings. This is the last word in that direction. Where will the thing end if the House accepts an amendment like this? Look at the precautions it takes already to safeguard capital—Advisory Committees are set up. I do not venture to state that every precaution taken to ensure this money is properly used. According to the amendment all these restrictions are to be abandoned.
I did my best to explain, and in fact was so particular that I reduced it to writing, what my suggestions were. It is rather a difficult subject, but it is not necessary for the Board itself to do it.
CATHAOIRLEACH
That is the weakness of the drafting of your amendment because if words mean anything this means that the Board is to erect these factories. If the amendment was passed it would read that "it shall be the duty of the Board to distribute, utilise and sell electricity ...and to promote and encourage the purchase and use of such electricity including the erection of factories consuming same." That imposes an obligation of erecting the factories upon the Board. If you used the word "promotion" your point would have been met but you put in the word "erection."
I am quite willing to accept the word "promotion" or anything that will follow the idea I have in mind.
CATHAOIRLEACH
I think you would be wise.
See what the amendment is. If it is a pious hope that the erection of factories will take place I would not object, but if they are to be erected and used as State factories which can afterwards be sold to someone else I ask the House to resist it strongly.
The idea was not that they should do it themselves but that they should be in a position to enter into agreements with people who are willing to do it.
CATHAOIRLEACH
That is what you intend, but it is not what your amendment would do if carried. If the House passed it as it stands it would impose upon the Board the erection of factories for the purpose of working them.
If I am allowed I shall withdraw the amendment and redraft it for the Report Stage.
According to the present wording of the section it would be the duty of the Board to do those things which are involved in paragraphs (a), (b), (c) and (d).
CATHAOIRLEACH
I tried to point that out to the Senator.
By way of dealing with the aim of the amendment I would suggest to the Senator that he should let the matter drop at this stage and bring it forward on Report Stage.
CATHAOIRLEACH
That is a matter for himself.
Amendment by leave withdrawn.
Sections 19 and 20 agreed to.
CATHAOIRLEACH
The next amendment, No. 11, is consequential.
Amendment agreed to.
Amendments 12 and 13 not moved.
Amendment 14:—
Section 21, sub-section (2). To delete in lines 55, 57 and 58 the words and figures "31st day of December, 1932" and to substitute therefor the words "appointed day."—Senator Sir John Griffith.
CATHAOIRLEACH
This amendment is consequential.
Amendment agreed to.
I think it would be necessary between now and the Report Stage to have this Bill carefully examined.
CATHAOIRLEACH
Yes, I said so already, because it is impossible without very careful examination to detect the various places in which amendments should be made. If you have to embody anything you can do so on Report. I am sure Senator Sir John Purser Griffith will go into it very carefully.
Amendment 15 not moved.
Amendment 16 (consequential amendment to amendment 11) put and agreed to.
Section 21, as amended, agreed to.
SECTION 22.
The Board may out of the funds at its disposal make advances to any authorised undertaker, permitted undertaker or statutory undertaker for the purpose of his undertaking on such terms as the Board thinks proper and, where so required under any other section of this Act, shall make such advances on such terms as may be fixed in the manner provided in that behalf by such section, and any authorised undertaker, permitted undertaker or statutory undertaker, notwithstanding anything contained in the Act, order, memorandum of association or other document constituting such undertaker, may borrow from the Board.
I move amendment 17 to Section 22, which reads:—
"After the word ‘terms' in line 9, to insert the words ‘and security.'"
The effect of this amendment is to make it clear to the Board that they should accept security and insist on security. As you read the section, loans can be made on such terms as the Board think proper. Well, ordinarily in banking phraseology, terms do not really cover security. Security is really a definite thing, which should be provided for, and I think there should be a statutory obligation on the Board to get security. What the security may be in many cases is another matter. It may not be very much good, but still for what it is worth there should be some statutory obligation to get it, and without these words statutory obligation would not exist.
Would not terms include security?
I was about to make the same remark. Is the Senator insisting that no loans could be made except a security is given?
Then consider it in relation to people to whom loans are made, authorised undertakers or local authorities. What security can be given there? The rates? There are other sections for dealing with this. The Senator should hold that over until he sees the sections involving rates as securities for anything local undertakers may do. He can then consider it in relation to the other types of undertaking.
But surely some security would not be impossible. The works, the generating station, and transmission lines would be security and should be taken. Actual security should be given. I very much doubt if the word "terms" would be held to cover security. "Terms" would be defined as the period of repayment, rates of interest, etc. What objection is there to putting it in?
Is there any good in doing it in view of the fact that they have power to take over an undertaking, stock, lock and barrel? When the Board can come in, in that way, is there any good in going to the expense of a mortgage?
The words suggested by Senator Sir John Keane are important, particularly as this section is permissive. From that point of view, I think that this amendment is important.
