IN COMMITTEE ON FINANCE. - ELECTRICITY SUPPLY BILL, 1927—COMMITTEE STAGE (RESUMED).
SECTION 6.
(1) The Board shall keep in such form as shall be approved by the Minister after consultation with the Minister for Finance all proper and usual accounts of all moneys received or expended by them, and in particular shall keep in such form as aforesaid all such special accounts as the Minister on his motion or at the request of the Minister for Finance shall from time to time direct.
(2) The accounts of the Board shall be audited annually by auditors appointed for the purpose by the Minister and the fees of such auditors and the expenses generally of such audits shall be paid by the Board.
(3) The Minister may with the consent of the Minister for Finance make regulations prescribing the time, place, and method of conducting the audit of the accounts of the Board under this section, and may also prescribe by such regulations the accounts of which copies are to be furnished to the Minister under this section and the accounts which are to be published and put on sale under this section and the time and method of such publication and sale.
(4) Immediately after every audit under this section of the accounts of the Board, the Board shall send to the Minister a copy of the balance sheet and profit and loss account as passed by the auditor, a copy of the auditor's report, and copies of such of the 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 shall publish and put on sale in accordance with such regulations such of the accounts submitted to the auditor as are prescribed in that behalf by such regulations.
I move—
To delete sub-sections (2), (3) and (4) and substitute therefor the following new sub-sections:—
"(2) The accounts of the Board shall be audited annually by the Comptroller and Auditor-General, who shall submit to the Dáil a report of such Audit together with a copy of the balance sheet, and profit and loss account, and copies of such accounts, as may be at any time prescribed by the Minister.
"(3) This Report shall be taken into consideration in such a manner as the Dáil shall from time to time direct."
This amendment is intended to substitute for the method of audit prescribed by the Minister in this section, a more impartial and more effective audit, and to bring the accounts of the scheme under the more direct control of the Dáil. I raised this point on Second Reading, and the Minister replied to me in a most convincing and emphatic manner: "This Board is not a State Department and we do not want the accounts audited by the Comptroller and Auditor-General because that would be bringing the Board within the scope and ambit of a Government Department. We do not want the Board to have that appearance." Of course, as Deputies have begun to realise, the Minister for Industry and Commerce is never more convincing and never more emphatic than when he is on rather delicate ground. This amendment will not bring the Board into line with an ordinary Government Department. An ordinary Government Department has its accounts audited by the Comptroller and Auditor-General automatically under the Comptroller and Auditor-General Act. A summary of that audit goes into the Appropriation Accounts and is automatically considered by the Committee of Public Accounts.
In order to meet this unusual timidity on the part of the Minister I have proposed a very different procedure. The accounts are audited by the Comptroller and Auditor-General who sends a separate report of these accounts to the Dáil, and the Dáil considers that report in such manner as it may think fit. It may consider it in Committee of the whole Dáil which, I think, is the Minister's view. It may set up a Special Committee to consider the accounts of the Electricity Board or it may, if it thinks fit, refer them to the Committee of Public Accounts, but that will be done by a separate act of reference and will not be, in any sense, automatic. The Minister spoke last night about the necessity for having on the Board a member with a proper and conscientious point of view as to the handling of public money, and he instanced, as a suitable member if he could be spared, which he cannot, Deputy Johnson. Deputy Johnson, I am sure, if he was on that Board would be the first person to desire to have an absolutely impartial audit of the accounts of the Board. If I could visualise Deputy Johnson at that Board, I can see that his first step would be to suggest that the accounts should go to the Comptroller and Auditor-General.
The amendment has two purposes, firstly to secure an impartial audit. As the section stands the Minister may appoint any person he thinks fit to be auditor. He may appoint an officer of the Department of Industry and Commerce. He may even appoint an employee of the Electricity Supply Board to audit the accounts of that Board. There is no limitation on it whatever. I suggest that the accounts should be submitted to a public official, already in existence who is a civil servant and absolutely immune from and impervious to any opinions or any pressure that might be brought to bear on him. That is the first purpose, but on the whole it is the smaller purpose of this amendment.
The more important purpose I am putting forward in this amendment is that the Dáil should receive the balance sheet and the profit and loss account. In the Bill, as it stands there is absolutely no provision of any kind whatever that the Dáil shall ever see these important documents. There are two provisions in the Bill dealing with audit and report. There is the provision in this Section 6, but that is entirely between the Board and the Minister. That has nothing to do with the Dáil. Section 30 is the section that lays down what the Dáil has to get and the Dáil and the Seanad are to receive a copy of every report made. But the audit is not a report. It is differentiated—"and all such statistics and returns furnished to him under this section together with a copy of such of the accounts of the Board furnished to him under this Act as in his opinion are necessary for the proper understanding of any such report." Now this Section 6 expressly differentiates between the balance sheet and the profit and loss account and such accounts as the Minister may require to have furnished to him. The result will be if the Minister thinks fit he can withhold from the Dáil the result of the audit, the balance sheet and the profit and loss account.
There are moments when I am sorry to say I am tempted to think that the Minister thinks the Shannon scheme is his private property and that it is an impertinence for the Dáil to require any information on it. That was evidenced by some of his replies yesterday to Deputy Good.
It is even more forcibly made plain by some of the sections of this Bill. Now this is not the Minister's private property, and of course it would be liable to great alterations in the event of a change of Ministers. We are not legislating in perpetuity, as the Minister says, and I am quite sure that if a Labour Government or a Farmers' Government came into power an amending Bill would be brought in. But there are sometimes changes of Ministers in the same Party. Imagine a change between the Minister for Defence and the Minister for Industry and Commerce. The new Minister for Industry and Commerce would give us a very much quieter time, but he might construe the provisions of this Bill in a somewhat different spirit, while Heaven defend us from the present Minister for Industry and Commerce as Minister for Defence, because his activity is such that we should be involved in a war some time. It is not wise to allow the whole of this Bill to depend on the Minister. It is, after all, a commercial measure, and we in the Dáil are in the position of representatives of the shareholders who have advanced the capital to enable this scheme to be carried out. I do not know of any limited commercial concern in which the auditor is not appointed by the shareholders and in which the shareholders do not receive a copy of the audit, the balance-sheet and the profit and loss account. I suggest that we, as representing the citizens of the State, whose money is being embarked in the scheme, should be entitled to appoint our auditor, and I suggest a civil servant, the Comptroller and Auditor-General.
The Comptroller and Auditor-General is not a civil servant.
An official of the Dáil, I should have said. I accept the correction. He is not a civil servant; he is actually an official of the Dáil, and that strengthens my case. I say that we should appoint one of our own officials as auditor, and that we should, by statute, be entitled to the results of the audit, the balance-sheet and the profit and loss account. As the Bill stands we have to rely for these on the good-will of the Minister, and I suggest we should have them as of right and not as of privilege.
Deputy Cooper says that his amendment is to get a more effective and a more impartial audit. That is the first purpose. The Deputy did question this matter on Second Reading, but questioned it in such a way that he left the House entirely in the dark as to his second idea, that he wanted to bring this whole scheme, and the whole operations of the Board from year to year, under the control of the Dáil and under the supervision of the Public Accounts Committee.
The particular point to which I had devoted a certain amount of my time in opening the Second Reading debate, and a point which had been approved of by the Dáil, was that the main thing to aim at was to get this business undertaking run in a businesslike way, without supervision of the type that we are accustomed to have by means of the Public Accounts Committee, or by means of questions in this House or by means of discussions on Estimates. It was quite clear to the Dáil on Second Reading that it was one of the fundamental points about this Bill that there should not be any interference in the matter by the Dáil. On the other hand, I did say, on Second Reading, that the one thing that people could ask for, and should be entitled to ask for, was that there should be the clearest publicity as to everything the Board did, that there should be no hiding of anything that was done. I am with Deputy Cooper in wanting to have an impartial audit. I have taken the only means open to me, as far as I could discover from other legislation dealing with concerns similar to this, that is to say, that there should be an auditor who would not be appointed by the Board that was to be set up, to preclude the Board from appointing an auditor who might gloss over matters in the accounts to which the Board did not want attention directed, and that this auditor, when appointed, would, however, have to be paid by the Board. I was thinking of going a step further and taking a hint from Canadian legislation by even saying that the Minister should go through the formality of handing over the fee to the auditor and that he should get that back from the Board afterwards so that there would be in no way any liaison between the auditor and the Board. But instead of looking for something which was merely an impartial audit, Deputy Cooper now thinks there would be a more effective audit through the Comptroller and Auditor-General. The duty of the Comptroller and Auditor-General, as laid down by the Act of 1923, is: "to control all disbursements and to audit all accounts of moneys administered by or under the authority of the Oireachtas at such times and in such manner as shall from time to time be prescribed by law." There is nothing prescribed by law with regard to these accounts. All that the Comptroller and Auditor-General could do under this amendment would simply be to say whether or not the disbursements were in order, and that is what the Deputy considers to be a more effective audit than that of an ordinary auditor in the case of an ordinary commercial concern. It is not a more effective audit than can be given in the way I have suggested, and if there is not enough impartiality about the method I have suggested, other steps might be taken to secure impartiality, without going to the length of bringing in the Comptroller and Auditor-General, who has very specialised functions and who operated in a particular way.
But the second point is a much more important one—bringing all the operations under the control of the Comptroller and Auditor-General, who would report to the Dáil, and then the Public Accounts Committee would sit upon that audit and report and discuss them, which is simply bringing in the thing that the Dáil had been specially invited to consider on Second Reading—this Section 6. The Dáil had, as far as I can discover, unanimously agreed to that. The only one who raised any objection at all to Section 6 was Deputy Cooper on the point as to whether the impartiality of the auditor had been sufficiently achieved. As to the limitations, if there is an amendment to Section 6 required to ensure that certain things must be published—not such of them as are prescribed in that behalf, by regulations to be made under certain authorities—if there is an insistence that the public ought to have certain accounts proceeding from the auditor, and these accounts with the auditor's report on them, let us deal with these things in detail. I am out for giving all the publicity possible to the accounts of the Board, and to any audit of them, but I object entirely to having any accounts of the Board dragged back again into this House through the supervision of the Comptroller and Auditor-General. I am told that I have come to regard this scheme as more or less my private property, and the strange comment was made that my answer to Deputy Hewat yesterday showed that. I think that Deputy Hewat must have been in a jocose vein yesterday when he asked me to do some of the things he put up to me. On reading some of the things he asked me I am more than ever convinced of that. The Deputy wanted me, for instance, to state what was the sum allotted in the £600,000 or in the £2,500,000 for compensation.
The Deputy wanted to know if I could give a clear indication as to the amounts under the different headings, and that was one of the headings of which he spoke.
I am not aware that there was anything in the Money Vote that would indicate that the money is to go in compensation.
The Deputy has voted money without understanding what he was voting for. Quite clearly the Board will have no money to pay in compensation if it is not the money voted yesterday, and undoubtedly compensation has to be paid. I would like the House to consider, say, in connection with the recent negotiations that have been almost concluded by the Minister for Lands and Agriculture in regard to the creameries, what would have been the position if the Minister had come here before making his offer, and had announced what money he was prepared to offer? I wonder would he have got as good a bargain as he is now supposed to have got?
Can the Minister say if the Minister for Lands and Agriculture made an arrangement before he came to the House?
We are wandering away from amendment 10.
I hope you will absolve me from having done any such thing?
Deputy Cooper says it is a commercial concern and we are the shareholders and are entitled to the accounts. Certainly if the shareholders indicate what accounts they want and can persuade their fellow-shareholders that that is a fair thing to ask for, then it will be put in. But the Deputy wants to throw it all back again to the Comptroller and Auditor-General, who apparently is to be put in by a certain body of shareholders against the present Executive Council, who are presumably not shareholders in this matter, or at least are open to suspicion as being prejudiced and unfair towards their fellow-shareholders. It was quite clear here on Second Reading that the whole aim and object of the Bill was to get a Board set up to run a business undertaking and to have that Board removed from anything which was merely going to be an interference. There is no objection to an audit of accounts, but there is quite clearly stated this purpose of having the accounts removed at any rate from the Comptroller and Auditor-General, removed certainly from the Public Accounts Committee, removed as far as possible from ordinary year-to-year discussion by the Dáil, and it seemed to me that that had been approved— I heard no objection to it. Let it be realised what is intended. There are two parts in this amendment. In so far as it aims at a more impartial audit, I would like to have the audit as impartial as can be achieved. In so far as it aims at greater publicity, more accounts to be given to the public who are the shareholders, I am all for that, but let us have a clear-cut decision what accounts are to be given. The second part of the amendment is what I object to—the bringing back of all the accounts and the whole operations of the Board from year to year for discussion in the Dáil, in view of the political reactions that are bound to follow from that. I thought we had decided on Second Reading to launch this Board, to see that there was as much publicity as possible given to their doings, but not to have every action of theirs criticised from the political point of view in the House.
I hope I never introduced undue partisanship into my criticism in this House, but I must say that the Minister's statement is very largely camouflage. Either it is camouflage or the Minister has not read the amendment. There is not a word in it about the Public Accounts Committee. It is expressly laid down that there should be a separate function from the normal review of accounts by the Comptroller and Auditor-General, that it should go through an entirely different procedure. It will be in the hands of the Dáil— which I presume means in the hands of the Executive Council—to say what this report and this audit shall consist of.
Did the Deputy mention the Public Accounts Committee?
I said that if the Dáil thought fit and the Executive Council thought fit—the Executive Council control the majority of the Dáil at present—they could send it to the Public Accounts Committee. But it would be open to them either to have it considered in committee of the full Dáil or to set up a special committee to deal with it. The only difference between myself and the Minister on this point is that the Minister visualises discussion in the Dáil. He said so in his Second Reading speech. He visualises in Section 30 a report from the Electricity Supply Board to be considered in the Dáil, and the only difference between us is that he is content to have a report furnished by the Board which need not contain any of the really important facts as to finance that we need when discussing it; while I seek to have a report from an impartial authority with full details on the finances of the Board. I do not think the Minister has realised the implications of his argument. He suggested that he would give full information, but did not wish the Dáil to discuss and debate the finances of the scheme. The only inference that can be drawn from that is that the finances cannot bear discussion. I do not for a moment think that that is the case. I do not for a moment believe that the Board will indulge in rash and dangerous experiments, but if the public mind in this country is to be satisfied that they are not doing so, you will have to give all the information possible, and not only all the information possible, but opportunity for discussing that information. My amendment does provide that machinery.
References to the Comptroller and Auditor-General are entirely irrelevant to this discussion. This is an additional function to be imposed on the Comptroller and Auditor-General, and I have reason to believe that he has a staff of officers who are capable of carrying out an ordinary audit on commercial lines, who before they became officers of his department had outside experience of carrying out commercial audits and are as a matter fact qualified accountants. It is an entirely additional function that we are imposing on the Comptroller and Auditor-General, and he is the only impartial official we can charge with it. There is nothing in this amendment to prescribe that his report should go to the Public Accounts Committee. It can be considered in the Dáil, if that is considered to be the most satisfactory method. I say it does provide a safeguard and will do much to prevent the rise of suspicions and implications which are the curse of every progressive undertaking in this country. It is well to provide against that beforehand, and that is the purpose of this amendment.
Amendment put.
The Committee divided: Tá: 23; Níl: 35.
Tá
- Bryan R. Cooper.
- Séamus Eabróid.
- John Good.
- David Hall.
- William Hewat.
- Connor Hogan.
- Séamus Mac Cosgair.
- Maolmhuire Mac Eochadha.
- Ristéard Mac Fheorais.
- Liam Mag Aonghusa.
- James Sproule Myles.
- Tomás de Nógla.
- William Norton.
- Ailfrid O Broin.
- Criostóir O Broin.
- Tomás O Conaill.
- Aodh O Cúlacháin.
- Liam O Daimhín.
- Eamon O Dubhghaill.
- Mícheál O Dubhghaill.
- Pádraic O Máille.
- Pádraig O hOgáin (Luimneach).
- William A. Redmond.
Níl
- Earnán de Blaghd.
- Séamus Breathnach.
- Seoirse de Bhulbh.
- Séamus de Burca.
- Máighréad Ní Choileain Bean
- Uí Dhrisceóil.
- Michael Egan.
- Patrick J. Egan.
- Desmond Fitzgerald.
- John Hennigan.
- Patrick Leonard.
- Seosamh Mac a' Bhrighde.
- Liam Mac Cosgair.
- Pádraig Mac Fadáin.
- Patrick McGilligan.
- Risteárd Mac Liam.
- Liam Mac Sioghaird.
- Pádraig Mag Ualghairg.
- John T. Nolan.
- Peadar O hAodha.
- Mícheál O hAonghusa.
- Parthalán O Conchubhair.
- Conchubhar O Conghalle.
- Eoghan O Dochartaigh.
- Tadhg O Donnabháin.
- Peadar O Dubhghaill.
- Eamon O Dúgáin.
- Donnchadh O Guaire.
- Fionán O Loingsigh.
- Séamus O Murchadha.
- Máirtín O Rodaigh.
- Seán O Súilleabháin.
- Caoimhghín O hUigin.
- Patrick W. Shaw.
- Liam Thrift.
- Nicholas Wall.
Tellers: Tá, Deputies Cooper and Hewat; Níl, Deputies Sears and P.S. Doyle.
Amendment declared lost.
Amendment 11—In sub-section (4) line 25, page 8, to delete the words "are as" and substitute therefor the words "as are"—(Liam Thrift) agreed to.
Question proposed: That section 6, as amended, stand part of the Bill.
I desire to say that I voted against Deputy Cooper's amendment on the strength of two statements made by the Minister which seem to me to be most important. I agree that it is desirable to keep the doings of this Board as far as possible from general discussion in the Dáil. I agree with the Minister also that it is desirable that as much publicity as possible should be given to the financial work of the Board. I wish now to ask the Minister whether between this and the Report Stage he would consider some form of amendment to secure what he himself has expressed as important: that is that a statement of accounts must be published. Perhaps that statement of accounts would include a revenue account, a capital account, profit and loss account, balance sheet, auditor's report, and such other things as he might think desirable when he came to consider the matter. I think it is important that a special auditor should be chosen for this purpose, and also that full publicity should be given to the accounts of the Board. I would wish that to be secured in the Bill.
I would be prepared to enlarge Section 4 so as to make it clear that certain accounts would necessarily be published. I cannot say myself that I am clear as to what the really important accounts would be. I have here a publication containing a statement of accounts of the Dublin Corporation. If we take the accounts given there it would necessitate that certain named accounts would definitely be published, and such others as might be prescribed by regulations made from time to time. I will bring forward an amendment setting down that certain accounts must be in the booklet published, and the Deputy can add to that.
That would meet my point.
I suggest that, in addition, there should be some means of bringing the matter before the Dáil. It must be recognised that the setting up of the Board which is to control the total supply of electrical energy is to lie in the Minister's hands. Assume for a moment that an unsatisfactory position is disclosed as regards any of the accounts of the Board, as to the cost, for instance, of generating electricity per unit or as to various other things visualised by the Minister, the Dáil would be precluded from discussing the financial position of the Board, and I maintain that would be entirely wrong. We all agree with the Minister that it is desirable that anything of the sort should be free from political control. But I suggest that to take the operation of a large undertaking of this kind in which are involved considerable sums of public money out of the purview of the Comptroller and Auditor-General, or to take it away from the range of criticism by this House under certain conditions, would be entirely wrong. I ask the Minister, in considering the question raised by Deputy Thrift, to review the whole matter in its fullest aspects, recognising the responsibility that must still remain with this House. We should not forget that no matter how this Board is composed its work is certain to react on the fortunes of the country, and its operations cannot be taken entirely out of the realm of criticism by this House.
Is not that secured by Section 30?
I would like to make one suggestion to the Minister which, if accepted, would mitigate some of the dislike with which I view this section. It is that the auditors to be appointed under this section should be appointed, not by the Minister for Industry and Commerce, but by the Minister for Finance. The relations between the Board and the Department of Industry and Commerce will certainly be intimate. The Board will be the creation of the Department of Industry and Commerce, and its failure would reflect on the policy of that Department. It is, therefore, desirable that there should be some outside authority to audit its accounts. The Department of Finance seems to me to be the most suitable body to make the arrangements for that purpose. I suggest that, if the Minister can see his way to agree to what I suggest, he need have no fear but that the Department of Finance will nominate suitable people. It will almost certainly nominate qualified or incorporated accountants. The adoption of such a course would, I suggest, remove some of the apprehensions that are felt in regard to this matter.
