Dáil Éireann díospóireacht -
Wednesday, 13 Jul 1955

Vol. 152 No. 6

Committee on Finance. - Electricity (Supply) (Amendment) Bill, 1955—Committee and Final Stages.

Section 1 agreed to.

SECTION 2.

Question proposed: "That Section 2 stand part of the Bill."

Mr. Lemass

On the section. I have not been able to work out how the Minister arrived at the figure that is in this Bill. As I understand the position, there were on the 1st April last, approximately 400 areas left to be completed under the rural electrification scheme and the average cost of completing each area is £33,300. On that basis the total cost of completing the scheme in the 400 areas to which it has yet to be brought will be £13,300,000 approximately. The E.S.B. had, however, under the Act of last year on the 1st April approximately, £3,150,000 unused authorisation so that the additional authority required to enable the scheme to be completed is £10,150,000. The Minister is proposing to provide £9,000,000. Apart from just putting down any figure that may have come into his mind I do not see how the figure in the Bill was arrived at. It is either too little or too much.

If it is intended to provide the E.S.B. now with legislative authority to expend money to the extent required to complete the scheme, then it falls short of that amount by slightly over £1,000,000. If it is intended that the Dáil should have another opportunity of discussing the progress of the board in relation to rural electrification before the construction of the network is completed, then it is too much because only a handful—comparatively speaking—of areas will be left by the time the additional £9,000,000 provided under this Bill is expended.

In that connection I want to query a reference which the Minister made in the Second Reading debate to the E.S.B.'s commitments regarding rural electrification. He stated that their expenditure and commitments by the autumn of this year would have exceeded the limit fixed in the Act of 1954. I do not know what the E.S.B. commitments under the rural electrification scheme have to do with it—I do not even know what they are. So far as the clear terms of the legislation are concerned they have nothing whatever to do with it. They need not be taken into account. The act of 1954 fixed a limit of £16,000,000 on the amount that could be advanced from the Exchequer to the E.S.B. for the purpose of rural electrification. It did not say anything about the board's expenditure or the board's commitments. It merely gave authority to the Minister for Finance to advance up to that amount to the E.S.B. for the purposes of the scheme. There is no reference in this Bill to the board's commitments. The authority here is to expend up to £25,000,000 and when that is spent the board can have and may have commitments, but it is not prevented from having them by any wording here.

I suggested on the Second Reading debate that the Minister was rushing this Bill through the Dáil in the present session for other reasons than he stated. The Bill is not required for the purpose of enabling the rural electrification scheme to be carried on through the second half of this year. The board has unused authority to expend under existing legislation sufficient to keep it going into next year. I think the real reason why the Bill is being rushed now is not as the Minister stated. It is possible, of course, that the cost of construction of the rural electrification network per area will increase beyond the average figure of £33,300 of last year. In that case the position might have to be reviewed and the board might require for the purposes of the scheme more money than I have calculated but it seems, on the face of it, foolish to provide £9,000,000 when £10,150,000 will complete the scheme. There can be no purpose served by that arrangement.

The Minister stated that he expected that the construction of the network would be completed by March, 1959. I said that 12 months ago, more than 12 months ago. I said it when I was introducing the 1954 Bill in February of last year. But that estimate of mine at that time was based upon the expectation that the board would be able to do what it said in its published report it would do, namely, construct the network at a rate of 100 areas per year. The fact that it only completed 75 areas in 1954-55 instead of 100 areas that it intended to complete indicates that either my estimate was wrong or the Minister's estimate is wrong. It certainly means, if the Minister's estimate is to be realised, if the board is to complete construction of the network by March, 1959, as I stated here 15 or 16 months ago, they will have to do very much better in the rate of construction than they did last year.

I know the Minister's problem in this matter. He is anxious to get to the position in which he can report any improvement in the rate of construction as something which he brought about and decline any responsibility for the fact that the board did not succeed last year in constructing the network at the rate which in its published report it said it would achieve. I think the explanation for its failure to reach its target was the financial difficulties created for it by the Government's withholding of the amounts due to the E.S.B. under existing legislation by way of capital grant for the construction of the network. I think the bad weather could also have contributed to slowing down the rate of construction. But, whatever the explanation is, we have not got it from the Minister. He did not attempt, in any way, to explain to the House how it was that the board, which in its report for 1953 said it would construct the rural electrification network at the rate of 100 areas per annum in 1954, only did 75 per cent. of that rate in that year. Some explanation is, I think, due to the Dáil.

In that connection I want to say something that I think should be said. This is the first time that a Bill of this kind dealing with the activities of the E.S.B. was brought to the Dáil without the circulation of a White Paper explanatory of the Bill and giving details of the board's plans and programme. I do not know why the Minister decided not to circulate with this Bill the customary report on the activities of the E.S.B. I will raise that point again in connection with the next section because it seems to me there must be, if that section is justified at all, some failure on the part of the board to proceed with other parts of their development programme at the rate contemplated in 1953. But, if there had been circulated the customary White Paper associated with this Bill, presumably that would have contained the explanation of the reasons why the board last year was not able to proceed with the construction of the rural network at the rate which they stated in the previously published report they hoped to achieve. Perhaps the Minister will give us the explanation now.

Mr. Norton

Let me assure Deputy Lemass that I have no ulterior motive of any kind in getting this Bill through the House before the Adjournment. I think, however, it is desirable that whatever discussion there is on this Bill should be cleared up before the E.S.B. goes to the country for a loan rather than that we should be asking money for the E.S.B. for a national undertaking at the same time when we here, who ought to be encouraging the E.S.B. to undertake something we want done, are engaged in what could, and what I hope will not, develop into a squabble as to whether the E.S.B. is right in this way or wrong in the other way.

The most vital mistake we could make is to imagine that any particular Party in this House owns the E.S.B. I would be as much gratified if the E.S.B. made progress under Fianna Fáil as I am gratified that it is making progress under the inter-Party Government. I do not want to seek any credit for the progress they make while I am Minister for Industry and Commerce. I would be willing to share the credit with every member of this House or with any other Party in the State. It is immaterial from the point of view of national well-being and the people's welfare what Government is in office so long as the objective set before the E.S.B. is achieved.

If Deputy Lemass wants to take credit for anything the E.S.B. did during his period of office I will not, in the slightest, begrudge any ration of credit which he claims for himself during that period, nor will I waste any time detracting from it. What I would like to see is that the E.S.B. would be regarded as an undertaking belonging to the whole nation, not belonging to any single Party and not claimed by any single Party, and that we would all aid, whether in Government or in Opposition, in making the E.S.B. the most efficient organisation we can make it.

On the question as to why the E.S.B. did not attain the development of 100 rural areas in 1954-55, I understand their position to be that the board said in its report for 1953-54 that it intended to effect a further increase in the course of the coming year, bringing the rate of construction to 100 areas per annum. Note that: "bringing the rate of construction to 100 areas per annum". The Deputy alleges this meant the board promised to develop 100 areas in 1954-55. Now it is a matter for the Deputy to put any interpretation he likes on this report. It was not written by me. It was written by a board which was functioning when he was in office. But I do not think it bears the interpretation the Deputy has attempted to give it, namely, that it meant 100 areas would be constructed.

It seems to me that what the board promised to do was to reach a position in which development would proceed at the rate of 100 areas per annum but not actually to develop 100 areas. In fact the position of developing 100 areas per annum was not attained until January, 1955. They did not attain it in 1954 but they have attained it in January, 1955, and from inquiries which I have made the position now is that between January and June, 1955, they have developed 52 areas. If that rate is continued during the year they will pass the 100 areas in the current calendar year. Whether they will fall back somewhat in the second part of the year, due to weather or other conditions, I cannot say, but this is what they are doing at the moment. Instead of putting the microscope on this matter, I think we ought to put the telescope on it and take an objective view of E.S.B. activities. I feel satisfied that the E.S.B. are doing the work which this House has assigned to it. Who is in office when that is happening is not an issue with which I am going to concern myself very much. If others want to do it they are welcome to do so. I am satisfied to see the E.S.B. doing this national work on behalf of the people generally.

On the question as to why we increased the allocation for rural electrification from £16,000,000 to £25,000,000, the present position is that within the existing limit of £16,000,000 the total already advanced to the board is £13.6 million and in the year 1955-56 the board's requirements for rural electrification are expected to total £4,000,000. At the end of May the board's total expenditure on commitments in respect of the schemes was £15,057,000. Therefore, at the end of May the board was running towards the position at which it was likely to exhaust the £16,000,000 limit set by this House and could possibly—I do not say actually—by the autumn have reached the position at which it had come level with the £16,000,000 which the House authorised the board to expend. Hence the Government's decision to make the board responsible for meeting rural electrification charges contained in this Bill. At the same time it was decided to give the board increased borrowing powers, raising the amount available for its purposes from £16,000,000 to £25,000,000, and that has been done.

The £25,000,000 is not claimed to be a precise mathematical figure. By current estimates of progress we think it will carry the board to about 1958. There might be a short fall there and there might not, but in any case this will carry the board along with funds to undertake this work until 1958. Then the money so voted by this House will have been exhausted and, in accordance with the customary practice, a Bill will be promoted here for the purpose of giving the board what additional money it needs. The House will then have an opportunity of surveying the work done by the board, ascertaining the stage which has been reached and, if it wishes, indicating to the Government what general direction the board ought to take for the completion of the programme. Those are the simple economics of it. There is no mystery about it. It is a candid, plain statement of what the position is and an explanation of why £25,000,000 was set as a figure which will carry the board through in its work for the next three years.

Mr. Lemass

On the Minister's general observations I just want to say that the rural electrification scheme was a good scheme. It secured the approval of all Deputies in the Dáil at the time. But let us be clear about this. The Minister is changing the scheme and I think he is disimproving it considerably. It is because I do not think he is doing it voluntarily, it is because I think he was rushed into accepting that arrangement by some of his Coalition colleagues that I am critical of him—and he is the only member of the Government I could criticise in that case.

Mr. O'Leary

The Deputy is always doing that.

Mr. Lemass

That is the function of an Opposition Deputy.

Mr. Norton

Even if I had not done that, it would hardly have saved me.

Mr. Lemass

I will say what I have to say on Section 4 of the Bill, which is the really relevant section. At the moment I am merely trying to get the position clarified. I want to know how much it is anticipated it will cost the board to complete the rural electrification network. On my calculation, and it is based on the assumption that there are 400 areas to be done and the average cost of an area is £33,300, it will cost £10,158,000 allowing for what the board has in the kitty unused of the £16,000,000 authorised last year. On that basis, the additional amount required to enable the board to complete the rural electrification programme, without any further legislation, is £10,150,000. The Minister is giving £9,000,000. Why not give them the whole £10,500,000 they require or, alternatively, give them less in order to ensure that the Dáil will have another opportunity between this and the completion of the scheme to criticise if it wants to criticise——

Mr. Norton

It will have that opportunity under this. The £9,000,000 will not complete the work.

Mr. Lemass

If my calculation is correct, by the time the E.S.B. will be coming back for further authorisation there will only be about 30 areas left to be done out of the 400.

Mr. Norton

Can we not even get joy and gratification out of that?

Mr. Lemass

I am merely trying to find out how this figure of £9,000,000 was arrived at. It seems to me to be either too little or too much on any basis. The Minister is confusing that calculation to a considerable extent by talking about the board's commitments. Commitments have nothing whatever to do with it. What are the board's commitments? I do not even understand the term. I can understand the board having commitments ahead in connection with a power station which might take three years to complete. What commitments has it in connection with rural electricity development except in relation to some supplies of cable and transformers?

Mr. Norton

Take those.

Mr. Lemass

They can only be of very insignificant dimensions. But, anyway, they have nothing whatever to do with it. Look at the wording of the 1954 Act. That Act says that the Minister for Finance may advance to the E.S.B. up to £16,000,000 for the purpose of the rural electrification scheme. It does not even limit what the board may spend on the rural electrification scheme, much less what it commits itself to spend. The Minister is not limiting the board under this Bill to keep its total expenditure and commitments within £25,000,000. It merely states in this Bill that the board must not spend more than £25,000,000 and I think that is the proper way to phrase the section. Therefore, all this reference to commitments is merely an unnecessary complication because commitments do not arise at all.

Mr. Norton

Commitment is interpreted in the sense that the board clearly owes certain sums of money which have to be paid and it is in process of entering into activities which, in due course, will take the form of an account furnished.

Mr. Lemass

May I remind the Minister that when he became Minister the board had spent a great deal of money on the rural electrification scheme which the Government owed it and has not paid since? Would the Minister explain how they did that? It is quite clear that the board is not limited by any legislation in the amount it spends on rural electrification it is limited in the amount it can borrow from the Exchequer for that purpose. However, would the Minister tell us now what is the present estimate of the total cost of completing the rural electrification network as from 1st April last or as from the present date?