It had been thought that "terms" included security, and it had also been intended that the whole thing should be permissive. Putting in "security" would not mean that the Board should insist in getting security. I think the final safeguard of the Board is what Senator Douglas has pointed out. If the Board sees anything wrong, it steps in and acquires the undertaking.
CATHAOIRLEACH
Would not the difficulty be got over by saying "such terms, including security"?
"Terms" implies some form of security.
I would accept the suggestion that terms include security, but might I ask it to be left over? It may be the subject of further drafting.
I move, therefore:—
After the word "terms" in line 9 to insert the words "including security."
Amendment, as further amended, agreed to.
It will also have to be altered in line 11.
Section 22, as amended, agreed to.
Sections 23 to 32, inclusive, agreed to.
SECTION 33.
The Board may by order make such general regulations as may be required for carrying this Act into effect and in particular may, subject to the provisions of this Act, make such regulations as it thinks proper relating to all or any of the following matters or things, that is to say:
(a) the making of special orders by the Board and applications to the Board for such orders.
On behalf of Senator O'Farrell, I move:—
After the word "may" in line 23 to insert the words "with the concurrence of the Minister."
Putting in these words, and particularly following up that with amendment 20, means definitely bringing back the powers of the Board under Parliamentary control, and under what I may describe as political control. It is my desire to remove this Board as far away as possible from Parliamentary control, having a certain amount of Parliamentary supervision. I ask that the amendment be rejected.
Amendment put and negatived.
On behalf of Senator O'Farrell, I move amendment 19:—
After the word "make" in line 25 to insert the words "with the concurrence of the Minister."
Amendment put and negatived.
Amendment 20 not moved.
CATHAOIRLEACH
Senator O'Farrell is not present. I will leave it open to him to move amendment 21 later if he desires.
Section 33 agreed to.
SECTION 34.
(1) The Board may by order make regulations (including regulations imposing penalties) in lieu of or in addition to the provisions heretofore contained in the Electric Lighting Clauses Act, 1899, as amended by the Electric Lighting Act, 1909, or by any other Act, and all regulations so made shall be deemed to be incorporated in every special Act or Order passed or made before the passing of this Act in substitution for any provisions on the same matters contained or incorporated in such Special Act or Order whether such provisions are or are not the provisions of the Electric Lighting Clauses Act, 1899, as amended as aforesaid.
(5) Whenever any regulation proposed to be made by the Board under this section contains any provision relating to any gas undertaking, railway, canal, inland navigation, dock, or harbour such regulation shall not be made until after consultation with the Minister and the service of such notices (if any) and the holding of such inquiries (if any) as the Minister may require to be served and held.
I move amendment 22:—
Section 34, sub-section (5). To delete the sub-section and to substitute therefor a new sub-section as follows:—
"(5) Whenever any regulation proposed to be made by the Board under this section contains any provision relating to or likely to affect any gas undertaking, railway, canal, inland navigation, dock or harbour such regulation shall not be made until after consultation with the Minister, and after notice of the intention of the Board to make such regulation has been given by advertisement or otherwise in such manner as the Minister may direct, and after an opportunity has been given to any person, body, or authority affected or likely to be affected by such regulation of being heard and making representations thereon at such inquiry as the Minister may direct to be held, and any such person, body, or authority shall be entitled to adduce evidence and to be represented professionally at such inquiry."
This amendment differs really very little from the section which I am moving to delete. What I am asking to substitute for the clause that I am moving to delete gives more power to the Minister. It also gives power to be represented by counsel at any inquiry. As a matter of fact, why that is framed is because of a previous section in the Bill, Section 24 (2), which reads:—
(2) Whenever an investigation is held under this section into the administration and financial position of the undertaking of an authorised undertaker such authorised undertaker shall be entitled to be heard and adduce evidence and, if he so desires, to be represented professionally at such investigation.
I do not think the Minister can object to this amendment.
If I might explain, this is really related to a certain number of amendments which come afterwards. The position with regard to Section 34 is briefly this. There is a certain Act, the Electric Lighting Clauses Act of 1899, which has been amended by other Acts, and there are certain schedules to that Act which are described as being a safeguard to gas and water undertakings. The position with regard to this is that although there is a repeal of the section, it states that the Electric Light Act of 1882 is to be repealed in this section but to a certain extent these Acts are re-enacted in this way. This Section 34 says: "The Board may by order make regulations (including regulations imposing penalties) in lieu of or in addition to the provisions heretofore contained in the Electric Lighting Clauses Act, 1899" and so on. Now the net result of the manner in which it is provided is this. The Electric Lighting Clauses Act, which is the main one, is carried forward and remains until amended by regulations, and these regulations when made in addition to or in lieu of anything in the Act, must come before both Houses of the Oireachtas, and an adverse vote of either House will defeat the regulations. Consequently in so far as possible we are stabilising the present position and giving to gas undertakers all the protection they heretofore enjoyed with this advantage, that any change made must be brought before both Houses and an adverse vote of either House destroys these regulations.