Then, apparently, I would have to consider a situation in which the Minister for Industry and Commerce would need to be a thorough rogue and the Minister for Finance, who accepts him as a colleague, will put in better auditors than any the Minister for Industry and Commerce will appoint.
I do not think the Minister has met the point of my argument. The Minister for Finance has to prescribe a form of accounts. He has to approve a form of accounts. Why should he not also approve the auditor?
I will accept the suggestion, but it is open to the other suspicion that the Minister for Finance might be of the type it is now assumed the Minister for Industry and Commerce will be.
Section 6, as amended, agreed to.
SECTION 7.
I move amendment 12—
At the end of the section to add a new sub-section as follows:—
"(4) The Board shall pay to the Local Appointments Commissioners out of the funds at its disposal under this Act such expenses in respect of the selection and recommendation by the said Commissioners under this section of persons to fill situations in the service of the Board as shall be fixed by agreement between the Board and the said Commissioners with the consent of the Minister for Finance or, in default of such agreement, by the Minister for Finance."
This is simply to give power to the Board to pay the Local Appointments Commissioners for any duties which the Board may ask the Commissioners to undertake under sub-section (3) of Section 7.
Amendment agreed to.
Section 7, as amended, agreed to.
Sections 8 and 9 agreed to.
SECTION 10.
(1) Every person appointed to be a member of the Board shall within three months after his appointment absolutely sell and dispose of all shares in any electrical undertaking which he shall at the time of his appointment own or be interested in for his own benefit, and of any shares in any electrical undertaking shall come to or vest in a member of the Board by will or succession for his own benefit, he shall within three months after the same shall have so come to or vested in him, absolutely sell and dispose of the same or his interest therein.
(4) In this section the expression "shares in any electrical undertaking" means and includes any stock, shares, debentures, debenture stock, bonds, or other securities of any company engaged in the generation, distribution, or supply of electricity in Great Britain or Ireland.
Amendment 13 agreed to:—
In sub-section (1), page 9, line 3, to delete the word "off" and to substitute therefor the word "if."
I move amendment 14:—
In sub-section (4), page 9, line 18, after the word "electricity" to insert the words "or the manufacture of or wholesale or retail dealing in electrical apparatus and includes any share or interest in any unincorporated undertaking similarly engaged" and in lines 18 and 19 to delete the words "in Great Britain or Ireland."
This amendment is necessary if the idea that is contained in sub-sections (3) and (4) of Section 10 are acceptable. It simply means that anyone having an interest or shares in a concern dealing in electrical apparatus would also be precluded from membership of the Board or would have to sever connection or remove his interest in the undertaking before he could act.
Amendment agreed to.
Section 10, as amended, agreed to.
SECTION 11.
(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 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 million, five hundred thousand pounds, and the total amount of the sums so advanced in any one half-year for any purpose other than as aforesaid shall not exceed the sum of four hundred thousand pounds.
I move amendment 15:—
In sub-section (2) line 33, after the word "exceed" to insert the words "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."
This is an amendment brought forward because of comments made on the Second Reading with regard to sums of money voted under the first Shannon Electricity Act, and now voted here. It is to make clear that the £600,000 referred to is not an additional sum of money to the £5,210,000 voted originally. It was expected that that sum would have been divided into £4,600,000 for constructional work and £600,000 to meet interest. Certain interest will have to be paid while the undertaking is in charge of the Minister for Industry and Commerce. The Board will be handed over whatever portion of the £600,000 has not been disbursed by the Minister for Industry and Commerce in accordance with the powers already given to him. It is to be noted that there are two limitations. One is that the sums advanced under Section 11 of the Shannon Electricity Act amount to the sum of £5,210,000, and subject to that limitation shall not exceed £600,000. It is simply to make it quite clear that there is not an additional sum of money being voted.
I think we understood that from the discussion yesterday, but my point is that the matter might have been met by leaving the £600,000 out of this Vote.
Then no portion of the £600,000 could have been handed over to the Board, the Deputy will realise.
Amendment agreed to.
I beg to move amendment 16—
In sub-section (3) line 41, after the word "half-year" to insert the words "except in the half-year ending 31st December, 1932."
There may be an important point in this amendment. On reading the sub-section it seemed to me that it tied the Board down rather unnecessarily. It seems to me worth while leaving a margin over for the final half-year, in order to be able to claim sums not advanced before that time.
I did not know what the amendment meant when I saw it put down. I would like to point out to Deputy Thrift that the total sum that may be advanced under sub-section (b) is £2,500,000, and that it may go in maximum sums of £400,000 every half-year. As between the date on which the Board is likely to be set up and, say, the beginning of 1933, there will be nine half-years. But if we take the sums there could be a claim made for a maximum of £3,600,000. I am not sure that there is any necessity for putting it in, but as it gives greater elasticity with regard to the last half-year, in which there may be a certain sum of money lying over to which the Board would be entitled. I would be prepared to accept it.
I am quite satisfied if the Minister considers this.
Do you wish the amendment inserted now?
Subject to the approval of the draftsman.
Amendment 16 agreed to.
I move amendment 17—
At the end of the section to insert a new sub-section as follows:—
"(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."
This amendment is very necessary. It will be observed that under a later section, the Board might advance money to various undertakings, and unless there is some phrase used such as this, the Board would apparently have power to advance money for purposes different entirely from electricity matters. This section says that all moneys to be expended must be expended solely for the purpose of the exercise and performance of the powers and functions conferred on the Board by this Act.
Amendment agreed to.
Question—"That Section 11, as amended, stand part of the Bill"—put and agreed to.
Sections 12 to 17 put and agreed to.
SECTION 18.
It shall be the duty of the Board—
(a) to produce and generate electricity in the Shannon works so soon as such works or a sufficient portion thereof for the purpose are handed over to the Board by the Minister, and to transmit through the transmission system of the Shannon works and any extension of that system the electricity so generated, and
(b) to control, manage, and maintain in good repair and condition and proper and efficient working order each and every part or section of the Shannon works as from the respective dates on which such parts or sections are respectively handed over to the Board by the Minister, and
(c) to distribute, utilise and sell the electricity generated by the Board in the Shannon works and to promote and encourage the purchase and use of such electricity in Saorstát Eierann, and
(d) to control, co-ordinate, and improve the supply, distribution, and sale of electricity generally in Saorstát Eireann and for the purposes of such control, co-ordination and improvement to exercise and employ the powers conferred on the Board by this Act.
(e) generally to perform and exercise all duties and powers which are imposed or conferred on the Board by this Act and all such other duties and powers as may hereafter be imposed or conferred on the Board by the Oireachtas.
On behalf of Deputy Cole, I wish to move amendment 17a:—
"In paragraph (c), lines 45-46, to delete the words ‘in Saorstát Eireann.'"
I simply want to bring this point before the Minister—that there might arise occasions when it would be possible to supply electricity along the Border. Take, for instance, a railway station; it might be advantageous to everybody concerned that we should go outside the bounds for that area. I also put it to the Minister that he might look further afield and that in the future he would be in a position to supply electricity further into the Northern area. The amendment is put forward at the present moment to meet the case of a railway station just over the Border.
I agree to accept the amendment.
Amendment agreed to.
Would it not be necessary that the words "in Saorstát Eireann" should go out also in sub-section (d)?
I do not think so. There is a different question of jurisdiction there.
Question—"That Section 18, as amended, stand Part of the Bill"— put and agreed to.
Question—"That Section 19 stand part of the Bill"—put and agreed to.
AN LEAS-CHEANN COMHAIRLE took the Chair.
SECTION 20.
(1) All charges made by the Board on or before the 31st day of December, 1932, for electricity (whether derived from the Shannon works or otherwise) sold by it in bulk or direct to consumers and for goods sold or services rendered by it shall be fixed at such rates and on such scales as are in the opinion of the Board most conducive to the Board being from and after the said 31st day of December, 1932, in a position to comply with the next following sub-section of this section.
(2) All charges made by the Board after the 31st day of December, 1932, for electricity (whether derived from the Shannon works or otherwise) sold by it in bulk or direct to consumers and for goods sold and services rendered by it shall be fixed at such rates and on such scales that the revenue derived in any year by the Board from such sales and services together with its revenue (if any) in such year from other sources will be sufficient and only sufficient (as nearly as may be) 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, renewals, depreciation, loans, and other like purposes.
I beg to move amendment 18:—
In sub-sections (1) and (2) to delete the figures "1932" in lines 40, 45 and 48 respectively, and substitute therefor in each case the figures "1942."
This section deals with the fixing of rates and scales of charges for electricity. To explain the amendment to the House, it is necessary for me to call your attention to the section as a whole. The substance of the section is that in the year 1932 the Board are to be in a position to pay all the charges and interest and sinking fund in connection with the undertaking. That, of course, is the implication in the section. My amendment is brought forward with the intention of exploring the position of affairs in 1932. It is clearly anticipated that during the years of construction there will be outgoings, and the amount of incomings, until the Shannon works are in operation, will, of course, be nil. We do not know exactly when the Shannon scheme will be in working operation. I would like the Minister to give the House a reasonable indication of when it will be in operation. As between the time it will be in operation and the year 1932, this section visualises that the enterprise will, in whatever period that is, have reached a stage of development that in the year 1932 the Board would be able, out of the revenue derived from the undertaking, to pay the interest and sinking fund and working expenses that will fall to be payable by the Board. I think this is an important question, and my amendment is put down with the idea that the Shannon scheme, in the year 1932, will not be in a position to pay any such sum. It does not matter what date I put in. I put in 1942, which gives a further ten years. But I would like the Minister to indicate on what lines he could possibly justify the inclusion of this section as an indication that the Board will be in a position to pay the charges that are being placed on this undertaking. Remember, first of all, we have the original capital expenditure of over £5,000,000. Yesterday the Minister introduced a new estimate of £2,500,000, and I think that the whole, 7½ millions or thereabouts, will fall on the Board for interest and sinking fund by these provisions in the year 1932.
If that is so, the undertaking will be burdened with a very large sum, in addition to the ordinary working costs, which will be very substantial, in connection with the further developments that are bound to take place. The original scheme of partial construction provided for an estimated output of 110,000,000 units. That was the amount contemplated when the scheme would be in full working order. We are now dealing with 1928 without any power from the Shannon scheme. The Minister has all the information; I have none. I would like the Minister to say what output he claims will be put on the station when it is started. What output does he see in the interval between the time the works are in full operation and the year 1932? I would ask him to be kind enough to give information elucidating this clause on which he assumes that in the year 1932 the Shannon scheme, under the auspices of the new Board, will be able to bear the charges that will be put on it.
Deputy Hewat asked me to give him certain information and, after that request, he said he had no information. Nevertheless, previously, although he had no information, he stated that this amendment was put down on the assumption that the Shannon plant could not be made remunerative before 1942. A little later he indicated that he might enlarge that period by another ten years —although he "has no information." In other words, Deputy Hewat is working on the old prejudice of two years ago—the question as to whether this scheme should or should not be brought along. The Deputy is without information and just haphazardly puts down 1942.
Following the example of the Minister.
If the Deputy had said this was the merest guess, and that as far as he could make out the plant would not begin to pay its way until some date—I do not care what date—we would have had some indication as to the way his mind was working.
How could I put that in an amendment?
We are simply told that the Deputy thinks that apparently in 1942 the charges made for electricity to the consumer ought to bring in such revenue as would meet the outgoings.
I did not say any such thing.
I presume that is the effect of the amendment.
I explained that 1942 was put down as being a more likely date than 1932, that the Minister put down. I asked the Minister to justify his figure. I could not put in any figure without being equally hazardous.
The figure is simply a guess. It does not mean anything. I have been asked when the plant will begin to deliver current. As the Deputy knows, I have, as yet, no indication that the plant will not be delivering current at the date originally indicated, February, 1929. I am asked as to the conditions. The experts drew up a report and made certain estimates. They made what I said, when I was arguing this scheme before the House, was a conservative estimate. If I take their estimate of the year to year increase and simply gauge that by the sale of units in the country at the moment, without any propaganda having been done for the Shannon scheme, or any extra effort made concerning the scheme, their estimate has proved to be conservative. Where at one time I looked forward to facing in 1929 a situation in which, if there had been no extra effort put into propaganda or educational matters, the sale would have had to be doubled before the plant would become remunerative, I now believe, from the estimate given me, that there will be this situation—that without anything extra being done or any extra current being sold by reason of propaganda on behalf of the Shannon scheme, or any work the Board may do when set up, when the plant begins to operate, there will be a sale in the country of 75,000,000 units.
In 1929, and there has to be 110,000,000 units to make the scheme pay from that date.
May I accept that as the Minister's considered opinion? I take it that he knows the output of electricity from all the works in the Free State. Am I to take it as a deliberate statement that in the year 1929 the Minister can see 75,000,000 units coming out of the Shannon scheme?
I can see a great many more if the Deputy means "production." I can see 132,000,000 units produced in 1932. I am taking the sales and the demand for current—demand, without any extra effort, for the number of units I have spoken of in 1929. The situation has eased, if anything, with regard to the scheme. When I take into consideration the number of towns that I know are clamouring along the single circuit we have started to build and the immediate increase there is going to be in the demand for electricity along that circuit, I am more than ever convinced that the experts' estimate, that the scheme should be revenue producing and a remunerative concern in 1932 is justified. Until I see reason to doubt that, and some more figures placed before me, I do not think we should get away from the figure the experts set out. It will be time enough to begin to put that back and look for further subventions from public funds—for that is what it will mean—when we see some indication that further subventions will be required.
I do not think it is right, simply because certain people never did believe, and do not now believe, that there will be any demand, that we should casually change 1932 to 1942, remembering at the same time that increasing the figure means nothing, because so long as the Board is tied up to a certain sum of money to meet interest and losses on working expenses, to say that you will postpone for ten years the date when their revenue shall be sufficient to meet their outgoings, makes no difference. After the Board has exhausted the sums of money given it under this Bill, it has to make both ends meet or get further moneys from this House. Merely to increase the period of years without recognising that, shows that this amendment is put down for the sake of revealing Deputy Hewat's consistently-revealed pessimism with regard to this whole matter.
I stated yesterday, with regard to the moneys, that if and when it seemed to me that the scheme was not going to be built out for the moneys voted, then I would come to this House and ask for more. I notice that that has been taken as a definite statement that the scheme is going to cost more. I made no statement of that sort. The Minister for Finance said yesterday that under no circumstances could the scheme cost more than £5,210,000. I thought it necessary to correct that. Under a lot of circumstances, it may cost more, but I have nothing in front of me yet to show it is going to cost more, and it will be time enough when it is borne in on me by the progress of the works that in fact there is going to be greater cost than I foresaw, to indicate that to the House. I am in the same position as regards the date—the date of opening of the plant and the date that this undertaking should become remunerative. Remember that when the experts talked of this plant becoming remunerative in 1932, they took into consideration simply the sale of Shannon electric current at certain prices. The Board which has to give the service to consumers under the terms of this Bill is going to have a great deal more to deal with than the mere selling of Shannon current. With the extra aids that are given—aids that, of course, go to the consumer in giving him an excellent service at the cheapest possible rate—I see no reason for changing the date 1932 to 1942.
Again, as I had to correct the Minister for Finance yesterday, let me correct any wrong impression that may be created by that statement. In 1931 the point of view put forward by Deputy Johnson, when the scheme was going through, may occur to people as being the best way to treat this scheme —that it should not be asked to meet all its charges in the early years. But we will have a much better appreciation of all the circumstances round about 1929 or 1930 or 1931 than we have now. At the moment, all the indications are that the plant will begin to operate on the date that is estimated, and that the Board will be able to meet, according to experts' indications, all its outgoings. Until I see something to the contrary, I will ask the Dáil not to change casually this figure and not to put it back ten years further.
I think the putting down of this amendment has served its purpose. The Minister has given us a considerable amount of information that we required. We were completely in the dark as to the exact ideas the Minister had as to when the scheme would be actually self-supporting. He has given us that information and his reasons and, as I think the amendment has served its purpose, I ask the leave of the Committee to withdraw it.
The Minister explained that the output of electricity in 1929 would be 75,000,000 units. Does that figure correspond with the estimates given here on the Shannon Bill, when an automatic 15 per cent increase per annum was taken into consideration?
It is rather a reduction on what has been the automatic increase since the Shannon scheme went through.
There has been that increase over and above the 15 per cent. estimated?
Does the Minister consider that that automatic increase will continue until the year 1932?
Decidedly, and even more than that. If the Deputy will pardon me, I said that that was a sort of ordinary increase, cutting out everything to do with the Shannon. Our entering on the first circuit—the south-eastern circuit—has definitely tended to show that the increase is going to be more than the normal percentage increase.
I think everybody will be pleased at the very reassuring statements made by the Minister. One would have to be somewhat of a prophet to form an opinion about Deputy Hewat's amendment. But so long as the point is recognised, that it may prove to be good business to run the scheme even at a loss for a certain number of years in order to make it pay in the end, I think the Minister is quite right in saying that the proper time to put that notion to the Dáil is much later than now.
The Minister has, of course, commented upon my putting down the year 1942 without any definite intention as being somewhat foolish. I took the opportunity to say, when I was proposing the amendment, that that date had no special significance. I wanted to extract from the Minister his ideas of the prospects of the concern, for the reason that he claims that the Shannon scheme will provide current in bulk at a lower cost than it can be produced. It would be instructive to tot up the interest and sinking fund, to estimate what the working expenses are going to be, and then to calculate what electricity is going to cost in bulk on the basis of a full supply. That is the bearing that the discussion on this amendment has on the position. The Minister says I am a pessimist as regards the Shannon scheme. I do not dispute that at all. Nobody in this House or outside it will be better pleased than I to acknowledge that I am wrong if the Shannon scheme is an absolute success. Nobody in the House or outside it wishes to greater success than I do.
May I point out that the Deputy is developing his pessimism at the expense of his business instinct. He charges to the bulk supply of electricity the extra sums now being voted to the Board. What are these extra sums being voted for? Is it for the supply in bulk? The Deputy at least knows that. The Deputy is going to charge up interest on moneys to be supplied for working expenses against the supply in bulk. He is charging all that on the unit figure in bulk.
I certainly would charge it. If this money is to be applied, as the Minister said, in compensation, is it not capital that has to be recovered in interest and sinking fund? If you are not going to charge it, how are you going to get it back?
If the Board is only going to supply in bulk who has to be compensated? Has it to compensate the people for taking a cheaper supply? That is a funny idea.
The Minister, as usual, is drawing red herrings across the trail. He is a past master in that. If the undertaking is going to buy out and compensate other undertakings, so as to enable Shannon power to be supplied, surely that is in furtherance of the undertaking? Who is going to pay it?
The consumer. There is a good deal of difference between the supply in bulk and the consumer, as the Deputy knows.
Amendment, by leave, withdrawn.
I move amendment 19—
In sub-section (2), line 61, after the word "fund" to insert the word "extension."
Amendment agreed to.
Section 20 ordered to stand part of the Bill.
SECTION 21.
The Board may out of the funds at its disposal make advances to any authorised undertaker 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, notwithstanding anything contained in the Act, order, memorandum of association or other document constituting such authorised undertaker, may borrow from the Board.
I move:—
In page 14, line 63, after the word "undertaker" to insert the words "permitted undertaker or statutory undertaker for the purpose of his undertaking," and in page 15, line 1, after the word "undertaker" to insert the words "permitted undertaker or statutory undertaker," and in line 3 to delete the word "authorised."
The effect of this amendment is to allow the Board to make advances not only to authorised undertakers but to permitted or statutory undertakers.
At the moment, any capital expenditure that is incurred in connection with these authorised undertakings has to go through certain procedure. Inquiries have to be held under this clause, and, apparently, inquiries held under the Public Health Acts would be done away with. Inquiries will be made by the Board which will deal direct with authorised undertakings. One would like an explanation from the Minister as to whether this amendment alters the present procedure and whether authorised undertakings will have to apply directly to the Board.