Mr. Norton

I have told the Deputy that the board is about half-way through its schemes. The Deputy can theorise as to about how much it will cost to do the rest. That depends on the rate of progress. That depends on the cost of materials. That depends on the physical difficulties.

Mr. Lemass

But surely somebody has made an estimate.

Mr. Norton

I know that, but I have not got the information here. I am approaching it from the standpoint of how much more the board will need to carry on its activities until 1958.

Mr. Lemass

Would the Minister answer this question: how did he arrive at the figure of £25,000,000?

Mr. Norton

By making a calculation that with the sum of money already spent, the sum of money the board will have to pay this year and the anticipated progress in the next three years, a round sum of about £25,000,000 will be necessary. Of course, if the board does not need the £25,000,000 it will not spend £25,000,000. If the board finds that before 1958 it has spent the £25,000,000 it will so indicate to the Department of Industry and Commerce and steps will be taken to put it in funds again. In any case one may be sure, since the accounts of the board are audited, that moneys will not be paid away where they are not due and, from that standpoint, all these questions have merely an academic meaning and have no real value in a sense. If the Deputy wants on the next Stage of the Bill, if we defer the Bill until to-morrow, to get a calculation made for his personal satisfaction as to what the anticipated expenditure will be for the completion of the scheme, and he can then fill in all the gaps he likes between 1959 and the date on which the scheme will be completed, if that satisfies the Deputy's thirst I will get him all the information he wants.

Mr. MacEntee

As a matter of principle I want to assert right now that this is not an academic question. The implication of the Minister's remarks is that if the E.S.B. comes and asks the Dáil to sanction an expenditure of £9,000,000 on rural electrification our job is to give them that money without asking any questions. But surely we are entitled to know how much they think it will cost per area. Surely we are entitled to ask if they have considered fully the efficiency of their construction methods. Surely we are entitled to ask whether it is possible to get the job done better or more cheaply. Are we not entitled to ask them at this stage to calculate how much it will take them to complete the job? These are all perfectly legitimate questions which the members of a company would ask the board of directors if they approached the shareholders for more money. We stand in the position of directors of a company, the board of which is coming to ask for authority to spend more money. These questions, therefore, arise and they should be answered.

Mr. Norton

If the Deputy is satisfied to get the information to-morrow I will not press for the remaining Stages to-day. I will get the information for him between now and to-morrow.

Mr. MacEntee

Surely that is an absurd attitude. Surely, if the Minister himself is responsible for coming to the House and asking the House to spend more money than the Dáil has already authorised the board to spend, he ought to have satisfied himself as to the basis upon which this request is put forward. This is the first time I have heard of a public corporation, a statutory undertaking, being able to come to the Minister for Industry and Commerce, the Minister responsible to the Dáil for the finances of that undertaking—let there be no mistake about that!—and say to him: "We want £25,000,000" and he does not even ask them: "What do you want it for?" Or, perhaps, they say they want it for rural electrification and he does not take the trouble to ask the board: "How are you going to spend the £25,000,000? How many areas are you going to do for that sum? How much will each area cost?"

As Deputy Lemass has said, that is what any person with a sense of responsibility on being asked to finance a project would at once want to know. He would want to know a certain amount; he would want to have at least some facts put before him. Apparently the Minister has not got those facts. Apparently he is so contemptuous of the Dáil, so confident that he will be supported in the Lobby by the dumb troops in the Coalition, that he has not even got the information that he ought to have in his brief. There never was a Minister who came to the Dáil and said: "If you give me the Committee Stage of the Bill to-night I will try to give you the information you asked for, and which I ought to have had, to-morrow." I think that is treating the Dáil and the general public with contempt.

The Minister said that one of the reasons why he was introducing the Bill before the Dáil adjourns is to facilitate the E.S.B. in raising money from the public. Does anyone think the sort of exhibition which the Minister has made of himself here this evening will help the E.S.B. to get money from the lending public? Evidently the Minister thinks it will because otherwise he would not be introducing this Bill telling us that the E.S.B. has asked him for £25,000,000: "They have told me they are going to spend £25,000,000 on rural electrification but I do not know what the basis of their calculation is. All I am telling them is to go and get the money from the public and they can spend up to £25,000,000 on this particular project." I think that is really treating the Dáil with contempt. It is treating the public with contempt also.

Mr. O'Leary

In other words, the Deputy is objecting to it.

Mr. MacEntee

I am objecting to the fact that the Minister comes in here and does not know his own mind.

Question put and agreed to.

SECTION 3.

Question proposed: "That Section 3 stand part of the Bill."

Mr. Lemass

This is the most inexplicable section of all. In the Act brought to the Dáil last year by me the E.S.B. was authorised to borrow from the public by the issue of stock up to £25,000,000 for the purpose of its development other than rural electrification. When I brought that Bill into the Dáil I explained that the board would in fact enter into commitments considerably in excess of that sum, but that its actual expenditure on development work up to March next would be £25,000,000, and that that would be covered by the money borrowed through the issue of stock. I want the House to understand first of all that the estimate submitted by the board to me was that its development other than rural electrification would involve it in expenditure of £25,000,000 up to March, 1956, and that the total development which it would begin during that period would involve a great deal more expenditure—that the £25,000,000 was only enough to meet its actual outgoings to March, 1956. Now the Minister brings a Bill in here which says that the E.S.B. may, within that limit of £25,000,000, borrow money for rural electrification.

Under the 1954 Act rural electrification was specifically excluded from the purposes for which the board could borrow, the reason being that rural electrification was a subsidised service and that it was thought to be inappropriate that the public should be asked to subscribe to a subsidised service. The Minister now has no objection to letting the public be asked to subscribe capital for a losing service, which rural electrification will now be. This Bill has nothing whatever to do with the forthcoming E.S.B. loan; the authority of the 1954 Act was ample for that. The Act gave the board the right to borrow from the public £25,000,000 for purposes other than rural electrification. No legislation relating to rural electrification has any bearing upon the board's power to issue that loan. It now becomes necessary to ask the Minister how it is expected that there will be available within that £25,000,000 limit a margin which can be used to finance the rural electrification scheme. Does it mean the board's general development programme is proceeding more slowly than was contemplated in 1953?

Mind you, there are some indications that that is so and I think the House should be given particulars of any alteration in the dates of commissioning of new stations which were mentioned in the board's report for 1952-53. In that report the board set out a programme for the generating stations to be constructed up to 1958 and gave, in respect of each of these stations, the probable commissioning year. Has there been any alteration in that construction programme, and, if not, how is it that it is expected the board will not spend on that work what it estimated in 1953 it would require to spend before March, 1956?

There is the alternative that the Minister is contemplating that the board will again draw upon the Exchequer for its capital needs—that it will not rely entirely upon moneys borrowed from the public under the authority of the 1954 Act. If that is so, the House should be informed. Certainly when the 1954 Act was submitted to the Dáil the House was left under the impression that the financing of the board's development other than the rural electrification scheme would not again be a matter for the Exchequer—that the board would have authority to get the money it required for that purpose by the issue of stock subject to limits laid down by the Dáil.

I want to draw attention to the failure of the Minister to circulate the customary White Paper with this Bill. We should have got this information by White Paper as was done on every previous occasion. Had we got that information many of these questions could have been avoided but let us assume that this section is not meant only as a gesture; let us assume that it is intended that the board's rural electrification work will continue to be financed from the Exchequer and that the full £25,000,000 which the board was authorised to raise under the 1954 Act will be expended, as was intended, on general development before March next.

Does that mean we are going to have another E.S.B. Amendment Bill in the autumn session? Unless the board is very far behind in its generation programme then there must be need for new legislation before March next. Why was not this Bill availed of to increase the authority of the board to borrow? There are matters on which the House needs information because there is the implication in this Bill that the board's generation programme is not working according to plan and that some of the money intended to be used for that programme can be diverted to rural electrification.

Mr. Norton

I do not know where the Deputy got the material on which he built up that kind of a case. Section 4 of the 1954 Act provides:—

"The Board may, with the consent of the Minister for Finance and the Minister, borrow money by means of the creation of stock or other forms of security to be issued, transferred, dealt with and redeemed in such manner and on such terms and conditions as the Board, with the consents aforesaid, may determine."

But the moneys required for rural electrification were specifically excluded from the right to borrow for the reason that the service was a subsidised one and that it was considered inappropriate that money should be sought from investors for such a service. The moneys required for that service, therefore, could be acquired only from the Central Fund or from the board's own resources—from whatever reserves they have for superannuation and such like provisions. But with the abolition of the subsidy for rural electrification the distinction between rural and non-rural capital requirements now completely disappears and it is clearly desirable that the board should obtain as many as possible of its capital requirements from sources other than the Exchequer.

In view of that, it is proposed to allow the board to get its capital requirements for its rural and non-rural activities from the general capital, and the limits of prohibition for doing that are renewed by this particular section. Subsidisation of rural electrification has gone. There is no difference between rural and non-rural electrification and therefore there is no need for the discrimination shown in the 1954 Act. The board may now go out and borrow its capital requirement. Its ability to finance its rural programme was clearly demonstrated when we discussed that matter on the Second Reading of the Bill.

Mr. Lemass

The Minister has missed the point altogether. The 1954 Act fixed a limit of £25,000,000 as the amount which the board could borrow by the issue of its own stock. The Minister does not propose to alter that limit in the Bill. Therefore, the board is still in the position that the maximum amount which it can raise by the issue of stock is £25,000,000. When the figure was put into the 1954 Act it was estimated that it would be enough, but no more than enough, to meet the actual outgoings of the board on its generation programme up to March, 1956.

I had explained to the Dáil that, by March, 1956, its commitments under that programme would be substantially greater and that the £25,000,000 was intended to cover only the actual expenditure which it would be forced to undertake before that date. If that is so, where is the margin for the financing of rural electrification out of that £25,000,000? The Minister is saying that the rural electrification finances will also be drawn from that source, and that, when the board issues its stock, the proceeds of that issue will be available for the generation programme and the rural electrification programme. But there is not enough unless the generation programme is behind schedule. Is that so?

Mr. Norton

No.

Mr. Lemass

Is it, in fact, intended that no part of the £25,000,000 which the board is authorised to raise will in fact be used on rural electrification? Unless the generation programme has fallen behind, the board will still have to go back to the Exchequer for the whole of the amount required for rural electrification. Then the section is unnecessary and will continue to be unnecessary until legislation is introduced as it must be before March— unless the generation programme is not up to date—to raise the limit of the £25,000,000 fixed in the 1954 Act for the issue of stock by the board.

Mr. Norton

I am assuming that the Deputy has the fear that somewhere there is lurking a plan for the curtailment of the board's programme.

Mr. Lemass

I want to know is it happening, if the board will still want the £25,000,000 before March?

Mr. Norton

The board can get it. The board's position has been somewhat changed by new sources of borrowing and new sources by which money is available to it. That is explained by the fact that depreciation reserves and borrowings from the Superannuation Fund are available to the board.

Mr. Lemass

That was calculated in the Estimate.

Mr. Norton

That is the explanation which reduced borrowings by the board for the year 1953-54. In addition to that, the board is empowered by Section 3 of the 1954 Act to make temporary borrowings, and under this the board is authorised to borrow to a limit of £5,000,000 up to December next. I understand that this authorisation has been availed of to the extent of £3,000,000. In addition to that, there is the buoyant revenue position of the board, together with general savings on fuel costs during the year. These have enabled the board to reduce its demand on the sources normally used for capital expenditure. With these sources of money available to it, the board has not been drawing as it might be drawing were these moneys not available to it.

Mr. Lemass

The effect of what the Minister says is that the board overestimated its cash needs for its generation programme. What the board said to me was that, taking into account all the resources that would be available to it, it would need in cash to meet actual outgoings in cash before March, 1956, £25,000,000, and consequently the 1954 Act empowered them to borrow up to £25,000,000. The board fully recognised that its commitments under the generation programme would be substantially larger. It was estimated that its actual cash outgoings by March would be £25,000,000. Unless the board has fallen behind with its generation programme it will still need £25,000,000 in cash for that programme.

The only other explanation is that its estimate was wrong. I do not think that the trend of prices for electrical equipment has been downward since the estimate was prepared. The board may have been able to buy advantageously, but, nevertheless, the general trend has been at least stationary, certainly not downwards. If its estimate of February, 1954, is correct, there is no margin there available to it for rural electrification. Does the Minister contemplate that the board will have to go to the Exchequer for finance for rural electrification in excess of the £25,000,000 which it is authorised to borrow on the issue of its own stock?

Mr. Norton

Not on present indications.

Mr. MacEntee

The Minister did attempt to justify the introduction of this Bill without the usual explanatory memorandum by saying that his reason for bringing it in late in the session was that he was anxious to facilitate the board in raising from the public the finances which it required. I should like the Minister to read his speech to-morrow and see if he thinks his statement is likely to conduce to that degree of public confidence in the operations of the board which would enable it to raise this money.