Is it strictly correct to say that the House can by regulation interfere with or set aside, public Acts, statutory Acts—that the House can do that merely by regulation and not by Bill? I am asking for information because I do not know.
That is the proposition. If this Bill goes through in its present form there will be power given. If the Bill goes through the position will be definitely that the old protective clauses stand until the Board attempts to change them. When the change comes before this House by regulations, this House can defeat these, and the old position remains. The position is with regard to these things, that such regulations would not be made until after consultation with the Minister, and consequently the service of such notice is a thing the Minister may require to be served. The Senator wants to amend that by saying that there must be an advertisement of the intention of the Board to make a change and that the people affected must have a right of being heard and making representations. If there is an inquiry there is a right to adduce evidence. The Senator holds that an advertisement must be given. If any inquiry is directed, then and only then will people have a right to be heard professionally. But it still leaves it to the discretion of the Minister as to the advisability of holding an inquiry. We are not having any dispute about that. There is power vested in me to allow people to insist upon being heard and be professionally represented if they so desire. It is not made compulsory that they should be always allowed. I do not think they should, because a very informal inquiry may settle a great many points that may arise, and I think it would be completely wrong to insist on having a formal inquiry with the production of witnesses.
There is only one point in dispute between us, and that is as to an advertisement being necessary—publication in "Iris Oifigiúil," or some such method of publication. The Senator insists on an advertisement. It is left to the discretion of the Minister as to the notice, if any, he shall order to be inserted. On the other hand, he says make it clear that professional representation is possible at each inquiry. The Bill, as it stands, says that if the Minister thinks an inquiry should be held, then he has power to make all the regulations necessary. I ask the House to leave it in the indefinite state in the Bill, as there is a great probability that these points will be decided before an informal inquiry. The Senator's amendment makes it necessary that in all cases there will be a formal inquiry. The position is safeguarded at the moment.
I admit there is something in what the Minister has said, but we are living for the moment in an atmosphere of electricity. I conceive that after the election the Minister will not be quite so infatuated with his bantling, and he will again resume his functions as represented by the Board of Trade. He will look, perhaps, at all those things more impartially than at present. My amendment is, I think, very reasonable. I ask the House to consider this in the interests of those people who have put their money into Irish industries. The Minister has not opposed the amendment or asked for its rejection. Under the circumstances, I ask the House to accept it.
Amendment put and declared carried.
I move:—
Section 34, sub-section (1). After the word "may" in line 6 to insert the words "with the concurrence of the Minister."
Section 34 enables the Board to make by an order very important regulations having the effect really of private legislation, and the sub-section provides that each and all of these regulations shall be laid on the Table of each House, and may be annulled by resolution of either House. What seems to be lacking is a connecting link between those who make regulations and the Houses that are supposed to examine and annul them if they think it desirable to do so. The section makes no one responsible to the House, and provides for no Minister being responsible to answer questions or to explain the effect or meaning of any of these regulations. As the Bill stands, the Executive Council as a whole is responsible to the House, where there is any responsibility, but if the Minister for Industry and Commerce, who is the Minister directly concerned, happens to be absent when any of these regulations is under discussion, there is no Minister one can call on to give any explanation as to their meaning or effect. It would be absurd for either House to examine these regulations and pass judgment on them unless there is a Minister who may be called on to give any explanation necessary. In the case of the Port of London Authority, on their request the Board of Trade issues an order. All I am asking is that the regulations made by order by the Board shall be made with the concurrence of the Minister, so that there may be some Minister to whom each House can look for information when discussing any of these regulations on their merits.
I have a fundamental objection to this amendment. It is trying to get a kind of political control back again. These special orders are brought before both Houses. Certain of the regulations in so far as they affect the departments that work the administrative control remain with a particular Minister, and it is the concurrence of that particular Minister has to be secured. The Minister for Local Government, the Minister for Industry and Commerce, and the Minister for Posts and Telegraphs are brought in, in the general matter of electricity operations, pure and simple, and not affecting gas or waterwork undertakings or harbours or coasts. I want the new position understood, that there will be no department of electricity in relation to Government, that in so far as there is any department concerned with electricity that is now being substituted by the Board, and the Board will take its place. I do not think there is any valid objection to what Senator O'Farrell says about answering questions. Regulations will be made and will come before this House, and if there is nobody here to answer questions on points on which the House desires enlightenment the House will refuse to pass the regulations. It will take the positive step of bringing in a resolution not to pass the regulations. It could be intimated that what had been done on that particular matter was because no explanation had been given, and somebody will have to come before the House to give explanations. It is asked now to get the concurrence of the Minister, so that he will be subject to criticism and that he will have to get deep down to work as regards the Board to see whether or not the regulations are properly drawn. That is what I have been objecting to, getting supervision of the Board's activities by the political head of a department of the Government.
