Seanad Éireann díospóireacht -
Wednesday, 7 Jul 1965

Vol. 59 No. 3

Electricity (Supply) (Amendment) Bill, 1965—Second and Subsequent Stages.

Question proposed: "That the Bill be now read a Second Time".

Minister for Transport and Power (Mr. Childers)

The main purposes of the Bill are to authorise increased capital expenditure by the Electricity Supply Board for general purposes and for rural electrification, and to provide for the continuance of State subsidy for rural electrification.

Section 2 proposes to raise the limit of capital expenditure by the Electricity Supply Board for general purposes, that is to say, for all purposes other than the electrification of rural areas, from the present limit of £160 million, which was set by the Electricity (Supply) (Amendment) Act, 1963, to £225 million. Actual capital expenditure is still far short of the existing limit—at 31st March, 1965 it was about £117 million but commitments entered into by the Board for additional generating capacity and for improvement of the transmission and distribution systems at that date were about £35 million bringing the total for expenditure and commitments to about £152 million.

At 31st March, 1965, the Board's total generating capacity was 10009.5 megawatts made up as follows:

hydro	219 megawatts
peat	367.5 megawatts
coal/oil	423 megawatts

Commitments entered into provided for the addition of another 400 megawatts by 1969-70. These commitments comprise an additional 40 megawatts at the milled peat-fired station at Lanesboro, County Longford; an additional 120 megawatts of oil fired capacity at Ringsend, Dublin, 60 megawatts of which has just been commissioned, and the new oil-fired stations at Great Island, County Wexford and Tarbert, County Kerry each with a capacity of 120 megawatts.

The additional set at Lanesboro is expected to be commissioned this year. The only further addition to turf-fired capacity possible with our present methods of bog development is a second generating set planned for Shannonbridge. With the installation of further oil-fired capacity, turf is now beginning to decline in relative importance as a fuel for electricity generation. The year 1964/65 was a rather good hydro year and 25.2 per cent of our electricity came from water power; 31.7 per cent came from peat; 2.7 per cent from native coal and the balance of 40.4 per cent came from oil. All the best of our water power is already being exploited for electricity generation, and no further significant addition to generating capacity can be expected from hydro stations. Indeed at the present high interest rates the hydro-electric development of the remaining few small rivers would be quite uneconomic. It seems unlikely at present that a nuclear generating station will be economic in our circumstances for at least about ten years.

Demand for electricity is increasing very rapidly. This is, of course, a mark of expanding economic activity and of improving living standards in the country. For the past four years, the increase in consumption compared with the previous year has been:

1961-1962—7.6 per cent

1962-1963—11.6 per cent (This was an exceptionally severe winter)

1963-1964—6.1 per cent (This was a mild winter)

1964-1965—12.9 per cent

This represents an average increase over the period of about 9½ per cent and a total increase for the four years of about 44 per cent. During these four years consumption for motive power increased by 38 per cent, for domestic purposes by 46 per cent and for all other purposes by 47 per cent.

The Board's long term plans related to the period of the Second Programme are based on an average growth rate of 9 per cent per annum, which is 2 per cent above the European average rate. To meet expected growth in demand in the years after 1970 the Board expect, during the next five years, to have to approve the construction of 720 megawatts of further generating capacity estimated to cost £47 million. This would bring total generating capacity to over 2,100 megawatts or more than double the existing capacity. Further improvements of the transmission and distribution network costing an estimated £30 million are also expected to arise for approval over the next five years. It is proposed that the limit of the Board's authorised expenditure should now be raised to £225 million. Further authority will probably require to be sought in 1969 to cover further expansion likely to arise for approval in 1970 and the following years. The present North-South discussions may, of course, suggest some alterations and economies in the programme of capital investment in electricity generation and distribution equipment for which the Bill proposes to provide, but we cannot anticipate them.

Section 6 of the Bill authorises the Electricity Supply Board to spend an additional £5 million on rural electrification, bringing the total authorised expenditure to £42 million. This expenditure should for practical purposes complete the scheme, and as the completion of the scheme is in sight, I should like to give a short synopsis of it.

A report on the electrification of rural areas was prepared in 1944 on the basis of experience in four trial areas. It was estimated that if 50 per cent of the capital cost were given by the Government as subsidy, supply could be offered at standard rates of charge to about 85 per cent of rural premises, that 80 per cent of these or about 70 per cent of the total would accept and that the scheme would be economic. To achieve this, supply was to be offered at standard rates to any premises, the annual return from the standard fixed charges on which would be at least 6.25 per cent of the capital cost of connecting the premises.

By the time the scheme had actually commenced, capital costs had increased, but the ESB adjusted the figure of 6.25 per cent downwards so that connection of about 70 per cent at standard rates of charge could be achieved. As, however, the more economic areas were connected first the loss to the ESB in the early years of the scheme was not great and indeed in the year ended 31st March, 1955 there was a profit.

From 1955 to 1958 the ESB paid the full cost of rural electrification and this, together with increasing costs initiated a loss on sales in rural areas which has continued since that time.

By 1962 practically all areas had had an opportunity to take supply under the Rural Electrification Scheme. Under the 1962 Act, the Government provided a special grant of £90,000 to enable the ESB to extend the scheme on the original terms to some areas which otherwise would have been completely uneconomic and could not have supply at all. In that Act the Legislature also authorised the new subsidy arrangement in respect of houses which had not been able to accept supply on the occasion of the initial development of the areas in which they were situated. The subsidy, instead of 50 per cent flat, as under the initial scheme, became 75 per cent with a maximum of £75 per house. It was expected that the new subsidy would enable the ESB without incurring any loss, to offer connection at standard rates of charge to about 70 per cent of those still unconnected. The ESB initiated a planned post-development scheme which will cover the entire country by 1968 and at the end of which it is estimated that there will be about 340,000 rural consumers.

In any case where the return from the fixed charges would be below the minimum percentage currently in force, the ESB rather than refuse supply, have been prepared to connect a premises if the owner was prepared to pay an extra charge sufficient to bring his return up to the minimum percentage. The minimum percentage return was not, of course, an economic return. In fact it was well below the economic return. This is the origin of special service charges in the rural electrification scheme.

Under the present post-development scheme some 70 per cent of the houses to be connected can be offered supply at standard rates of charge and a further 20 per cent can be offered supply at special service charges of not more than 50 per cent of their normal fixed charges. For a small farmhouse, a typical fixed charge without any special supplement amounts to about 4½d. per day and this together with unit charges compares favourably with charges abroad. The remaining houses, which represent little more than three per cent of all the rural premises in the country, would be so costly to connect that special service charges of more than 100 per cent of the normal fixed charge—very much more in many cases—would be required to enable them to show an economic return. It is a physical fact that in rural Ireland where houses tend to be scattered singly over the country it is impossible to design a network which will enable supply to be brought at a moderate charge to every premises, and the ESB have had to design the network as best they could to cater for those prepared to accept supply when it was offered.