What has the Minister told us this evening?—that the board is being compelled by this Bill to borrow from the public and to finance in toto a service which is entirely uneconomic, which can never pay its way, a fact which was recognised by the Fianna Fáil Government when they started the rural electrification scheme and decided that, in order to undertake it, it would be necessary to subsidise the capital cost to the extent of 50 per cent.

The Minister has told the lending public this evening that among the purposes for which they would be asked to lend money to the board is in order that the board may undertake an activity which, as I have said, will never be economic, an activity which will lose money at such a rate that the economists and the engineers of the board and the Minister who was primarily concerned with the activities of the board, the Minister for Finance, decided that they would have to subsidise it as I have said to the extent of 50 per cent.

Apart altogether from the question as to whether the board is going to get money from the public for that purpose, what is going to happen on the figures that have been given to the House? We have been told by Deputy Lemass that the figure of £25,000,000, which appeared in the 1954 Act, was very narrowly calculated, that, in fact, it was the bare amount which would finance the operations of the board's capital programme up to 1956. The Minister has told us that, so far as the generation programme of the board is concerned and so far as expenditure upon what may be described as the normal activities of the board is concerned, these are not being curbed or restricted in any way. Accordingly, money is allowed to flow out from the board to meet commitments which it had entered into under contract.

I cannot see that any one of the outside sources of finance to which the Minister has referred could provide any really significant sum for the purpose of defraying the continuing and, as I think it will be, the increasing cost of the rural electrification programme. The Minister has said that the board has been fortunate in so far as it has been enabled to make very substantial economies in regard to the use of fuel. Well, that was due entirely to the exceptional conditions which prevailed last year and which, to some extent, prevailed up to recently. But have we any assurance that the abnormal rainfall of last year will be continued from this until the end of the year? Even if we had such an assurance, would it be sufficient to offset the certain rise which will take place in the price of fuel?

The Minister has referred to the fact that the board was able to save on fuel costs during 1954 and perhaps during part of 1955. Does he say, in face of the statement which has been made elsewhere, in face of the fact that the cost of coal, even to the British user, is going up by, I think, 18½ per cent., that the board will secure that economy next year? Therefore, how much money will be set free to the board to spend on its capital programme and to meet the inevitable deficiency which, I think, will arise in regard to the finance required, not merely to complete, but to carry on the rural electrification scheme?

It would seem to me that the real purpose of this section is to enable the Minister to put a brake on the carrying-out of the original rural electrification programme, because he can quite easily say to the board—in fact he is going to put the board in this situation —"You have entered into commitments with the suppliers for generating plant. You have entered into commitments with building contractors for building your stations. You have entered into commitments for additional transmission lines. You have entered into commitments with contractors for switch gear. All of these are contracts which you will have to honour and pay the moment the contractor says: ‘I have the plants ready or part of the plant ready for shipment. I have part of the plant ready and part has already been delivered.' You have to pay for the materials almost on the nail."

Therefore, the board is being put in this situation that, having entered into these contracts which it has no way of getting out of, if the money is not forthcoming from some other source than the borrowing public, then it has got to close down on some one of its activities. The only one to which it is not committed up to the hilt is the rural electrification programme because it, by comparison with the other activities of the board, is a minor activity. It does not require anything like the same capital expenditure so far as the network is concerned and they can slow down progress on the erection of the rural electrification network to that extent which will enable them just to carry on without having to fail in meeting their commitments under contract to the suppliers of plant and equipment.

I think that is one of the reasons why this section is being introduced here. I cannot see any other reason for it except, as I have said, to put the board in the situation that it can always say and it will say to the Minister and the Minister will come here and say to the House: "Well, the board is very sorry but it is just not able to finance the rural electrification scheme in the circumstances in which it finds itself. It has now got to pay more for fuel than it paid in 1954. Other costs have gone up correspondingly and the £25,000,000 that we originally voted in 1954 will be barely enough to enable the board to meet its obligations under contract to those who are at the moment manufacturing and will ultimately erect the machinery which the board requires."

Mr. Norton

Of course, this is the same kind of Bleak Street speech that we had from Deputy MacEntee on the last occasion.

Mr. MacEntee

Answer it, anyhow.

Mr. Norton

I will come to answer it but I like to be dealing with a normally healthy mind when I am dealing with a matter like this. The Deputy is in his most pessimistic mood this evening. He is talking about dry summers going to descend on us in perpetuity and prophesying that there will be a scarcity of water which the board could cash for fuel and he prophesied, as is customary, other disasters, all of which have the great merit that they never happen.

The position is the same as I said it would be when I discussed this matter on the Second Reading. The board has had substantial surpluses. The board had its biggest-ever surplus this year.

Mr. MacEntee

Will the Minister put a figure on the surpluses?

Mr. Norton

I thought the Deputy knew something about the E.S.B. Apparently, he does not. He talks as learnedly as if he did.

Mr. MacEntee

Other members of the House are entitled to have this information.

Mr. Norton

I do not propose to be a librarian for Deputy MacEntee. I will invite him to go to the Library and look up the E.S.B. accounts.

Mr. Lemass

You will not find it there.

Mr. MacEntee

You will not find it there.

Mr. Lemass

Not for 1954.

Mr. Norton

Which proves that you did not even go to the trouble of looking for them.

Mr. Lemass

Not for 1954-55.

Mr. Norton

Go and look at the surpluses since 1939 and you will be surprised at how healthy the E.S.B. has been financially all during these years.

Mr. MacEntee

Nobody is suggesting that it is not.

Mr. Norton

The Deputy at one time, of course, described this excellent national organisation as a white elephant. So, anybody listening to Deputy MacEntee on the E.S.B. must remember the jaundiced eyes through which the Deputy looks at the E.S.B.

Mr. Lemass

If the eyes were jaundiced, it would not be white.

Mr. MacEntee

It might be pink.

Mr. Norton

Deputy MacEntee has seen extraordinary things before, as Deputy Lemass knows, and probably was more bewildered at what he saw than I have been.

Mr. MacEntee

Now get back to the question.

Mr. Norton

The fact of the matte is that the E.S.B. has a substantial surplus, has had a substantial surplus had in the current year a surplus or its rural account for the first time and under this Bill, it can now finance the rural electrification scheme out of it funds and it will not need any subsidy from the taxpayer. Here is an under taking, an excellent undertaking nationally, an excellent undertaking economically, an excellent undertaking financially, able to pay its way treatec as a unit and yet, in spite of the fact that it can pay its way treated as a unit, that it will have a surplus, Deputy MacEntee still wants to pay a subsidy to an organisation which, treated as a unit, has a very substantial surplus. I think that is the economics of a lunatic asylum— nothing else—to give a subsidy to a body which is already yielding a substantial surplus.

Mr. Lemass

I suggest that the Minister is making on Section 3 the speech he could relevantly make on Section 4.

Mr. Norton

I did not start this discussion on Section 3. It was widened by what was said before I spoke and, of course, Deputy MacEntee could not be controlled in any reference he is making on any section of this Bill and probably will not be controlled even on the Title.

The fact of the matter is that that is the reason for dropping the rural subsidy. Why should the taxpayer— why should Deputy MacEntee's wealthy constituents in Ballsbridge, in whom the Deputy takes such an interest in election time—be asked to pay a subsidy to the E.S.B. when the E.S.B. in its published accounts shows that it does not need a subsidy? In this Bill we are making sure that the E.S.B. will pay for rural electrification and non-rural electrification and, taking both of them together, this excellent organisation will pay on the nail, as Deputy MacEntee says, for all it orders, for all it gets and for all the work it carries out. It can do it easily under this Bill. I am sorry if that annoys Deputy MacEntee, but the facts of history cannot be changed merely to please Deputy MacEntee. The facts show it can do that and we are asking that it should be done.

Mr. Lemass

We will discuss what the Minister is doing with the surplus on the rural electrification account when we come to the next section. He seems to have made a shocking mess of it. We are dealing here with the capital needs of the board. He has not clarified the point I raised but one remark of his offers explanation. The Act of 1954 empowered the board to borrow on a temporary basis pending the issue of its stock up to a limit sanctioned by the Minister for Finance. The Minister now says that, over and above meeting its requirements for generation development up to March next, £25,000,000 will also meet the capital requirements of the board for rural electrification.

The Minister reminded me that the Act of 1954 empowered the board to borrow temporarily up to whatever limit was agreed with the Minister for Finance. He mentioned £3,000,000 as representing temporary borrowings to date. That is the first time the House has got that information that the board —through its bankers or otherwise— was authorised to borrow £5,000,000 on a temporary basis pending the issue of its stock.

I think the board will be in a real difficulty in financing its requirements up to March next. It has authority for the borrowing of £25,000,000 by the issue of its stock. It was contemplated that a substantial part of that sum would be raised last year but the E.S.B. were warned off the market by the Minister for Finance who wanted all the money that was available for investment in trustee securities for his own loan. The Government would not allow the board to issue stock last year. It now has nine months left in which to raise that amount of money by the issue of stock. I do not think any Deputy in the House feels that circumstances in this country will permit of the subscription of £25,000,000 for trustee stock in a single year. The board is very unlikely to get its full requirements by the issue of stock unless that stock is underwritten by the Exchequer or by the banks and the underwriters are prepared to hold a substantial part of it.

Experience over a number of years has suggested that £25,000,000 is more than is available one year after another for investment in trustee securities In that case, the board presumably will be authorised to borrow temporarily even more than the £5,000,000 that it has borrowed up to date. To what extent is it contemplated that the board should avail of that power of temporary borrowing? I have no objection whatever to the board's using that power quite extensively. When framing that Act I contemplated it would be the normal practice of the board to build up temporary debt pending the issue of stock but it seems that the board will now have to carry a substantial burden of short-term debt for a considerable time ahead. Remember that the £25,000,000 was estimated to be barely enough to meet requirements until next March. Before that, we shall have to have fresh legislation and authorisation to borrow a larger sum.

If the board is again warned off the capital market by the Minister for Finance next year, there will be many difficulties. The fulfilment of the board's commitments is important to every aspect of our economic life. The Minister is gravely mistaken if he contemplates that the board—in addition to financing, by borrowing from the public, the erection of new generating stations—will also finance the rural electrification scheme. It cannot be done. The Exchequer will just have to carry the burden whether it does so by way of loan or grant. Otherwise, we shall have to go on the assumption that the board's activities will be slowed down.

Mr. Norton

It will not be slowed down.

Question put and agreed to.

SECTION 4.

Question proposed: "That Section 4 stand part of the Bill."

Mr. Lemass

I am accepting the ruling of the Chair that my amendments to this section are out of order. I have no option. However, I want to protest against the very bad drafting of this Bill. The main purpose of this Bill was to withdraw the rural electrification subsidy. The Bill should have been framed in such a way that the Dáil could take a vote upon that single issue. By putting sub-section (1) into Section 4—it is really just a provision consequential on Section 2 and should have been incorporated in Section 2 —the draftsman or the Minister has effectively precluded an Opposition Deputy from dividing the House on the single issue of the withdrawal of the rural electrification subsidy. I propose to divide the House on the section, but I want to make it quite clear that my objection to the section is confined to sub-sections (2) and (3), the effect of which, if passed, will be to withdraw retrospectively the subsidy given for the rural electrification scheme—the capital grant payable under the 1945 Act.

Let us now turn to the surplus in the rural revenue account. The Minister told us—we have not yet seen the accounts of the board for 1954-55—that the rural revenue account of the board showed a surplus in that year of some £40,000. First of all, may I point out that that surplus was due to the fact that only half of the capital invested in the construction of the network was a charge on the board? It only had to pay interest and provide for sinking fund on half the capital invested. The effect of this retrospective legislation is to add, according to the Minister for Finance, £245,000 to the debit side of that account. That wipes out the surplus and leaves the board starting off the second half of the rural electrification programme with a deficit of some £200,000 per year in its rural revenue account. What will happen after that? It is a simple matter of mathematics. I think that, on the Second Reading, the Minister tried to confuse the Dáil as to the consequences of what the Bill proposes to do. Any Deputy who can add can work this out for himself. On the average, it costs £33,300 to erect the network in each area.

In order to avoid loss on that expenditure, the board must get back, as the Minister has stated, in fixed charge revenue 12 per cent. of the outlay. Apart altogether from what the consumer pays per unit for current, he has to pay a fixed charge based upon his valuation and the sum total of the fixed charges from each area must equal 12 per cent. of the cost of constructing the network in the area if the board is to avoid loss. Again, it is only a simple question of mathematics but, if my calcuations are correct, 12 per cent. of £33,300 is £3,996. That is the sum which the board has to get on the average in each area in fixed charge revenue if it is not to lose money on the construction of the network. In fact, the board got last year from 75 areas that were completed in that year an average fixed charge revenue of £2,070. The average fixed charge revenue per area fell short of the amount required by £1,926. There are 400 areas yet to be completed and if the board is going to lose £1,926 per area, its total deficiency, when these 400 areas are completed, will be £770,000. To that has to be added the £245,000 additional charge placed upon the board by reason of the Government's decision not merely to withdraw the subsidy but to withdraw it retrospectively, so that the total deficiency on the rural electrification account in respect of fixed charge revenue will be £1,015,000 a year.