It is easy to say that the Oireachtas is really responsible for these regulations, inasmuch as that if it allows to pass some regulation that may be detrimental to the public interest it has in effect accepted responsibility for it. The Minister thinks it is absurd to ask him to find out all about these regulations so that he may be in a position to answer questions regarding them in the House and he says that these regulations are to be laid on the Table, and as public representatives they were asked to see that they are not detrimental to public interests. We cannot call on any Minister to come forward and give an explanation, particularly if the regulations do not affect his particular department. Is not that an absurd position, refusing to accept responsibility and throwing the collective responsibility on the House? The Minister knows that Senators or Deputies, because they do not know sufficient about the regulations, will not take the responsibility of annulling them. All he and his colleagues may do is not to put in an appearance, and we are asked to accept responsibility for the regulations. If that is the Minister's position he is justified in opposing this amendment. It is placing the Oireachtas in an absurd position to say that he shall place the regulations on the Table for the purpose of having them annulled if thought necessary and no Minister is made responsible for explaining them.
In so far as regulations are ever looked up by anybody I think the amendment is useful. There is one Department that seems to be supreme in the matter and that is the Department of Finance which has to provide the funds. I am astonished at this abrogation of Parliamentary responsibility, and departure from a principle hallowed by tradition.
Senator Sir John Keane would prefer to go back to Parliamentary control. I do not think that is the point of view of Senator O'Farrell. I had some conversation with him, and at first I was inclined to think that there might be something in the line he took. On thinking the matter over since, I have come to the conclusion that the essence of the control provided in this Bill is independence, subject to the responsibility of the whole Executive Council to do any of three things. They can either approve of the policy of the Board generally and stand for that to the House or remove the Board. If not at the end of three years they can give their reasons or inform the House they have set out on a new line of policy which they wish the Board to undertake. If they do not carry that out they will be removed. Would it mean making a particular Minister, as distinct from the whole Executive Council, responsible? I do not believe it would. I believe there would be a tendency of question and answer to that particular Minister. I think it would be far better to leave it to the Executive to delegate. I do not believe it is correct criticism of the Bill to say there is no one to answer. I believe the Executive if they cannot satisfy the House as to their policy with regard to the Board, will have to make it a matter of confidence and have to go out if beaten on it. If that is the case, this amendment would not make it right. If money is voted by the State there must be control. I am satisfied that the Executive are not a body independent of the Dáil. If defeated in the Dáil they would have to resign.
Amendment put and declared lost.
Section 34, as amended, agreed to.
I move:—
Section 35. To add at the end of the section a new sub-section as follows:—
"(6) In the event of a notice being given by the Board under sub-section (4) of this section, the person whose right to sell electricity or supply electricity for sale is determined by such notice shall be entitled to compensation for any loss incurred by him by reason of such notice: the amount of such compensation to be determined by arbitration."
This amendment deals with the section prohibiting the unauthorised sale of electricity. In the past two classes of people supplied electricity in this country. One was the authorised undertakers. The Bill provides that the Board shall have power to take over their installations and that they shall be paid. Another class which has been doing very useful service is the unauthorised supplier. For many years that has been fulfilling a very useful service in many parts of Ireland. They have been supplying electricity to the people in their districts. It is proposed now that they should be done away with and there is no provision for compensation.
There is no proposal to do away with them.
The section says:—"The Board shall be able to give them notice."
Will the Senator read the end of sub-section (1) of Section 35?
If the Board refuses to give a licence?
If the Senator will look at Section 37 he will see that it is not possible to refuse a permit.
Under these conditions I withdraw the amendment. I was asked by people in that position to put down the amendment as they were afraid they would be prevented from carrying on.
I think there is a certain amount of genuine apprehension with regard to this matter. In his speech on the Second Reading the Minister stated that it was not proposed to do away with unauthorised undertakers under this Bill, and that powers were provided to give them a permit under certain conditions. The unauthorised undertakers objected to give certain information which the Minister intended to deal with in another Bill affecting them. The Minister stated where it was proved there was value in the authorised undertakings he recognised the principle of compensation.
There will be some instances where there will be no value and no reasons for compensation. As I read the Bill it is provided that they must get a permit until the alternative supply is available. There is a fear that until the alternative supply is available, if through circumstances over which the Minister has no control, and if something like a calamity happened at the next elections, and if the Minister is not here—no other Bill would be brought in, that then the permit would come to an end, and there was no specific provision for compensation. I think Senator Barrington's amendment was put down to the wrong section. I think if it were added to Section 35 it would give compensation for disobeying the provisions of the law—a thing which I think no one could stand over. I think it would be clearer in Section 37, which deals with the same subject. I was wondering if the Minister would consider providing that when the time of the permit ceased another Bill should be introduced. I think there is some flaw in the Bill as it stands.