Capital expenditure on rural electrification up to the end of April this year was £36½ million. It is expected that the statutory limit of £37 million will be reached in July and that the extra cost of completing the scheme, including the cost of necessary improvements to the distribution system, will be about £5 million. Section 6 of the Bill proposes, therefore, that the ESB should be authorised to incur expenditure up to £42 million, that is, an additional £5 million, on the rural electrification scheme. The degree of rural electrification which will by 1968 have been achieved, 90 per cent, compares favourably with other European countries in a similar state of economic development. Electricity has been persistently demanded by rural dwellers and the Government have gone as far as reasonably practicable to ensure that that demand is met. It is now our hope that those for whom the service has been provided at such substantial cost will recognise and exploit its many potentialities for increasing their productivity and improving their incomes.

The total loss on rural consumers for the year ended 31st March, 1964, the last for which the accounts have been published, was £900,000 and it is expected that when the present post-development scheme is completed in 1968 it will be about £1.2 million per annum. This loss is in practice made good mainly from the surplus revenue from urban domestic consumers.

Section 8 provides for the continuation of the present rural electrification subsidy until the limit of £42 million is reached. By then it is expected that the total State subsidy for rural electrification will have exceeded £12 million. The time limit of five years from the 17th April, 1962, for payment of subsidy is being dropped because it will take until 1968 before the post-development scheme can be completed in all parts of the country.

I should like to mention, at this point, that the ESB are covering the country with the post-development scheme in an orderly fashion, just as they completed original development in an orderly fashion. This is necessary so that new connections may be made as cheaply as possible and the charges which the new consumers must pay kept to a minimum. If particular houses or areas were taken out of turn, the scheme would be disrupted and the cost of making connections would increase with resulting increases in charges. The ESB local office is now usually in a position to inform interested parties about when the turn of any particular area will come around.

The consumption of electricity per consumer in rural areas has increased by 30 per cent approximately since 1960-61. The use of electricity for farm production is illustrated by the following percentage increases in the numbers of electrically-operated equipment since 1959:

	Percentage Increase
Infra red lamps	17
Water pumps	42
Milking machines	98
“Burco” boilers	77
Grain grinders	92

Further evidence of the improvement in social conditions may be given by recording the percentage of farm residences using the following domestic equipment:—

Electric irons	79
,, washing machines	19
,, kettles	47
,, cookers	20
,, vacuum cleaners	10

Sections 3, 4 and 5 are included in the Bill for the purpose of bringing the ESB into line with the State companies covered by the State Guarantees Acts, 1954 and 1964. These sections will enable the ESB to borrow and the Minister for Finance to guarantee their borrowings in currencies other than Irish currency. Section 3 establishes the method of calculating the equivalent in Irish currency of borrowings in foreign currency. The rules for conversion follow those in the State Guarantees (Amendment) Act, 1964. Such conversion is necessary to determine the value of the Board's borrowings for the purpose of section 2 of the Electricity (Supply) (Amendment) Act, 1954, which is the basis for Parliamentary control of the capital expenditure of the ESB. Section 4 is the section extending the power of the ESB to borrow, with the consent of the Minister for Finance and the Minister for Transport and Power, to include borrowing in foreign currencies. Section 5 extends the temporary borrowing powers of the ESB to include borrowing in foreign currencies.

Section 7 of the Bill is merely to give explicit sanction to a clause in the superannuation scheme for full-time members of the Board of the ESB whereby any dispute as to the applicability of the scheme or the amount of superannuation granted is decided by the Minister for Finance and his decision is final. While the clause does not conflict with any existing legislation it is thought better to regularise it by a provision in the parent statute. The Turf Development Act, 1953, has such a provision in respect of the superannuation scheme for full-time members of the Board of Bord na Móna.

I confidently recommend this Bill to the House. The Electricity Supply Board are one of the most effective of our State-sponsored bodies. They have always maintained a high standard of service and have in no small measure contributed to the economic progress of the country. The enactment of the Bill will enable the Board to continue their service to the nation.

Mr. Garret FitzGerald

The Minister is fortunate in that the Bills which he has brought to this House in the brief time since I joined it have been uncontroversial Bills which have received a warm welcome. This is true of this Bill as it was of the others we have had before us.

In the discussion on an earlier Bill a fortnight ago relating to turf development, I raised some questions and the Minister, in replying, did advert to some of the points I made. I used the word "advert" with deliberation as I am not sure that he answered them.

I should like to return to a major issue I raised then and also as I think I am entitled to do now to broaden it somewhat. In that debate I raised the question of the appropriateness of charging the electricity consumer with the cost of the turf development programme, the further development of which was to be financed by that Bill.

Now that we are talking about the ESB, one can include a further social activity with the cost of which the ESB are charged, that is, rual electrification. I think I mentioned on the previous occasion that the extra cost to the ESB consumers arising from the turf development programme is something of the order of £1,000,000 to £1,250,000 per year. The loss on rural electrification is running at £800,000 or £900,000 but the cost of it has to be borne by the non-rural consumer. Taking these two together then, the total increase in the cost of electricity to the non-rural consumer, as a result of these two social activities which he is called upon to finance, exceeds £2 million per year. In other words, the cost of electricity to these consumers is, on average, increased by something over ten per cent. If these costs were not borne by the ESB but were charged to general taxation—as I think they ought to be—you could reduce electricity charges generally by ten per cent. If the benefits of this were passed exclusively to the industrial consumer, whether State industries or private industries, who take about one-third of the total output of the ESB, it would be possible to reduce the cost of electricity to industry by something like one-third. To put it the other way round, the Government's failure to adopt such a policy and their policy of charging these costs in this hidden way is increasing the burden on the electricity consumer generally by ten per cent, or by one-third or more in the case of industry. The cost of electricity to industry could be reduced by that amount if the cost of these social developments were charged to the taxpayer.

As I mentioned a fortnight ago, the Minister said in the Dáil—I think it was on the Turf Development Bill— that our electricity costs are comparable with and no higher than those in Britain. In the debate here, I challenged this point and asked the Minister what were the grounds for this statement. His reply I found somewhat unconvincing. My experience of State bodies, both outside and inside, is that they make the best case for thgmselves from the public relations point of view. I would not accept merely ex parte statements from the ESB as adequate proof that electricity costs in Ireland are the same as those in Britain but it may be that the ESB have some backing for this.

Since that last debate, I have looked into this matter further. Then I quoted figures for the year 1955 which I thought were rather disturbing in that they showed that only three out of 11 countries in Europe had an average electricity cost higher than ours and that we compared very unfavourably indeed with Britain. Since then, I have had an opportunity to look into the British charges in more detail and I find that for a much later year, 1962-63, the average cost per unit in Britain was 1.58 pence as against 2.08 pence in Ireland; in other words, a quarter lower. The cost in Britain varied a good deal from area to area. The price was 1.370 pence in Yorkshire and in one of the most expensive areas in London it was 1.874 pence, which was still substantially lower than in this country. The industrial rate in Britain was 1.342 pence per unit, in other words 15 per cent below the average rate. These figures confirm the accuracy of the comparison for the year 1955 which I mentioned previously. The figures I have given now for Britain and Ireland in 1962/63 show an increase of about ten per cent by comparison with the 1955 figure and I am sure the rates in the other countries have not changed radically in that time.

It seems then that electricity in Ireland, on average, is substantially dearer than elsewhere. Discounting Sweden which has an abnormal rate, our electricity costs were between 30 per cent and 55 per cent dearer than those in Switzerland, the United Kingdom, Austria, Italy and the United States in 1955. Our electricity costs were also dearer than the Netherlands and France.