The surplus of £40,000 on the rural revenue account looks very insignificant now. By the time this rural electrification scheme is completed, the rural revenue account will, because of the Government's decision to withdraw the capital grants and because the board has been unable to get in fixed charge revenue the 12 per cent. of capital cost required, show per year a deficiency of £1,015,000, if my calculation is correct. The Minister says we do not have to worry about that, that the board had a surplus on its general revenue in 1954-55 of £928,000.

Let us see how real that surplus is and to what extent it is available to meet this anticipated deficiency on the completion of the scheme of £1,000,000 per year in the rural revenue account.

Mr. O'Leary

You are painting a bad picture for rural electrification.

Mr. Lemass

I am trying to get the Deputy to understand what his Government is doing.

Mr. O'Leary

No matter how many times you say it, the people do not believe you.

Mr. Lemass

Anybody who can do simple arithmetic will have to accept these calculations. That sum of £920,000 is not available in full to meet losses and it is a complete distortion of the picture to suggest that it is. The Minister said that there had to be deducted from it in respect of income-tax payable on the previous year's surplus, £100,000. The previous year's surplus was £242,000 and, on the surplus for 1954-55, the income-tax charge to be deducted will be very much greater than the deduction in the present year. Income-tax is paid one year in arrear. I do not profess to be an expert on income-tax, but a rough and ready calculation suggests that next year the income-tax but a rough and ready surplus revenue will be about £300,000. That already reduces the amount of the surplus very substantially—by one-third.

Let us find out why the board thinks this surplus has emerged at all. The board pointed out in its 1952-53 report that weather conditions from its point of view were exceedingly favourable and we know from bitter experience that they were, from the board's point of view, equally favourable in 1954. 1954 was one of the wettest years on record and the board even had difficulty in utilising all the water power available to it as it had in 1953. The board estimated its saving on fuel costs in 1953, because of the wet weather, to amount to £537,000. If this year is a normal year so far as weather conditions are concerned, the higher cost of fuel alone will wipe out the whole of that surplus after the income-tax charge has been met.

The board used in 1952-53, which was a wet year, £3,000,000 worth of fuel. I do not know if Deputies have appreciated the significance of the fuel charge in the board's accounts. If it has now to go back to normal fuel usage and can still buy coal and turf in 1955 at the price at which it was able to buy in 1953, the surplus which we are told will be shown in the 1954-55 accounts will disappear. But can the board buy in this year coal and turf at the price at which it was able to buy in 1953? I do not know what the Bord na Móna accounts are going to show but I shall be very much surprised if its production to date is not very far short of its normal standard production in previous years.

We know that the weather was completely unsuitable for turf winning, until quite recently, and the scope of Bord na Móna production of machine turf in any year is settled before 1st July. It can make some addition to its production after 1st July, but not much, and if it has not been able to take all necessary steps to ensure its harvest before 1st July, there is not much it can do after, and unless the loss is to be transferred from the E.S.B. accounts to the Bord na Móna accounts, it is likely that Bord na Móna will be seeking a higher price for turf in this year than it sought in 1953.

We know that the price of coal has gone up and there is nothing which the E.S.B. can do about that, except pay, so that, apart altogether from the expectation that at some time we will have a normal weather year, there is a certainty that, when the board has to resume its purchase of fuel on the old scale, it will have to pay more for it and that the additional charge for fuel in the board's accounts will exceed even the £530,000 which it estimated to save because of the weather conditions of 1953.

I said before that I was not an income-tax expert. I am not a meteorological expert either, but I used to believe at one time in the 11 years' cycle theory. It looked up to now as if this year was going to upset it. 1922 was an abnormally dry year. Those of us who were campaigning in one form or another during that year will remember it. 1933 was also an abnormally dry year, so dry that we at one stage in that year had to face up to the possibility of cutting off power from many of the country's industries. I remember that we were negotiating with a shipping company to bring some Atlantic liners into Dublin, with the intention of using their generators to add to our meagre output of electricity. The weather broke before the end of the year and made that course unnecessary.

Nineteen hundred and forty-four was also a very dry year, a year in which the E.S.B. was unable, in the conditions which applied in regard to fuel at the time, to maintain anything like an adequate output and during which we had indeed to shut down the cement factories for a period and other heavy industrial users of electric power. How 1955 is going to work out is anybody's guess but, if the weather in 1955 is anything like the weather which operated in those years, not merely will the surplus in the board's accounts be wiped out but the whole of its fuel reserve to which the Minister referred will disappear also. A 15 per cent. increase in the board's usage of fuel over 1953 or a 15 per cent. increase in the price of fuel over 1953 would more than account for the whole of the fuel reserve to which the board attributed its surplus revenue of this year. Is the Minister, therefore, justified, because the board threw up this accidental surplus of £900,000 in one year, in saying that for every year henceforth it has got to carry £1,000,000 additional loss on rural electrification? Does he think it is going to be possible for the board to carry that loss without increasing its charges for current?

The board has no money except that which it gets from the consumers of current, and, if the board's accounts work out as I have calculated, the board will be facing a deficiency of a substantial size in its general revenue and will have no option under the law but to increase its charges. The law puts on the board the obligation to so regulate its charges for current that they will be sufficient to meet the whole of its outgoings—the wages it pays, the materials it buys, and the interest and sinking fund charges for which it is liable. The Minister is not proposing to alter that law. It is still an obligation on the board, and while that is so the Minister cannot prevent the board fulfilling its statutory obligation by increasing its charges if that situation should arise. He is not proposing to take power to prevent that. Therefore, all the assurances given to members of the Dáil that there will be no increase in charges because of his withdrawal of the capital grant for rural electrification are valueless. They are completely dependent on the weather. If the weather remains bad the forecast may prove accurate. If it returns to normal it must prove wrong.

I have seen a number of local newspapers protesting against the utilisation of this surplus for the relief of the Exchequer through the withdrawal of the capital grant for rural electrification rather than in the reduction of charges. I think their protest has point. In so far as the board has a surplus revenue, if there was any prospect of that surplus continuing it was the intention of the Oireachtas that the benefit of the surplus would be given to the public in the form of a reduction in electricity charges. I do not think there is any certainty of the continuance of that surplus. But if the Minister proceeds with this proposal and if the board has to carry this growing deficit on its rural revenue account, a deficit which must grow at the rate of about £250,000 per year, then it is certain that no position is likely to develop in relation to its general revenue which will prevent it facing a deficit, which will have to be offset sooner or later by an increase in charges.

What does the Government gain from all this? The disappearance of one item of £85,000 from the Book of Estimates. And it was merely for the purpose of presenting to the Dáil a Book of Estimates which appeared to show some reduction in Government expenditure that the Government adopted this proposal. The only thing they cut it by through this manoeuvre was an item of £85,000. In return they not merely wrecked the basis of a perfectly good scheme but the Minister is permanently raising the level of charges which the consumers of electricity will have to bear in the future. If ever there was an example of bad financial business this is it, and that is why I am asking the Dáil to vote against this particular proposal of the Government on this section of the Bill.

Mr. O'Leary

God bring them rain.

Mr. Lemass

That is what they are banking on.

Mr. Norton

I do not think it is necessary to traverse the ground being covered by Deputy Lemass, because in the main it is the same as the argument made by the Deputy on the Second Stage and on Section 3 of this Bill. I notice that the Deputy has not developed this afternoon the line of thought that he had on the Second Reading. On the last day we were told that this was going to slow down progress in rural electrification, which was going to be cut down.

Mr. Lemass

I will develop that argument if you like.

Mr. Norton

I do not mind.

Mr. MacEntee

You could not answer it.

Mr. Norton

The Deputy said that this Bill was going to slow down rural electrification. I have said that that was sheer nonsense. I have proved by the quotation from a document here to-day that in the last six months the board has for the first time in its history completed its rural electrification work in 52 areas. At that rate, therefore, during this calendar year it will complete 104 areas.

Mr. Lemass

If the weather remains fine. You cannot have it both ways.

Mr. Norton

Do not let us approach this on the Old Moore's Almanac basis. I have shown that in the first six months of this year the board have completed 52 rural electrification schemes and that at that rate at the end of the year they will have completed 104, and that this is the first year in which they have passed 75 areas; so that in the first place on those figures it was clearly obvious to everybody that the Deputy could not run this argument of a slowing-down of rural electrification. That argument has been abandoned this evening for the simple reason that it is based on a fallacy and a falsehood. There has been no curtailment of rural electrification and there will be no curtailment. Rural electrification will be accelerated and will not be in any way diminished by the passing of this Bill. I hope that that ghost which kept groaning round here the last day has now been duly laid to rest.

Mr. O'Leary

It got a canter from the local elections too, but it had very little effect on them.

Mr. Lemass

It did not do too badly in Wexford.

Mr. Norton

On the question of increased rural electrification charges I said the last day, and repeat it now, that nothing in this Bill provides any justification for an increase in the charges for rural electrification. Whatever other circumstances might arise at any time in the foreseeable or unforeseeable future, this Bill does not and cannot provide any justification for an increase in rural electrification charges. That tune was not hearkened to with any great enthusiasm this evening and it is difficult to find what the argument this evening is.

I could find no clear outline of the argument. It is just a protest against this being done and a suggestion that by following this approach to the whole problem somebody believed that this will happen, somebody considered that there will be a situation of disaster and catastrophe if something else does happen. The simple fact of the matter is that there is no need for the bleakness which has consumed some Deputies opposite over this Bill. Rural electrification will go on at an accelerated rate. There will be no increase under this Bill in rural electrification charges. Now that lays those two ghosts, I think.

Mr. Lemass

It is going to increase charges.

Mr. Norton

The only other question is, should we continue to ask the taxpayer or the Exchequer—and the Exchequer is the taxpayer, since it does not grow money; it collects money from the taxpayer—should we in all seriousness ask the taxpayer to write a cheque annually as a subsidy for the E.S.B. when on its own showing in its own audited accounts the E.S.B. shows that it has a surplus?

Deputy MacEntee is not a very satisfactory prophet in so far as predicting the future of the E.S.B. is concerned, and he is as likely to be wrong now as he was when he was dealing in the past with the future of the E.S.B. The facts in this matter speak for themselves.

Mr. MacEntee

Would you explain Section 4?

Mr. Norton

I am replying to Deputy Lemass. The E.S.B. has provided a reserve for depreciation renewals of its physical assets, and the amount of that reserve is £12,750,000.

Mr. Lemass

That is only 16 per cent. of their value. It is not more than adequate.

Mr. Norton

Would you go and get an auditor of any standing who would say that this is not a more than adequate provision for reserves by the E.S.B.?

Mr. MacEntee

That has nothing to do with it.

Mr. Norton

Let Deputy MacEntee audit the accounts himself. Let him have half an hour with the E.S.B. accounts and he would build up a nice set of figures which would prove anything to the Deputy's own satisfaction.

Mr. MacEntee

The Minister does not have any figures or if he does he does not understand them.

Mr. Norton

Not being a director of a company I do not know as much about them as the Deputy. The E.S.B. has created a reserve of £12,750,000 for depreciation renewals of its physical assets, but that is not all. They had a contingency reserve which was £700,000 and they jerked it up to £1,000,000 last year. All these are guarantees against the waste water that you were in such a bad way about half an hour ago when the tide was ebbing with the Deputy and he was in distress and wondering where the fuel was going to come from. It is because of this concern with the ebbing tide that I want to call his attention to these reserve funds, out of which, if the E.S.B. has got to buy increased or more expensive fuel, it can find the money to do so.

Mr. Lemass

These reserves could not be used for that purpose unless you want to put the E.S.B. directors in jail.

Mr. Norton

Please do not compete with Deputy MacEntee in hysteria.

Mr. Lemass

You should have been reading in the paper recently about somebody who ran his company in that way.

Mr. Norton

He is more a friend of yours than he is a friend of mine. I do not know who advised him.

An Ceann Comhairle

I will hear the Minister on the section.

Mr. Norton

The contingency fund was pushed up from £700,000 to £1,000,000 last year. They created a further funds called a fuel cost equivalent reserve fund and they put about £500,000 into that.

Mr. Lemass

About 15 per cent. of a year's purchases.

Mr. Norton

That reserve fund is also there.

Mr. MacEntee

What has that to do with Section 4?

Mr. Norton

It shows that under Section 4 the fears that you expressed are groundless.

Mr. Cunningham

When they did so well they should have reduced the charges.