I have an amendment on the paper also, and, like Senator Douglas, I am in doubt as to what is the position of unauthorised undertakers if the Bill passes in its present form. The object of Senator Barrington's amendment and mine, in the event of these unauthorised undertakings being taken over by the Board, was that they should get compensation. As the Bill stands, rightly or wrongly I do not think it contains a provision for compensation. Compensation is provided for authorised undertakings, but there is none for unauthorised undertakings. In many places these unauthorised undertakings are small concerns started by enterprising people, and it would be a great misfortune if they were extinguished without getting compensation. As Senator Douglas reminded the House, the Minister on the Second Reading stated that his difficulty was to get the particulars he required from these small undertakings. He said he could not get these particulars until he was armed with powers. In many cases the explanation is that those connected with these concerns are in a small way of business, and do not keep accounts. Accordingly they were not able to give the information the Minister asked for.
I think it would clear away a good many of the doubts that exist if the Minister in his reply would give us a popular account of what unauthorised undertakings mean, and what their position will be when the Bill is passed. From the remarks that are heard there is great doubt about the position of these undertakings.
I know the Minister's difficulty with regard to this point. He asked these unauthorised undertakings to give information that he wanted. Down the country when statistics are asked for, there is a feeling that they are required in connection with income tax. While a man may wish to put a good valuation on his undertaking if it is to be taken over by the Board, he might not care to face the same information when he comes to justify his income tax returns. Accordingly, I think there is a legitimate difficulty in regard to unauthorised undertakings.
I am an unauthorised undertaker, and I may state that I have never been asked to give particulars. If I were, I certainly would give them.
With regard to unauthorised undertakings, the difference between authorised and unauthorised undertakers is that the authorised undertakers have got authority to sell in a particular area which is marked out, within which no one else is allowed to sell, save and except the authorised undertaker. There are five private companies who have areas marked out for themselves. Being set up in that way they have obligations towards the consumers. There are maximum prices and a condition that consumers shall be supplied. The consumer is protected. There are also regulations with regard to the public. An unauthorised concern is simply that of a free lance who comes into any district and decides to generate and sell electricity, but if that unauthorised individual has not to tear up the public street he can operate without the consent or leave of anybody. If he has to tear up a street or to cross a street he must get permission from the local authority. That being obtained, he can set up his own net-work in any way he likes and supply whatever customers he likes. He can vary his rates from day to day and from year to year unless there is a special contract made to prevent that.
The whole matter depends on contract. Obviously, in regard to an unauthorised individual whose charges are not under any supervision and who is not subject to ordinary regulations, one has to be much more particular in the assessment of compensation than in the case of the authorised man, because the unauthorised man may be—I do not say it is always the case—simply skimming the cream of a district. He may be simply taking the very good customers where he can get them massed into a small district, and be leaving out areas where his profits would not be so much. The whole system and net-work are, maybe, of a poor type. It may have been set up to supply a particular area and have been loosely thrown out from time to time to meet new demands. One has no indication as to how far the plant or net-work has been kept in a state of repair, and if depreciation and repairs were attended to. I did try to get these particulars.
I do not say I tried to get them from all unauthorised undertakers but I did try to get them from some and I was refused by the great majority. At one time an offer was made, seeing that the expenses were so large, that if 40 of them applied to become authorised they could become authorised at a cost of about £10 per head. A certain number accepted the offer—I am possibly on dangerous ground here—but I am of opinion that inspired by the Electricity Supply Association, some of those even who applied withdrew their applications except six who persisted to the end. As the numbers we thought of did not come along we could not carry out the £10 per head agreement. I have no power to get that information from the unauthorised undertakers and I have been refused the information by a great number. However, it will require a great deal of question sheets, returns and examination of the returns, and the getting of experts to go and see the types of net work and plants before one can get a proper appreciation as to the value of the undertakings taken over by the Board in the event of the Board deciding to take them over.
I said I was in a difficulty because the Bill was deficient in regard to unauthorised concerns. If it is deficient, I suggest that it is deficient because we have not got the information upon which I could ask the House to form a proper judgment as to the compensation to be paid. My reaction towards these undertakings was that I tried to frame a long clause which would give the arbitrator certain lines on which compensation could be determined, but the clause got very unwieldy and we had no belief that it would cover all the points it would be necessary to cover. Eventually a decision was come to that we should make it imperative on the Board to give permits to the unauthorised undertakers. These permitted people may advance to the rank of authorised undertakers with the sanction of the Board. I promised to the Dáil that I would recommend to the favourable consideration of the Board—I could do no more—the six people who had persisted to the very end and who wished to become authorised on the old conditions and that I would recommend the special case of Greystones which made application to the House of Commons and had been blocked by certain gas undertakings, after incurring a considerable amount of expense.
With regard to unauthorised undertakings, including these six with the special case of Greystones, the position is this: the Board must give permits and the permit may later be increased to a sanction of that undertaking as authorised. In that case it will fall into line for compensation with the others.