That is the suggestion. Advances may be made to any authorised undertaker on such terms as the Board thinks proper. I would like again to make it clear that the Board is, for all purposes connected with electricity, to take the place of my Department. Inquiries used to be held under the auspices of my Department plus the Ministry for Local Government. In future all such applications will be made to the Board, and the Board will decide.
Amendment put and agreed to.
Question—"That Section 21, as amended, stand part of the Bill"—put and agreed to.
NEW SECTION.
I propose amendment 21, which is as follows:—
Before Section 22 to insert a new section as follows:—
The Board may require any authorised undertaker to give to the Board and every such undertaker when so required shall give to the Board such information relating to his undertaking as the Board considers necessary and every authorised undertaker who on being so required fails or refuses to give to the Board such information as aforesaid shall be guilty of an offence under this section and shall be liable on summary conviction thereof to a fine not exceeding twenty-five pounds.
The general trend of the Bill is that once the Board is instituted it may hold inquiries and cause investigations to be held. This amendment gives power to the Board to get all information necessary from those connected with the sale or supply of electricity and also from the people using it. The trend of the section is towards the formal type of procedure by which an investigator is appointed and sent out to hold an inquiry into a certain undertaking. Previously one could not get information about unauthorised undertakings, but now it will be possible to send out certain sets of questions and have them attended to, instead of having the formal process of investigation referred to in the next section. This power is very necessary.
Does not the Minister think that he has sufficient power already to deal with this? Is there not sufficient terror already without putting on a heavy penal clause?
Is not this a nicer way to do it?
Would the Deputy prefer to have a letter sent to an unauthorised undertaker stating that he would not get a permit unless he supplied the following information? As a matter of fact, the Deputy has done me a service, because I notice that the marginal note says: "Authorised undertakers and permitted undertakers to give information to the Board." I will therefore alter my amendment before the Report Stage.
Amendment put and agreed to.
I move amendment 22. as follows:—
At the end of the section to add a new sub-section as follows:—
(3) The authorised undertaker shall have the right to be represented at such investigation, either by counsel or otherwise as he may think fit, and the costs of such investigation, including the costs of the authorised undertaker, shall be paid by the Board.
I was approached by an authorised undertaker, which is also a local authority, namely, the Rathmines Urban Council, with a view to opposing the whole of Section 22. I stated that I did not think that that was reasonable, and I said that the Board should have certain powers of inquiry into the conduct of authorised undertakings. As the section stands it applies only to authorised undertakings. I think that that is reasonable, but I think that the authorised undertaker, who holds his power under Act of Parliament and who has gone to the expense of promoting an Act, either in the British House or in the Oireachtas, should have some safeguard against unnecessary and frivolous inquiries. Consequently I drafted this amendment. The first part of the amendment is that in any investigation contemplated the undertaker whose conduct is being inquired into should have the right to be represented either by counsel or otherwise. Personally, if my conduct was to be inquired into, I should prefer "otherwise" and get an engineer or chartered accountant to represent me. When you lay down a procedure akin to that of the courts by imposing a penalty on witnesses who fail to appear, and when you take evidence on oath, you must, in common justice, give the party into whose conduct inquiry is being made the right to be represented at such inquiry. The second part is intended to discourage unnecessary or frivolous investigation. It lays down that the Board should bear the cost of the inquiry, so far as the authorised undertaker is concerned. That would tend to discourage the Board from starting an inquiry unless there is good ground for so doing. It is a safeguard against the Board inquiring into the conduct of all undertakings and calling upon them to submit their books and undergo an investigation. This amendment is a via media between the great powers which the Minister has taken and the attitude my constituents took up in regard to refusing all inquiries. I do not think that it is wise to refuse all inquiries, hence I have put down the amendment.
Might I suggest to Deputy Cooper that he omit from his amendment the words "either by counsel or otherwise"? If he does so, it would enable authorised undertakers to be represented as they think fit. According to the amendment as drafted, they would have to be represented either by counsel or someone else, but not by both.
There is a great desire to pile up costs against the Board. The Board is looked upon apparently as something of a bogey and the best thing to do is to throw up a tremendous obstacle by piling up costs against it. Who is to pay the costs in the end? The consumer of electricity. After 1932 the charges for electricity have to be such that outgoings are to be met by revenue. Now according to the amendment, in order to prevent the Board from making what are regarded as necessary investigations there is a threat to have an army of counsel and experts, and the Board is to meet all the expense. The Board cannot be segregated in the way that people think the Government can be segregated in believing that the Government has a private purse from which all expenses are to be met. The Board has no private purse and will have to draw on consumers to meet the outgoings. According to the amendment, undertakers are to appear at the inquiry with an array of counsel and experts, the costs of whom are to be borne by the Board. Thus it is thought to defeat the purposes of the Board. In so far as it is their right to be represented at such inquiry, nobody could object; but when it comes to saying that the undertaker may bring in counsel and chartered accountants, and no matter what the result is the Board shall pay the costs, I say that that is quite unreasonable. I will accept the amendment so far as it says that the authorised undertaker shall have the right to be represented at such investigation, but that the costs shall be paid by the undertaker. Let the undertaker have the onus of justifying his conduct by bringing in counsel, and let him justify himself afterwards to the consumers whom he represents. It is quite unfair to say that once an investigation is ordered all costs must be borne by the Board.
The Minister has directed his argument entirely to the second part of the amendment, and I assume he accepts the first part. He says the Board is looked upon as a bogey Board. If so, that is the Minister's own fault. We have no information about the Board except that it is to be given extensive powers, and that there is the possibility of appointing Deputy Johnson on it. Even that latter proposal does not remove my fears regarding the Board. Who is to pay the cost of investigation? Presumably the person appointed to hold the investigation will have some qualifications for doing so, and will be an engineer, or an accountant or somebody learned in the law, and he will have to be remunerated. Who is to pay for that? Presumably a certain staff will be needed, and possibly shorthand writers.
These people will be on the staff of the Board and will be paid by the Board.
So the staff of the Board will have to hold an impartial investigation when the Board makes a complaint against an undertaker?
Where is the idea of complaint with regard to Section 22?
"The Board may at any time hold or appoint any person to hold an investigation into the administration and financial position of the undertaking of any authorised undertaker." I think if anybody were to hold an investigation into my financial position, I should have some locus standi if it was suggested that my financial position was not satisfactory. I suggest the same should apply with regard to an authorised undertaker.
Does the Deputy realise that the Board hereafter is given power to fix the charges, and for the fixing of the charges there will have to be an investigation beforehand? There is no question of complaint arising.
I do not follow the Minister's argument. I think efficient authorised undertakers under this section have no safeguard against the Board suddenly ordering an investigation into their business. These undertakers have statutory powers and have gone to the expense of promoting Acts in order to enjoy their powers. They have the right to certain consideration. Under this section the Board may, as the Minister says, without any complaint, and of its own action, say "We are going to inquire into your financial position." The Minister knows that every inquiry of that character involves a certain amount of expense which would tend to stop an extension of development of any kind, and yet all safeguards are rejected. At the same time, I am prepared to meet the Minister half way. If I remodel the first part of my amendment and put it down for the Report Stage, so that the authorised undertaker shall have a right to be represented at such investigations——
That is that they shall have representation?
Then I will act on Deputy Redmond's suggestion, and withdraw the words "by counsel or otherwise."
The Minister says that the Board, according to this section, will have the right of investigation into these undertakings, and that it will be given powers to fix charges. I submit to him that the presentation of the position of the authorised undertaking by a proper representation at this hearing will be part of the investigation, and that the Board, who will presumably have to pay for their side of the case by paying their staff, should equally be liable for the charges which will have to be borne by the undertaking, which will have to submit their side of the case. I submit, therefore, that the costs, whatever they may be, either to the Board or to the undertaking, should be borne by the Board, and that they should be all part and parcel of the investigation which the Board shall have the right to make. The investigation will embrace the case as put forward by the Board, and as by the representatives of the undertaking. I do not think it is too extravagant to ask that the cost of not only the staff of the Board but also those who will have to appear on behalf of an undertaking should be borne by the Board.
These costs must be kept as low as possible. In the case of an ordinary investigation, an engineer on the staff of the Board, and a member of the accounting department will go down to look into some matter regarding an undertaking. They will be met by the engineer, or somebody on behalf of the accounting branch of the undertaking, and that will be the beginning and end of it.
Would the Minister consider an amendment so as to prevent pressure being brought to bear on the Board by any particular authority that, for one reason or another, are anxious to harass by continually demanding investigations? I think if the Minister put in a provision that in any investigation held under this section the undertaking should be immune from investigation for the next year or two it would meet the case. There is an apprehension that local authorities, and most of these authorised undertakings are local authorities, will be harassed by the Board, and there is the fear of bureaucratic methods which, I hope, will not be realised, but which certainly do exist.
I would like to see the amendment which Deputy Cooper would produce on these lines.
I was hoping the Minister would produce it.
I am taking a different view of the Board, and I am looking on it as a reasonable corporation which will not do absurd things. If the Deputy put down an amendment dealing with the point of vexatious interference I would consider it. The Board would have regard only to the interests of the consumers of electricity and would be actuated by the desire to get current sold as cheaply as possible and to get units as cheaply as possible. There is no attempt to pile up charges. As to harassing an undertaking, the Deputy will find there is no necessity to have repeated investigations every week, simply to drive somebody out of business. The Board will be given sufficient powers, and I cannot see how it would act in a foolish manner under this provision.
The difficulty is that no one will have any control over it. We are, wisely, I think, giving the Board very extensive powers. We do not know how the Board is going to be composed, and it is desirable to limit its powers of interference to a certain extent.
The amendment has been reduced merely to giving the right of representation.
I will move later to delete all words after "investigation."
This section appears to me to be rather one-sided. It sets out exactly what the Board is to do, and what powers it is to have, but apparently it does not consider the other side of the question, and give any powers as to what witnesses may be summoned or otherwise by the authorised undertaking.
If the Minister will read it impartially—I do not mean that in any offensive sense—he will see that the Board shall have power to summon witnesses to attend such an investigation, to examine them on oath, and so forth. But it does not appear to me at all that there is any power on the other side for the authorised undertaking to summon witnesses and to have them examined.
We will first dispose of the amendment. Is Deputy Cooper withdrawing his amendment?
If the leave of the Dáil is given to amend my amendment, it will save time and trouble. I propose to delete all words after "investigation." I gather the Minister is prepared to accept that.
That would not constitute a sub-section in the Bill. It might be better to withdraw the amendment.
To the truncated form of Deputy Cooper's amendment I was going to suggest an addition to meet Deputy Good's point, that the undertaking shall have the right to be represented at such investigations and to produce witnesses. I do not pretend to be a draughtsman, but I would suggest to add to that the matter of the undertaking also bringing in witnesses.
If the Minister will put that down for the Report Stage I will withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed: "That Section 22 stand part of the Bill."
There are some points on the section that I had intended to make. I referred to them last week. What will lead up to the investigation? Must there be a complaint of mismanagement before the Board decides to hold an investigation into any concern? If the concern is a well-managed, profit-making concern to-day and is doing well, will the Minister or the Board have power without cause to go in and call for an investigation or must there be some complaint that the place could be better managed or that something better for the citizens could be done if the Board stepped in and took control? The Bill as it stands repeals all existing Electricity Acts under which various concerns are protected. I find, and Deputy Cooper was surprised to find, that it is the Board which is to hold the inquiry. That is not to be an independent inquiry.
I would hold that in cases like this a proper independent inquiry should be held probably at the suggestion of the Board and that the authorities should be represented. If they succeed in proving to the Inspector or whoever holds the inquiry that their concern was well managed there should be no interference.
I have in my mind the concern in Dublin City as Deputy Cooper had in his mind the Rathmines concern. They are two well-managed concerns, Dublin City showing a very handsome profit, and occasionally it has given relief to the rates of the city. I can well see the Board urging an inquiry with a view to taking over the concern in Dublin City and getting control of its finances in order that they might, instead of developing Dublin City or giving relief to the rates, develop the Shannon scheme elsewhere. I think on the whole, that while the inquiry might be suggested by the Board or by the undertaking itself it should be an independent inquiry. I would also suggest that some word should be brought into this section that would limit the investigation so that the members of the Board could not at any time they took the notion demand an inquiry into this or that undertaking and call from the undertaking its principal officials to the detriment of the future working of the concern.
I do not know what are the objective signs of good management. The Deputy has talked of profits. In the case of a municipal undertaking the fact that big profits were being made would be obviously a matter for investigation at once because a municipal undertaking should not make big profits.
Might I remind the Minister that under other Acts up to the introduction of this Bill, that was already provided for, and the Dublin Corporation gave relief to the rates from the profits of the electric lighting undertaking?
Certainly if that was found to be the practice, and if it is going to continue as a practice, there would be an immediate cause for investigation. The Deputy may take that as one of the things that would be immediately inquired into—a municipal undertaking making profits to be distributed for the relief of the general rates.
Should they run it at a loss?
Suppose it had been run at a loss in the past?
I think the Minister has raised an extraordinarily broad question in this matter. A municipal authority is not to make anything out of any undertaking it runs and the citizens are put in the position that they are to bear the whole of the losses if losses are occasioned.
Is the Deputy presuming to give me a case? I said "big profits."
I think the Minister said that a municipal undertaking should not make any profits.
I think the Minister was emphatic in saying that a municipal undertaking should not make any profits.
I will explain that. I said first that the question of big profits being made is a matter for immediate inquiry. We can come on afterwards under Section 37 to the question of any profits.
That starts the very large question, that in various places in Great Britain and Ireland municipal undertakings have occasionally been successful. We can take for instance the Glasgow Trams, the Belfast Gas, and various undertakings of that sort. I think the Minister lays it down that a concern of that sort running at considerable risk has to be run on such bare lines that it will not show any margin for reserve or for building up.
Any margin for distribution to the general ratepayers.
Even though there has been a loss in the past?
We will deal with that on Section 37.
Yes, but we cannot separate it.
I separate it this way: I say distinctly that it is the intention under this Bill that the Board should be allowed to hold investigations in cases where complaints have not been made. If you are to say that some complaint should be made, I know that some Canadian Act talks about a complaint lodged by, I think, four people. I wonder if there is any Deputy who does not believe that in regard to any municipal undertaking you could get four people to lodge a complaint. Deputy Byrne has talked of a well-managed undertaking. The investigation might simply be held for the purpose of seeing if it was well managed, without there being any prejudice to that point of view. The Board will not go in and say: "We believe this is badly managed, and we want to find out." I hope that an investigation will not be looked on as necessarily implying a complaint, and there will be no necessity for a long-drawn-out investigation that would take people away from their business. I should say that, ordinarily speaking, an investigation would follow when the information to be required under the section had not been given, or had not been given sufficiently, or, when given, revealed something for which a formal type of investigation was called for.
The dictum of the Minister that municipal undertakings should not give big profits is certainly a novelty in the way of public utterances. I remember the great struggle for the municipal control of electricity in Dublin when the principal opposition to that undertaking was on the ground that it was not likely to be profitable, and not likely to be profitable to the citizens of Dublin. Is it to be laid down that because a municipal undertaking is well managed there should be an investigation, or is it to be laid down that an investigation should take place where there has been a loss? I cannot at all understand the attitude of mind of the Minister in this matter. If an undertaking which has been under the control of a municipality is proved to have been self-supporting to such an extent that it was able to produce big profits, that those big profits were devoted to the reduction of rates, and thereby to the benefit of the citizens generally, and at the same time if the charges for the products of that undertaking were not exorbitant, I certainly think that that undertaking should be left as it is, and that there should be no investigation.
In that connection would the Deputy approve of the water rate being raised in order to allow profits to be made on water, and be distributed to the relief of the ratepayers?
I am talking of a municipal undertaking. I am not talking of a necessity of life, such as water.
It might be under a municipal undertaking.
I am dealing with a different subject. I suggest that if a municipal undertaking has proved itself to be one that has produced big profits and that these profits have gone to the reduction of the rates for the benefit of the citizens, along with proper charges for the products of that undertaking, that is certainly an undertaking which does not warrant any investigation. But if, on the other hand, the undertaking had proved to be a loss, and if the ratepayers had to pay for that loss, I think there would be grounds for an investigation.
I do not want to mislead the House in any way regarding the question of big profits being devoted to the relief of rates. But small profits have been so devoted. Occasionally sums have been devoted to the relief of the rates out of the Dublin electricity undertaking. But valuable improvements were made in the plant out of revenue in the hope that some day, when the plant was complete, the ratepayers who contributed towards it, both out of the rates and by means of taking expensive electricity in its early stages, would get relief in the near future. If the Corporation had thought that a Bill to confiscate their property, after they had taken this course, was likely to be passed, these improvements would have been carried out out of borrowed money instead of out of revenue, and the profits would have been given back to the ratepayers. By taking the course that they did they have in Dublin to-day a valuable concern for which a million pounds was offered a few years ago.
What I am trying to get at are the powers that are to be given to the Board to hold an inquiry with their eyes on these profits, instead of having an independent inquiry. I say that such an inquiry would not be fair when, as a result of its findings, the Board would take control, in order to take from the city of Dublin the profits that should go to the relief of the rates and devote them towards the development of the Shannon scheme elsewhere. An offer of £1,000,000 was made for the city electricity works seven years ago, but under this Bill I say that it can be taken for £400,000.
I quite agree, but what I want to bring out is that an inquiry would be held by a Board that will hope some day—and I think I am entitled to say that they would go into that inquiry with prejudiced minds— to put their hands on Dublin city property and, as all other Electricity Acts will have been repealed, the powers that the city has under other Acts to give relief to the rates out of this very valuable concern would be taken from it.
I do not want to follow this argument, because it will arise again on Section 37, but I would like to have it indicated if I am right in assuming that Deputy Redmond holds that it is right for a municipal undertaking to make profits?
To make profits which may be used for the relief of the ratepayers?
Providing that the rates that they charge for their products are reasonable rates.
Providing that a municipal undertaking should be entitled to make profits from a number of people and spreading these profits out for the relief of the general ratepayers? Deputy Byrne would agree with that?
Not altogether. I say that the Dublin ratepayers are entitled to get a little relief for what they contributed towards making the supply twenty-five years ago.
If there was any subvention from the general rates to the electricity concern, that the electricity concern, when successful, should pay back? Is that where it begins and ends, or does the Deputy go further and think that they should be allowed a certain margin of the profits derived from the electricity undertaking and that that profit should go to the relief of the general ratepayer?
I quite see what is in the Minister's mind. I say that electricity consumers should not have to pay a price that would make a profit to be given back to other people who are not consumers of electricity.
And the Deputy disagrees with Deputy Redmond?
But the point I want to get at is that the ratepayers had to contribute in days gone by, out of the rates, and that the Corporation of Dublin has power, at present, under the Electricity Acts, to devote money made out of the concern to the relief of the rates, and I say that there is nothing wrong in asking that such a reduction should be given.
Will not all this arise on Section 37?
Question put and agreed to.
SECTION 23.
(Users, etc., of electrical apparatus to give information to the Board.)
I move amendment 23:—
In line 33 to add at the end of the section the words:—
"Nothing in this section shall prevent the ordinary use of current for experimental purposes, nor shall this section confer any obligation on the user to disclose the nature or object of such experimental work."
This section has created some alarm in the minds of some users of electricity. Possibly they do not understand exactly what it means. There are a number of users of electrical apparatus who are experimenting and I do not know whether it was the intention of the Minister to give the Board the right to call upon these experimenters to reveal exactly what is the intention of the experiments. Of course there are cases where the Board should have the right to call upon the user of electric current to explain what he is doing with it under certain circumstances. In order to clear up the matter and to allow these experimenters to continue I put down this amendment.
If I were sure that the amendment as drafted did not go beyond what the Deputy says I should accept it right away, but I want to be sure. I am agreeing to the principle of the amendment, but I want to hold it over to look at the drafting, in order to see that a user of electrical apparatus could not refuse or could not block the Board in asking him for information by merely saying "experiment" and that then the Board would be cut out.