Mr. Norton

They have £100,000 as income-tax reserve and their ordinary reserves increased from £150,000 in 1953-54 to £263,000 in the current year. This body, which may have to face some of the disasters or emergencies that Deputy MacEntee talked about, has at its disposal reserves amounting to £12,750,000 for depreciation renewals of its physical assets.

Mr. Lemass

Is the Minister suggesting that the assets are not wearing out?

Mr. Norton

I am suggesting that, as far as the board is concerned in making provision in these reserves, it has put itself in an eminently satisfactory position from the point of view of the reserves it has got there.

Mr. Lemass

Depreciation is as much a working cost as wages.

Mr. Norton

You can assume that the lifetime of certain machinery is X when in reality it is XYZ. When the Bill goes through, rural electrification will be accelerated; there will be no increased charges and the board's reserves will be capable of providing for any problems it may have to face in the matter of increased fuel costs.

Mr. Lemass

It will want to start raining soon.

Mr. Norton

I think that the present hot weather is unsettling the Deputy. The last point is that there seems to me to be no reason or justification for paying out of the taxpayer's pocket a subsidy to the E.S.B. It is a body which can now pay its way and meet all the charges which arise and which are due to be met by the board without any draw on the taxpayers' pocket or without any impairment of the high speed and efficiency which the board has set.

Mr. MacEntee

The Minister has been very careful to try to create a smoke-screen to conceal the real purpose of this particular section. We are dealing with Section 4. The Minister did not read Section 4 to the House or explain what it purports to do. Sub-section (2) of Section 4 provides that:—

"The total amount remaining due to the Central Fund at the passing of this Act in respect of advances already made under that section together with the total amount of moneys hereafter advanced shall be repaid by the board."

The section referred to is the section under which the rural electrification scheme is being carried out and the operative word in the sub-section I have read is "total". "The total amount remaining due to the Central Fund after the passing of this Act shall be repaid by the board." These words operate to break a public contract entered into between the Government and this House and the E.S.B. under which the E.S.B. was induced to proceed with the rural electrification scheme and the Government bound itself to pay the board one half of the capital cost of the rural electrification scheme.

That is the position as it exists until this Bill is passed. It has existed in that form from the beginning. It is now proposed to break that covenant and to compel the E.S.B. to give back to the Government what this House has already voted for the purpose of erecting these rural electrification networks. That is the purpose of the Bill. It has nothing to do with fuel costs or reserve funds in the manner in which the Minister has tried to induce the House to believe it has. The sole purpose of this section is to break the solemn covenant entered into by legislation by Dáil Eireann on the one hand and on the other the E.S.B. and the consumers of electricity.

What is going to be the financial effect of this section? Deputy Lemass has set it out at length. The ultimate result is that this section will impose on consumers of electricity an annual charge of not less than £1,000,000. Now, let me be meticulously correct. This section will impose on the E.S.B. an annual charge of not less than £1,000,000 a year.

Mr. Norton

That is nonsense, of course.

Mr. MacEntee

Deputy Lemass, by the calculations which he has put before the House—which any person with a knowledge of arithmetic can follow quite simply—has proved that. He has shown quite conclusively that that is what is going to happen if we enact this section. I said this was going to impose a charge on the E.S.B., but the charge is not going to rest on the E.S.B.; the E.S.B. will have to pass that charge on and it will fall on the consumers of electricity. That £1,000,000 will fall on the consumers, in the ultimate result.

When he was talking on the preceding section, the Minister gibingly sneered at the "rich users of electricity" in my constituency. He knows that Ringsend, Beggars' Bush, Cherryfield Buildings and such places are not inhabited by the idle rich of Dublin South-East, that the number of workers, middle-class people and civil servants far outnumber those who might be described as surtax payers in Dublin South-East. I am sure the Parliamentary Secretary, in the course of the canvass which he so sedulously conducted prior to the election of 1954, must have seen in some of those working-class houses electric bulbs. They were not there for ornament; they were there because by far the largest portion of the consumers of electricity are people who have to earn their living, people who are workers, who live in working-class houses and local authority houses all over the country.

The £1,000,000 which you are going to vote, if you pass this section, is going to fall, not on the members of the board, not on the staffs of the board— except in their capacity as consumers —but ultimately on those who live in working-class houses, who work in shops or in factories, on the general mass of the people, and not upon the 1,500 or 2,000 surtax payers to whom the Minister so sneeringly referred when he was talking on the last section. Make no mistake about it. Those who use electricity will have to pay more, or certainly will have to forgo any hope that the charges will be reduced in anything like, as the Minister has said, the foreseeable future.

That is what Deputy Tully is not aware of and I am endeavouring to tell him what he is voting for in this Section 4. Let there be no mistake about it. Let him not go out and plead that he did not know what he was doing.

Mr. James Tully

Because you say that?

Mr. O'Leary

The Minister did not say that.

Mr. MacEntee

Of course, the Minister did not say that. He dare not say that; he would be afraid to say that. He dare not tell the truth about this Bill; he dare not confess what its true purpose is. This section will impose, first of all, a charge on the E.S.B. which they must pass on to the consumers. The E.S.B. cannot use its reserves in order to meet that charge recurring year after year, until these capital sums have been repaid. Of course, when they have been repaid, in about 20 or 25 years from now, the borrowing will end. At the moment, so far as the present users of electricity are concerned—at present or in the foreseeable future, as the Minister has said—this section will impose these charges upon them.

Mr. A. Byrne

Did the Minister not give an assurance that there will be no additional charges? I think I heard him say that on more than one occasion.

Mr. Norton

I gave that assurance.

Mr. Lemass

Judging by the intervention of some of the Deputies, it is worth while putting this point. Let us assume that this surplus the Minister is talking about is a genuine surplus of £900,000 and that the Minister for Finance will forgo his claim for income-tax on the surplus.

Mr. McGilligan

There will be no surplus next year, is not that so, on your calculations?

Mr. Lemass

It depends on the weather. The Attorney-General may not be aware that income-tax is paid in arrears.

Mr. McGilligan

I am.

Mr. Lemass

The income-tax which the board will pay next year is on this year's revenue and if there is a surplus in 1954-55 of £900,000 the Minister for Finance is going to get his tax on that surplus, no matter what the board's experience next year may be. Let us assume he forgoes it. Let us assume that rain is going to start falling now and keep on falling until next Christmas.

Mr. M.E. Dockrell

Water on the brain.

Mr. Lemass

If the Deputy had a brain to have water on, he would not be talking. Let us assume that that is what is going to happen, that the board will not need to use any more fuel and that the price of fuel goes down to the 1953 level. I say, let us assume that that happens and that the surplus is continued into next year and the year after. Then Deputies opposite would announce a reduction in the price of electricity and redeem one of their election promises. Do they realise that the Minister is asking them to forgo the advantage of being able to say: "Here was one little thing we did in fulfilment of our promises, even though not through any act of ours"? Rather than give you the satisfaction of saying that, of getting credit for that small contribution towards the fulfilment of these enormous promises, he is taking that surplus for the benefit of the Exchequer.

All these assumptions are not going to happen. The Minister for Finance is going to look for his £300,000 tax out of that £900,000 revenue. The weather, I hope, is going to keep normal—if not consistently dry, at least dry enough to enable us to go out occasionally without an umbrella or a raincoat—in which case the saving of £500,000 which the board attributed to abnormal weather in the last two years will disappear. We know the price of coal is going up and the E.S.B. can do nothing about it. We expect the price of machine turf produced by Bord na Móna will have to go up also. If this happens, there will be no surplus.

What happens then? The Minister says I did not make a clear case. In effect, he says: "What a clever fellow I am, I saw that the board had this surplus and I am using it to save the taxpayer and take off the taxpayer's back the obligation to finance the rural electrification scheme."

Mr. McGilligan

How much is that saving?

Mr. Lemass

Trivial in relation to what the consumers of electricity will have to bear. That is one of the points I am making. Instead of the taxpayers having to pay this capital grant on an annuity basis spread over a period of 50 years——

Mr. McGilligan

Why did you change to that?

Mr. Lemass

That is a side issue.

Mr. McGilligan

The Minister for Finance made you do it.

Mr. Lemass

You are changing back again.

Mr. McGilligan

We are not.

Mr. Lemass

You are making the consumer of electricity pay not over 50 years but next year——

Mr. Norton

Not at all.

Mr. Lemass

It does not matter whether he will pay by an increased charge or by having the price of electricity kept up when it does not have to be kept up; the fact remains that it is the consumer who will have to pay one way or another by suffering an increase in charges if the surplus disappears or by not getting a reduction.

Mr. McGilligan

Which he should get. You put it up.

Mr. Lemass

I put it up. That brings me to the question of the contingency funds. The board's contingency fund of £1,000,000 cannot be considered anything more than the minimum reserve against a variety of circumstances that may arise.

Mr. Norton

They have other reserves.

Mr. Lemass

I will deal with that in a minute. There was in 1952-53 a very slight trade recession accompanied by an increase of charges which wiped out the board's contingency reserves at that time.

Mr. O'Donovan

A slight trade recession? The Deputy is not serious. I was round Dublin South-West at that period.

Mr. Lemass

Whenever it was, it wiped out the board's contingency reserve.

Mr. A. Barry

It wiped out Fianna Fáil, too.

Mr. Lemass

If you had a strike lasting two or three weeks that contingency reserve would be gone.

Mr. McGilligan

Do not forget the air raid.

Mr. Lemass

I am not talking about air raids.

Mr. McGilligan

That is what you talked about in 1927.

Mr. Norton

In the "white elephant" days.

Mr. Lemass

There seems to be a considerable desire amongst Ministers to side-track this discussion. What are they afraid of? Are they afraid of the facts coming out? What about the depreciation reserve? Is there not a statutory obligation upon the board to set aside out of revenue every year provision for the depreciation of its assets? Does the Minister not understand what a depreciation reserve is?

Mr. Norton

It has done it with such exceptional generosity that its financial position is unassailable.

Mr. Lemass

Is the Minister suggesting that these depreciation reserves are in the form of liquid assets on which the board can draw to meet losses on rural electrification?

Mr. Norton

Nobody said that. That is like what Deputy MacEntee would say.

Mr. MacEntee

That is what you did say.

Mr. Lemass

As a turbine or a generator wears out, the board's statutory obligation is to set aside enough money to buy another. That is what these depreciation reserves are.

Mr. Norton

Thanks very much.

Mr. Lemass

Every penny is invested in fixed assets and the board has been financing its development by drawing upon pension funds and other reserves of that kind. These funds are not available now to meet current losses. That is what the Minister was attempting to convey to the House when he talked about this £1,000,000 deficit. These reserves are not available for that purpose and cannot be used for that purpose. There cannot be any suggestion of the E.S.B. drawing on its depreciation reserves to meet current losses.

Mr. MacEntee

Or on the pension funds.

Mr. Lemass

The Minister can give what assurances he likes about electricity charges. They are worth nothing. Every Deputy knows that the charges for current in rural areas cannot be increased. Even at the existing charges, the board has not yet got over the completed areas as a whole the 69 per cent. acceptances on which the scheme was based. This year it has got up to 67 per cent. or to 68 per cent.

Mr. Norton

80 per cent. and 90 per cent.

Mr. Lemass

The average for the country as a whole is still only 67 per cent. If the information given to me in reply to parliamentary questions is accurate, the average for the whole country is only 67 per cent.

Mr. Norton

I told you what the facts are.

Mr. Lemass

The finances of the scheme, even with the Government grant, were based on the assumption that the average acceptances would be 69 per cent. There can be no talk of increasing the charges because, if the charges were increased, the percentage of acceptances would fall still further.

Mr. Norton

What do you say they are? For 1954-55 they are over 70 per cent.

Mr. Lemass

In some areas.

Mr. Norton

There is an average of 70 per cent.

Mr. Lemass

They did not average over 70 per cent. unless there was an enormous development in the past two weeks.

Mr. Norton

They averaged over 70 per cent. for 1954-55. That is why you are so perplexed about this business. You do not know the progress that is going on.

Mr. Lemass

Wait until I do a spot of calculation. In any event this is once again an irrelevancy. The Minister is trying to side-track the discussion but, wait, I have here a reliable source of information. Here is what the board said: "The proportion of dwellings connected in the completed areas is approximately 67 per cent."

Mr. Norton

May I tell you that it will be 72 per cent. in the next report you read?

Mr. Lemass

Quite possibly.

Mr. Norton

Certainly it will.

Mr. Lemass

We will wait until we get the next report. I based my case on the most recent report available. It is nonsense to talk about increasing the charges of electricity in rural areas because the percentage of acceptances is bound to fall. The Minister need not tell me that the scheme is popular in rural areas and that consumption is going up every year. That is what I foretold years ago when Deputies opposite did not believe it.

Mr. McGilligan

What did you say?