All of this difference in cost is not, of course, due to the turf development or rural electrification schemes, or to the Government's unfortunate policy of charging the cost of these schemes to the electricity consumer. The small size of the country, and the small amount of total consumption involves the ESB in the use of small units which are uneconomic; but the fact is that the difficulties inherent in producing electricity cheaply in this country have been deliberately aggravated by the Government's policy of charging the cost of these social developments to non-rural electricity consumers. I should be interested to hear from the Minister a fuller explanation of the reason why he stated in the Dáil that the cost of electricity here is comparable with that in Britain.

If I have perhaps unwittingly produced comparisons which are false, I am quite prepared to be convinced of that, but the information I have now got from different sources seems to show the same picture.

The Minister also said, in defending the Government's position, that there was no evidence that new industries had been deterred from coming here as a result of electricity charges. That was the only point he made on that aspect, but the fact that there is no apparent evidence of this is not conclusive. Major industries do not even think of coming to a country like Ireland which is such an expensive producer of electricity. I know personally of one case of an industrialist who came and looked at the country but did not look very long when he discovered that the ESB charges were much higher than elsewhere. So the mere fact that we are getting a stream of industries coming here and going away disappointed proves nothing more than the fact that they know, as everybody, I think, interested in industrial development knows, that this is not a country to come to for cheap power.

The important thing is not so much whether or not new industries are being discouraged, but whether our existing industries are being impeded by the high cost of power and the high cost of the other basic requirements of industry, steel and transport. In relation to these two commodities also, the Government have adopted the policy of making them dearer because they are not prepared to impose the cost of their social policies on the taxpayer, but wrongly impose it on industry, to the detriment of our economic expansion.

The truth is, I think from all the evidence, that the Government still does not think in terms of economic expansion, in terms of the Second Programme for Economic Expansion designed to develop the country's economy rapidly by keeping costs down and making economic expansion easy to achieve. Their thinking is still back in the 1950's, in the period of stagnation. They are still thinking in terms of redistribution of income to be carried out in the way least expensive to the taxpayer. The Government's policy is completely out of tune with the whole thinking of the Second Programme. This is a basic problem at the present time: neither the Government itself nor many Government Departments are in tune with the Second Programme or really understand what it is all about.

This is something which quite evidently is causing concern to the National Industrial Economic Council which last week published a report in which its "concern" was brought out very clearly. I quote:

The need for steps to ensure that all departments of the public service and State enterprises play their full part in implementing the programme is reinforced by the priority given to the attainment of economic growth in the Second Programme. The implication of this development and the need for a realignment of policies and administrative machinery may not be completely realised as yet in some parts of the public service and in all the State enterprises.

It goes on to say:

In our view, existing administrative arrangements should be developed and extended to secure a continuing overall appraisal of the policies and actions of the public service and of State enterprises, so as to ensure that they are in keeping with the objectives of the programme especially in such areas as manpower policy and... there is s clear indication of their concern here, I think... Policies which affect the level of casts of basic materials and services used by industry or agriculture.

I think it is quite clear that the National Industrial Economic Council takes the view that the Government and Government Departments do not understand what the Second Programme is about and have not attuned themselves to the requirements of economic expansion. The Council is concerned that there should be changes in policy and administrative procedures if we are to achieve the progress we should achieve.

It goes on to say:

This will require continued development of the co-ordinating role of the Department of Finance.

It also says that the Council should review progress periodically. It adds:

It is of interest that same commentators on French planning believe that some of the main obstacles to effective planning lie in the public sector... We quote these views to emphasise the fact that it would be best if such problems were not allowed to arise here. French experience of nearly twenty years of economic planning suggests that when such problems do appear they can be very intractable.

That is a good principle to apply to the Government here.

Again, later on, the report comes back to this in another part. It says:

The experience of other countries where democratic economic planning is practised would suggest that paradoxically it is within the public sector itself that the guidelines which an economic plan provides are least often followed, and that targets— especially for capital expenditure— are most often revised. Whatever the reasons for this, there can be no escape from the conclusion that an economic plan which is soundly based on available resources cannot succeed unless the public section obeys its precepts.

It is quite evident from this that the Council is unhappy with Government policies, with the intractability of Government policies in this matter. Power is one of the most important areas so far as this question is concerned. I would plead with the Minister to think again about this matter and to take it up again with the Government.

It is notable that this report was accompanied by a statement by the Government that:

In so far as recommendations made in the report effect Government Departments and State agencies, steps will be taken to give effect to them.

The Minister is responsible for only one part of this but it will be interesting to hear what steps the Government are taking towards the realisation of the changes called for by the Council, and which are required if we are to make economic progress.

There is one point I should like to put to the Minister in coming back to this question of power itself. I mentioned earlier that, apart from the problems off rural electrification and the cost of the turf programme, there are other factors pushing the cost of electricity so much above the level in Britain and other countries. One of these is the problem I mentioned of the small size of the units of production, turbines and sets. One reason for this is that the ESB has followed a policy of increasing its electric power capacity by a succession of small steps and not jumping ahead of consumption to any degree. There are, perhaps, historical reasons for this. If was in the fifties forced by Government policy, and most unwisely, to over-expand, and it has not psychologically recovered yet from the effect of Government policies at that time, which had such an unfortunate effect on the ESB finances for a period of years. I have a feeling that the ESB may still be influenced too much by its reaction against Government policy at that time and the damage done by it, and that it is too much concerned to move ahead by small steps and to make sure —and this itself is a laudable ambition —that supply and demand be kept closely in harmony with each other. The policy of proceeding by small steps and keeping them m harmony and ensuring that at no time is there excess capacity such as there was in the fifties can, however, lead to raising the cost of electricity because all the individual units are so small whereas if the ESB were to decide in any given year that instead of installing a 30 megawatt or 60 megawatt unit it should should build a larger unit, knowing that it would have excess capacity for a year or 18 months or two years, the extra cost might be more than recovered by the reduction in the production cost in all the subsequent years during which the more economic units were used. I would be very interested to hear from the Minister what has been done to study this problem. Has any adequate economic analysis been made of the relative advantage of small or large jumps when you have the potential advantage of lower costs from larger units?

In this connection the question of co-operation with Northern Ireland is very important. I understand, in fact, that if we can achieve agreement with Northern Ireland to integrate our two electricity systems this would enable both of us, perhaps, to double the size of the individual units introduced at any given point of time even if policy were not changed along the lines that I have been discussing. That would involve significant economies in both areas. In the short term there is no area in which such large practical economies can be achieved through North-South co-operation as in electric power.

I would like to ask the Minister if he can foresee the possibility of some I agreement along these lines fairly soon, to what extent the ESB programme up to 1970 can be adjusted to gain the benefits of such an agreement by modifying their existing plans and introducing in co-operation with the Northern authorities larger units which would yield lower costs. Will we have to wait, even if we get agreement with Northern Ireland now, until the next decade before we begin to reap the benefits of it because the time scale on which the ESB has to plan is so long that it may not be possible to change the plans at this stage?