On the understanding that the matter will be considered on the Report Stage, I ask leave to withdraw the amendment.
Amendment by leave withdrawn.
I wish to suggest a small verbal correction in line 27. I suggest that the second "such" should be deleted, and "aforesaid" substituted.
Section 23 agreed to.
Section 24 agreed to.
SECTION 25.
It shall be the duty of the Board to advise the Executive Council generally on all matters relating to the exploitation of water power and other natural resources of Saorstát Eireann for the generation of electrical energy and to make all such investigations and collect all such data relating to such water power and such natural resources as may be necessary for the purpose of the exploitation thereof for the generation of electrical energy and to advise the Minister on the location and extent of the transmission system and lines to be constructed in pursuance of the provisions of the Shannon Electricity Act, 1925 (No. 26 of 1925).
Amendments 24 and 25 are more or less identical. Perhaps an arrangement can be come to between the Minister and Deputy Thrift.
I think we are agreed that the words used in two places in the section are not satisfactory. "Generation of electrical energy." I could not allow to pass without protest. I suggest that we should insert the words "generating electricity" in both places, or, what would be better even, "production of electrical current."
I am agreeable to have the word "electricity" put in instead of "electrical energy" in both places.
Amendment 24 not moved.
I move amendment 25 then in this amended form:—
In lines 45 and 48-49 to delete the words "electrical energy" and substitute therefor the word "electricity."
Amendment, as amended, agreed to.
I move amendment 26:—
In line 50 to delete the words "and lines" and to add at the end of the section the following words—"and on such other matters arising out of the exercise and performance by the Minister of the powers, functions and duties conferred and imposed on him by the said Act as the Minister may think fit to refer to the Board for their advice."
The intention is that the Board, as soon as set up, would be the people to make the inquiry as to the demand and to make provisional contracts as quickly as possible, and thereafter to advise as to the transmission circuits that were to be built, and where they were to be located. The section, as drafted, would cover that, but there might be also referred to the Board in its advisory capacity, over the construction period, not merely the location of lines but a whole lot of other matters that would not be covered by the words here. Consequently it is proposed to add the words in the amendment. It is simply that the Board would be in a better position than I would be hereafter to get information—in fact, it is set up for the purpose of getting information and would be the best authority to advise on such matters as might be referred to it.
Amendment agreed to.
Section 25, as amended, agreed to.
SECTION 26.
(1) The Board may conduct such investigations, experiments, and trials as the Board thinks fit for the improvement of the methods of transmission, distribution, and supply of electricity or of the utilisation of fuel, water power, or other means of generating electricity.
I move amendment 27:—
At the end of sub-section (1) to add the words—"and may establish and maintain a testing laboratory for the testing and standardisation of electrical instruments."
I do not think that what the amendment aims at is covered by the words used in the section. What I am driving at has been hanging fire for some time, namely, that we should have a system of testing available within our own borders. I think it would be quite a good thing to have this power specifically set out in reference to this Board.
I think this amendment is certainly rendered necessary by Section 104.
Amendment agreed to.
Section 26, as amended, agreed to.
resumed the Chair.
SECTION 27.
(Exhibitions and Displays of Electrical Apparatus, etc.)
There is just one question I desire to ask in connection with this section, which states that the Board may, for the purpose of promoting and extending the uses of electricity for domestic, industrial, agricultural and other purposes, open or arrange for the opening of show rooms for the exhibition and display of electrical apparatus and appliances. What I am anxious to know is, if the section, as it stands, takes away from other undertakings the power to do what it is provided this Board may do.
Obviously this section does not take away power from any other person.
Section agreed to.
SECTION 28.
(Assistance of Departments of State.)
I move amendment 28:—
In line 19, after the word "may" to insert the words "with the consent of the Minister for Finance."
The amendment is moved simply for the purpose of arranging for the consent of the Minister for Finance with regard to Departments of State making contracts with the Board.
Amendment agreed to.
Section 28, as amended, agreed to.
Section 29 agreed to.
SECTION 30.
(Annual Report, Statistics and Returns.)
I understand that Deputy Thrift is anxious to ask a question on this section.
I think the question really produces its own answer. I think that, undoubtedly, the Dáil would have the right to discuss such a Report. I would be glad, sir, if you could confirm that view.
I suppose there would be a right to get some kind of a discussion on a Report presented, but one would require to see what the Report was like. There will be this difficulty, that the Minister will not be responsible for the operations of the Board. Is not that so?
That is so, but there could be a ventilation of ideas in the House with regard to the Report.
There could be some kind of discussion.
Section 30 agreed to.
SECTION 31—(GENERAL REGULATIONS).
I move amendment 29:—
In page 17, before paragraph (c), to insert two new paragraphs as follow:—
"(c) the granting by the Board of permits to generate, distribute, and supply or to distribute and supply electricity.
(d) the fees to be paid in respect of the making by the Board of special orders authorising and in respect of the granting by the Board of permits empowering the generation, distribution and supply or the distribution and supply of electricity."
These are two matters about which it is thought desirable to give the Board power to make regulations. The two matters explain themselves.
Amendment agreed to.
Section 31, as amended, agreed to.
SECTION 32.
(7) Every regulation made by the Board under this section shall be laid before each House of the Oireachtas forthwith and if each House within the next subsequent twenty-one days on which that House has sat after such regulation is laid before it passes a resolution annulling such regulation shall as on and from the date of the passing of whichever of such resolutions is last passed be annulled accordingly but without prejudice to the validity of anything previously done under such regulation.
I move amendment 30:—
In sub-section (7), page 18, to delete the word "each," line 16, and substitute therefor the word "either," and in line 18 after the word "regulation" to insert the words "the same" and to delete from the word "as," line 18, to the word "passed," inclusive, line 20.
The amendment provides that the vote of one House, instead of the two, is all that will be necessary to prevent hasty legislation on this matter.
The section as drafted is the usual one with regard to regulations: that they shall be laid before both Houses, and that it requires a vote of both Houses within certain periods to annul.
Is not the usual form in which we pass similar regulations to this: a vote of either House?
I think not. I was certainly under the impression that the procedure which the Oireachtas had adopted with regard to these regulations was that it required a vote of both Houses to annul.
I think the other form is the more usual. As a matter of fact there are precedents for both. Perhaps the Minister would agree to consider the matter and deal with it on Report.
I will have inquiries made as to the precedents and see which would be the most suitable for this, if they are different.
Amendment, by leave, withdrawn.
Section 32 agreed to.
Sitting suspended at 6.25 and resumed at 7 p.m.
AN LEAS-CHEANN COMHAIRLE in the Chair.
SECTION 33 (1) AND (4).
(1) From and after the expiration of six months from the passing of this Act or such further period as may be fixed by the Board for any particular area, no person (other than the Board) shall sell electricity or supply electricity for sale unless he is an authorised undertaker or is a person authorised by a permit granted under this Act to supply electricity.
(4) Every person who shall sell electricity or supply electricity for sale in contravention of this section shall be guilty of an offence under this section, and shall be liable on summary conviction thereof to imprisonment with or without hard labour for any term not exceeding six months or, at the discretion of the court, to a fine not exceeding one hundred pounds together with, in the case of a continuing offence, a further fine of ten pounds for every day the offence continues, or to both such imprisonment and such fine.
I move the following amendments as they are bound together:—
31. In sub-section (1) to insert after the word "Board," line 28, the words "and the persons mentioned in sub-section (5) hereof."
32. To insert before sub-section (4) the following sub-section:—
Any person who on the 1st day of March, 1927, was selling or supplying electricity for sale shall be entitled to continue to sell or supply until an order is made by the Board terminating his right so to do.
Amendments 31 and 32 are bound together. Would the Deputy state what is bound up with 31: is it amendment 32 or amendment 32a?
It is 32. I would draw your attention to a clerical error in amendment 32; the words "to insert before sub-section (4)" should be "to insert after sub-section (4)." My reason for bringing forward this is that when an Act of Parliament is passed it does not reach the ears of everybody. I know ignorance of the law is no excuse. But there must be hundreds, particularly small people supplying electricity, who will be breaking the law when this Act is passed. A great number of those people may not hear that they are committing an offence against this Act. Therefore I think it right that the Board should notify those people terminating their powers to sell electricity rather than that they should become, unwittingly, breakers of the law.
If what the Deputy requires is that notice must be given to people concerned before Section 33 would operate upon them I can give that consideration but I do not like the form of this amendment.
That is all I want, and I am satisfied if the Minister will undertake that the Board shall notify all those people before they become criminals.
Undoubtedly notice will have to be given and I shall see that that is put into the Bill.
Then I ask leave to withdraw amendments 31 and 32.
Amendments by leave withdrawn.
I move:—
To insert before sub-section (4) a new sub-section as follows:—
"Any person who (other than an authorised undertaker or a person with a permit under Section 35) but for the provisions of the last preceding sub-section, would not have been entitled to carry on an undertaking for supply of electricity for sale, and whose right to do so is terminated by an order of the Board, on satisfying the Board or the arbitrator hereinafter mentioned, as the case may be, that such undertaking at the date on which such order was made was being worked in an efficient manner, and that he has suffered loss by reason of such order having been made, shall be entitled to be paid by the Board such compensation in respect of such loss as in default of agreement shall be fixed by an arbitrator to be appointed by the Chief Justice of Saorstát Eireann."
The principle underlying the question of compensation is, and it will be running through the Bill, that all persons who have had the right to carry on the generating and distribution of electricity will have a right to compensation, if the Board is going to say to them that they are not to carry on their business or to interfere with their means of livelihood or the carrying on of their work. In other words, the principle of compensation will be recognised. In this Bill you raise the question, and it is a very important one. In discussing this Bill we are at a considerable loss to know whether we are to take the wording of the Bill or the intentions of the Minister when interpreting it as an Act. I would like to hear at this stage from the Minister whether he proposes that anybody should be cleared out of the industry without adequate compensation. I think it ought to be a recognised principle that, where a business, private interest, or other interest, is interfered with by legislation, or in connection with private negotiation, a scale of compensation for disturbance shall be laid down and accepted. That is far-reaching in connection with this Bill. I raised a question at an earlier stage when £2,500,000 were voted by the House to go to the credit of this Board, and I was told that an indefinite sum in connection with that was for compensation. I accept that as something in the right direction. I would like the Minister to be good enough to say whether he draws the line anywhere in connection with the operation of this Bill. I think, perhaps, at this stage, the Minister might go even further than that as far as compensation is concerned, and give us some little explanation of the underlying principle involved in the Bill. At present there are large authorised undertakings scattered throughout the country; there are also small, and very small, undertakings, and if a measure for the public good is being advanced would the Minister say that he would be prepared to deal with all interests in the same way as, in the Schedule to the Bill, he is providing for the interests of the employees that are being disemployed? Will the same principle apply to all the undertakers who are permitted or otherwise?
Adopting the principle that all existing undertakings will automatically come under the same head and continue to exist, until the Board in its wisdom shall decide that some of the undertakings are inefficient and will, therefore, have to be wiped out, this whole question is very serious from top to bottom. I should like to know on what ground the Minister is going to terminate or suggest the termination of such undertakings. Under the powers of this Bill, even when you come down to small undertakings, there may be reasons that will induce the Board to say they will not continue their permits, or perhaps that they will revoke the permits that might have been originally given to them. I understand from the last amendment that the Minister practically accepts the definition that an undertaking, as it exists, will start afresh under a new order until the Board makes an order for the termination or taking over, or whatever it may be, of such undertakings. Will the Minister follow that principle up and say that he recognises their right to exist? And if the Board recognises them, but in the public interest, or the general interest of the electricity scheme, considers that they should be abolished, he will accept the principle of compensation on a reasonable scale?
The form of this amendment is peculiar. First of all, it is in addition to the last preceding sub-section which has been withdrawn. I am taking this now as it has to be construed in the light of what happened to the last two amendments. The last two amendments in regard to the order have been withdrawn by Deputy Myles on the basis that notice would be given to every unauthorised undertaker before what Deputy Myles calls the criminal atmosphere of sub-section (4) would advert to any unauthorised persons carrying on business without a permit from the Board. I have promised that notice will be given.
May I interrupt the Minister? He referred back to the two sub-sections I have withdrawn but the amendment here does not refer to these sub-sections; it refers to the sub-section in the Bill.
"Any person who (other than an authorised undertaker or a person with a permit under Section 35) but for the provisions of the last preceding sub-section would not have been entitled to carry on an undertaking for the supply of electricity for sale and whose right to do so is terminated by an order of the Board." That has disappeared in the withdrawn amendment. I am construing this: the sense is obvious.
Deputy Hewat wants to set up this state of things: That if there is an undertaking which is unauthorised and can prove it is working in an efficient manner and that it has suffered loss by reason of—I am putting it in my own words—not being granted a permit, then compensation shall be paid and that compensation shall be agreed upon or fixed by an arbitrator to be appointed by the Chief Justice of Saorstát Eireann. That is what we are discussing—the right of an unauthorised undertaking not granted a permit, or I presume the same will apply to those granted a permit, but from whom it is afterwards withdrawn——
No. It is not exactly the same thing, in this way. I would like the Minister to accept the principle that no authorised distributors or generators will be refused a permit to continue until the Board comes to a decision on the matter.
That is not going to carry the unauthorised undertaker very far. It simply means that though they can be given a permit the permit may be withdrawn under a later section of the Bill. Let me avoid all argument as to the terms of the amendment. What the Deputy wants to carry off is that compensation shall be paid to unauthorised undertakers and, thereby, put them on the same basis as the authorised private undertaker as there is no such thing as compensation to a municipal undertaking.
We will come to that later.
We will come to that later. There are two fallacies in what the Deputy is putting forward in his amendment. It is based upon wrong grounds. There is the question of efficiency. The matter of efficiency is really not one upon which there is going to be any determination. It is not the question whether an undertaking is efficient that will lead to its continuance, and it is not the question of inefficiency only that will lead to its discontinuance. Even without very much knowledge of what the Board may hereafter do, I can say quite clearly that privately-owned undertakings managed and run however efficiently will have to be taken over by the Board in the interests of rural electrification. Efficiency is not the test and inefficiency is not the reason why an undertaking should disappear. This, as well as many other things contained in it, is an amalgamating and consolidating Bill in regard to electricity supply, and efficient undertakings will have to disappear after being compensated, but the question of efficient working is not the test. That comes in with other amendments, but that is my point on that particular item.
In the matter of compensation, I do not want to give the Board powers, as they are undoubtedly given in the Bill, to proceed on a campaign of wholesale destruction of unauthorised undertakers with no compensation given. That is not the intention. The Board are given certain powers and, of course, the suspicious mind can bring to me this consideration: "But the Board may not use these powers." I will admit they may not, and they may wipe out, and pay no compensation to, an unauthorised undertaker. But the Board may make every unauthorised undertaker sooner or later an authorised undertaker, and the moment it does those fall into the line for compensation on the same basis as the authorised undertaker. My difficulty in approaching this matter is this: we have not enough information about the unauthorised undertakings to know how they should be treated. We had not power to get the information and, when we tried to get it, the information was mainly refused to us because we had no right to apply for it. The unauthorised undertaker was free and beyond our control, and in the majority of cases the unauthorised undertakers refused to give us any information whatsoever.
There is a further point of difference. The authorised concern has an area marked out for it by an order. Within that area it is supreme. It is under control with regard to the maximum rate that it is to charge. It has obligations to supply all consumers indifferently within that area, and it is granted a monopoly in perpetuity for the sale of electricity in that area. One can see, in estimating profits of an undertaking which has achieved a monopoly in a particular area, but which also has the obligation to supply all customers indifferently, that the profits likely to be made by such an undertaking are likely to be lower than those made by the unauthorised undertaking. The unauthorised undertaker can go to a district, start a generating plant, make a network, sell to selected customers at any rate he likes, and change his rates according to his contracts with his customers.
Take an ordinary example that would apply to the majority of unauthorised undertakings in this country. The majority of them started in this way: a man who has a mill wants power for that mill. He gets a plant and generates power for use in the mill or factory. Later on he throws out a line and supplies his own house with current for lighting, and then, later still, he throws out lines in order to supply his neighbours. Obviously that man has charged all the overhead expenses against his factory and he can count on every item he gets in for the sale of current distributed to his neighbours as profit. If we are to take him and assess him on the basis of so many years' profits, we will be paying very heavily for a man who really has done no public service whatever. He is subject to this: anybody else can start against him in that district, and if the newcomer can give better service and cheaper rates he can wipe him out.
The statutory undertaker is in a different category. He has been given rights and guaranteed rights, put under obligations, and he may sell indifferently to all customers. We think such a man deserves compensation for the money he has put into the generation of current. There are, of course, a great many unauthorised undertakers who have done good public service. They have supplied lighting for streets and for a community. There are many of that type who would ordinarily become authorised undertakers if they had applied for an order.
Supposing some did and did not get it?
That would apply to about two. They are in a different category. I am speaking of the majority. It is wrong to treat all unauthorised undertakers in the manner Deputy Hewat suggests. I think the man who, according to Deputy Myles, had to apply to the House of Commons long ago and paid upwards of a thousand pounds for his order obviously has a grievance if he is going to be assessed on the basis of profits, as he had to bear that expense when other men had not. Obviously again the man who is authorised and who has to supply all customers within a maximum and who is under various obligations is not in the same position as the man who could be described as a free-lance. The Board simply might be told "Go ahead; go down into any community where there is an unauthorised undertaker at the moment and that man has no rights against the Board." At least he has equal rights with the Board to sell in that area. The Board could build another network and I wonder is there any doubt in anybody's mind that three weeks after the Board had built its network the consumers attached to the unauthorised undertaker would not be clamouring to be taken over by the Board and no compensation would be paid to anybody?
If I had sufficient information I believe one could schedule two categories in this Bill. One would be a group of undertakers who have sold at reasonably low rates to a sufficient number of customers, have a network of some value to the Board for distribution purposes, have come in on the same footing as authorised undertakers and stand for compensation on the same basis. Then you would have another group, also with a network, who have done public service but who have sold indifferently to all customers. The claim may be made that they should be put on the same basis as the authorised undertaker and fall in for compensation. There would be a third group, such as the man with the factory supplying a few neighbours with current. The Board need not worry about him; let him carry on his supply for his few neighbours. The Board will not want his network; they will not have anything to do with it. It would be a burden on the consumers generally to say that anything should be paid for that small network which is going to be of no value to the Board.
I think the Board ought, at least, to be made do this: pay a fair value for any network it takes over and uses. It must start from that and that is the minimum. If we have sufficient information six months hence we might easily schedule a certain number of undertakings as people who have supplied sufficiently well and at a low price to a big enough number of consumers and have done a certain amount of public service to warrant becoming authorised undertakers and getting compensation on the same basis as the authorised undertakers. I have had to present the Bill in a rather weak form on that point, for the reasons that I could not get the information from the unauthorised undertakers of the country.
Their attitude was: "You have no business to inquire, it is none of your concern; we will have nothing to do with you." They would not supply us with any information on which we could have based some sort of distinction between them. There are times when I am disposed to leave them to their fate. I think it is only right that they should suffer for that now. I am often wondering what they were thinking of then when they were asked to become a statutory undertaking, and when they were persuaded by their association that they should not become a statutory undertaking. I would like to know what is in their minds now on this matter with regard to the association that so advised them.
I would like to ask the Minister what authority he has for saying that the association recommended those people not to become statutory undertakings? I say that deliberate statement by the Minister is incorrect.
I am going on a resolution passed by the association at the annual conference, Deputy Sproule Myles presiding. I do not want to press this thing too far. I do not know if there would be any denial on this point that at a certain time when an offer was made that orders would be given on a basis of £10 per head if 40 came along, at one time 23 of them did come along and subsequently these diminished to seven——
May I interrupt the Minister? The Minister delights in painting the worst side of every picture. I cannot let him go on about this thing, as to people making application. We will have an opportunity in the next amendment of going into that. But I should like to remind the Minister that at the time that he circularised these people, and at the time that the resolution was passed, there was no word about the Shannon scheme, but there was word about another Bill coming from the Ministry. Furthermore, there was hanging over these people's heads the fact that another Bill was coming, and some of the sections in it were very much in line with the section we have here to-day. One section, I believe, was "that it shall be illegal to sell six months after the passing of this Act," and so on. I think I would also be right in reminding the Minister of his anxiety at that time to rope in the lost sheep into the fold. I remember nearly four years ago—it is certainly over three years—when there was then no word about the Shannon scheme, there was word about something else. The Act of 1919, passed in the British House of Commons, was never applied to Ireland. It should have been applied to Ireland, I believe, but it was never applied. An effort was made by the Minister's Department to apply the money section of that Act. Demands were made on various undertakings to that effect.