Mr. Lemass

That the development in popularity of the rural electrification scheme would take years.

Mr. McGilligan

It took you 15 years to find that out.

Mr. Lemass

The Deputy is always trying to sneak credit for the progress made by somebody else. I do not give a damn who gets the credit so long as Deputy McGilligan does not get it because he is the one least entitled to it. In any event, the case I am making is that the board cannot calculate on getting surplus revenue on the scale which we are told it got it although we have not seen the account for 1954-55; that there is not available in the board's account £900,000 surplus to meet the anticipated loss of £1,000,000 on rural electrification; that the Minister was misleading the House when he gave that information. Three hundred thousand pounds of that £900,000 will go to the Exchequer in income-tax.

Of the balance of £600,000, more than £500,000 is attributed by the board to the saving of fuel due to wet weather. If the wet weather ends, and we hope it does, that surplus will disappear. It means the calculation can only be right on the assumption that the rain is going to start and continue on such a scale that the board will again meet their fuel expenditure with the same outlay as they met it last year.

The board, I know, has set aside out of their revenue £500,000 to equalise fuel costs. The increase in the price of fuel alone which has taken place will more than wipe out the whole of that reserve. That represents only 15 per cent. of the board's annual consumption of fuel and the increases in the price of coal and turf this year alone will involve the utilisation of the whole of that reserve. If, over and above that, we get normal weather involving higher fuel utilisation the revenue surplus will disappear or be substantially reduced. The board must aim at some revenue surplus and certainly it cannot get it unless it increases its charges. The revenue surplus on the general account is partly offset by a growing deficit on rural revenue. The deficit will be £250,000 this year and it will increase by £250,000 per year until it reaches £1,000,000 on the completion of the scheme.

That is what the Government are proposing to do, but I would put it seriously to the Government that, while they may feel themselves entitled to make that change in the details of the rural electrification scheme in respect of the future, they are not entitled to go back on the past and make the board repay them money which they were assured they would get from the previous Government. The board came to me in 1954 to complain about this deficiency in capital grant payments which they had experienced because of my delay, the delay in securing the enactment by the Dáil of the Act which ultimately became the Electricity (Supply) (Amendment) Act of 1954. I assured them that the Act would be passed with all speed and that when it was passed these arrears of capital grant would be made good. They have not been made good and not one penny has been paid since in respect of these and the Government now proposes to claim on the board for the whole of that amount, to make that sum repayable advances instead of capital grant.

There is no legal remedy against the Government's proposals. If they get their Bill passed by this House, it will become law and that charge will be put on the board, but I submit to the Government that they are adopting a very bad precedent indeed in retrospectively annulling the contracts of their predecessors. That is what they are doing. Even at this stage I ask the Minister to make this Bill apply to the future only and pay to the board the amount due to them under the 1945 Act, an Act passed by this House unanimously and to which every member of the House was committed.

Mr. McGilligan

When I listened to Deputy Lemass ten or 15 minutes ago I heard him explaining that he was not an expert on income-tax or meteorology. I suggest he should put himself forward as an expert in gloom, particularly gloom in connection with the Shannon scheme. Right through the years there has been nothing but gloom over there with regard to the Shannon.

Mr. Lemass

If the Shannon is going to be brought in here I can give facts about it that have not been told for 25 years.

An Ceann Comhairle

Section 4 is the only matter which falls for discussion.

Mr. McGilligan

Long ago we were told that if electricity was to depend on the Shannon station we were putting ourselves in a terrible predicament by building industries on that because Deputy Lemass said one air raid would leave industries in every city and town paralysed and a reign of darkness over the whole country. That was the mood in 1927 and it has not changed since.

Deputy Lemass made a calculation. He stopped while making another one to correct a figure that the Minister gave because apparently the calculation did not work out. That calculation is just as absurd a calculation as the £1,000,000 he is going to add on to the expenditure of the board.

Let us see what we are doing. Deputy Lemass wants to leave the board to its present way of working so that as it incurs certain expenditure it will get 50 per cent. of capital moneys advanced in respect of rural electrification. Perhaps Deputy Lemass does not know that the board wanted that 50 per cent. increased to a 90 per cent. contribution by the State. I suppose Deputy Lemass would have given this to them. We resisted it. The E.S.B. came to Deputy Lemass in 1953 and put up arguments which persuaded him that the charges must be raised. Deputy Lemass is the man who put up the charges on the electricity consumers. He was the only person to do it.

Mr. Lemass

Do you object to those charges? If so, why do you not take them off?

Mr. McGilligan

That sort of cheap-jack interruption does not get the Deputy much further. Am I not entitled to say that it was the Deputy who was in some way or other convinced by the E.S.B. that they were in a perilous condition and that they got leave from Deputy Lemass to increase their charges? We did not do it. Now Deputy Lemass says: "Oh well, get the charges down". Perhaps they will come down in the course of time, but they would not come down if Deputy Lemass were there.

On the Second Reading of the Finance Bill, I prophesied that this board would have £1,000,000 of net surplus this year. They have £928,000. It was a pretty good guess, was it not —better than anything Deputy Lemass has done with regard to the E.S.B. over 25 years?

Mr. Norton

Plus £68,000 from trading.

Mr. Lemass

What precisely did you do to bring it about?

Mr. McGilligan

At any rate I was not responsible for raising charges. The Deputy did help to bring it about by raising charges. What did the E.S.B. do with that money? They have found it, as I understand, very difficult to hide from the public the profits they did make last year. They put part to a contingency fund. I understand that they had it an objective to establish a contingency fund of £1,000,000. They have it at £1,000,000 now.

Mr. Lemass

Why is this Bill being rushed through before the E.S.B. accounts are out?

Mr. McGilligan

The Deputy will be consoled to know that they have a fuel equalisation reserve standing at £500,000. They have a variety of other contingencies for which they have made efforts to provide involving sums which amount to very big totals in the aggregate. In their accounts they show that their capital reserves, if you do not include non-repayable receipts, are about £16,000,000 without counting this £1,000,000 of a special reserve and not counting the £500,000 for fuel equalisation reserve.

We were told they were bound, under the original Act, to do certain things. They were; and they are probably the hardest-pressed board financially in the whole country because of the way in which the financial provisions of their establishment were built up. It is said they have got to provide against wasting assets. So they have. They have also made provision for the increased cost of those assets when they have to rebuy them at some date in the future. Remember the position the board will find itself in if the original plan works out is that at some date which cannot be more than five or eight years from us it will have all its plant up-to-date by money taken out of annual revenue and applied to the renewal of physical assets. In addition, they will have put enough money aside to rebuy the whole of the plant—which, of course, they will not have to do.

There are millions in the E.S.B. They show a certain amount of those, but people do not really understand the board's position unless they can go into the accounts with a thorough understanding of the burdens that have been placed on the board. I will repeat the facts which I gave on the Finance Bill and say that, leaving out the war years, this board has never failed to show a surplus of revenue. If you take in the war years, I think there were two in which they were down slightly, and one—I think that was the year 1945-46—when there was an appreciable deficit. That was when they were paying very dearly for bad coal. Outside of the war years they made a surplus every year. The surplus over the years, according to my calculation, taking in the £1,000,000 this year, would amount to something over £2,500,000. We are asked now to hesitate about asking this very concern, the best board this country has ever had—it had a great opportunity because it got a great scheme—to carry on its shoulders a sector of its scheme which is not in itself directly self-supporting.

What is the whole fuss about? As far as the Estimates this year are concerned I think the saving to the taxpayer is £85,000. In Deputy MacEntee's last year as Minister for Finance he saved in this account £820,000. Of course, that saving was a bit of a trick because what had happened was that in the time of the first inter-Party Government we modified the system of repayments. Instead of paying whatever the amount was all in one year we paid it on an annuity basis over a certain number of years. In the first year when Deputy MacEntee resumed control of finance—that was the year in which he wanted to have as bad a budgetary situation as possible, and in the second year also—he resumed the system of paying all in the same year until he was squeezed in the last year and the Budget had to be made some way presentable. He saved £820,000 by reverting to the annuity basis. The Party that did that, as I said, went back on the annuity basis because that was the year they wanted to do the civil servants out of their rights and they wanted to show what could be explained as a loss on the revenue of the year. They lumped in £600,000 which grew eventually into £900,000 as a single year payment and, when things went bad, the Minister for Finance returned to the annuity basis which he had repudiated when he took over from us in 1951. What is the fuss about? Should we let this board continue to pile up surpluses? Deputy Lemass says: "No. Let them reduce their charges." It is a pity he did not think of that in 1953.

Mr. Lemass

That is the law.

Mr. McGilligan

It is not the law. The law is that this board can be made meet its legitimate expenditure in the year and if this Dáil says that, in regard to rural electrification, certain charges should be derived from rural consumers, that is the law. That is going to be the law.

Mr. Lemass

Applied retrospectively.

Mr. McGilligan

Yes. One would think to listen to Deputy Lemass that this was a board of private proprietors and they would have to forgo some emoluments of their own or they would have to lose dividends——

Mr. Lemass

It is the consumers, not the board.

Mr. McGilligan

The consumers are not to be billed one penny piece. It might be right to say: "If you do not do that you can to the extent of £85,000 reduce electricity charges over the year." I do not know what palaver the board used on the then Minister but they left him in a state of gloom about the E.S.B., and that gloom has been reflected here to-night.

Take a good view of the situation. Look over the accounts and look at their accumulations and realise they are accumulating funds at such rates as will, say, five or six years hence, enable them to remake the whole of the original scheme. They will have made enough to do that but they will not want to do that because the plant will be kept up by the replacement of wasting assets. There is no board in this country with as good a record or can show as good a picture as the E.S.B. If Guinness to-morrow were to look for a loan or float a prospectus they could not make as good a showing as the E.S.B. In these circumstances, we are asked to lose our tempers and get panicky over a saving of £85,000 a year to the taxpayer through the Estimates. That is what the whole fuss is about.

Mr. MacEntee

We have heard the most extraordinary statement from the Attorney-General who is supposed to be the head of the legal profession and the law adviser to the Government. He has said that it does not matter whether the Government gives a pledge to a public undertaking or not. This Dáil can come in and tear up that pledge, can dishonour its contract, can dishonour its obligation to keep its word.

When the rural electrification scheme was begun, when it was under discussion, it was quite clearly recognised that it could not be in itself an economic scheme. Therefore, because we wanted to provide our farmers with the facilities which, say, farmers enjoy in more densely populated countries, because we wanted to provide our rural dwellers with one of the amenities which urban dwellers enjoy, we said we were going to initiate the rural electrification scheme, that it was going to go ahead. Because of the social and economic advantages which the community as a whole would derive from that scheme, we decided that the community as a whole were going to bear half the cost of this scheme to make it economic so far as the E.S.B. were concerned and our anticipations, according to the Minister's own statement, have been found to be correct. He told us that since 1947, within seven years from the inauguration of the scheme upon the capital basis which I have described, there is already a small surplus upon the rural electrification account. Deputy Lemass pointed out that if it were not for the special arrangement in regard to the capital cost of the rural electrification network that surplus would not exist, that instead there would be a deficiency which would be an accumulating and a growing one of some hundreds of thousands of pounds, a growing one which would ultimately involve a capital charge of £700,000.

That is the basis upon which the rural electrification programme was embarked upon, on the basis of a contract, a pledge, a bargain entered into between the Government and the E.S.B., a contract which was subsequently ratified by the legislation of this House. The Attorney-General, the principal law adviser to the Government, the head of the Bar of this country, comes in and, in effect, tells this House: "It does not matter what you pledged yourselves to do in relation to the E.S.B. We are entitled to come in here and dishonour that pledge and, in fact, to dishonour it retrospectively, to say that from the very day we gave the pledge we did not intend to keep it and we are going to ask the E.S.B., in spite of that pledge, to pay us back the money which we gave it as a free gift."

That is what the Attorney-General has said. I am prepared to say that the Dáil is omnipotent in these matters, and it can legislate as it is legislating this evening. It can tear up this contract and it can dishonour this pledge. But the thing we must ask ourselves is this: is it a good thing in the public interest to do this? Is it a good thing that the Attorney-General should come in and tell the House we can do it? Should he not rather be concerned to ensure that a contract which has been entered into will be observed? Surely that is the function of the legal adviser to the Government? But the man who is the head of the Bar in this country, who is supposed to observe such a high standard of conduct in matters of this sort, comes in here and talks in a way which I think is really dishonouring to the House. Let us see what will be the effect of this upon people outside. The Attorney-General has told us we can, we have full power; we have absolute power, uncontrolled and absolute power, to dishonour the pledge which we gave.

Mr. Dillon

This is the language of the kindergarten.

Mr. MacEntee

That is what the Attorney-General has said. Let us see now what the next section of this Bill proposes to do.

Mr. Dillon

This is the language of the kindergarten.