One final point concerns the clause in relation to borrowing abroad. We have been told that these provisions are introduced to bring the ESB into line with other State bodies. I would like to know whether, in fact, there is any intention to have any borrowing abroad by the Board. I know that it has been done by Aer Lingus, very appropriately, because it is a substantial earner of foreign currency and has no difficulty in remunerating borrowings abroad out of foreign currency earned. The same would not necessarily be true of the ESB and a policy of borrowing abroad might be economically less sound or less appropriate for this concern. I wonder whether the introduction of these clauses suggests that the Government is thinking in terms of actually going abroad to borrow for the ESB, because this is something that we should know about if it were intended.

Having made these comments which I think are not in any way critical of the ESB even though they are critical of Government policy, I reiterate that this is a Bill which we all welcome on this side of the House and we are glad to see the ESB expanding its output in this way. There was a period when the ESB was so influenced by its reaction against the policy of the fifties which led to over-expansion that at the end of the fifties and in the early sixties it failed to respond immediately to the recovery in our economy. There was a time when there was almost a danger of having inadequate electric power because of their slow reaction in consequence of their reaction to earlier Government policy, but since 1960 they have responded and have revised their plans upwards again and again and increased the rate of growth to a more realistic level in tune with the kind of economic expansion we have been having and to which we can reasonably look forward. This Bill is yet a further stage in this development. The Minister, indeed, indicated in his remarks that it is going to play its part in the continuing growth of our economy which we hope will not be interrupted by whatever economic difficulties lie immediately ahead of us.

Professor Dooge

This Electricity Supply Bill follows the pattern of recent Bills of this type. There is authority for extension of expenditure and extension of borrowing; there are sections dealing with rural electrification, and there is, as happens from time to time, a section dealing with superannuation matters. On the occasion when an Electricity Supply Bill was last before this House I raised the matter of one particular superannuation difficulty which has arisen in the ESB, and on that occasion the Minister indicated that if a memorandum were submitted to him on this point, the point being the position of those under 40 when the superannuation scheme came in, he would consider the matter. Since then I understand that such a memorandum has been submitted and that the staff and the Board appear to be in agreement as to what should be done, but I understand that no decision has been made in time for this particular Bill.

I do not intend to discuss the matter at length, but merely to remind the Seanad that the ESB had no superannuation scheme for 15 years. A scheme came into operation in 1942. Then men over 40 were given their prior service and those who were under 40 years of age were not allowed their prior service and have been at a disadvantage ever since. They were given the doubtful offer of being able to purchase their previous service to pay for it. If we remember this scheme came in 1942 at a time when there was a wages stand-still order, in the middle of the war, when these people who served the ESB during the heat of the day were people between 30 and 40 when the commitments of such officers with wives and growing children would be at a maximum, we can realise the reason why virtually none of them felt in a position to purchase. The position is that the Board are willing to pay whatever is required to give those loyal long-time servants of the Board their complete service.

These officers will shortly be retiring. I do not wish to deal with this matter at length. I do not even wish the Minister to tell us in his reply to this debate what he thinks of it, but I want to urge on the Minister that this is a matter which should not be postponed very much longer and to express the hope that when the next Electricity Supply Bill comes before the House the Minister and the Minister for Finance will have bean able to agree with the Board and the Board's officers on this matter that this is something which did discriminate against a particular class in 1942 and that this discriminiation should now be removed.

Mr. McDonald

I would like to welcome this Bill but there are just a couple of small points that I would like to bring to the notice of the Minister. In his speech the Minister said that it was proposed to grant subsidies totalling £12 million for rural electrification and it is hoped to extend the service to some 75 per cent of our rural community. The present system of levying the bimensal charge has operated from the start and no effort was made at any time to streamline it or make it just or equal in its application to all. I find that in cases where the Land Commission divide estates the unfortunate applicant who is granted the mansion or big house is virtually barred from availing of the rural electrification because of the exorbitant bimensal charge calculated on the floor area. Surely in a State body it should be possible to have an upper limit fixed connected in some way with the acreage and the capacity of the holding. I know of one particular farm in Laois of 25 acres where the bimensal charge annually was around £40, whereas the rateable valuation was only £15 on the same buildings. There are lots of these cases. Surely it is within the competence of the Board to come to some terms with those unfortunate people. I consider that a farmer who would not have at his disposal the use of electrical equipment is at a grave disadvantage nowadays. The Board could come to some agreement or at least set up a top bimensal charge.

I know of another similar case where there are 14 cottages built on the lawn of a mansion. The 14 cottages together have a smaller bimensal charge than the one family living in the big house. That is really a situation that is uncalled for, where people are denied the service that the State was subsidising to 70 per cent of the public. I find, too, that in many rural areas where it has been uneconomic to extend the connection those people are offered the ten years gas subsidy or some such scheme. Now that the Board has almost completed the rural electrification scheme a last effort should be made to extend the service to every rural householder who applies for and wants it, seeing that the Government are spending £12 million on it. An extra £1 million should go on, and I do not think that there would be that much of an outcry over it.

I am glad that the Minister has decided to bring in this Bill and thereby extend the service still further. The progress made by the Board and their staff throughout the country has been remarkable and I wish to congratulate, the Board on its activities. Coming from the constituency of Laois-Offaly that has many ESB installations, I feel that I am in a position to see the ESB and its officers from very close quarters and I have only the highest of praise for the excellent service that the vast majority of those servants of the Board give to the public.

There is one point that has been worrying me, and that is in cases where rural electrification has been in existence with some farmers and when they wish to instal perhaps corn-crushers or some heavier pieces of machinery there is a difficulty sometimes about the line capacity or the transformers. I should like to ask the Minister if it is the custom that the customers have to bear some of the increased capital costs of providing heavier transformers in order to supply the farmers with sufficient voltage to use a grinder or some other piece of machinery?

I do not wish to delay the House any further. I consider the bimensal charge very unfair in many cases. I would again urge the Minister, and the Board, to set some upper figure and to relate it in some way to the acreage and earning capacity of the farmers. There are very small farmers with big houses and they are paying more for their electricity than are other men who are better off in small cottages or bungalows. That is very unfair and it is something the Board should be interested in.

Dr. Sheehy Skeffington

As Senator FitzGerald has said, this is a non-contentious Bill. It gives us an opportunity to say something about the electricity supply in Ireland. Most of what we have to say is in praise of the Board. We can be satisfied with, and even proud of what has been achieved in this field in Ireland over the past 40 years by successive administrations.

There are some points of criticism nevertheless. Some of them are minor and some of them, as Senator Fitzgerald has said, are of a major kind. They are not so much matters for the ESB as they are matters of general policy decisions. There are minor failures with regard to the ESB because they have not so far sufficiently standardised fittings, plugs and sockets. I do not know how many sizes and types are available in this country but there always seems to me to be plenty of variety. A single electricity authority ought really to be able to do something in this matter and to have improved it more than it has been.

I agree quite frankly with what Senator FitzGerald has said in his very effective speech. There is one point I should like to deal with, that is, what he called the over-production in the 1950s. I can remember that being referred to when I was in this House earlier but it seemed to me then that there was exaggerated fear on the part of the people that perhaps the demand for electricity might not keep up with the increased growth of about ten per cent year by year. I thought at that time that there was a bit of panic in that we might over-produce. It seems to me Senator FitzGerald was trying to have it both ways, in recognising some justification by using the very word over-expansion in the 1950s and at the same time, deploring the state of fear which produced, perhaps, under expansion in later years. We will have to recognise if we want to avoid under expansion and under production that we will have to accept what we might technically call a measure of over production. In other words, it is betteto have too rouch available for a basic power supply than too little.