I think the Minister will agree that I am right in this. He was not the Minister then. That demand was very largely resisted, because these people said: "Why should we pay under the terms of that English Act that we have never made use of, and that was passed a year or so before the Treaty—why should we pay when we have none of the rights and privileges connected with it; what is the service going to be done for us?" That was the attitude when that resolution was passed, and that was the reason why the majority of the undertakers at that time did not fall in with the Minister's idea, because at that time it was believed that he wanted to have them authorised for no other purpose than that of collecting this money and giving them no service.
Deputy Myles is quite right in saying the resolution did draw attention to the fact that new electricity legislation had been forecasted.
The Minister was not there at all at the time, so he cannot correct it.
I have the terms of the resolution before me. I say the Deputy is quite right in all that he has said with regard to the resolution. Let us take those unauthorised undertakers as they are. The Deputy will realise the difficulty. I want Deputies to take it, also, that there is no intention whatever of allowing the Board to act unfairly with the unauthorised undertakers. We set out with the object of preventing the Board from dealing unfairly with these people. But as to the question of the compensation to be paid to them, the Dáil is not in possession of sufficient details to pass judgment on those to whom compensation should be paid. I will guarantee to bring that in, that a fair price shall be paid for any portion of the unauthorised undertaking taken over and used by the Board. That does not go very far, but it goes some way. There is a further question: Does the House desire that there should be any question of paying compensation on the basis of the profits for a period of years?
I think I might remind the Minister that the amendment itself reads:—
"Any person who (other than an authorised undertaker or a person with a permit under Section 35), but for the provisions of the last preceding sub-section, would not have been entitled to carry on an undertaking for supply of electricity for sale, and whose right to do so is terminated by an order of the Board, on satisfying the Board or the arbitrator hereinafter mentioned, as the case may be, that such undertaking at the date on which such order was made was being worked in an efficient manner, and that he has suffered loss by reason of such order having been made, shall be entitled to be paid by the Board such compensation in respect of such loss as in default of agreement shall be fixed by an arbitrator to be appointed by the Chief Justice of Saorstát Eireann."
I am arguing against that; I am pointing out, by implication, that that is entirely unsatisfactory. Take an unauthorised undertaking, supplying electricity to, say, a select twenty customers and supplying it at a big rate, that though its network may never afterwards be used by the Board and though the Board may never want these twenty customers, that, nevertheless, the Board shall pay compensation to that undertaking on the basis of lost profits.
We do not require compensation. All we say is, let them alone.
The Minister has already defined other ways of assessing compensation.
I cannot answer the two Deputies together. Deputy Hewat has proposed an amendment, and I have been asked by him to give an undertaking generally on the lines on which I was approaching unauthorised undertakers. When I proceed to point out what his amendment means, and that I cannot agree to it, Deputy Myles says there are other ways of dealing with it. I must be allowed to deal with it in a different way. Deputy Hewat has made another point—why not let the men carry on. I would like him to consider that proposition. Let us take any town at all. The Board will give a permit to the undertaker in that town to carry on, to continue as at present, and the Board will, after giving that permit and while continuing that permit, proceed to exercise its own rights, as it has them at the moment, without any extra legislation, and proceed to set up a network of its own, and in the stress of competition one of the two disappears. I am backing the Board to survive. There will be no compensation paid because the permit will still be given to the undertaker. The Deputy says let the men continue. But the idea is not merely to continue but to guarantee that nobody else will come in. I would like to get time to consider it, but I think it would be most unjust to allow unauthorised undertakings to carry on and allow the Board to enter into competition with them.
It would be very expensive for the country.
Yes, but the Board comes into the area and enters into competition against them. Surely the undertaker's best policy would be to sell his network, and surely the Board should pay for that network after they take it over.
On that account, he would be prepared to be reasonable.
Deputy Hewat is now putting up a proposition which I feel inclined to agree to right away, because I think most of the undertakers will become reasonable under the stress of the competition the Board can put up against them. But Deputy Hewat must realise the difficulties— the difficulties of dealing with a whole mass of people, everyone of whom is a distinct undertaking in himself.
Is the Minister thinking of the Bill he was promoting yesterday, when he talked about the competition between the railway buses and the ordinary buses? In this case, he would have the nation's resources behind him to fight the competition.
I think Deputy Myles is agreeing with me that Deputy Hewat's suggestion would be useless.
It is only another point of view.
I put up Deputy Hewat's amendment and I object to it. I say that we could not accept that amendment, because we would have to take a whole mass of people, upon whom we have not the data to form a precise judgment, lump them into a class of authorised undertakers and say that they will be compensated for any losses they suffer. It must be remembered that their losses will be based on the profits derived over a series of years. The second suggestion is to let these people carry on and let the Board go down and enter into competition with them. I believe I could accept the second suggestion. But, on the whole, neither of the two suggestions constitutes a satisfactory solution.
I can get this matter more fully considered before Report. I can advance to the point that any portion of a network taken over will be paid for. When it comes to anything else—when it comes to the question of paying an unauthorised man, who is not guaranteed against competition, and who never was guaranteed against competition, compensation for something that is going to happen him, not in the ordinary course of events but not in any extraordinary way, we must have something more than we have to form a judgment upon. I am afraid that there is nothing for it except to leave the section as it is and let us, six months hereafter, when the Board will have got all the necessary information, attempt to schedule the undertakings. There will be a proviso in that, that meantime the Board can take over, all the data having been acquired by the Board on which a judgment as to compensation can be formed afterwards.
I recognise that it is going to be very difficult indeed to deal with all these people without this information. On the other hand, if we pass this Bill without dealing with them, we are going to create a very difficult and a most unsatisfactory position. I should like the Minister to indicate what information he would require in order to have a schedule inserted in this Bill determining the bodies which are to be given different treatment. Perhaps there is some point in what the Minister says, that undertakers have been lax, so far, in giving data that would make it possible to deal with their cases in this measure. Without this information I suppose it would be impossible to deal impartially with those undertakers. Whatever carelessness or negligence may have been shown by undertakers so far, I think we must realise that they are wide-awake at the present time.
Their interests are going to be very seriously endangered. They do not know exactly what is going to happen them. They are going to be in a state of uncertainty for a period of six months, when the Board will commence to operate. Even then, they will not know what is to happen. My opinion is that there would be little difficulty in obtaining from existing undertakers, between this and the Report Stage, all the data the Minister and the House require to deal with this problem as it should be dealt with. If the Minister would indicate this evening the data necessary to examine the problem and deal with it in a practical and equitable way, I am sure the Minister's Department would have all the particulars required between this and Report Stage.
It is a much bigger task than the Deputy thinks. I have spoken on two occasions of 90 non-statutory undertakings. I mentioned that figure because I put a certain limit by way of size to the undertakings. I only referred to undertakings above a certain point. If you were to take all the people who can class themselves as undertakers in the sense that they sell or supply for sale, there would be somewhere between 250 and 300 undertakers in the country. Does Deputy Baxter think that between now and Report Stage one could get from these 250 or 300 persons information on such matters as the area which would ordinarily have been allotted to them if they were looking for an order—that is, seeking to become statutory—the number of consumers actually served in that area, the number of potential consumers, the prices charged over a period of years, so that one could strike an average, the capacity of the plant and the state of articulation? Having got all that information, one does not take it, as it is put forward by an interested party, without examination and verification. An engineer would be required to report on every case. There is not the slightest possibility of that being done in the course of a week or before Report Stage.
If we pass this Bill as the Minister suggests, and as it is possible for him to have it passed, the position will be very unsatisfactory. We must assume that the existing undertakers, authorised and unauthorised, have some form of organisation. In dealing with a matter like this, you must be prepared to take things in the rough. You will not get complete and exact data no matter how long your investigations are carried out. If the House had a return of the number of undertakers unauthorised, the number of consumers in the case of each undertaker and the prices charged, that would enable us to arrive at a decision which, from the point of view of the Dáil and of the undertakers, would be fairly satisfactory. I think that could be done if the matter were taken up in proper manner.
I think the Minister has admitted that, as it stands, the Bill does not adequately meet the situation as it exists.
The cases are of such variety that it is difficult to classify them. I do not pretend to suggest how that difficulty can be met, but I know it is there. The Minister has given us one important concession so far as it goes—that any network that has to be taken over by the new Board shall be paid for according to its actual value. He is going to bring changes before us at a later date that will embody that. I think he ought to go further, because there are, undoubtedly, cases which will be very hardly dealt with if they simply get compensation for their network. There are cases in which a great deal of good work of a preparatory kind has been done by individuals. They have spent their time, their money, and their lives in preparing a state of things which will be all to the good of the Board when it comes to start its work. They have done the spade work that was really necessary to provide that particular business with the market which the Board desires to have, and which will be of value to it. If they have plant and network which is up-to-date, and that can be used, I think, in addition to getting consideration for that, they should get consideration for the fact that they have done spade work which will be for the good of the Board by providing the market it desires. The only way that I see of meeting the matter is to take out such cases and separate them from the general provisions of the Bill, by securing that they will be taken over as authorised undertakings, if of sufficiently good character. That question will come before us on a later amendment. I think the Minister might have gone a little further than he has gone, and say that he will pay attention, in the sections he is proposing to bring before us, to certain other points besides the actual value of the transmission network to which he has referred.
The Minister has made great play with areas and with the fact that private statutory authorities had areas mapped out and defined. I do not think it was worth while bringing those people so often before us in the Dáil, as there are only five private statutory concerns in the whole State. In some cases they are individuals and in some cases companies. They are mostly small companies. The only difference between them and the ordinary non-statutory undertaker is the fact that they got the final seal in the British House of Commons, and that they had certain regulations to follow.
The Minister made great play about these regulations, that they were a handicap to these people, and that they could not make any money. First of all, I admit that these regulations were vexatious in some cases. That is one reason, in addition to the cost, why the non-statutory people never went for them. The Minister also knows that one of the reasons why these people did not go to the British House of Commons was that it cost an enormous sum to do so, especially if they were opposed. I know one case not far from Dublin where close on £500 was spent and the authority was not given. I think the Minister should consider cases like that. These regulations that the Minister has such faith in were impossible of compliance. They were never complied with. Even in municipal statutory undertakings they were never complied with, because they were never meant for this country. They were framed in England to suit large industrial centres and big areas of population. I contend that these regulations were never intended for this country and that there should have been separate regulations framed. The majority of non-statutory undertakings in this country are not as described by the Minister. They had an area in some cases as big as the average statutory authority had defined. I think the Minister is making too much play by constant reference to regulations and area. I think he will find that in the areas of the ninety people he has mentioned very few consumers suffered from want of attention.
It is only fair that I should go back some time. What would be the state of this country for the last twenty years, so far as electricity is concerned, if it had not been for the energy and enterprise of individuals, in some cases groups consisting of men who were not very wealthy, who put their money down, in some cases to benefit their neighbours more than themselves? Some of them lost money in this way. On the Second Reading of the Bill it was cast up at these people, as a kind of slur by the Minister, that they were operating for gain. I do not think that is a crime. I think there are very few of us in this world who do not try to operate for gain.
It was repeated on several occasions and, to my mind, it seemed a block to any fair treatment —the fact that they were operating for gain. I think the Minister would be surprised if he knew the feeling on this question in the country, especially in places where good service had been rendered by these people for the past twenty or twenty-five years. They have rendered general service to the community. A great number of the stations are waterpower stations. The result was that thousands of pounds were saved that would otherwise have been sent out of the country for coal and fuel of other kinds. That money was spent very largely in giving employment to local men. These places give a large amount of employment, having regard to the size of the districts. When the Minister was condemning all these people for their laxity and ineffectiveness generally he should have given them some credit for the benefit they have been to the country. Take what happened during the recent coal strike. Where would the small towns of this country have been had it not been for the electric light stations? These stations were able to carry on on oil and on waterpower. I do not know a single town where there is an electric light station where the public suffered any inconvenience owing to the fuel shortage. Yet the Minister would like to say to these people: "You have no fixity of tenure; some of you have done your job and some have not; get out the lot of you." What an outcry there would be if the Minister for Lands and Agriculture took up that attitude. Would he get any hearing in the Dáil if he did so?
The policy of the Minister for Lands and Agriculture, as far as I can see, is to help the lame dog over the stile in agricultural matters, but the policy of the Minister here is to put down the weaker among the people he comes in contact with. If people are going to be injured by the action of the State, which has the care of all citizens, by depreciating the value of their property, then they should be given reasonable compensation. That is what the question comes to.
If the action of the State in this case is for the benefit of the country, and it is alleged on all sides that it is, why is not the State prepared to pay something to those people who are going to suffer as a result of it? I think that is the principle which this House should accept. I would like to go a little bit further. When the Shannon Bill was going through the Dáil, two years ago, I think Deputies got the impression that when the bulk supply came along these people would be made use of. I will quote some remarks of the experts on this matter. The foreign experts retained by the Government comment on the small progress made in electricity supply in Ireland compared with that made in other countries, and they state: "The reason for this very slow development in Ireland must be sought in the depressed economic conditions of this country." The Government Shannon experts, in their report, suggest much that is in the present Bill, including the Swedish model. They, however, emphasise the point that the existing undertakings should remain as distributors of electricity and should not be expropriated. Their recommendation is quite clear. "The larger and medium size towns will, of course, themselves arrange for their power distribution and will be wholesale consumers from the point of view of the State supply. It should be remarked that the State supply and the development of the Shannon scheme will by no means involve the dismantling of the organisations existing in these towns, with the exception, perhaps, of a small portion of the operating staff. On the contrary, the increasing consumption will accelerate the growth of these municipal organisations." We were led to believe that Sweden was a wonderful place for national supply. In this regard I desire to quote the statement of Mr. Kleman, Secretary to the Swedish Water Power Association, in which he says: "The Swedish power plants and transmission lines belong to various owners, to State and municipal authorities, to power companies, industrial concerns, financial corporations, and private persons. The Swedish towns and municipalities own their own power plants either directly or through companies. There are large numbers of quite small power stations which have been found efficient for local use and able to compete with the larger concerns. Other small concerns are distributors only. The system of State management in the power field, in competition or co-operation with municipalities or individuals, which has been developed in Sweden involves obvious advantages, even so far as State management is concerned, advantages for the consumers, the public, and industry, through the stimulating and regulating influences and, particularly, through the control provoked by occasional conflicts." Here is a quotation from Mr. Hansen, another Swedish expert. He says: "It should be emphasised that the State does not exercise any power monopoly, but the State system cooperates or competes quite loyally with the private enterprises." Sweden has been held up as a great example to us.
I would like to know by whom. It was held up as a good example of a State organisation for a particular purpose.
That was not explained in the Bill and I believe that Sweden was held up as an example of the benefits of nationalisation.
That is the impression I got. These Swedish engineers, to whom I referred, take a different view.
That is an argument against a case which was not made here.
I agree, in view of the consideration given to this question of unauthorised undertakings, that the matter will require an amount of investigation before we reach the Report Stage. When the Minister gets into the question of unauthorised undertakings, he will find great difficulties. I have before my mind cases of several such undertakings which, in the first instance, did not want to avoid their liabilities. The Minister laid stress on the fact that undertakings remained unauthorised in order to avoid certain liabilities, and pointed out that these liabilities were concerned with such matters as giving current to every person who applied for it. I know several undertakings which made a real effort to get conditional orders, and expended large sums of money in trying to get them, but failed to do so. and in the absence of such orders went ahead and incurred large expenditure. These are cases which require special consideration. They did their utmost to become authorised. When you come to the question of unauthorised undertakings, even there, there must be classification and a different method of treatment. The Minister pointed out in his reply that, in dealing with these unauthorised undertakings, it might be desirable to take portion of their network from them and to leave them the balance.
That, in my opinion, would be highly undesirable and unsatisfactory, because, while an undertaking may be economic with its entire network, it might become uneconomic if left with only portion of it. That solution, I think, is not one that would commend itself. There are cases, of course, in which one might divide the plant from a certain amount of the undertaking. The Minister mentioned a case in which the plant was set up to supply a mill and, subsequently, it took on an entire area. In such cases, I agree with the Minister that it might be possible to take from that plant the area which was added to it. If you propose to do that, however, you must give compensation, as the plant was set up to distribute over a larger area, and you are going to circumscribe that plant and limit it to a smaller area. Therefore, there will be an economic loss which will have to be met. As I say, the whole problem will require careful consideration, and it is very hard to deal with it on hard and fast lines. That is the difficulty I see. If numbers of such undertakings are to be thrown over, possibly after they have done useful pioneer work in developing an area and supplying consumers, and if that work is to be taken from them, they ought to be adequately compensated. In dealing with this matter you must not deal with it in a niggardly manner. I think the Minister should deal with it in a reasonable way, and, if he does, it will not be so difficult to solve.
I would like to add to what I said before in regard to the Minister's statement. All his arguments prove one thing, and one thing only; and if he was setting himself out to prove that, I would not be disposed to disagree with him, namely, that it would not be right to compute the compensation for statutory undertakings in the same way as for those who have been working not in accordance with regulations.
It is quite a different thing to say that you must compute your compensation for one class in one way, for another class in another way, and to say that one class will get no compensation at all. It seems to me that the Bill would give the Board power to give a permit to any unauthorised undertaking for a time and then revoke it, leaving the undertaking without any compensation whatever.
I desire to support the plea that has been made for fair treatment of the pioneers, as I might call them, of electric lighting in this State. Carlow was, I believe, the first town in Ireland lit by electricity, and that was due to the enterprise of Major Alexander, who set up works on the River Barrow and got the requisite power from the river. That was a good many years ago, and he has since given great satisfaction generally in that town. The town of Athy has also been lit through private enterprise. I think it would be a hardship if the men who started these enterprises and risked their capital were not adequately compensated if their business is interfered with.
I do not know that there is much use speaking on this matter, and I have almost despaired after hearing Deputy Myles. I think he was suffering from the handicap of speaking from a brief against the Bill rather than on what I said.
That is not so. I spoke very much to the amendment.
The Deputy spoke as if every unauthorised undertaking was to be wiped out.
There is nothing in the Bill to say otherwise. That is what I want to see put into the Bill, and we will then be satisfied.
The Deputy will not take any indications as to what is coming.
I have not seen anything coming yet.
Exactly. The Deputy has not heard any remarks that would give him any satisfaction. He still believes every unauthorised undertaking will be wiped out without any compensation.
The Board has power to do that.
I described the three categories into which these people might be placed, and the compensation to be awarded to each. The House is supposed to be governed by argument, and Deputies are supposed to listen to what is said. I am told there is nothing for it, and that there is a tremendous difficulty in dealing with these people. There are 250 or 300 unauthorised undertakers, and could it be expected we could get the information required from these in a week or ten days? It could not be done. It is a matter of getting the engineers' report, verification of finances, and many other considerations. I do not believe that a series of ques tions could be prepared before the Report Stage, much less the answers. If it were possible to do it even in a rough way I would be glad to get the inquiry started, but I do not think it is a possible solution of the difficulty. Deputy Good referred to a remark of mine that undertakings might be segregated into two classes: those that started with some idea of public supply, and those who supply power to a mill or factory, and where the public supply of electricity was a subsidiary matter. The 250 or 300 unauthorised undertakers who were selling or supplying electricity may be cut down to 90 if you said you did not recognise an undertaking for the purpose of compensation unless it was supplying at least a dozen consumers.