Mr. MacEntee

The Deputy is a good judge of the language of the kindergarten. He has never been out of it.

Mr. McGilligan

Deputy MacEntee has certainly gone to the lowest form at the moment.

Mr. MacEntee

Let us see what Section 5 says. Section 5 states:—

"A guarantee of the Minister for Finance, given under Section 9 of the Act of 1954, for the due repayment of moneys borrowed by the board under Section 4 of that Act may extend also to the payment of interest on such moneys."

What is there to prevent another Attorney-General in another Coalition Government coming in here and making the same sort of speech as has been made here to-night by the present Attorney-General in relation to the undertaking given by the Government to the E.S.B. in 1945 and, as I said, ratified by legislation of this House in 1945? What is to prevent another Attorney-General coming in here and saying, as he can say with truth, that the Dáil can nullify the guarantee given under any Electricity Supply Act or, indeed, under any Act of this House in relation to the repayment either of borrowed moneys or of interest upon such moneys? Nothing whatever. But would it be in the public interest that he should do so? Would it conduce to the economic stability of this country. Would it conduce to the prosperity of the country or the development of the country? Of course it would not. But on the same grounds as the Attorney-General has attempted to defend Section 4 of this Bill another Attorney-General could come in here and say that the Dáil is perfectly at liberty to nullify the guarantee and, because the exigencies of the Government are such, the Government is recommending that the Dáil should nullify its guarantees and dishonour them.

The Minister, speaking on Section 2 of the Bill, said one of the reasons why he was rushing the Bill through the House was in order to facilitate the E.S.B. in raising from the public the money it needs to finance its constructional programme. Does anyone think the speech we have just listened to from the Attorney-General will make the public more ready to invest in a loan or an issue of stock by the E.S.B.? I would say, on the contrary, it is more likely to deter them. But, in any event, having said what I had to say about the principle of the speech made by the Attorney-General, let us get back now and examine the pledge itself.

In the beginning it seemed to me as if the Attorney-General was going to devote himself to making an attack on the E.S.B. because the E.S.B. had acted prudently in the manner in which it made its estimates as to the contingencies with which it would have to deal. He seemed to blame it, on the one hand, because it had built up a special reserve of £1,000,000 to cover contingencies. I think that was an astonishing line to take. I do not think that even £1,000,000 is sufficient to cover the contingencies which an undertaking of this sort may have to face.

He then said they had built up £500,000 as a fuel reserve. Deputy Lemass has pointed out that, if this year and next year be normal years, the increase in the price of coal and the increase in the price of turf which has taken place in recent months will wipe out or absorb the whole of that £500,000 and it will not be there. Therefore, the Attorney-General will have nothing to criticise the E.S.B. for under that head because there will not be any fuel reserve and the Attorney-General will not be able to level his darts against them on that score.

A special reserve of £1,000,000 might quite readily disappear and, if I were to outline any of the contingencies for which it might be called upon to cater, I would be told I was making a gloomy speech. I am not making a gloomy speech. I am merely saying these men were prudent in building up that reserve.

Let us come now to the other side. The Attorney-General seemed to blame the E.S.B. because, according to the statement of the Minister for Industry and Commerce, the board will have a surplus this year of £900,000; I should not say a surplus in this year but rather in respect of the year 1954-55. It has already been pointed out that a large part of that surplus is hypothecated to meet the obligations of the board in relation to income-tax. The surplus may, therefore, exist on paper but it is not in fact a disposable surplus of £900,000; it is merely a cash surplus which has accrued as a result of one year's working and against that surplus there are obligations due to a number of people—due, among others, to the Minister for Finance.

The Attorney-General seemed to blame the board because it had a surplus arising in one year, a considerably greater surplus than arose in the preceding year. He said the board has had a surplus in every year except during the war years. As a matter of fact the board had a very heavy loss three years ago and a year later it merely broke even. I think the board's surplus for the year 1952-53 was £995. That was the surplus which the board had in that year and the Attorney-General has come in here and spoken as though the board, year in and year out and every year, had a surplus of £900,000. It has had one exceptional year in which that surplus has accrued. We do not know whether it will have that surplus next year, or anything like it; but, in any event, what is the Minister proposing to do?

Normally the board, when it had a surplus, reduced the cost of electricity to the consumer until war broke out in 1939. It is my recollection that the cost of electricity to the consumer was going down gradually every year up to 1939. Since the outbreak of war another trend has set in and, so far as one can see, that trend will be an upward trend for a number of years to come. I will not say whether it will be for one year or for two years. In the years when the board had a surplus, such surpluses were devoted to reducing the cost of electricity to the consumer.

What is the House proposing to do now? The Attorney-General has said the board has a surplus of £900,000. He wants the House to believe that that surplus is entirely disposable and can be devoted to any purpose to which the board wishes to devote it. If it had that surplus for 1954-55 and has a surplus for the current year 1955-56, then the board is inevitably bound to consider under the statute which governs it the giving of a reduction in the cost of electricity to the consumer and would, I think, if it had any reason to believe that the surplus was likely to accrue at the same date year after year, undoubtedly reduce the cost of electricity to the consumer. But it will not be able to do that if we pass Section 4 of this Bill because Section 4 will inevitably for a very considerable number of years indeed impose upon the board the obligation of finding £1,000,000 per year to meet the capital charges on rural electrification schemes and will therefore wipe out any surpluses in the order of £1,000,000, or maybe less, because these surpluses will not exist in the future and what we are really doing here under Section 4 is stopping the board from doing what they were able to do prior to the war—to use the surpluses accrued for the purposes of reducing the charges to the consumer.

Mr. Dillon

I thought the Deputy said there was no surplus.

Mr. MacEntee

I have not said there was no surplus.

Mr. Dillon

Then there is a surplus?

Mr. MacEntee

The Attorney-General seemed to be in a critical mood because in 1954-55 they had a surplus of £900,000.

Mr. Dillon

At least the Deputy has made that much of an admission—that there was a surplus.

Mr. MacEntee

The point is, is that surplus going to be allowed to go back to the consumer?

Mr. Dillon

How much of a surplus?

Mr. MacEntee

After the Act was passed, and modified by the Act of 1945, the board could pass back that surplus to the consumer but by this disenabling section the board cannot pass it back. It is outside its power to pass it back—not outside its legal authority but outside its financial capacity to pass it back and thus make the reduction in its charges which we all want.

Mr. Dillon

We would get somewhere if the Deputy answered the question of how much the surplus was.

Mr. MacEntee

If the Minister for Agriculture wishes to behave as a marionette there is a place outside which he has just left where he will be much better received.

Mr. Norton

Would the Deputy oblige?

Mr. MacEntee

There is another point which I wished to raise. According to the Attorney-General, who was blowing his own trumpet as usual, the position is going to be in four or five years from now that the users of electricity, because of the generous depreciation allowances, will not have to pay any charges. The lawyer said that but the engineers said that the depreciation allowances were not only not generous but that they were barely adequate and I think the board's engineers are better judges in this matter than any lawyer or any layman and they think that the depreciation allowances are just sufficient to cover the ordinary normal depreciation that occurs in any ordinary machinery.

The Attorney-General said that, by reason of the very generous depreciation allowances the board puts by, consumers of electricity are going to be in the fortunate position in the next four or five years that the whole system on which the E.S.B. was originally based will have been bought and paid for so that it will cost the consumers nothing in the future. The Attorney-General knew what he was talking about but the ordinary members of the general public do not. He was talking about the Shannon scheme, the capital cost of which was between £4,000,000 and £6,000,000. Go into the capital cost of the board's equipment to-day and you will see the depreciation allowances necessary to cover the depreciation of these capital assets which have increased twelvefold since the board started. This increase is largely investment in the fuel stations, particularly in the turf-burning stations, and the development of the Erne and other such schemes which have taken place.

Mr. McGilligan

All under the 1927 Act.

Mr. MacEntee

All of which took place under the aegis of a progressive Government which was concerned to ensure the capital development of this country even though it entailed imposing a few burdens upon the people. But the capital assets to which the Attorney-General referred in his speech are, as I have said, comparatively insignificant fractions of the total investment of the E.S.B.

Mr. McGilligan

The 1927 Act still controls it.

Mr. MacEntee

There is no use in the Attorney-General blowing his own trumpet and trying to imply that the turf-burning stations and the development of the Lee and the Erne were not conceived under the aegis of Deputy Lemass when he was Minister for Industry and Commerce.

Mr. Dillon

I understood that Deputy Lemass argued that there was not any surplus and then I understood Deputy MacEntee to make loud lamentations because there was a surplus and because this Bill required the E.S.B. to use this large surplus for a purpose other than that which Deputy MacEntee felt it should be used for— to bring about a reduction of the rates. It becomes laughable when two leading members of the Front Benches of the Opposition contradict each other in such a fashion.

Mr. MacEntee

There is no contradiction.

Mr. Dillon

Either there is a surplus or there is no surplus, and eventually Deputy MacEntee was brought to the point of saying that there is a surplus. I understood Deputy Lemass to say there was no surplus and to say that we were misleading the House by misrepresenting that there was a surplus. Then Deputy MacEntee worked himself into a panic about this surplus being used for a wrong purpose. Surely any Deputy in the House, after listening to two consecutive speeches of that character, is entitled to inquire which of the two speaks for the Opposition and on which leg either of the two proposes to stand. Now both legs are pretty groggy, but which leg do you want to stand on in order to carry conviction to your mind? It would be of benefit to the House if Deputies Lemass and MacEntee would get together and resolve first of all whether there is a surplus and, secondly, if there is a surplus, how best can it be employed and what is its order and magnitude.

Mr. Lemass

If the speeches of the Minister for Agriculture, the Minister for Industry and Commerce and the Attorney-General reflect the opinions shared at the Cabinet meeting it is no wonder this Bill was presented in this way.

Mr. Norton

It is quite clear that the Opposition have switched from one kind of argument to another, but all the arguments which they produced last week on the Second Stage of this Bill have completely disappeared. The argument they produced last week was whether or not this was going to slow down rural electrification. I killed that argument by saying that from January to June of this year the E.S.B. have completed 52 areas—that is, 104 areas in 12 months. One hundred and four areas is the highest figure ever attained, and when Deputy Lemass was in office the figure was 60 areas. I do not care if Deputy Lemass pins the E.S.B. to an increase in 150 areas; I will be glad; but he is not entitled to bedevil a whole discussion because he is annoyed that the rate of progress is better now than when he was in office. Let us see what the facts are. I have a report here which I got from the E.S.B. and which says that the second speed-up in the rate of construction was completed in the period under review and that, by the end of January, 40 crews were in the field as compared with 30 in the previous January and 21 in January, 1953. All that is a clear indication of the number of crews now engaged on rural electrification schemes. We have 40 now; we had 21 in 1953.

That is good business and good progress. These figures have killed the slowing down argument. To meet the argument that the board has not yet got above 69 per cent. of acceptances, I am saying now that when the board's report is issued this year it will show that the percentage of acceptances for the taking in of electricity under the rural electrification scheme in the 12 months ended March last will have reached 72 per cent., the highest that has ever been reached under that scheme. One might add to all the gloom and despair in which Deputy Lemass enshrouded himself this evening the fact that he was not able to push the percentage above 69, so that taking the basis of his argument as regards the future one can see that it was built on a sandy and unsustainable foundation because the situation which he thought had not yet been achieved has already been achieved and can be read in black and white in the board's report within the next fortnight.

Let me come to depreciation. Deputy Lemass was in office when the board published its report for the year ending 31st March, 1952. Here is what it said in respect of depreciation:—

"The problem of provision for renewals of plant was the subject of special examination during the year. The inflated price of new installations demanded a careful survey of the position. That survey satisfied the board that it is in a position to finance plant renewals as they arise partly owing to the fact that renewals do not normally synchronise and also due to good life experience with plant, resulting partly from high standards of maintenance.... The board has decided as a matter of policy to continue to make provision against renewal costs as long as plant remains in commission. Previously, it had been intended to provide only over the period during which it had been assumed initially that the plant might be expected to be in productive use."

There you have the board making a statement which clearly indicates that it is making what in its view is an extremely generous provision for renewals. If anybody wanted to go into the accounts of the E.S.B. to make an accountant's provision, I am quite certain that he would find that the provision which had been made was more than generous, more than prudent and more than it was necessary to make on the experience of the board.

That was 1952. That is the board's statement of its policy. That policy has been continued since. It is because it has been continued since that the board has built up a situation in which its reserves for depreciation and renewals are high, and the lifetime of its machinery is longer than it was initially assumed to be when provision was made for it. Therefore, the board's position is strong and is on an unassailable financial basis.

Deputy MacEntee this evening tried to spread as much gloom as he could about investment in the board's shares which will be offered to the public. I am quite satisfied that anyone who can read the two sides of a balance sheet and the board's report will have no hesitation in realising that an investment in the E.S.B. is a first-class investment in an Irish enterprise.