There is another point which has not been mentioned but which I consider should have been mentioned. I am sure the Minister is a person who will be concerned with this kind of thing. Are we entirely satisfied with the aesthetic aspect of the new development in the power house at Ringsend. for instance, and other places? Are we satisfied that Dublin Bay, the amenities of Dublin and the approaches to Dublin, are not being over-ridden, to some extent, by industrial squalor from the aesthetic point of view? I recognise the necessity for the proximity of oil-burning plant to a deepsea port, and so on, but I wonder is it absolutely necessary to have the new buildings and the new power houses quite so objectionable. They are very ugly on the horizon. We all value the appearance of Dublin and the appearance of the bay. I am afraid that, on both sides of the river, and at the mouth, industry is taking over in an unnecessarily ugly way. I should like to hear the sympathetic response which I would expect from the Minister on this particular aspect.

There is another question I should like to ask, although I am afraid the answer is likely to be less sympathetic. Has there really been established the difference in cost between overhead and underground cable for the main network throughout the country? Is this so vast that we could not contemplate laying underground cable? I realise that the underground cable, basically, may be considerably more expensive but I would also guess than the maintenance cost would be perceptively less than the maintenance cost of overhead cable.

The aesthetic aspect enters into this also. There is no question that if Ireland is to be criss-crossed with cables and pylons, we will lose something which is very valuable, that is, the scenic beauty of Ireland itself. If the answer is likely to be less sympathetic than the answer to the previous point, that the difference in basic costs is so enormous, then, of course, we will have to bear with the unsightly pylons. Have we calculated, over a sufficient number of years, the saving in maintenance costs by laying underground cables, at least where feasible? Perhaps it is feasible more often than we actually apply it.

I am not clear as to just how the production costs of electricity are calculated. For instance, it is obvious there are off-peak periods. The ESB can be proud by reason of the fact that they were ahead of Britain in the launching on a large scale of the system of storage heating which is now being taken up in a big way in Britain. The ESB were many years ahead of them in that. This was based on the cuts there were for electricity in off-peak hours. Again, I wonder whether the rates for off-peak electricity have not remained rather too high?

I would like to know from the Minister whether it would not be feasible and better to use the maximum in off-period electricity and so reduce the cost for this type of electricity for storage heating which can be extremely valuable at least as background heating, not only for domestic use but for industrial use also. I am not quite sure how the cost is related. If in fact you have electricity you are not using, then it seems that if you are charging so much that it is not being used to capacity, you are losing money by-reason of the fact that you are charging too much.

Senator FitzGerald made a very strong case against the concealed subsidisation of rural electricity and of the use of turf far making electricity. He suggested, and I think it should be quite frankly admitted, that it should be a charge upon the taxpayers, not merely the national taxpayers but the ratepayers an rural development, rather concealed in an artificially high basic price for electricity. I would suggest, nevertheless, that there is a distinction here between the necessity in our attitude towards rural development of electricity and the use of turf for making electricity, because however we subsidise it, there is no question that the production of electricity from turf, even though it be at the moment more expensive than from oil, is from the point of view of possible emergency in this country, of absolute basic necessity. There is no question that if in 1939-40 we had the turf development and electricity production from turf that we now have, we would have been considerably less dependent upon outside sources of supply.

If the analogy is not a bit far-fetched, I think in a sense it is a bit like the subsidisation through price of production of sugar from sugar-beet which, from the international point of view is uneconomic, but from the point of view of giving us our own national reserve from our potentiality for producing our own sugar, is justified. The same applies to the production of electricity from turf if there is any danger that the oil supply might be increased in price or cut off completely.

I do not think I am misquoting the Minister when I say that he said rural electrification is being paid for largely from the surplus revenue from ordinary consumers. That is not quite logical. Why should it be to such a large extent the urban consumer who subsidises the rural consumer? I think it should be a national charge. If it increases the amenities of the countryside why should it not be to some extent an increased charge on the local ratepayers, and subsidised more generously by the taxpayers? A very obvious advantage, as Senator FitzGerald pointed out, would be a reduction in the basic price of electricity which would affect the whole community. Similarly, with turf. I would be in favour of Senator Fitzgerald's suggestion that if it must be subsidised—and I think it must—it should be done nationally through the nation's funds, through the taxpayers, rather than as a charge upon the consumers of electricity.

I do not want to say much more on this Bill which is non-contentious, except to support what has been said very cogently and usefully by Senator Fitzgerald in relation to the necessity of keeping as cheap as possible the price of our basic utilities and services, power, transport and communications. It is folly to raise our postal charges, to make it more difficult to acquire telephones, to raise telephone charges and to raise electricity charges, instead of, artificially if necessary, keeping them as low as possible. It is Government policy rather than ESB policy which is keeping them higher than they need be. The warning gently issued by Senator Fitzgerald is extremely useful, and I should like to support him in it:

Mr. Ronney

This is more or less an enabling Bill to provide approximately £45 million extra towards the expansion of electrification and the demand for electricity. We have seen that apparently the ESB have been a highly efficient and successful unit in our economy. No one will deny the fact that electricity has made the greatest contribution to our industrial and economic expansion, and also towards raising the standard of domestic living.

The report we got this evening raises some questions in relation to the source of power. We have seen that the power goes into the grid through our hydro schemes, our peat schemes, and a small proportion from coal and a large proportion from oil. It seems from the report that the prospect for the future is that we must depend more and more on oil for the production of electricity. Apparently the possibility of obtaining further electric power from the hydro schemes daes not exist. There are very few rivers or streams now which could be harnessed economically to provide electric power, mainly because this country has not the high mountains and large valleys which other countries have.

Apparently we have harnessed all the turf areas also which could be economically developed for the purpose of providing electricity. I notice in the report that it is possible that one more peat station may be established at the Shannonbridge turf area in order to get electricity into our grid; but it would be a very limited amount. I wonder whether the possibility of harnessing tidal pressures has been examined I presume it has. We have not got the type of fiords and inlets they have in Norway and Sweden and apparently the possibility of harnessing tidal power almost does not exist, so for the future, anyway, it seems that we must depend on oil until such time as we may be able to avail of nuclear power.

At this stage I should like to give a quotation which shows very clearly what our prospects are so far as power is concerned. As reported at column 879 of the Official Report of 15th June, 1965, the Minister said:

With the installation of further oil-fired capacity, turf is now beginning to decline in relative importance as a fuel for electricity generation.

The possibilities from the point of view of the hydro schemes, the peat schemes, native coal and anthracite seem to be exhausted, leaving only the prospect of getting electricity from oil or possibly from imported coal which, of course, would involve very high costs.

I was disappointed to see in the report that we may have to wait another ten years before nuclear power may be a practical proposition. I hope we will have it sooner than that. There was some talk of co-operation between North and South for the purpose of setting up a nuclear power station. I believe that idea should be explored. Taking all things into consideration, including the fact that we are now faced with the necessity of depending further on oil, it is possible that it may be found that we should go ahead even at this stage with plans for the provision of a nuclear power station paid for by the consumers in the North and South. We had an example of North-South co-operation already in the Erne hydro electric scheme which enabled Northern Ireland and the Republic to co-operate in providing further electric power.