The number I have given—90—is only an estimate, for I have no information, only a certain amount of conjecture to go upon. You might say that out of that 90 28 have electricity supply as a subsidiary item. They supply mills, or breweries, or cinemas, and in one place a colliery, but supply to a district is a secondary consideration. If you omit that 28, then, even as regards the 62 left, there is a tremendous amount of detail to be dealt with. With regard to Deputy Good's point as to people who tried to get an order and failed, there is a special amendment dealing with that.
Taking the fundamental point to which Deputy Thrift has called attention, that the basis of compensation must be different in the case of people who are granted a monopoly in a district, and where people put money into that undertaking which is now to be taken over, there must be a difference in the compensation paid to that type of person and the person who set up not knowing that he was to be subject to competition, and having no rights in the district. If that be agreed, there is at least a basis for bringing forward something on Report that undertakings will not be considered unless where there is a minimum number of consumers supplied, say about a dozen. In other words, you are not going to help the man who is supplying himself and a few neighbours. Secondly, there will not be so much compensation given where electricity supply is a secondary consideration; and, thirdly, that as between a statutory undertaking set down at its fair value as a going concern and a business laid down by people who have really no rights in an area, there must be some distinction. If that be so, I may say that as a minimum the Board must pay for any piece of network which they take over. I shall try between this and Report to bring in an amendment which will give the Board some idea to work on afterwards. Deputy Myles referred to the Shannon scheme when it was being originally put through and of the things envisaged. I would like to give a quotation from the debate on the first Shannon Bill. A Deputy said:—
"There are two types of suppliers of electricity for light; one is a company operating under a licence from the County Council, I believe. That may be a company in a small town or village. As a rule, it is not a company; it is a case where a mill-owner, the owner of a factory, or something of that kind, has put in electric light on his own, and is persuaded to extend it to the village on agreed terms. The licence under which that light is supplied can be revoked by the County Council at will, and, therefore, such concerns have no grievance if they are superseded by the competition of the Minister for Industry and Commerce."
That is from the Official Reports of May 15th, 1925.
Deputy Myles is not responsible.
No, but I want to let Deputy Myles see that he has not the support of people on whom he may be relying. I also have a quotation from the experts' report which has been used by the Press as if it really did back up the point of view that has been expressed. I am told that the experts apparently decided that the Shannon supply was to be only really a supply for bulk purposes and that they recommended a condition of things in which the smaller towns would themselves arrange for power distribution. The experts did nothing of the sort. The experts faced a certain condition of things and said that in those circumstances certain things would occur. But all that they did say was that "the development of the Shannon scheme will by no means involve the dismantling of the organisations existing in these towns"; and they stated: "Apart altogether from the question whether the electricity supply is to be a State service, or partly a State and partly a municipal service, or even a private undertaking." In other words, they set out three types, and said: "We are not deciding which of these it should be." In fact, one of them said to me, when I talked to him about the organisation, that it would have been impudence on their part to decide how the State should run its local and general distribution hereafter. Again, I would like to make a passing reference to Sweden. I have never quoted Sweden in this House as an example of the nationalisation of electricity supply. I could not possibly do so. I went to Sweden the end of last year, and I sent a letter to the Executive Council stating that I would like to go to Southern Sweden and study their system, which was, apparently, partly private and partly municipal. After writing that letter, if I were to get up here and say that Sweden should be taken as an example of nationalisation. I must have undergone a peculiar transformation in the meantime. And, of course, what I saw in Sweden bore out what I knew before.
Deputy Good referred to a remark of mine that it might be possible for the Board to take and pay for a proportion of the network, and he said that it would be unfair to take portion and leave the rest. But is not the corresponding argument equally applicable, that if the Board requires portion of the network it should be made take over and pay for the whole network, although it does not want the whole? That is an indication of the difficulty of dealing with the whole problem, and the best I can offer—Deputy Myles will not accept it, because it is not now in the Bill—to the reasonable portion of the House is that between this and the Report Stage we will have some amendment thought out based upon the considerations I have spoken of, and we will see if it is possible to determine the basis of compensation and to give an indication to the Board.
Will the Minister admit the principle of legitimate compensation for a legitimate interest?
Yes, depending on who defines "legitimate." That is where we get into a quarrel immediately. An agreement on that would carry us no further. I have stated that there is no desire on my part that people whose networks are likely to be used should have them confiscated without any money being paid, but I do object to this idea of compensation on the basis of profit. If that were to apply to the man who made profits in face of competition and under restrictions, and the same conditions were to apply to the man who made profits by skimming the cream of a district, I do not think it would be fair. However, if Deputies agree to leave it at that and see what will come along on the Report Stage, my intention at the moment would be to advance by way of amendment 35 rather than by way of anything else.
I do not propose to carry the Dáil back to May, 1925. I propose to carry them back to the 16th March of this year—a fortnight ago. The Minister has used a quotation of mine. I am not vain enough to quote my own words. I will quote the Minister's. The Minister said on the 16th March:
Non-statutory undertakers will be permitted to carry on until such time as the Board is able to make an inquiry as to their plant and their financial standing, and it will then decide if they are suitable cases for compensation. When that decision is come to, it will be easy for them to become authorised and to fall under the conditions of the Bill with regard to authorised undertakers. I think it was Deputy Cooper who spoke on behalf of those people. It is recognised that they have done good work and that there is an area of supply open to the new Board that would not otherwise be open under such easy conditions.
Then there is a paragraph referring to a minority of non-statutory undertakers who are not efficient, and then he went on:—
There is every intention to treat these people generously, but there is no intention to make the general body of consumers pay for the wiping out of people who are inefficient, people who, even by bringing the latest ideas to their job, by having modern plant and equipment and by using great enterprise, could not possibly be efficient.
I do not think anybody is making that plea; certainly I did not hear in Deputy Myles's speech any plea for the inefficient. Then Deputy Good asked:—
Will the efficient be compensated?
And the Minister replied:—
We can deal with them under the section, but I would point out the difficulty of trying to arrange, prior to an inquiry into the circumstances of individual undertakings, by a general clause in a general Bill what is going to happen to all non-statutory undertakers. This Bill gives the Board power to treat them all fairly and generously, and the efficient non-statutory undertaker may be made by the Board not merely a permitted but an authorised undertaker. That being so, if it comes to be wiped out, the clause in regard to compensation for authorised undertakers will operate. There is, at least, power given to the Board to treat these people generously, and we can discuss any furtherance of that point in detail in Committee.
I think if the Minister consulted his own speech of a fortnight ago rather than my speech of twenty-two months ago, he would have approached this amendment in a more sympathetic and generous spirit.
I stand by every word of that. I have nothing to retract from that.
Then why does the Minister not accept the amendment?
This amendment seems to me to deal with the machinery. The Minister may ask: "What is an efficient manner?" We must assume that the various objections that the Minister makes as to the different positions of the different undertakings concerned in this would be a matter which the arbitrator would take into account. After all, what is the arbitrator for? He is not to voice the opinion of the Minister, or the opinion of the owner of the concern, as to what is the value of the concern. He is to arrive at the value of the concern, and surely, if he is a capable arbitrator he will do that in a reasonable spirit, having regard to the responsibility of compensating the individual or the company, and not leaning as against the State in any way. We have had a very clear and complete discussion on the matter. The valuable point is that, notwithstanding the Bill, the Minister is willing to admit that an amendment somewhat on the lines suggested here would be accepted by him. That is going a long way, and I think that the proper course would be to withdraw the amendment, on the understanding that the Minister will, following the discussion, bring in a satisfactory amendment.
The Minister seems to admit now that there is some justice in the claim for compensation in regard to those unauthorised undertakings.
I admitted it on Second Reading.
And it was not proposed in the Bill that there should be anything in the nature of compensation.
There is room for it in the Bill.
There is plenty of room for it in the Bill.
What the mover of this amendment is asking is that it should be inserted in the Bill. I understood the Minister to say that these unauthorised undertakings might be segregated—"might be" I think were the words he used. I hope he will make it clear in some future amendment what those undertakings will be. He has mentioned that in his opinion the basis of compensation should be different for undertakings which exist owing to statutes or orders and those which are merely private undertakings. That may be so. The basis of compensation may be different, I admit, but I would like to hear from him why he goes so far as to say that there should be no compensation given to a man who is supplying himself and a few neighbours. As far as I understand, the proposal before us is that a person who has through his energy, enterprise and expenditure of his own money installed a system of electricity whereby he benefits his neighbours as well as himself, is to be ruled out except that with the approval of the Board he be granted a permit. Such being the case he will never know from day to day when his permit will be withdrawn and the position he will be in as to the future security of his premises.
I would like the Minister to explain why he differentiates between the man who is supplying himself and his neighbours and who is not doing so on account of any statutory or other authority. I do not see why a person in that position, because he is in a small way and because he has benefited his neighbours and himself, should be particularly penalised. Why should he not be treated equally as well as those in a different position who have got statutory rights? I think that he is entitled to compensation for the possibility of his concern being taken away as others are. I do not think the Minister has made out a clear case in the way that he is treating smaller people who have installed electricity plants and who have benefited themselves and their neighbours thereby. He has made a statement that it is not his intention to compensate them. I would like to hear him give his reasons.
We started this argument about ten minutes past seven and it is now a quarter to nine. The Deputy wants me to go over the ground again in the interests of the man who supplies himself and a few neighbours. I think that would be a waste of time.
I am afraid I cannot repeat it because the Deputy did not hear it.
Is the amendment being withdrawn?
I am withdrawing it in agreement with the Minister.
Deputy Hewat is withdrawing the amendment, having heard the Minister?
I will leave it at that, because, of course, the discussion speaks for itself. I will withdraw the amendment.
Amendment, by leave, withdrawn.
Question—"That Section 33, as amended stand part of the Bill"—put and agreed to.
SECTION 34.
(1) The Board may by special order authorise any person to generate, distribute, and supply or to distribute and supply to the public electricity for all purposes within a particular specified area which at the date of the order is not included in and does not include the whole or any part of the area of supply of an authorised undertaker.
(2) Every special order made under this section shall operate to constitute the person thereby authorised to supply electricity to be the authorised undertaker for the particular area specified in the order and to confer on such person the exclusive right to supply electricity in such area.
I move:—
In sub-section (1), page 18, in line 51 after the word "person" to insert in brackets the following words "(notwithstanding any enactment prohibiting such person from generating electricity for distribution and supply to the public or from distributing and supplying electricity to the public)."
This is a necessary amendment. It is simply to meet the case that where an order is prohibiting a certain thing to be done, that order may be removed.
Amendment put and agreed to.
I move:—
To add at the end of sub-section (1) the words "but the Board shall by special order authorise any person who at any time before the 1st March, 1927, applied for Parliamentary powers by special order or otherwise and who was on that date supplying electricity for sale."
The Minister told us, on the occasion of the Second Reading, and it was mentioned to-day also, that he circularised the existing non-statutory undertakings some two or three years ago and that he received a small number of replies agreeing to his proposals. He was quite sympathetic to those people who had agreed to his proposals. I ask him now to carry out the proposals that he made at that time. That would have the effect of making those people statutory undertakers, not only those who answered him in the affirmative—there are some other cases—but other people who tried to get their powers from the British Parliament and who failed through no fault of their own.
The amendment is that "the Board shall by special order authorise any person who at any time before the 1st March, 1927, applies for Parliamentary powers by special order or otherwise and who was on that date supplying electricity for sale." When I looked at this amendment at first I thought it referred to the well-known case at Greystones.
It covers that, but it particularly refers to all those who answered the Minister two or three years ago and who agreed to take out powers when the Minister invited them and who got no further. The Greystones case does come into it, too.
The case of Greystones is a particular one. I believe there is one other like the case at Greystones. An actual application was made to the British Parliament, but blocking tactics were resorted to in the House of Commons, with the result that after a certain amount of expenditure was incurred the order was blocked and the matter did not go ahead.
That bears out my argument that nobody could get through. By very small expenditure in blocking tactics it would be held up.
We have to look at the case of people who did go. Even there, it cannot be assumed that when an undertaking that wanted to become a statutory undertaking applied for an order, that the order would be granted. The terms and conditions would have to be looked into. What happened was that the application was blocked before being considered. Consideration of the application might have changed the whole position.
There is a case for having Greystones and one other looked on as special. As a matter of fact, though I do not know what the arbitrator might think hereafter, there is little doubt that the Greystones case is one that would be put in the category of authorised undertakings. There is a certain number of consumers supplied and a certain amount known about the plant. I think if we had a separate schedule Greystones would appear in A Schedule as people who have become authorised undertakers. Deputy Myles goes further: he wants those people, the 23 non-statutory people who applied for orders, on the offer made—
The Minister told us that it had boiled down to seven in the finish.
That was what I was going to say. That the 23 honest and tried souls frittered away to seven in the end. There is something to be said for the seven who held out to the end, who wanted to become statutory and who are going to submit themselves to examination. Certainly I do not think there is very much to be said for the sixteen who came along first, and afterwards withdrew for some reason we know nothing of. I could not consider the amendment as it stands. I think it would be better to leave it over. I have made the admission that I think the people who actually went the length of applying for Parliamentary powers and who were ruled out for considerations over which they had no control are special cases. It would be better to leave the amendment over until we come to deal generally on the Report Stage with the unauthorised undertakers, the admission having been made by me that there is a special consideration to be given certainly to Greystones, and the others if they can be discovered in time.
I suppose the Minister will agree to recommit the Bill on this particular matter?
Yes, on the unauthorised undertakings.
Amendment, by leave, withdrawn.
I move amendment 36:—
Before sub-section (2) to insert a new sub-section as follows:—
(2) There shall be paid to the Board in respect of the making of every special order made under this section by the person authorised by such order to generate, distribute and supply or to distribute and supply electricity such fee as shall be fixed in that behalf by the regulations made by the Board under this Act and the payment of such fee shall be a condition precedent to the making of such order.
This is a very useful amendment. It enables the Board to receive payment for special orders when the Board makes such special orders authorising undertakers to generate and distribute, and, when they distribute, supply.
Can the Minister give us an idea of what the figure might be?
Unless the Deputy wants me by some positive amendment to bind the Board, I cannot say what the Board will charge. Inasmuch as my own Department at one time made the offer that orders could be made at a rate of £10, I think that that might be taken as something like the fee.
I am satisfied with that.
Remember that it is left to the Board.
Amendment agreed to.
Section 34, as amended, agreed to.
SECTION 35.
(1) The Board may subject to the provisions of this section grant to any person a permit to generate, distribute, and supply or to distribute and supply either to the public generally or to particular classes or members of the public electricity either for all purposes or for one or more specified purposes in a specified area subject to such of the provisions of this Act and such other conditions as may be specified in the permit.
(2) The Board shall not grant a permit under this section to any person to supply electricity to any person in an area of supply to whom an authorised undertaker is able and willing to supply electricity.
(3) A permit granted under this section shall operate to empower the person to whom it is granted to generate, distribute, and supply or distribute and supply (as the case may be) electricity in accordance with the terms thereof and may also if so expressed operate to confer on such person the exclusive right to supply electricity either for all purposes or for one or more specified purposes in the area specified in the permit.
(4) A permit granted under this section may be expressed and if so expressed shall operate to confer and impose on the person to whom it is granted all or any of the powers, functions, obligations and duties conferred or imposed on an authorised undertaker by this Act and regulations made thereunder, and for the purpose of the application of this Act and such regulations to a permit so expressed and to the person to whom such permit is granted the expression "authorised undertaker" in this Act and such regulations shall include such person.
(5) A permit granted under this section may be modified or revoked by the Board as and when it thinks fit.
(6) A permit granted under this section shall, subject to all (if any) modifications made therein by the Board, continue in force during the period specified in that behalf in the permit or, if no such period is so specified, until the permit is revoked by the Board.
Amendment 37 contains two presumably contentious matters, one contained in the first sentence, and the other dealing with who shall appoint the arbitrator in cases where an arbitrator is to be appointed. I would suggest that we should simply discuss amendment 37 on the lines of the first sentence of it, leaving out the question of who shall appoint the arbitrator, and taking the question of the arbitrator and his appointment on amendment 51, which might be regarded as a key amendment in that matter, and which can be taken to decide the general question whether the Minister or the Chief Justice shall appoint the arbitrator. I think amendment 37 has also a bearing on amendment 45, and amendment 55 seems to be to the same effect.
I move amendment 37:—
To add at the end of sub-section (1) the words "provided that such permit shall be granted to all unauthorised undertakings which at the passing of this Act are working in an efficient manner. The question whether an undertaking is working in an efficient manner shall, if necessary, be determined by a person agreed on by the owner of the undertaking and the Board and in default of agreement by a person nominated by the Chief Justice of Saorstát Eireann.
The first part of this amendment has been pretty well discussed, and I think we have more or less come to an agreement on it. The plea I put forward in connection with a previous amendment was that all undertakings shall, on the passing of this Act, remain in statu quo and shall have permits issued to them. I suggest that within a certain time the Board should indicate not the ones that would be authorised, but the ones that they would not authorise, or to which they would not continue to give a permit. I think they all have a claim, and that the efficient undertakings ought to be facilitated to become authorised undertakings. It is difficult to deal with this matter at present, because notwithstanding a good deal of discussion, we have not yet ascertained the mind of the Minister as to what is going to be done by the Board in connection with the statutory powers that it will get under this Bill, as to whether it is going to wipe out all undertakings, authorised or otherwise, or whether the policy is to maintain the authorised undertakers to continue as distributors where they get the electricity in bulk. We shall come later to the sections dealing with the municipal undertakings.
One must recognise, of course, that the Minister is dealing with the Bill in a very general way, and that when he takes up any of the very serious and involved questions that arise one is in a difficulty to know what the intention of the Minister is or what the policy of the Board is to be. As far as I know the Minister has never told us that the intention underlying the Bill is that the Board shall become distributors of all electricity within the State, or whether they will allocate their powers to authorised undertakers. It is very hard to criticise many of these things owing to want of knowledge of what the Bill really means. It makes a very material difference as regards compensation, security of tenure, and the position that the authorities will be in if you read the Bill literally that the intention of the Executive Council is that the Shannon scheme being in operation the Board to be appointed will, in fact, set out at the outset to deal with the whole question of the distribution of electricity. The provisions are laid down that after it becomes a State monopoly nobody can generate electricity. If we knew that was the policy of the Government we would be fairly clear on the matter, but as it is, when we are talking about authorised undertakings we are talking through our hats. There will be no such thing as an authorised undertaker. It is only a question of time until the one authorised undertaker to distribute all the electricity generated in the Free State will be that connected with the Shannon scheme. A question that will arise on some stage of the Bill is whether any man will have the right to generate electricity for use in his own private house or in a mill, if he owns one. Obviously that is a very big question that will arise. I daresay that when he comes to reply the Minister, from his point of view, will give us a very satisfactory one. He will say that he does not know. I suggest that if he could give some indication as to what the policy of the Government is to be on this it would save us a lot of trouble in discussing various sections of the Bill.
To end this discussion, may I repeat what I said on the Second Reading of the Bill, that I hoped that within five years the Board would be the sole distributor of electricity in the State.
I think, as far as the first part of this amendment and amendment 38 go, that already we have done all the debating that can be of any use at this stage. Therefore, we cannot proceed, with advantage, any further until we know what the Minister is going to do.
I think that really there is not much good going on with an amendment which says: "A permit shall be granted," and when you read sub-sections (5) and (6), continuing, (5) "a permit granted under this section may be modified or revoked by the Board as and when it thinks fit"; (6) "a permit granted under this section shall, subject to all (if any) modifications made therein by the Board, continue in force during the period specified in that behalf in the permit or, if no such period is so specified until the permit is revoked by the Board." The Board could give a permit and revoke it the day after.
I take it that authorising it by special order means turning it into an authorised undertaking?
Yes. This only speaks of a permit.
Amendment 37, by leave, withdrawn.
Amendment 38 not moved.
I move amendment 39:—
Before sub-section (2) to insert a new sub-section as follows:—
"(2) There shall be paid to the Board in respect of the granting of every permit granted under this section by the person to whom such permit is granted such fee as shall be fixed in that behalf by the regulations made by the Board under this Act and the payment of such fee shall be a condition precedent to the granting of such permit."
This amendment is similar to one previously moved with regard to the taking of a fee for granting a permit.
Amendment agreed to.