Let us take the ability of the board to carry what has been described as the burden which we are putting on the board. I propose to quote in round figures what the board's surpluses have been. In 1946, the board's surplus was £152,000; in 1947, it was £265,000; in 1948, £102,000; 1949, £240,000; 1950, £262,000; 1951, £546,000; in 1952, £45,000. In 1953, the first break in a long sequence of surpluses, there was a deficit of £451,000. In 1954, the surplus was £242,000, and in 1955 it was £928,000. By any process of adding or averaging, is not that clear evidence of the financial stability of the board?

Let us be clear on this, that we ran into a specially bad year or a specially good year—it depends on the way you look at it—through the drought in 1953, and the board lost £451,000. Deputy Lemass looked in wonderment when I suggested that the board could meet a certain deficit out of its contingencies fund. He looked as if it could not be met in that year. The board ran into this deficit in 1953, and it liquidated the deficit in 1954 from the contingencies reserve which had been re-established in 1948-49, thus reducing the reserve to £500,000. When the board ran into this difficulty in 1953, it said: "Well, we have got the contingencies reserve and why should we not meet this from it and reduce the contingencies reserve to £500,000?" It did that and the contingencies reserve has again gone up to £1,000,000. The board did that while Deputy Lemass was in office and by standing over the board's report to the Government he clearly indicated that that method of finance had his approval. I think he was right, but if he was right then he was wrong in arguing the contrary to-day.

Mr. Lemass

The Minister has not yet begun to understand what the argument was.

Mr. Norton

Another argument made against the E.S.B. was——

Mr. MacEntee

Not against the E.S.B. The Attorney-General was the first to criticise the E.S.B.

Mr. Norton

The E.S.B. has reported to me that the demand for rural electrification is greater than ever. Every Order Paper of the Dáil is tattooed with questions asking when the scheme is going to be started in this area and in that area. The board, in a report to me, says that anxiety to obtain a supply was manifested by an increasing number of householders especially in areas where development had been completed for some time. Many of these people, it says, were reluctant to take supplies but have since come to realise the amenities which a supply of electricity can provide. The board says that the volume of work handled by the advisory service showed an upward trend, and to cope with a greater number of queries additional staff were recruited. Farmers, it says, are now showing a growing interest in the use of electric power for machinery, and the board generally feels that everything is bright and cheerful.

If that is the position, as the board, with their technical competence, see the future, why should the Opposition here try to inject into that halcyon economic picture all the gloom and bleakness that it is being sought to manufacture artificially here this evening? Is not everything clear now—no cutting down on the rural electrification scheme; instead, it will be accelerated; no increase under this Bill on the rural electric-energy user?

Mr. MacEntee

What about the other —the general body?

Mr. Norton

The E.S.B., standing as a whole, can now carry rural and urban electricity without any demand on the taxpayer to give them a subsidy at a time when they are making a surplus.

In his opening speech on the Second Reading, Deputy Lemass said that he could understand the principle of regarding the E.S.B. as one unit with two types of activities, balancing these. The only doubt in his mind was what was the best way to do it. While I can understand speeches made on this Bill for the purpose of political propaganda, I cannot understand it being pushed to such absurd extremes.

Here is a board, in respect of 80 per cent. of its activity, making a surplus, likely to continue to make a surplus; on the other 20 per cent. of its activity, making what in the past was a loss, what may continue to be a loss even in the future. Is there anything wrong with saying, instead of going out to beg from the taxpayer to meet the losses on the 20 per cent. of its activity, they should stand up on their own feet in a spirit of self-respect and say: "We do not want anything from the taxpayer. Let the taxpayer keep his money. He wants it all. Instead of asking the taxpayer for a cheque, for alms, annually, for the purpose of financing this deficit, we will take the surplus that we have on the 80 per cent. of our activity and as much as we want out of that we will take out to balance the loss on the 20 per cent. of our activity"? That is what the Bill is doing. Notwithstanding what we have heard from the Opposition Benches, I think that is good economics.

Mr. Lemass

There are a few comments that I want to make on that and it will be an end of the discussion as far as I am concerned. So far as the rate of progress in the rural electrification network is concerned, I came back to office in 1951 very sceptical of the continuous replies I got to questions put to the then Minister for Industry and Commerce in the Dáil explaining the delay in extending the rate of construction on the ground of scarcity of materials and early after my resumption of office that question was discussed in the E.S.B. and arrangements were made for the placing of orders. I was particularly concerned to ensure that these orders would be placed with Irish manufacturing firms and that the capacity of these firms would be built up to meet them, to ensure that the scarcity of materials would disappear at an early date.

By the beginning of 1953, the board stated that scarcity of materials was no longer a problem except in regard to some minor items and that they had started the process of training the staff necessary to increase the rate of construction of the rural electrification network and by the end of 1953 they stated that they were in a position to construct the network at the rate of 100 areas per annum. In their published report on the year 1953-54 they stated their intention of constructing the network at that rate.

The Minister tells us that they are working at that rate now. I stated my view that their failure to achieve the target which they set themselves last year, the fact that they only completed 75 areas instead of the 100 which they had forecast in their report, was attributable to the financial disorder and strain occasioned by the Government's decision, not then sanctioned by legislation, to withhold the capital grant under legislation.

Mr. Norton

You must know that is not correct.

Mr. Lemass

No other explanation, not even the weather, has been offered to the Dáil and I suggest—I tried to put in the Minister's mouth the alternative suggestion—that the bad weather of last year may have had something to do with it.

However, in so far as I am concerned, the expectation that 100 areas would be completed in 1954 and 1955 was expressed in the provisions of the 1954 Act which provided the board with enough money to carry on the development work at that rate.

I will take the Minister's word for it that in all the areas now connected under the rural electrification scheme there are 72 per cent. of the dwellings connected. That, I think, is what the Minister said. The faith of those who were responsible for the framing of that scheme and its submission to the Dáil was that once the benefit of electrical supply was experienced by any number of dwellers in a rural area the great majority would want to get it and the problem, indeed, in the earlier stages of the scheme was the reluctance of a number of rural dwellers to take the supply then, hoping that the board would be able to give it to them a year or two later. Indeed, many complaints were expressed in the Dáil because the board was reluctant to go back on to areas already developed in order to give supply to those who did not take it when they got the chance, because of the consequential delay in its general development work.

I am sure that in the course of time we will get the same percentage of acceptances of electrical supply in rural areas as has been secured in other countries.

I do not disagree with the Minister when he says that the board has made generous provision for the depreciation of its assets. My argument is that the Minister, in quoting the size of their depreciation fund here in relation to possible loss on the rural electrification scheme, can have no purpose except to mislead the Dáil. There can be no question of the depreciation fund being reserved for use to offset current deficiency in the rural electrification account. These reserves are represented by fixed assets—turbines, generators and power houses. They are not something equivalent to money in a bank which can be drawn upon to meet losses.

As regards this alleged deficiency, it is a simple sum in arithmetic to calculate that the present average revenue on fixed charges which the board is getting from areas wired in 1954-55— the most recent areas wired—is falling by £2,000 per area, approximately, below the revenue it must get to break level and that, with 400,000 acres yet to be wired, that deficiency in the rural revenue account must amount to £800,000 by the time the scheme is completed.

Mr. Dillon

400,000 areas?

Mr. Lemass

I mean 400 areas, at £2,000 an area, that is £800,000 deficiency and, on top of that deficiency, the Minister is putting on the board an obligation to carry a charge of £245,000 per year in respect of interest and sinking fund on moneys that were given to the board as capital grant, which are now being turned into loan liability. That brings the deficiency on the board's rural revenue account over £1,000,000. It cannot do anything else.

Mr. Norton

A fantastic figure.

Mr. Lemass

There has been no suggestion by the Minister that the board's rural revenue account will not show a deficiency of that dimension. It must show that deficiency. But the Minister's argument is that the board has a surplus of £900,000 this year to set against that deficiency. I can tell you, the board has no such surplus available for that purpose. Of the £900,000, £300,000 will go in income-tax to start with and of the balance——

Mr. Norton

There is no surplus?

Mr. Lemass

I said that they have no surplus capable of meeting the deficiency which is going to emerge in the rural revenue account. Of the £900,000 this year, assuming that is continued next year, assuming that next year the board's proceedings are just as profitable, against the £900,000 for next year there will be a £300,000 income-tax liability because of this year's surplus and I pointed out to the Minister, from the most recent board's report available, the board itself attributed the emergence of a surplus of that scale to savings on fuel costs due to bad weather. Assume normal weather and there must be some reduction in the saving in fuel costs even if there is no increase in the price of fuel.

It is misleading, therefore, to suggest that there are available anywhere in the E.S.B. resources which will offset the losses which will accrue upon rural electrification—losses which will be at the £200,000 level this year, double that the following year and which will ultimately amount to £1,000,000 a year. Under the law as it stands—the law which the Minister is not proposing to change—the board have no option but to adjust their scale of charges so as to get revenue which will offset that deficiency.

I will agree that there would be no justification for an increase in charges this year. I would have argued, if I had seen the board's report for 1954-55 and if this Bill had not been produced, that the consumers of electricity were entitled to a reduction—were entitled to the reduction which the Deputies opposite promised them. It is quite obvious, however, that at some stage the board must get in revenue to offset the growing losses on the rural electrification account and the only place where they can get it is from the consumers. I will admit that there is force in the argument that nowadays the consumer of electricity is almost inseparable from the taxpayer but it is a queer way of benefiting the taxpayer by avoiding an imposition on him and, instead, putting it on the same individual as a consumer of electricity.

Question put.

The Committee divided: Tá, 57; Níl, 46.

Tá.

• Barry, Anthony.
• Beirne, John.
• Blowick, Joseph.
• Burke, James J.
• Byrne, Alfred.
• Byrne, Thomas.
• Carew, John.
• Casey, Séan.
• Coburn, George.
• Collins, Séan.
• Coogan, Fintan.
• Corish, Brendan.
• Cosgrave, Liam.
• Costello, Declan.
• Costello, John A.
• Crotty, Patrick J.
• Crowe, Patrick.
• Deering, Mark.
• Dillon, James M.
• Dockrell, Maurice E.
• Donegan, Patrick S.
• Donnellan, Michael.
• Doyle, Peadar S.
• Dunne, Séan.
• Esmonde, Anthony C.
• Everett, James.
• Fagan, Charles.
• Finlay, Thomas A.
• Flanagan, Oliver J.
• Giles, Patrick.
• Hession, James M.
• Hughes, Joseph.
• Kenny, Henry.
• Keyes, Michael.
• Kyne, Thomas A.
• Larkin, James.
• Leary, Johnny.
• Lindsay, Patrick J.
• Lynch, Thaddeus.
• MacEoin, Séan.
• McGilligan, Patrick.
• McMenamin, Daniel.
• Manley, Timothy.
• Mulcahy, Richard.
• Murphy, William.
• Norton, William.
• O'Connor, John.
• O'Donnell, Patrick.
• O'Donovan, John.
• O'Hara, Thomas.
• O'Reilly, Patrick.
• O'Sullivan, Denis J.
• Palmer, Patrick W.
• Rooney, Eamonn.
• Sweetman, Gerard.
• Tully, James.
• Tully, John.

Níl.

• Aiken, Frank.
• Allen, Denis.
• Bartley, Gerald.
• Beegan, Patrick.
• Blaney, Neil T.
• Boland, Gerald.
• Brady, Seán.
• Brennan, Joseph.
• Brennan, Paudge.
• Breslin, Cormac.
• Burke, Patrick J.
• Butler, Bernard.
• Calleary, Phelim A.
• Carter, Frank.
• Childers, Erskine H.
• Colley, Harry.
• Collins, James J.
• Crowley, Honor M.
• Crowley, Tadhg.
• Cunningham, Liam.
• Davern, Michael J.
• Derrig, Thomas.
• de Valera, Vivion.
• Egan, Nicholas.
• Fanning, John.
• Flynn, John.
• Geoghegan, John.
• Gogan, Richard.
• Hilliard, Michael.
• Kenneally, William.
• Kennedy, Michael J.
• Killilea, Mark.
• Lahiffe, Robert.
• Lemass, Seán.
• Lynch, Celia.
• McEllistrim, Thomas.
• MacEntee, Seán.
• Maher, Peadar.
• Moher, John W.
• Moran, Michael.
• Moylan, Seán.
• Ó Briain, Donnchadh.
• Ryan, James.
• Sheridan, Michael.
• Smith, Patrick.
• Traynor, Oscar.

Tellers:—Tá: Deputies P.S. Doyle and James Tully; Níl: Deputies Ó Briain and Hilliard.

Question declared carried.

Sections 5, 6 and the Title put and agreed to.

Bill reported without amendment.

Agreed to take the remaining Stages to-day.

Bill received for final consideration and passed.