We had some discussion here regarding the fact that the urban consumers are contributing heavily towards the losses incurred in providing rural electrification. It is no harm to make the facts known to all the people in order to show them how they stand because, of course, the same situation applies so far as transport is concerned. The urban community of Dublin city contributes very much more in the form of costs and fares than would be necessary for them to contribute but for the losses incurred in the rural areas in our national transport system.

It was noticeable from the report that an increasine amount of electricity is being used on our farms. That, of course, is associated with the decline in the number of persons working on the land. In the past three years something like 38,000 fewer people were working on the land which means that whatever output was associated aith these people must be made up by mechanisation. We have noticed also in the report that there was an inerease of 98 per cent in consumption relative to milking machines. Similarly, boilers associated with the dairying industry also increased by 77 per cent in consumption, Grain grinders increased by 92 per cent. In the rural houses we find the housewives have increased the percentage of electricity consumption by 79 per cent since 1959 in the use of electric irons and a similar amount in relation to electric kettles. Apparently cookers have been considered too expensive. I would not mind washing-machines so much because not many people have them but, apparently, there has not been any significant swing-over to cookers in the rural areas due possibly to the cost of electricity in relation to them.

It was significant to hear the case made by Senator FitzGerald which, in fact meant that this country is fourth in the list of electric costs, one of the other countries being Turkey, which is a huge underdeveloped country and would probably be involved in long lines of communication as far as electricity purposes are concerned and possibly also in very great development. Similarly you have the high cost of coal in Belgium affecting the price of electricity there, and you have it to some extent in Germany.

However, we have noticed here now that the ESB have done a very good job in respect of electrification and that almost 90 per cent of the population—I think that is what it is—now have electricity available io them and the most expensive portion still remains to be connected. They are the people in remote rural areas. I feel. as has already been suggested, that it. would be too much for the existing consumers to pay for installation in the remote areas and it should be made a national charge. We know, of course, that a subsidy is being paid to the ESB at the moment. Arrangements were made to subsidise the ESB until 1967 but now it has been decided to give them a subsidy for a further year— up to 1968. When we see a subsidy being made available to the ESB, when, in fact, at one time there was no necessity for any subsidy at all and when there was over-production of electrical power, I think it is only fair to suggest that it might be possible now for the State to step in, having regard to the high cost of the unit. The State should subsidise the extra cost of providing rural electrification for the remaining consumers in the country who must be facilitated. Many consumers is the rural areas are paying heavy special service charges. They had hoped that the day would come when the country would be completely covered by the network and that they would not be required to continue paying this rather heavy charge.

It may be argued, of course, that the urban consumers could not possibly pay any more than they are at present but I do feel some scheme should be devised whereby this very heavy charge or penalty on same of the consumers could be abolished and that the charge could be levelled out, when it would be the same for one as another. So far as paying for the service is concerned by way of a meter charge, this is the basic method of applying a charge for the service as far as the ESB is concerned. There is a feeling throughout the country that everybody should pay the same meter charge for electricity and that it should not be cheaper for one than another. Most people who were obliged to pay the fixed charges in the rural areas which were based on the floor space of their farm houses and sheds felt that when the whole country would be provided with this service, charges could then be levelled out and no matter where you live you paid the same amount as a meter charge and the balance was paid in the form of a charge on the unit consumption.

When we arrive at the stage that we can have nuclear power I think it may be possible to bring down costs on this basis which would seem to be the fairest basis for all our citizens considering that every man considers he should receive equal treatment with his neighbour and that the neighbour I should not have preference over him.

Mr. D.J. O'Sullivan

I find at this late stage in the debate that many of the points I had hoped to advance have already been put on record by other speakers. As there is no advantage to be gained by repetition, I should merely like to say that I welcome the Bill as further evidence of the potential which the ESB have in relation to the future of the country. We can look back with pride on the achievements of the Board back to the early days of the State. I regard the establishment of the Shannon Scheme a, a courageous and wonderful venture which we can now record with pride and glory for the courage and authority of the men who launched it. It was with regret I noticed at some recent function where some large development was being celebrated —I do not know whether it was a mere omission or otherwise—that some of the men happily alive today who were at the initiatson of the scheme had not been invited. I would suggest to the Minister that, if he has some capital works as well to perform in extending the operations of the scheme, he should favourably consider placing some concrete momentum for posterity in one of these schemes. The ESB is now regarded by all sections of the community as an essential service, providing agriculture and industry with the necessary power and all the amenities that now have become accepted as an integral part of our society.

I am glad to learn from the Minister that we now envisage the end of rural electrification and that we can see the date by which we will have provided, with the exception of a few, a service for all our rural community. This question of rural electrification unfortunately was not really tackled until after the last war. If it had been embarked upon and had advanced to any extent before the last world conflict, it could have been done at far less cost and we should not have the problems we have today relative to the amount involved, in providing this service for the rural community.

I sympathise with those who have complained regarding the imposition rural electrification puts on them and the awful cost of it to the rural community. But, if we were to apply that to all facets of administration, we would find some anomalies working the other way. It is a fact that 65 per cent of the houses built under State subsidy were built in Dublin and the rural population have been paying in taxation for the substantial grants, perhaps inadequate in many eyes, given.

It is the same in the administration of the Department of Justice. We find Garda stations closing down and we find increased demand for Garda services in the city of Dublin. It has been suggested that the cost will be rapresented in the rates of the local communities in those areas. No doubt the urban dweller would shoulder a share if it were suggested that the cost of the additional Garda services should be borne by increases in rates. If we look into it we will find examples where the rural dweller is constrained to pay for services enjoyed by the urban dweller. If this is an example of where the urban dweller is called upon to pay something towards the subsidisation of an essential service in our society for those who are unfortunate enough to be compelled to reside in inaccessible areas, we should not grumble with it.

I should like to know what success has attended the novel idea introduced some time ago regarding the provision of bottled gas in areas or regions where there is not an electricity service. Before I depart from the question of the financing of rural electrification, I should like to mention that the Minister said that ultimately a figure of some millions of pounds per annum might be involved in the financing of it. Yet, last year the Government secured an income of £128,000 in turnover tax levied on the electricity consumers of the country. So that, far from subsidising this service the Government are actually, taxing it. It is in the form of a sum exacted from industry and all users in the country.

I should like to know from the Minister whether he is satisfied, in relation to the protection of our fishery interests, regarding the problems that have arisen in the matter of fish passes in some of the dams. The Minister is aware of the detrimental effect the establishment of the Lee dam had on the Lee valley. The points at issue between the interests involved concern the efficacy of the fish passes. This is a serious matter and one about which I should like the Minister to appeal to the Board. He should ask the Board to give sympathy and consideration towards overcoming these difficulties. Finally, I should like to refer to a long standing grievance regarding the activity of the Board. I admit, as I did at the beginning, the wonderful work the Board has done and will do for our people but there are certain matters relating to its activities that call for criticism. I refer to the practice of the Board in coming into the retail trade, and taking the livelihood from some of our people in the small towns who are engaged in the servicing of electrical equipment. The Board have a most unfair advantage over people who have overheads to meet which the Board have not. Those people have not the machinery at their disposal to cover costs which the Board has. These people have to meet increases in the cost of living, increases in rates, increases relative to the maintenance of their premises and the conduct of their businesses, but yet here we have a semi-Sate body engaged in the retail business to the detriment of many families engaged in business in our rural towns.