If it is still worked under permit, the Board will in the first period of its existence have to operate its compulsory powers with regard to acquiring information to get from those people all the material that will have hereafter to come before the House, so that a proper determination may be made with regard to compensation. The effect of Section 37 is that there shall not be a refusal to grant a person who is supplying electricity otherwise than as an authorised undertaker a permit under the section. The point is raised now that that is one of the conditions so long as no alternative supply is available, and Senator Douglas makes the point, knowing my point of view, that one can rely on my bringing forward amending legislation when the material is got together, but that one cannot rely on some other Minister who might replace me doing this. If I leave out "so long as no alternative supply is available," the position is that there is no guarantee of amending legislation being brought forward. The unauthorised undertakers would then be put in the specially favoured position of being able to block acquisition where an authorised undertaker would suffer acquisition under certain circumstances.
Would there not be a guarantee to bring in amending legislation?
I think not. I think that the attitude towards authorised undertakings is that any Government will have to deal with them by way of compensation for the undertaker. If a Government came in and decided to wipe out an authorised undertaking, once the Shannon current was available, without bringing in any amending legislation providing compensation, there would be such a storm of public opinion raised against them that they would be forced to this conclusion. Of course, another Government backed by public opinion hereafter could disregard this guarantee, and there would be no obligation on them to bring in legislation.
Would the Minister object to inserting something which would provide for such a guarantee, at any rate until there is amending legislation? I admit frankly that it would not give any absolute guarantee, but it would be a guide as to the intentions. Otherwise I think people quite friendly to the Bill and in no way hostile would be uneasy.
I would like to support the suggestion of Senator Douglas. If the Minister can see his way to insert a provision on Report it would be a good thing.
I would like to support that suggestion.
I will take the point raised into consideration and I will try to have some strengthening of the section made, by naming the period or by some other way. Senator Barrington's amendment would not effect his purpose, neither would Senator Brady's.
Amendments Nos. 23 and 24, by leave, withdrawn.
Sections 35 and 36 agreed to.
SECTION 37.
I move amendment 24a:—
Section 37, sub-section (3). Before sub-section (3) to insert a new sub-section as follows:—
(3) Provided always that notwithstanding anything in this Act, companies or persons who are authorised undertakers shall not be compulsorily purchased until the time specified for purchase in their special Act or Order.
As Senator Brown knows very well, there are undertakings constituted under special Acts of Parliament. I suggest that if Section 37 is allowed to stand in its present form the Board would acquire these undertakings notwithstanding the provisions of the Act restricting the purchase of them to the end of a certain period of years.
CATHAOIRLEACH
All companies and persons who are authorised undertakers are not subject to this condition.
I understand there are special undertakings.
CATHAOIRLEACH
Your amendment applies to all companies and to all persons. You do not say "companies and persons, authorised undertakers and subject to a proviso for purchase." You want to obtain from the Minister an amendment in the case of companies or persons who are authorised undertakers and who under the terms of their authority are liable to be bought out.
The outcome of this amendment would upset the whole purpose of the Bill because it would upset acquisition permanently.
I will leave it over for the Report Stage.
Amendment, by leave, withdrawn.
Section 37 agreed to.
SECTION 38.
I move amendment 25:—
Section 38, sub-section (2). To add at the end of the sub-section the words:—
"Provided always that the power to acquire an undertaking conferred by this sub-section shall not be exercised unless and until it shall have been ascertained by a public inquiry, held by a person agreed on between the Board and the undertaker, and in default of agreement by a person nominated by the Chief Justice of Saorstát Eireann, that the non-acquisition of the undertaking will prejudicially affect the working of the Shannon Power Scheme."
It is not clear that anything is to be gained by the Board taking over every authorised undertaking which will take its bulk supply. I gathered from the Minister on the Second Reading that if he was satisfied a local undertaker was distributing a sufficient supply of electricity in the area in which it was operating it did not necessarily mean that the Board would take that over. The only question is how rapidly the electrical development works must proceed in order to provide a load. He told us in the early portion of his scheme that it is likely it will be very busy with new as compared with old undertakings. It is obvious that I have in mind a special case such as that of Dublin and if the Board was satisfied that Dublin was doing all it could in the matter of electrical supply I suggest there is no reason why they should be taken over without an inquiry as to whether the non-acquisition of the undertaking will prejudicially affect the scheme.
I would like to say that I am in agreement with the Senator to this extent, that I believe it is not desirable that local authorities, if it is possible to avoid it, should be taken over by the Board and I am, further, of the opinion if the Board is a business Board that it will not take over those authorities when it has a great deal of other work to do if those authorities take the necessary steps to increase the supply which is essential for the success of the Shannon scheme. With some reluctance I have come to the conclusion that it is necessary there should be this power.
The question is if the power is there, is there any need for this amendment? In the first place I would deprecate the bringing of the Chief Justice into what is pretty near politics by asking him to appoint a person to hold an inquiry. Furthermore, I doubt if it is good to have a public inquiry into a question in which the Board are the only persons who can come to a definite opinion. If the Ministry cannot get an honest and competent Board this will be a failure. If, on the other hand, you are going to give them the powers which I think it is essential they should have, the most you should do is to say that they should not exercise them unless it is absolutely essential. I believe that the holding of an inquiry would really be taking the matter out of the hands of the Executive and Parliament and would make for incompetence.