Amendments 40 and 41 not moved.
Section 35, as amended, agreed to.
SECTION 36.
(1) Notwithstanding anything contained in any Act or order, any authorised undertaker may at any time request the Board to acquire his undertaking and thereupon the Board, if it thinks fit so to do, may by order acquire such undertaking.
I move amendment 42:—
In sub-section (1), line 35, after the word "Act" to insert the words "including this Act."
I think this addition is necessary to the section in order to make its meaning clear, and I hope it will be accepted by the Minister.
Why is it necessary to bring in this: "including this Act"?
Mr. BYRNE
The section did not appear to me to be very clear. It makes reference to previous Acts, but does not mention this Act specially. It was for the purpose of making the section clear that I put down the amendment. So many Electricity Acts are being repealed by this Act that I thought it desirable to bring forward this amendment.
Putting in "this Act" does not include all the other Acts.
Is it clear that "any Act" includes "this Act"?
Yes, as far as I understand.
Mr. BYRNE
If the Minister is satisfied on that, I am prepared to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment 43 not moved.
I move amendment 44:—
In sub-section (1), lines 37-38, to delete the words "if it thinks fit so to do may by order" and substitute therefor the word "shall" and to add at the end of the sub-section after the word "undertaking" the words "and such request shall have the effect of a notice of acquisition served by the Board under Section 37 of this Act."
The object of this amendment is that the Board shall acquire existing undertakings if the undertakers so desire it. What the amendment really amounts to is that there shall be some reciprocity in this matter of the acquisition of existing undertakings. The Board will have the power to acquire existing undertakings compulsorily, and what the amendment aims at is that if existing undertakers desire to have their concerns taken over the Board shall do so. On a review of the whole position I think there will be cases of undertakers who will desire to be taken over for the reason that, on the passing of this Bill, they will find themselves in a very difficult position. In many cases of that kind, the Board might desire not to take them over, but I think that if a claim on the part of an undertaker to be taken over is a valid one, and not unreasonable, it should be acceded to. The Board is being given very extensive powers, including compulsory powers in the matter of the acquisition of existing undertakings. I think that, in return, certain obligations should be placed on it in the case of undertakings that desire to be taken over. I do not know whether the Minister agrees with this amendment or not.
This amendment reflects a complete change of attitude on the part of the Deputy towards the Board. Hitherto the Board was the bogey. Now undertakers are rushing to destruction or acquisition.
No, there is no change whatever. The Minister went to a lot of trouble arguing that there are various kinds of undertakings, but as a result of the discussions here he admitted that a number of undertakings were on a different plane.
This only refers to authorised undertakers.
I know, but even all authorised undertakers are not on the same plane, and there is differentiation. In the case of two authorised undertakers one may take the view that it would desire to be taken over by the Shannon scheme, while the other may take the view that it would not. Under this Bill the Board is given equal power in both cases. It can take over one or the other whether they like it or not.
All I ask in that amendment is that if they have that power they will exercise it in favour of the man who wants to be taken over if the occasion arises.
Another reason for that would be the power that the Board would have to come to an undertaking and take control of it. Our idea in the amendment was that the undertakers should have power to come to the Board and say "Take me over," just on the same lines. If the Board wants to take control it does not suit everyone to be taken control of for two to five years and that their undertaking should be played ducks and drakes with in the meantime. Many men would say "take it altogether," and that is the meaning of the amendment.
If that is the object of the amendment it has been met. If the Deputy looks at the scale of charges in Section 58 he will see the effect of it. If the Board fixes a scale of charges an objection can be lodged by an undertaker against control or acquisition. If he wants to meet that point, that is being met by Section 58, but this amendment, as Deputy Hewat explained, has nothing to do with control. It simply means that any undertaker may come along and say "take me over," and thereupon the Board must do it. Let me take an undertaking in Donegal towards which Shannon lines are not intended to be thrown, in the first instance. It may be that there are undertakings non-authorised in Donegal which, after examination, may seem suitable ones to become authorised. Is the Board to be put in the position of having to take over an undertaking away from its area of operation, and towards which no transmission line from the Shannon has been located? They can compel the Board to take it over, although it is quite outside the area. So far as this is intended to defeat the idea of control that point of view is being met by Section 58, but simply put as it is here that the Board must take it would mean that an authorised undertaking, removed entirely from the sphere of operations of the Board, would have to be taken over by the Board. That would be unworkable.
The point the Minister makes is quite sound in the case of an isolated concern in a district where the Board is not going to operate for some time, but that is an exceptional case. Will he make provision for undertakers within the scope and area of the Board's operations?
I do not understand that this is intended to withdraw control. If it is I ask Deputies to look at amendment 79 relating to Section 58. The effect of that is a scale of charges is fixed for an undertaker. The undertaker raises an objection, and when sending in the objection he can say: "I will not work on this scale of charges. I want (a) to be controlled and (b) to be acquired," and thereupon the Board must do what he wants.
That only covers the scale of charges.
How else can this matter arise? Cannot the undertaker make it always arise by refusing to operate under the scale of charges?
I suppose he could. It is a roundabout way of doing it. If that is the Minister's view—I am not able to controvert it at the moment— I think that the argument I put forward in this case is really not necessarily referring to the scale of charges at all. In principle the Board can take that undertaking compulsorily. I say, that being so, that the undertaker ought to be in a position to say to the Board: "You have the power to take me over. Take me over," and the Board shall take him over. The Minister raised the question that the undertaking may not be within their area of operation at all. I say: "Very well, leave that out of the scope of your operations." The Minister refers me to Section 79, which deals only with the scale of charges. I am not sufficiently conversant with the undertakings down the country to know whether there are cases, irrespective of the scale of charges, where such an undertaking would wish to be taken over, but, if there are such, would the Minister agree and admit that under these circumstances the Board should, on request, take that authorised undertaking over?
I am afraid that that is what is in the Bill. Deputy Hewat has down two amendments, 44 and 45. Forty-four, in effect, says that if an undertaking asks to be taken over it must be taken over. Amendment 45 says:—
"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 at 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 undertaking is not working in an efficient manner."
How are the two to be reconciled?
Of course they cannot be reconciled at all. They are not needed to be reconciled. The amendments are there to provide for different circumstances altogether.
Supposing the amendments were passed, we would be left in this position: "Notwithstanding anything contained in any Act or Order any authorised undertaker may at any time request the Board to acquire his undertaking, and thereupon the Board shall acquire such undertaking," and then we shall have another sub-section to say that the power shall not be exercised unless and until there is to be an inquiry and a decision come to that the undertaking is not working in an efficient manner. Those amendments are both proposed by Deputy Hewat.
One case deals with undertakers that want to be taken over by the Board; the other deals with the Board compulsorily acquiring an undertaking; there as two different aspects of the question altogether. I am asking in one case for protection for the concern taken over compulsorily, and I am asking further for the protection or the right of one that wants to be taken over, to be taken over by the Board.
That is to say, the Deputy does not mind what inefficient undertakings land themselves on the Board, but wants to prevent them from taking over efficient ones.
You may put it that way if you like. I am not out to explain it in those words.
Amendment put and declared lost.
Amendment 45 stands with No. 37. It is the same point and has to be left over.
Question—"That Section 36 stand part of the Bill"—put and agreed to.
Amendment 46 not moved.
SECTION 37, SUB-SECTION (6).
Whenever the former undertaker is a local authority the new undertaker shall as on and from the date of the vesting order become and be by virtue of this sub-section liable for and bound to indemnify and keep indemnified the former undertaker against all capital loans (including current bank overdraft) outstanding at the date of the vesting order and borrowed by the former undertaker for the purpose of the undertaking and all mortgages and charges on the undertaking or the assets thereof outstanding on the date of the vesting order (save and except loans borrowed and mortgages and charges created after the 1st day of March, 1927, and before the constitution of the Board without the consent of the Minister or after the constitution of the Board without the consent of the Board) and also the interest on such loans, mortgages, and charges from the date of the vesting order.
I move amendment 47:—
To delete sub-section 6.
I think amendments 47, 48 and 50 deal with the same subject.
This amendment of mine is a very important one from the point of view of the local authorities. The sub-section is designed to perpetuate a very different basis of compensation for local authorities from that which applies in the case of private undertakers. In the case of a private undertaker the undertaking is to be taken over as a going concern, at a fair value, but in the case of a local authority the undertaking is to be taken over by the Board simply making itself liable for the outstanding capital charges, plus the current bank overdraft, if any. That simply means that if a local authority has incurred a capital expenditure of £100,000 on its undertaking, and has paid off £50,000 of that capital expenditure, the Board can step in and acquire that undertaking from the local authority by taking over the liability for the outstanding capital charges. In other words, an undertaking which costs £100,000, provided £50,000 of that expenditure is paid off, the Board can take over that undertaking for £50,000. That seems to me to be altogether unfair, and I cannot understand why such a discrimination is made against a local authority. The basis of the compensation appears to be thoroughly unfair. I cannot see why the same method of compensation is not applied to a local authority as is applied to a private undertaker. I have got the case of one local authority, with which I am connected, in mind. The capital value of the undertaking is approximately £160,000. £90,000 of that capital expenditure has been repaid, and there is now an outstanding balance of £70,000. That undertaking will have cost the ratepayers £160,000.
The ratepayers. The capital expenditure was £160,000, and that is to be repaid by the local authority.
It has not to be repaid by the local authority.
Perhaps the Minister will say by whom it has to be paid?
Well, I will substitute local authority—the capital charges paid by the local authority.
This is a debate, not a cross-examination.
The local authority has an undertaking worth £160,000.
I will let the President speak if he wishes to.
I want to hear Deputy Norton.
The capital is normally £160,000, £90,000 has been repaid and £70,000 is still outstanding, and the Board proposes to step in and acquire that undertaking by paying off £70,000. I think the local authority has got just as good a right to compensation for this undertaking, on its fair market value, as a private undertaker has, and I think it is the minimum compensation that ought to be expected. Up to the present and provided it is not taken over by the Board it would have a right to fix its own charges, to control its own supplies, and, ultimately, it would have the right to complete ownership of the whole undertaking, and could direct its development upon its own lines. They sacrifice all that now. They will sacrifice the paid off capital expenditure and for all that sacrifice they will get nothing. The Board will simply make itself liable for the outstanding capital charges. I think there is no case for discriminating in that manner against the local authority. I think they have got as good a claim to compensation on the same lines as will apply to private undertakings.
We are now dealing with amendment 47. I take it that Deputy Byrne agrees that amendment 48 seeks to accomplish the same thing. Therefore the decision on amendment 47 will govern 48 and of course, 50, which is merely consequential.
On this amendment it is necessary for me, as an ex-member of the Dublin Corporation Electricity Supply Committee to make a short statement in asking for fair prices for the municipal undertakings. When electricity was in its infancy the Dublin Corporation decided to venture its funds on a supply for Dublin, and applied for a Provisional Order under the Electricity Acts. This was issued in the year 1892, and a small scheme for the lighting of the centre of the city was put in hands, the current being generated and distributed from what is now the Fleet Street Distributing Works. It was found that this scheme was designed on too small a scale, and a larger scheme was entered on, based on the present Pigeon House Works, and the Fleet Street machinery was scrapped. This was done in the face of the greatest opposition by the financial and commercial magnates of the city, who foretold the losses that were certain to accrue.
Notwithstanding these prophecies, the city electrical undertaking at the Pigeon House has been a great success, and not a penny of the total capital adventured, £1,300,000, has been lost. On this capital expenditure the Corporation might have paid 5 per cent. per annum to the credit of the rates, but in the interests of what was thought to be sound finance this was done only on a small scale, but the money which might have been so employed was put into the undertaking, with the result that notwithstanding the yearly expenditure on plant and cables for the growing undertaking the capital now outstanding is only £400,000. In the opinion of those competent to form one, the Dublin undertaking is now worth at least £1,500,000, and this has been built up by the Corporation out of the undertaking itself with the aid of the credit of the Corporation, which was risked.
But if this Bill is to go through as presented, what appeared to be sound finance was folly. If the Corporation had repaid all the capital, the citizens would get nothing from the Board at all. If the Corporation had expended more and paid off as little as possible, the Board would have to pay a huge sum under this Bill, even if there was no profit at all. It is all very well to assist the Shannon scheme, but why for that purpose rob the citizens of Dublin of their successful undertaking, built up out of their money and credit, to enable electricity to be supplied cheaply to people who have done nothing for themselves? Why should not the citizens be paid for their property as well as a public company which had risked its money in a similar enterprise? If the Dublin Corporation were in existence, I do not think any such suggestion would have been ventured on. Their protests, which would have been supported by the citizens with absolute unanimity, would have brought down the Minister who suggested it, if not the Executive Council of which he is a member. And in this cause, at any rate, it is clear that the Rathmines and Pembroke Councils would have been at one with the Corporation, for these Councils are similarly situated as the owners of successful undertakings built up on the money and credit of Rathmines and Pembroke, and in a like manner.
I really think this Bill must have been introduced by the Minister for Industry and Commerce without any consultation with his brother Ministers. I do not think the President of the Executive Council, who was himself so much responsible for the sound and prudent financing of Dublin Corporation Electricity undertakings, and who is entitled to credit for the position of the undertakings, would be a party to penalising the citizens for his wise and prudent handling of the finances of the Dublin Electricity Supply, and here I would like to point out that the methods adopted during his chairmanship of the Finance Committee of the Corporation were adopted as the correct and proper method for dealing with the undertakings of the London Borough in the London County Council Act of 1924. Nor can I understand any members for the city or county of Dublin supporting such a scheme for the spoilation of their constituents even for the Shannon scheme.
Now that the Shannon scheme has been entered on it must be supported as far as is possible, justly, and it is possible that the new Board should be empowered to take over existing undertakings to provide a load for the Shannon works, but only on the honest terms of paying a just price for what they are acquiring. If they do not wish to do this the Corporation and other local authorities should be allowed to carry on as before, and contract as free agents with the Board for a supply. If the Board are able to supply electricity as cheaply as the Minister has suggested they will be able to do so, as no local authority would hesitate for a moment in taking a supply. But the clauses in this Bill as presented to the Dáil rather suggest that this is problematical and that the local authorities will have to be goaded into doing so by threats of control, inquiry and acquisition, as well as by the powers of veto, price fixing, and closing down of generating stations contained in the Bill.
There are two courses open to the Minister: (1) let him at once say that such undertakings are to be acquired at a fair price, or (2) leave them as they are to carry on their undertakings successfully as in the past.
Deputy Norton referred me yesterday, in connection with another Bill, to a measure which he had backed, and indicated his point of view with regard to the socialisation of certain services. We now discover Deputy Norton is a Socialist only when he is not a member of the Rathmines Council, but as a member of that Council his good Socialism manners are corrupted, and we get the heresy that was preached here with regard to Socialism, a heresy from such a man as Deputy Norton. According to the Deputy, there is no difference between a municipal and a private undertaking. Has he thought over the meaning of these words before he uttered them? "There is no difference between a municipal and a private undertaking"! I do not sit on the Labour benches, but——
I might point out to the Minister that I did not suggest there was no difference between a municipal and a private undertaking. I always took the view that the people got infinitely better service from the municipal undertaking, even though they do not admit it, but what I said was that there should be no difference in paying compensation.
We are getting back to what are the services for— what are the particular undertakings for, and I put it to the Deputy that a municipal electricity undertaking is supposed to give good service. A private undertaking gives service and makes a profit. Is there any difference between a private undertaking and a municipal undertaking when the compensation comes to be weighed? We are asked by Deputy Norton to put the two types of undertakings on the same basis, and the basis to be the fair value of a going concern. The Deputy knows quite well that the fair value of a going concern means, in the end, after a series of things have been taken into consideration, how many years' profit will a person be purchased out at? Will the Deputy have that test applied to a municipal undertaking, or does he not believe that there is anything fundamentally wrong in a municipal undertaking making profits? The Deputy talks of the Board going to take over from, say, the Rathmines Council, or let him take it, the Board are going to take over from the Dublin Commissioners. Deputy A. Byrne spoke here as representative of the old Dublin Corporation. He was himself a member of the old Dublin Corporation. Did the Commissioners pay anything to the Dublin Corporation for taking over this valuable plant?
They are working it for the advantage of the citizens.
If the plant is not working then nothing should be paid. The Dublin Commissioners paid nothing to the Corporation for this valuable plant. It was worth, we are told, one and a half million pounds. I am sure it was worth one million pounds at the time the Commissioners took it over.
Did they pay anything to the Dublin Corporation for anything?
No, and they did not pay anything, amongst other things, for the electricity undertaking.
Do I understand the Minister to say that the Dublin Corporation could not make any profits?
What then did the Minister say about the Corporation?
There is a contradiction in terms. I am talking of a municipal undertaking and profits and having compensation for a municipal undertaking on the basis of a profit-making concern.
Will the Minister explain——
We cannot have this cross-examination of the Minister. Deputies will please let the Minister proceed.
I am aware of the profits the Dublin Corporation have made and I am going to talk about these profits. There is a scheme called the Greater Dublin Scheme. The Report has been produced. That Report recommends certain things and if the scheme proposed is to be carried through, the Dublin Corporation is going to take over the Rathmines electricity undertaking. Are the Dublin Commissioners, or the new Board to pay anything to the Rathmines Council for taking over the Rathmines undertaking? I suppose not. I think it is on the same basis. That plant is going to be used for the service of the people who put the plant up. We have heard talk about what the plant was worth, and Deputy Norton talked of how that value was arrived at, and how the money has been paid off. He said first it was paid out of the rates but withdrew that. It was not paid out of the rates. Whatever value was on any plant in Dublin, that value has been paid in the main from occasional subventions from the rates. Whatever value was placed on the plant in Dublin, that value was derived from charges put upon the electricity consumers. These are the facts. Incidentally it was rather amusing to hear Deputy Byrne in his historical review mention that the commercial magnates of 1893 were bitterly opposed to the Dublin Corporation engaging in an electricity undertaking themselves. The commercial magnates have not learned anything since.
I was wondering how long the Minister would go on without saying that.
Deputy Byrne further remarked that if this matter were fully understood by the Dublin populace, they would be so stirred up that the Shannon scheme would never have been passed. I want to counter that statement by this, that if the electricity consumers realised what is on at the moment there would be certain other people stirred up. The people in the balance in this thing are not the Dublin Commissioners or the Rathmines Council or people who pretend that they own plant. These people are simply trustees for the plant which they have built up out of certain people's money—moneys got out of the people by electricity charges.
We might as well get down to this question of profits. There was a Liffey scheme which was under the consideration of a joint committee, and certain members of the Dublin Corporation were called to give evidence on behalf of the Dublin Electricity Supply Bill. I would like Deputy Norton to understand what other people, who do not profess to be Labour people, and who do not profess to have socialistic instincts, have said about municipal undertakings and profits. On February 5th, 1925, the City Electrical Engineer. Mr. Kettle, stated before the Private Bill Committee: "My opinion is, all profits should be reinvested in the undertaking itself; in other words, as we get the profit from the electricity user it should go back to the electricity user." Asked, in cross-examination: "I understand you are not in favour of money going to the ease of the rates?"—I recommend this to Deputy Redmond, who thinks differently—Mr. Kettle replied: "No, I am in favour of it going back to the electricity consumer." On February 12th, 1925, the Town Clerk gave evidence. Senator Barrington asked was it not obvious the profits must be a great deal more if the Corporation generated electricity by means of water. The Town Clerk replied: "No, we will reduce the price. We do not want profits. Profits are absolutely contrary to the spirit of municipal trading. The object of municipal trading is to provide services for the citizens at the lowest possible cost. The Corporation would have nothing to do with the profits."
Has the Minister finished his quotation?
I would like to say that I did not make a single reference to profits in my speech, because I believe profits ought to be utilised for reducing electrical charges instead of relieving rates.