Dr. Sheehy Skeffington

It is to the benefit of the consumer.

Mr. D.J. O'Sullivan

At any rate, it is to the advantage of the people engaged in selling and in the normal maintenance of equipment. I am in complete agreement with the major activities of the Board but I feel they have an unfair advantage over the small man who is trying to educate his family and trying to live on the income he derives in a rural area. Perhaps, Senator Sheehy Skeffington is right that the consumer is gaining but I do feel that the people who have overheads to face are at an unfair advantage in competition with the Board.

Mr. Childers

One always feels a certain amount of diffidence in taking on an expert economist such as Senator Garret FitzGerald but I am bound to do it. I do not think that Senator FitzGerald has done his homework on the question of the comparative cost of power here and in other countries. To begin, it is extremely difficult to compare electricity charges as between one country and another. A study was carried out in 1962 and it was found that with a wide range of industries the average cost of energy was 3 per cent of production. I know that there may be industries where even if the cost rises to 3.1 or 3.2 per cent of the total cost of production it may be impossible for those industries to start. But, from what I know of the cost of production in industry generally, I can hardly believe that so slight a difference would have the result of preveating an industry starting.

As Senator FitzGerald knows, there is a very wide difference in productivity as between one factory and a group of industries and the difference can be as great at 3 to 1. He knows of the study that has been made in regard to that. Those in which energy costs are 5 per cent of cost of production or more are non-ferrous metals, wood sawing and furniture, the vegetable oil industry and oil processing. In these industries a very material increase in cost here might affect their chances of operating in this country.

Before I go further I might deal with the allegation anade by Senator Fitzgerald that, in fact, power costs more here than in other countries. I have to rely for this information, at least to some extent, on the Electricity Supply Board. I doubt if the Board would deliberately falsify figures or misinterpret figures or even give a strongly optimistic slant to figures when they were asked by their Minister specific questions with regard to cost of electricity here and in other countries. We worked out the cost, the rates of charge per annum for our farms. I do not think that I need go into this in detail, but it showed that for the 30 acre farm in this country and in three areas in Great Britain the average cost, the amount charged per annum for electricity, was more favourable here than in Great Britain.

Now, of course, it is true that British farmers get higher subsidies than ours because of the enormous availability of the subsidy there and the comparatively low proportion of resources in England devoted to farming and the high proportion of resources concected with industry and the ease with which transfers can be made from one to the other. Nevertheless, all the facts I could gather on that subject indicate that the charges are quite reasonable here. I came to the conclusion that we are quite sincerely bound to try to make comparisons, to try to find some logical comparison between our charges and those of other countries.

Senator FitzGerald should be Interested to know that a group of expects of the Common Market countries attempted a comparison in those countries in 1962 but decided that the struotural differences made it impossible to compare them. The ESB has made attempts to calculate a corresponding figure for Ireland. This comparison is quite favourable to Ireland. It has been difficult even to get full information on the basis upon which one can work. As far as I can gather, to make a real comparison we would have to find a consumer of one supply authority and an exactly similar consumer of another supply authority. in 1962 an effort was made by the Common Market countries to compare average unit prices for domestic and agricultural consumers in those countries and the ESB calculated their charges to make comparisons possible.

I believe that the ESB will act quite scrupulously in this regard. From my experience of them I can completely believe them and that they would not try to put an optimistic gloss on their unit charges to make them appear mere favourable compared with other countries. I am not going to read out all the figures for the benefit of the Seanad, because it would take too long, but I will give just one example of what is described as a medium domestic type of consumption, the unit charges expressed in pence for 1962 ware for Belgium 4.01 pence, Germany 3 pence. France 2.72 to 3.67, Italy 3.24 to 3.57, The Netherlands 2.37 to 2.61 and Ireland 2.22 to 2.61, so that the comparative price in Ireland was reasonably favourable compared with those of other countries. That is also shown in the comparison of prices charged to farmers.

As I have said, apparently there is no real way of making a comparison, but, nevertheless, as far as we can gather from all the examination we can make the price of power here appears to be reasonably satisfactory.

The Senator launched an attack on the Government suggesting that there is lack of co-ordination between the various officers and experts who are activating the economic programme for expansion or attempting to secure its success. I cannot agree with him. I myself happen to know what is going on in the whole work of the Second Programme because my Department co-ordinates with other Departments, officers of my Department meet officers of others to discuss various matters where different factors are involved in securing increases in production, and I myself think that the Government is fully alive to the need for coordinated planning. However, we canndt discuss that at length here tonight, quite obviously, but I should make it clear that I have had no complaints either from industrial development associations throughout the country, from prospective industrialists or promoters of industry, nor has a complaint come to me either directly or indirectly from the Industrial Development Authority or from the Minister for Industry and Commerce that the cost of electricity is having an effect on the number of enterprises that are being initiated here. That is a fact, and I know of one particular case where some years ago there was a proposal to start an aluminium factory. I consulted some of the promotors of this factory and the prospective Irish directors and I said to them: "If ever there is a question of a really big aluminium factory starting here you must come and tell me if the ultimate question is what would be the price of electricity, because there I know it could be a crucial factor." I learned later that the project was not regarded as possible, but that it was not because of the refusal of the ESB to make a special charge for electricity or of my refusal to engage with the Government in a discussion as to whether under the circumstances something should be done about it. There were other reasons for the factory not coming here.

I can assure Senator FitzGerald that if I ever receive news of the possibility of large scale industrial development, something really worthwhile, the Government would consider it because of the importance of establishing large scale industries in this country, but as I have said I understand that the cost of electricity amounts to 3 per cent of the total cost of production of most goods with the exception of certain industries.

Senator FitzGerald has suggested the provision of some kind of operating deficit subsidy by the Government or the taxpayer so that the cost of electricity could be kept down, and he suggested that the taxpayer should be made to pay a general charge every year to balance the accounts of the ESB in so far as charges could be reduced arising from the use of turf and arising from the subsidisation of the rural consumers by the urban consumers. As I indicated previously during the debate on Bord na Móna, I utterly disagree with him on that proposal. I dread the thought of operating deficit subsidies. I absolutely loathe the concept of them. I accept every one that has to be accepted with the greatest misgivings because I believe that they are breeders of inefficiency. It is a totally different thing to provide the ESB with a capital subsidy once and for all to help it discharge its obligation to provide electricity in the country and to say: "We will balance your books so as to keep the cost of electricity from going above point A to point B". It would be appalling for the mentality of our people where the Government is paying out so much money one way or another, and we must be tremendously careful that we do not get people to believe that we can do things because the Government will jump in and pay the difference. This tendency to seek Government subsidy for everything is due to the necessary manifold injections of capital by the Government and to the payment of certain subsidies that are absolutely unavoidable.