Surely it is not asking too much on the part of the Dublin undertaking that some inquiry should be held as to the necessity of taking it over if those responsible for the Dublin undertaking are doing everything as suppliers of electricity that the Board itself would do.
The Senator has changed one of his first remarks on really the point on which this turned. He said earlier: "Why should the Board take over if the Dublin Municipality could prove that it was doing its best?" And in his last remark he said: "Why should it take it over if the Dublin Municipality was doing as well as the Board would do?" I do not say that the Dublin undertaking is not doing its best, but I have grave doubts that it is doing as well as a single Board elected for the purposes of electricity management would do. There is a good deal of slack or lee-way to be made up. Take one thing. I would like an enumeration of the numbers of officers there are, and I would like to be informed of what trouble those in charge of the undertaking went to in order to attract bigger consumption, apart from mere consumers. I think very little will be found done. That may not be a criticism of the local authorities. It may be that they have not funds or that it was not considered part of their duty. but I think it will be found, if I am to believe from the letters pouring in to me since the matter started, that people had gone out of their way to prevent the promotion of the use of electricity. Why should there be a public inquiry with regard to the taking over of any station?
There is a Board to be appointed having in mind electricity consumers in the main. There have been amendments in the Dáil inserted securing Dublin consumers against any harm arising out of the Shannon scheme, and securing further the benefit of any decreasing liability taken over from them. A change of trusteeship is being effected. I put it on the basis of efficient and better management that an electrical engineer representing a Board specially elected here is going to do better work than that same man reporting to the three City Commissioners who have a variety of other business to look into.
I cannot see what sacrifice is asked of Dublin. Dublin is sharing in an undertaking in which the whole country has to share. There would be no subsidy if this thing works out as it is understood it will. It is aiming at distribution of electricity throughout the whole country. There is no hardship being imposed on anybody. Why should we have the necessity for all this paraphernalia of a public inquiry being entered into, and people being nominated by the Chief Justice to determine whether non-acquisition would affect prejudicially the working of the Shannon power scheme. I cannot see the distinction between the working of the Shannon scheme and the generation of power in the country. The country has embarked upon the scheme after the scheme had been thoroughly considered, and the prospects seemed to be bright. The prospects have got brighter, and the one thing that emerges is the greater the consolidation with regard to electricity undertakings the greater the benefit that comes to the consumer merely by that fact. I do not see why Dublin should be prevented from having that benefit by having a public inquiry, and having all this storm created. I think if the Board is allowed to do its best, and secure benefits for consumers all over the country, the Dublin person is protected against anything which the most suspicious mind can imagine. That protection being there, why should the Board be prevented from carrying out the work simply because a storm has been created in this city with regard to a particular undertaking?
I think everybody is anxious that the Shannon scheme should be successful, but if the details of the project are all to be opposed it is highly improbable that the scheme can be a success. I think it is the duty of the House, having accepted this scheme, to support the Minister and the Bill, and not attempt to introduce amendments which are merely hampering amendments.
I think that is a most extraordinary statement which the Senator has just made. What are we here for at all? To say that these are all merely hampering amendments is to say that we have been wrong in all the amendments we tried to make. Anyone can say: "I am in favour of the Shannon scheme." I may say that I was enthusiastically in favour of it before it was ever brought before the Oireachtas and after it was brought before the Oireachtas, and I am in favour of it still. But that is no reason why I should not criticise certain things in the Bill, which are very different from what we were at first led to believe. The Minister says there should be no public inquiry. One Senator says it would be the wrong thing to bring in judicial persons, but have we not judges and people of that sort inquiring into land and matters of that kind? I do not see why a judge should not be allowed to inquire into a matter of this kind as well as into matters concerning the sale of land. The Minister says Dublin is protected in some extraordinary way in this matter.
Under what clause is the protection given to Dublin?
I do not know. I was criticising the statement made by the Minister, but I do not know where it comes in. I read a statement of the Minister's once that it was immoral to apply the profits from electrical supply to the relief of rates. I do not know where the morality comes in. I do not know what he means by moral and immoral in that connection. Certain things on the religious side are said to be immoral, but now we have a new definition of morality from the Minister for Industry and Commerce. He has his own ideas about morality. What happened in Dublin? The people of Dublin pledged their rates to raise money for the supply of electricity. How does that differ from a capitalist pledging himself, and getting the loan of money to establish any particular factory or to supply electricity here to anywhere else? If a capitalist had done that he would own and continue to own the business he set up, and he would cry out very much if he were interfered with.