I am satisfied if the cross-examination of Mr. Kettle and Mr. Murphy has even brought that from Deputy Norton. The Town Clerk stated further: "The word ‘profit' is frequently used with regard to municipal undertakings. It is entirely a misnomer. The word is surplus, and the fact that you earn more than you expend only proves that the price you charge was too much for the service rendered." We have to take that into consideration in conjunction with Deputy Myles' comments. The Town Clerk says it proves that the price charged was too much for the service rendered. He goes on: "It is an estimate for each year, and the practice of the Corporation, in my opinion, ought to be to balance income with expenditure as regards any particular service." Then there is a question by the Chairman to Mr. Murphy, the Town Clerk: "And to do more than that is really immoral?" The Town Clerk replied: "Yes, as you are drawing money from the smaller body to spread amongst the larger." That is sound doctrine.
Would you apply it to the railways?
I did not allow Deputy Norton to be interrupted. I think he should allow the Minister to proceed without interruption.
I welcome that interruption.
That is the worst of the Minister.
If Deputy Norton does not quite realise the difference between a privately-owned concern and a municipal undertaking, he falls back upon the railways. He invariably refers to the railways, but in this instance there is absolutely no comparison in this particular instance the Deputy can put forward in opposition is the railways. There is no comparison in this particular instance with the railways. We have been told about a plant worth one million pounds. When was the plant said to be worth one million? I have seen it stated in the papers recently that an offer was made, and one-million-and-a half was the purchase price. Is that what the Deputy refers to? How is this valuation of one million pounds arrived at? I understood it came about this way, that certain people said they would give one million in order to be allowed to run the electricity undertaking of Dublin. Is that what it was?
In what year was the offer of one-and-a-half millions made? Was it ever made in relation to rates, or was anything said about a maximum charge if the Finance Corporation came in? Does the Deputy believe that the one-and-a-half millions were offered for plant? I suggest that is not so. The million-and-a-half was offered for the chance to make profits out of the electricity consumers in this city. What was the chance? The chance was greater or smaller, according as the maximum price was high or low. I am very anxious to get the year in which the million-and-a-half offer was made. It would throw a considerable light on the operations of the undertaking in Dublin since that period. Ordinarily speaking, the return looked for in money from an electricity undertaking is 8 per cent., irrespective of sinking fund to return the capital. Eight per cent. on one-and-a-half millions is £120,000. That net profit would ordinarily be looked for. I cannot say the Dublin undertaking, in fact, did get profits to the extent of £120,000. They were nearer to getting half that. What is the deduction from that? That a finance corporation saw that with better management, keeping the rates as they were, an additional £60,000 upon profits could be got. And that is what the Board is going to get in future, and put to the benefit of the Dublin electricity consumers.
I suggest it is beside the point to talk of what a plant is worth. Money may have been spent and a plant may be said to be worth a certain amount because so much has been spent from year to year. But it must be remembered that the electricity consumer has paid for all that. What does he get in return? He is getting service. If that plant has been paid for to a great extent, then the consumer to-day is getting a service at less cost than when the capital charges were high. That is the beginning and end of the whole situation. If there were profits made, according to the Corporation witnesses before the Private Bill Committee, then those profits only mean that a greater charge had been extorted for the service than what the service was worth. What is the cost to the electricity consumer in any area to-day? It is this—in Dublin it is the cost of the power station plus the cost of distribution. The cost of the power station, as far as the relation between the Board and Dublin are concerned, does not come in. If the generating station is closed down there is compensation paid for it; in so far as it has net-work, if the net-work has been paid for to a certain extent, the Board might take over the net-work. It may take over the net-work, of which capital charges to the extent of 50 per cent. have been paid off. The difference is that at the moment the electricity consumer in Dublin is getting his current cheaper, and under the Board the same conditions will hold.
Will the consumer get it cheaper under the Board?
That remains to be seen. I do not see any reason why he should not, inasmuch as the capital charges each year will be written off, then necessarily the price of the current must come down year after year.
This talk of buying over from a municipal undertaking reveals the greatest confusion of thought that has been exhibited in this country for many years. The fact of the matter is that at the moment as the Dublin Corporation were trustees for certain electricity consumers, so the Commissioners succeeded them, and the Board will succeed them exactly in the same way as trustees for the same body of consumers.
Yes. I could pay one-and-a-half million pounds, provided the Dáil granted me the money, to Dublin for this undertaking to-morrow. But I want to know what is going to happen to that million-and-a-half pounds once the Commissioners get hold of it. What is that one-and-a-half million pounds to be expended on? I suggest that it can be dealt with only in one way — it must go back in some way to the people who built up the plant for which the one-and-a-half million pounds is being paid. In other words, it must go back to the consumers. Instead of charging for electricity, you could give a bonus for every unit consumed and, in the next ten years, Dublin electricity consumers would have to pay the cost of the capital charges of the one-and-a-half million. They would be relieved for the first year and they would pay for the ten or twenty succeeding years. I suggest that it would be illegal, even if the one-and-a-half million pounds were paid, to dispose of it even to the electricity consumers, because, obviviously, they are not the same body of consumers the charges upon whom have increased the value of the plant year by year. You could never get at these people. They have changed. Some of them have left the city. This is only shifting the responsibility. You can pay one-and-a-half million pounds and the net result is that the price will be fixed at the transformer station on the outskirts of Dublin for Shannon current. There you must take into consideration the liability incurred in taking over Dublin. The one-and-a-half million pounds must be divided out amongst the number of units likely to be consumed in Dublin, and you are going to pay money which cannot be fairly distributed, which people have paid for certain purposes, and for which they have got benefit. You are going to pay over that money and recover it by charges on these identical people for years to come.
That is totally different from the case of a private company. There the object was purely gain — at least, gain came into their considerations. They were guaranteed a certain area over which they were going to be allowed to make gain for years. That chance is being taken away from them and necessarily there must be compensation paid. But what case is there for compensation to people who are supposed not to make profits; or, if they have made profits, according to the evidence before the Private Bill Committee, it is only definite proof that exorbitant charges have been made for the services given. All these things have to be weighed together. From these three witnesses, who were examined before the Private Bill Committee, and cross-examined with regard to what the purpose of municipal trading was, we get this fact — that this plant was built up over a number of years by charges to electricity consumers. And we get this further point, that you could pay that money, and it would do nobody any good, because I do not know how it could be equitably distributed. At the same time, it would do immense harm to consumers of electricity in this area for years to come.
The Minister is usually very interesting and very emphatic and very convincing. As regards the position of municipal undertakings, he is undoubtedly right. The ratepayers did not build up the electric stations except in so far as the rates have contributed in case of loss. On the other hand, what have the municipal undertakings done? There was no money, in the first instance, in the shape of capital. There was a loan got which was paid off by sinking fund and interest. If that arrangement worked out in the ordinary way, and if the period over which the loan was repayable corresponded with the assets created, then at the end of that period there would be no assets. But what has happened is what would happen in any well-regulated concern. Due regard is made for depreciation of machinery and, instead of raising continuous loans, these undertakings have allocated portion of their profits for renewals, repairs and extensions. In the case of Dublin, a valuable good-will and a valuable concern, in the commercial sense, have been created over a period of years. Obviously, in the event of anybody coming in to purchase that concern, its value is as a going concern its assets, its good-will and its ability to make profits. The Minister says that they have no right to make profits. He also says very properly, that the undertaking has been built up by contributions, not from the ratepayers, but by charges on the consumers — in other words, that had the big consumers been charged less, the assets that would be taken over would be less. But the Shannon scheme comes along and proposes to take over a ready-made asset. If that was confined to Dublin, and if it were proposed, under the Shannon scheme, to give consumers in Dublin lower rates than, or as favourable as, they are getting now from their own station, the matter might end there. But it does not end there.
The Shannon scheme proposes to deal nationally. It proposes to deal with people who have established undertakings and also with people who have done nothing at all. What the position is going to be as between the consumer in Waterford, who is getting a new service, and the consumers elsewhere, where there is an existing undertaking, is not indicated in this Bill.
We have in the Bill nothing to show whether there will be a flat rate all over the country or whether there will be different rates in different places. Take the case of Dublin. Is it reasonable to say that the Board are entitled to take over a valuable asset created by the consumers of Dublin for the purpose of providing somebody in some other part of the country with current at a price that it could not be sold at but for Dublin? We may take a very broad national view on this question and say that, for the good of the country, consumers in Dublin and Tipperary should pay exactly the same rate — that as we pay the same amount for a stamp in Tipperary as in Dublin, so we should pay the same amount for electricity. But is that fair to the consumers in this case? After all, we are only human beings, and, generally speaking, we have our feelings as regards our own self interests. Is the Shannon scheme going to be worked on the basis I have suggested? If it is, the whole scheme of things will be founded upon Dublin contributing far more than its proportion of the cost of generating current on the Shannon. I can quite follow the Minister's argument in this regard. Assume the Dublin station was valued for £1,500,000 and that the Board were called upon to pay the Corporation of Dublin that money. The difficulty would be to know what the Corporation of Dublin were going to do with that money. Obviously, the Minister says, it cannot go back to the rates. But it would not be beyond the power of the Minister, under this Bill, to provide that the assets taken over by the Board should be valued and that the cost of electricity to consumers in Dublin should be correspondingly lowered because of that capital. Would that be unreasonable?
Is it fair to ignore the work that has been done? I am sure that the public spirit that put up the station, in face of the opposition of "narrow-minded business men," had an outlook, but it had no interest in the affairs of Cork and Tipperary. The foundation of the Dublin station was based on a civic spirit, rather than on a national spirit, which appears to be the main characteristic of this scheme. It is not a question of a cash payment, as that may not be suitable, but I think there should be recognition of the value of the asset handed over to the general control of the Board, and which is going to be operated by this Act. One has always to look to the Minister for explanations. I am afraid we do not get much further by our quest, but it is a good thing to delve into these problems. The Bill does not indicate on what basis charges will be made. One of the well recognised factors in connection with electricity, and which has evolved the system of superstations is, that the larger the volume of current up to a certain point that can be used, the cheaper is the first cost, on account of the larger number of units manufactured at the power station. Dublin is, undoubtedly, the largest consumer of electricity and has the largest development in that respect in the Free State. The Shannon scheme is going to give a bulk supply for the area. Taking Dublin as a unit, is the Minister able to say what the intention is in that respect? Is the Board going to take into consideration consumption in well concentrated places which enables distribution to be undertaken on relatively favourable conditions? Possibly, the reply I will get from the Minister will be "I do not know." The Board are going to be free to do any blessed thing they like. The great thing is they will be able to do what they like as we will have nothing to say to them—"I am sick of this whole business and as soon as I get the Board I will heave it all on to them." There is no suggestion in the Bill as to what principles underlie the whole scheme. However, I would like to hear the Minister's view.
I wish to draw attention to the emphasis laid by the Minister on the point that municipal undertakings are not entitled to make profits. According to the Minister's statement it is wrong for such undertakings to do so. Sections 32 and 36 empower the Board to make regulations to take the place of provisions contained or incorporated in Acts or Orders under which electricity undertakings are at present carried on. It is possible that these regulations might omit some of the valuable provisions contained in such Orders, such as those under which the Dublin Corporation now operates. "After providing for all proper expenses and for reserve to carry the net surplus remaining in any year to the credit of the local rates, or to apply it to the improvement of the district or in reduction of capital moneys." The surplus may not exceed in any year 5 per cent. on the aggregate capital expenditure, and when this is exceeded the Corporation are bound to reduce the price of current. Five per cent. of the aggregate capital expenditure in the city of Dublin would be between £65,000 and £70,000 per annum. This clause and the two clauses that I have referred to indicate that Dublin City may be deprived of this power. While I am anxious to see the Shannon scheme a national success, I am not prepared to see any privilege Dublin holds today taken from it for the benefit of any town or people that did nothing for themselves in the past. There is a profit allowed by the various Acts, and the profit, after certain allowances are made, can go towards various improvements in the city of Dublin. What I greatly fear is that Dublin will not get any benefit in the near future, and that the profits, if any, will be taken from their funds in order to help to build up some other part of the State at the expense of the city of Dublin. That is what I am out to safeguard if I possibly can.
We have heard Deputy Byrne as to what the Corporation have power to do under their Acts. I would not mind leaving, previous to this, power to make a certain amount of profit, and carrying forward that profit to the general credit of the rates under the control of people who say, as Mr. Kettle and Mr. Murphy have said, that it would be immoral to make profits and apply them to easing the general rates and the deduction to be drawn from the existence of such profits is that you have overcharged your consumers. Those are the views held by the City Electrical Engineer and the Town Clerk, and that would be one of the reasons why, in fact, moneys were not carried to the credit of the rates. How often was money carried to the credit of the rates? What, in fact, is Dublin being deprived of which it already enjoys? Deputy Byrne is fearful of the interests of Dublin and the way he seeks to safeguard those interests is to make the Board pay £1,000,000.
Mr. BYRNE
Or some other benefit such as a special rate in the city of Dublin.
That is not in the amendment. The amendment is to the effect that there is to be compensation paid, and compensation is talked of at the rate of £1,000,000. We do not know where that million is to come from.
There are other ways of compensating without paying moneys, such as the provision of cheap electricity.
The compensation referred to in the amendment is that the Dublin municipal undertaking is to be put on the basis of a private company under a statutory authority, That is to be bought out on the basis of having its value assessed as a going concern. We will be told that there is £1,000,000 concerned but the unfortunate consumers are to pay for that. That is Deputy Byrne's idea of protecting the consumers of Dublin. Deputy Hewat has asked me what my idea is as to what is going to happen. I have one idea of what is going to happen and that is that if this amendment is put through it would be prejudicial to the interests of Dublin consumers. I do not think that the Deputy could have founded his arguments on the amendment. Private and public companies are to be put on the same basis for compensation purposes. That is not going to help the Dublin electricity consumers, and, in so far as that is the object of the amendment. I do not think it should be pursued.
The amendment is rather broad.
I do not think it matters whether you say that the name of the owner of the property is a local authority or the Shannon Board. What matters is, how much the consumer has to pay? I listened attentively to the Minister's first speech and I would like to give the impression which I got from it. He seemed to me to be foreshadowing the work of the new Board somewhat in this way, namely, that the Board would keep its accounts, more or less, in an isolated fashion. There would be an account for the Dublin district inasmuch as the Board was taking it over. The same way with Rathmines, where they were taking over the Rathmines installation. The system of charges to be adopted when it came to the user would be to take into account how much would have to be cleared off in each district on account of capital charges. Therefore, in each district in which the users to a large extent cleared off the capital charges, benefit would automatically be given by way of getting current at a reduced rate. That is one easily-imagined way in which the new Board might work. Is that what is in the Minister's mind? If it is, is it foreshadowed in the Bill? They might work on a different plan and put together all the costs of the different capital charges of the different undertakings and bulk them, as well as bulking the cost of production of the current, and in that way distribute the whole cost. Then, users in Waterford, say, would get benefit to the extent to which Dublin users already paid off their capital cost. If that is the plan on which the Board will work I can see, in cases where a considerable amount of capital charges have been wiped out, there will be injustice done, not to the local authority but to the users in that district. I would like the Minister to make it clear as to the way in which he envisages the work of the Board, and whether it is secured by the terminology in the Bill.
The Deputy has correctly interpreted what I think will be the operations of the Board, but it must be stated that that is not laid down. I would like to leave a considerable amount of elasticity to the Board. The largest consumer is Dublin. Dublin will probably be handing over less to the Board in the way of liability than anyone else. We have to consider whether the generation cost on the Shannon is likely to be lower than the cost in Dublin. Is there going to be any economy in central administration than by having 250 undertakings in operation, and is there going to be any benefit to Dublin by the provision of cheap electrical appliances which the Board will be able to give them? Will any consumer in Dublin say whether he has any fear that he is not going to get electricity less than what he is getting it for at the moment? That is all I can say as to what is likely to happen. I could not imagine the Board saying "Dublin is the biggest consumer. It is the area from which we get the least liability. Everything makes for a favourable consideration of Dublin yet we are going to penalise it."
All I can say is that the Deputy must be thinking of a Board that would be appointed under his amendment of yesterday.
The very first principle of the Bill is nationalisation. The Board has no competition whatsoever to face, and why should they not collect money from wherever they liked?
Exactly. The Deputy's mind runs in the way of competition, and profits must be looked to. This is for the sake of keeping down costs. The Board is to operate on the basis of no profit and no gain. Imagine a Board, even Deputy Hewat's Board, that is going to charge a consumer in an area from which they get the least liability a much greater price than any other area. I think that is to be left to the commonsense of the Board. I am not objecting to having some amendment which would indicate that the second part of costs relating to any area would be a consolidated rate. It would be built up on the cost of generation and transmission. What that cost will be could be left to the Board. The House, when talking on the Shannon scheme, seemed to indicate a preference for a flat rate all round for transmission. At any rate, it will be some rate for generation plus the cost of distribution, and that will be based on the liabilities the Board have incurred in taking over any area. When I was having this Bill drafted, and was looking forward to the work the Board would have to do, I always had in mind that the last place to be approached by way of acquisition would be Dublin, because there would be so many difficulties in taking over, and because by deferring the taking over there would be a considerable amount of time available to be devoted to other areas, but it would be in the interest of consumers in Dublin that the Board should acquire Dublin, because it has been stated in the papers for the last couple of days, and by Deputy Byrne here to-night, that no matter what the Town Clerk or the Engineer suggested about the immoral practice in the past, consumers are to be charged not merely for the services but the profits have to be put to ease the general ratepayers. That is a position that is not in the interests of the electricity consumers in Dublin.
We have heard a great deal of discussion as to whether the electric light user should reap the advantage of profit on a station, or whether the ratepayers should reap that advantage. As the House knows, all those stations around Dublin, and to a large extent in the country, have all gone through rather distressing periods. I would like to ask the Minister when there was loss on the running of these stations for ten or twelve years who discharged those losses? The ratepayers, and now when there is a profit on the stations the ratepayers who bore the loss are not going to get the profits. Oh, no; these profits belong to the people who paid for the electric light, but when there is a question of losses they are put on the people who are users of electricity, and on whose behalf the losses were incurred. We forget about that, and the Minister forgets about it, but now when these stations have through the generosity of the ratepayers been put in the position of profit-earning concerns, the ratepayers must not receive advantage of the early charge that was put on them — the money they have earned is the property of the people who paid for the electric light. That is a form of logic that may satisfy the members of the Government. I do not know that it appeals to me, and I do not know that it would appeal to the ordinary ratepayer. Now we are told that the value of the Dublin station as a going concern is not the property of the ratepayers, and that there should be no profits to them from it as a going concern. Another body comes in under this Bill to take over that concern, paying nothing for it.
Supposing a body of capitalists put up the same proposal, do you think the House would pass a Bill transferring the good-will in that particular station to that body of capitalists without indemnifying the Dublin Corporation for what they were taking from them? But this Board, with all the authority given to it by this Bill, is allowed to walk in, take over that place, and pay nothing for it. Does that appear a reasonable or desirable proposition? It appears to satisfy the Government, and the Minister waxes enthusiastic over his proposal. He was most anxious that Deputy Hewat and the other speakers to-night should finish their speeches, so that he could get at their arguments and tear them to pieces. I have listened to the Minister's argument, and I do not know that it is convincing. It certainly was not convincing to me nor I am sure will it be convincing to the Corporation and other local authorities who have in the stations which they established a vested interest that is of considerable value, and that under this Bill is to be wiped out without their getting any indemnity. If the House approves of that proposal there is no use in my offering any further objection. The Minister says that Dublin will get advantage under the new proposal. Let us explore that proposal for a moment.
In addition to the station Dublin has a network of distribution wires for which it has paid. Is Dublin going to get its current laid on at its station or at its boundary; and is it going to have no additional charge put on it for distribution costs? Is Waterford, which has been referred to, going to be treated on the same basis? What will happen is that Waterford will be charged for its current at the boundary, and in addition it will be charged for distribution plus the capital cost of distribution. Is that the method of charge that is to be adopted in the Free State? It is all very well for the Minister to say, "That is a matter for the Board," and that "We are going to deal with Dublin as it ought to be dealt with." When an awkward question is put here we are told "That is not a matter we can settle; it is a question for the Board." This Board seems to be a great place of retreat when a difficult problem arises. The problem arises here. It has been put up to the Minister, and he has given no definite answer whatever.
Progress ordered to be reported.
The Dáil went out of Committee. Progress reported. Committee to sit again on Friday, 1st April.