There is another way out of this which I indicated before in connection with Bord na Móna. It is the option to provide capital grants in order to provide sufficient capital compensation to enable industry to operate here economically. It would be even possible for the Government to make some slight allowance in depreciation in connection with taxation to encourage industry if the Government found certain costs were excessive. I would much prefer that kind of capital assistance rather than assistance by way of subsidy to cover a slight deficit. I am not going into politics about this to any great extent. I think it would be advisable, perhaps, if I reminded the House that the Coalition Government cut off the subsidy on rural electrification in 1955. It was restored by our Government in 1958 and the consumers of electricity are paying over £500,000 a year because that capital subsidy was cut off by the Coalition Government. I need say no more about that.

Dr. Sheehy Skeffington

If the Coalition Government were wrong, why disapprove of this subsidy?

Mr. Rooney

Is the Minister not opposed to subsidies?

Mr. Childers

It is capital subsidy.

Mr. Garret FitzGerald

That makes it all right.

Mr. Childers

The Rural Electrification subvention is a capital subsidy and this makes a great difference. The same thing is true in connection with agriculture. I much prefer capital grants than paying farmers direct subsidies on their annual production based on any form of accounts that they present to the local officer. There is a very great psychological distinction between one practice and another. I notice if you go into the more modern countries in Europe, on the whole, the people who run them agree with my view and that of the Government, that the operation of subsidies should be reduced to a minimum.

Dr. Sheehy Skeffington

Does that mean that the Coalition was right to reduce them?

Mr. Childers

No.

Mr. Rooney

We were producing too much electricity.

Mr. Childers

At the moment the actual position is, in relation to rural electricity, that the urban consumer is financing the rural consumer to the tune of about £900,000 a year. That kind of trans-subsidisation within a particular service is quite common in other directions. It can be found in other industries. It can be found in a wide variety of practices. The taxpayer is paying at the moment on a capital charge, which will eventually disappear, £500,000, for the interest and principal in order that the capital subsidy may be afforded to the ESB of 75 per cent of the cost of providing rural electricity for the maximum of £75 per dwelling. That is the actual position and I do not think I need say any more on this subject.

I am absolutely certain that if industries had over a large number of years refused to come here because of excessive ESB charges I would have heard long ago about it and so would the Government. There may be individual cases of which Senator FitzGerald has knowledge but it would surely have been ringing in my ears during the last four years if it had been important and we would have had to make a decision if the matter had become serious, as to whether we should ask consumers to pay more in order to finance industrial power. There are different ways of doing it but the subject has not so far arisen.

Senator Sheehy Skeffington asked a number of questions. The ESB has no power in law to standardise equipment in the form of plugs and so forth. When the ESB do installations they use standard plugs but they have no power to standardise the use of an individual type of plug. I understand that Irish plugs and equipment are being used to a great extent by the ESB. If this industry can be expanded they should be able to supply all the equipment necessary.

Dr. Sheehy Skeffington

Should the ESB not be given the power to standardise?

Seán Ó Donnabháin

Buy Irish will do just as well.

Mr. Childers

Senator Sheehy Skeffington referred to the development of Ringsend. I do not think the area looks squalid but, nevertheless, I know what he meant when he was speaking about the general development in that direction. This is a matter of long-term planning by Dublin Corporation. I understand, in connection with the industries contemplated in that area, this one way of overcoming the objections of the people who live in Sandymount may be the construction of a park with trees at a place which will hide most of these industrial buildings. That is not my responsibility. It is the responsibility of Dublin Corporation and the Minister for Local Government under the new Planning Act of 1963.

Senator Sheehy Skeffington asked about the difference in the cost between overhead pylons and cables. I am afraid to say that the cost is between ten and fifteen times as much to lay the underground cables as by the construction of pylons. I understand from ihe British Electricity Authority that in the case of some of the connections, where hugh quantities of power are passing, the underground cable could cost as much as £1 million per mile. All I can say at this stage is that we will try to make an effort where some of the really priceless scenic areas of the country are involved. One could not permit a pylon system of cable to go over the Lady's View at Killarney. That would really be blasphemy.

Mr. Garret FitzGerald

What about the Barnesmore Gap in Donegal?

Mr. Childers

The matter is looked at as sympathetically as possible but this country cannot afford to pay 15 times the cost of the pylons.

Dr. Sheehy Skeffington

Does this take into account the saving in maintenance?

Mr. Childers

I am afraid that lower maintenance costs do not compensate for the difference in cost. I have been asked about the off-peak rate for storage heating. I asked the ESB about that and they claim they cannot reduce the cost any more. Senator Rooney asked a question about tidal power. The ESB examined tidal waters around St. Malo and they also looked at a particular bay in Donegal. They found that the drop in the rise of the tide is not sufficient to make it an economic proposition. Senator O'Sullivan objected to the Board selling electrical equipment. I think the Board has to lead in this matter in the country. It has to advertise the use of electricity. By so doing it actually encourages more lively and energetic private contractors. I have had no complaints in this connection from any association abaut the Board's activities. Probably the reason is that the Board make arrangements with approved contractors who are able to do the work well and offer hire purchase terma through collecting instalments as ESB accounts. This is quite a bit of help to the private contractors, and I have had no complaints. I certainly had an assurance from the ESB that all the appropriate overheads and incidental costs of selling equipment are charged to the equipment sales account. They are not subsidised on that side of their activity.

I think I have answered all the questions that were asked of me, and I thank the House again for their constructive approach to the Bill.

Question put and agreed to.

Agreed to take remaining Stages today.

Bill considered in Committee.

Section 1 agreed to

SECTION 2

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

Mr. Garret FitzGerald

This section raises the limit to £225 million. I should like to deal with some of the points the Minister made. I found his presentation of the figures in relation to the cost of electricity singularly unconvincing when carefully analysed. He pohrted out that three per cent is the average proportionate cost of electricity for industry as a whole. We are not concerned with industry as a whole but with individual industries, and this three per cent is a smoke-screen rather than anything else. It covers up the realities that lie underneath it.

The Minister gave a comparison with Britain in relation to farms of 30 acres and said the average cost was more favourable here. The second comparison he gave was with European countries in respect of domestic charges. He said the EEC had found it impossible to make industrial comparisons because of structural difficulties. That is not the issue. The fact is that we have a higher overall average unit cost than they have in Britain. If the Minister is right —and I presume he is right—when he says that farm and domestic charges are not so much out of line, that only makes it more clear that the comparison in relation to industrial charges must be much more unfavourable. As regards the effect on new enterprises, I do not know why so much effort——

An Leas-Chathaoirleach

I do not think the Senator should deal with the effect on new enterprises.

Mr. Garret FitzGerald

My point is that it is not relevant.

An Leas-Chathaoirleach

I agree with that point.

Mr. Garret FitzGerald

That is not the issue. The issue is the effect on industry.

The Minister told us there was no problem of co-ordination in regard to the Second Programme his Department are busy co-ordinating with everyone. The fact is that NIEC are most concerned with the overall position that does exist, and expressed themselves in no uncertain terms. This Council is headed by the head of the Civil Service ——

An Leas-Chathaoirleach

I must remind the Senator that we are on Committee Stage.

Mr. Garret FitzGerald

The Minister used the word "trans-subsidisation," a word I had not heard before but it is a rather good word for the purpose. This is very common. But there are many things in this country which are very common but, which are also very wrong, and which people know to be wrong though they still. remain common. This is one of them.

Question put and agreed to.

Sections 3 to 9, inclusive, put and agreed to.

Title agreed to.

Bill reported without amendment, received for final consideration and passed.