This Bill makes a difference between the capitalist and the Corporation. The people of Dublin have got an electricity supply, not the people who use it, but the people who created it, by raising the necessary capital for that purpose, and they own it just as much as any capitalist would own his enterprise. The fact that the money raised on the guarantee of the rates has been gradually paid off does not affect the matter in the least. If a capitalist had acquired this scheme he would establish a sinking fund, and he would pay off his debt gradually, and that is what the people have done. They have paid off the debt, and now they own the electricity. It is theirs unless you say that the moment the capital in any business is paid off then the owner ceases to own it. That would be an extraordinary proposition. I think the way the Government is proceeding in this matter is quite wrong, and will not be justified in practice. I think they should confine themselves to the supply of electricity in the Bill as was originally intended.
Everyone in the Dáil and Seanad did not understand that.
Senator Sir John Keane would not say that.
We never were able to get at the bottom of many things that the Minister said, and there are very many things that we do not understand.
I will vote for this amendment, because I think it is both moral and, as a matter of fact, right to do so. And I think it will really be an advantage to the scheme.
I want, with the permission of the House, to withdraw this amendment. I would like to be permitted to say this in answer to Senator Guinness's criticism. To be perfectly frank, I did not move the amendment with any desire to hamper the Bill or to prevent its passage. On the contrary I hope that I made it clear on Second Reading that I was very strongly in favour of the Shannon scheme. I put down this amendment with some reluctance in order to promote the discussion which we have had, and I think I will satisfy the people outside as to the reasonableness of my withdrawal.
I do not think it is a reasonable thing. I think it is most unreasonable to keep us talking here for an hour over this amendment.
Amendment by leave withdrawn.
Section 38 agreed to.
SECTION 39.
(4) The vesting order, in so far as it purports to transfer to and vest in the new undertaker the property, assets, and liabilities of the former undertaker, shall be expressed and shall operate:—
(a) to transfer to and vest in the new undertaker free from all charges and encumbrances all the property and assets of the former undertaker owned and used by him (including property out on loan or hire to consumers) on the date of the vesting order for the purposes of the undertaking, and
(b) to transfer to and vest in the new undertaker all book debts and other moneys owing to the former undertaker on account of the undertaking on the date of the vesting order and the right to sue for, recover, and give good receipts for such debts and moneys, and
(c) to impose on and vest in the new undertaker the liability for and obligation to indemnify the former undertaker against all debts and liabilities owing by the former undertaker on account of the undertaking on the date of the vesting order save and except—
(i) capital liabilities, mortgages, loans, and bank overdraft, and
(ii) any liability exceeding one thousand pounds incurred after the 31st day of March, 1927, and before the constitution of the Board without the consent of the Minister or incurred after the constitution of the Board without the consent of the Board.
(7) Whenever the former undertaker is a local authority, and has before the 31st day of March, 1927 raised by means of the rates any sum in aid of the undertaking, the new undertaker shall as on and from the date of the vesting order become and be by virtue of this sub-section liable to pay such sum (less an amount equal to the portion (if any) thereof which has before the date of the vesting order been paid to the general revenue account of such local authority in relief of rates) to the former undertaker by ten equal yearly instalments, the first of which shall be payable twelve months after the date of the vesting order, and every other of which shall when received by the former undertaker be paid into its general revenue account in relief of rates.
I move:—
To delete in sub-section (4) lines 44 and 45:—(i) Capital liabilities, mortgages, loans and bank overdraft.
I put down this amendment in order to try and ascertain what the effective meaning of this sub-clause is. When the Board acquires an undertaking and becomes the new undertaker, it apparently takes over only certain of its liabilities. I presume it takes over its book debts. I presume the Minister will find it one of the few occasions on which the Board will have the privilege of paying income tax. If the Board takes over any arrears of rates or income tax it will have to pay them. But apparently it takes over the liabilities, mortgages, loans and bank overdraft. Surely that is a peculiar position for an undertaking that professes to be run on commercial lines. The answer is that these accepted liabilities are to be discharged out of compensation. This compensation is fixed by an arbitrator, and there is no direction to the arbitrator as to the price he shall give. As far as I can see, when the compensation is fixed the position would be that the former undertaker could put his money into his pocket and go to America. I cannot see that this compensation is in any way held to discharge these accepted liabilities. If there is a bank overdraft secured by mortgage on the former undertaking there is nothing to ensure that the money is to be held to discharge the debts.
The answer is contained in sub-sections (6) and (8). It may be that there is a flaw in what is to be done but the intention is perfectly clear. If there is a flaw I would like to have it pointed out. Sub-section (8) says:—
"As soon as may be after such payment or putting to a separate account the Board shall out of the moneys so paid to it or put to a separate account by it discharge so far as such moneys are sufficient for that purpose all mortgages and charges affecting the undertaking or any of the property or assets thereof on the date of the vesting order and shall pay the residue (if any) of such moneys to the former undertaker."
Amendment, by leave, withdrawn.
The Seanad went out of Committee.
Progress reported.
The Seanad adjourned at 6.50 p.m. until 3 o'clock to-morrow, 12th May, 1927.
