Before we take up consideration of the Committee Stage of this Bill, I should like to indicate that I have ruled that amendments Nos. 4 and 6 standing in the name of Senator Lenihan are out of order on the ground that they involve a potential charge on State funds. The Senator has been notified accordingly.
Gas Bill, 1976: Committee and Final Stages.
The previous sections were all of a non-substantive nature and the first crunch issue comes up in section 7, the establishment of the board, and in the First Schedule where the modus operandi of the board is set out. I presume that seeing the First Schedule is referred to in section 7 I can refer to it on the section. In one sense, anything I say is of very limited value because I know quite well the Minister has no intention of accepting amendments at this stage seeing that the Dáil has risen and it would require a recall of the Lower House if any amendments at all were to be accepted.
There are no amendments proposed to this section.
But suppose the section was defeated. This would also require recall of the Dáil. The Leader of the House knows exactly what I am talking about because when he was on this side of the House he on many occasions made exactly the same plea.
I said it from this side last week.
It is nice to know the Senator is so even minded in his approach to the situation. I wish to talk about a problem which arises with semi-State bodies and particularly with this semi-State body, and it really is a substantive issue. It involves the composition of the board. I agree that even if I had put down amendments the amendments would be very complex because those which I should like to have put down would have substantially altered the way in which the board will be set up. I can see the arguments against any change in what is set down here because the argument would be that this has been the situation in semi-State bodies up to now and we do not intend to change it. My contention is that this argument does not hold any water because the fact that semi-State bodies have been established in this way for 50 years or so does not mean that we should continue to do this. It is high time we examined the whole raison d'être of our semi-State bodies and that we should adjust our procedure accordingly. I feel that the board as set out here is not——
If I might interrupt the Senator. The Senator drew attention to the fact that the First Schedule is referred to in this section. There are amendments down to the First Schedule dealing with the composition of Bord Gáis Éireann, and it might be better if we dealt with the specific formation under the First Schedule rather than under the section. The custom has been to try to avoid duplicating discussion and as there are amendments tabled I think it would be preferable to postpone discussion on this point until we arrive at the Schedule.
Section 7 (2) states that the provisions of the First Schedule to this Act shall have effect with respect to the board. Therefore it is quite in order——
The Chair is anxious, and I am sure the House would be anxious, to avoid repetition of discussion both under the section and on the Schedule.
The changes I am going to look at have nothing whatever to do with the amendments here and I can assure you that I do not intend to repeat myself and I will not make these points of the argument concerning the First Schedule.
It would be more appropriate to deal with them under the Schedule. I do not want to rule the Senator out of order on this but there are amendments tabled and after the amendments have been dealt with we will be dealing with the First Schedule in any case.
In the First Schedule the functions of the board are set out in great detail. One of the points I have been trying to make is that if I were going to submit any amendments I would have said that the First Schedule should have been replaced totally, though in that sense I wish to suggest a new structure. I will attempt not to go on at too great length but I think it is a very important point, and there is another point of principle here. This should be considered by a committee which should have been set up to deal with the problems of semi-State bodies and it would be appropriate that the sort of suggestions I am making should be considered by that committee because the suggestions that I am making have implications for more than the Gas Board. They apply to the board as set out here, but they have wider implications.
My contention is that single-tier boards are now outmoded and that they cause considerable problems. It may have been the right concept 25 or 30 years ago, but it is no longer the correct concept. Groups which are not represented on the board as constituted here should be represented and a single-tier board should be replaced by a two-tier board—one small executive management committee essentially and a much larger supervisory committee overhead which would have representatives from different groups, some of whom are specifically excluded from our board as at present. The upper or larger tier would have representatives from the labour side of the organisation, civil servants, not just from the Minister's Department but from all the Departments who are interested in the operations of An Bord Gáis, such as the Department of Finance, the Department of Lands because of pollution problems, the Department of Transport and Power.
I also contend that, when we were setting up this new structure, we should have taken into account the plea which has often been made in this House, that we get away from the outmoded system of debarring Members of the Oireachtas who are currently sitting from holding a place on the board and anybody who has been nominated as a Member of the Oireachtas. They should also have their place on the upper tier. One of the things this would do would be to increase the lines of communication between the Minister and the board, particularly between the public representatives and the semi-State bodies involved, and between the public and the semi-State body involved. It is obviously a very complex issue and an amendment to try to achieve this would require the deletion of the First Schedule and the substitution of another First Schedule of a fairly complex nature. A lot of thought would be required for this, and that is why I say I can see the argument. One could say that the argument against this is the argument of precedents, that we have always done things like this and we should continue to do so.
I firmly believe that what we are doing at the moment is causing considerable problems for a semi-State body, such as An Bord Gáis. The small board which will consist, perhaps, mainly of civil servants is not, in my mind, the appropriate way to run a major enterprise of this nature. The other groups whose names I have mentioned need—not just deserve—to be represented at some level in the governing body of an organisation, such as An Bord Gáis. Therefore it is high time that we considered alternative structures for our semi-State bodies, particularly at the top. It is important that the Members of the Oireachtas have this feed-in and that there is a feed-back from semi-State bodies. We all know about the problems the Members of the Oireachtas have in trying to obtain information, other than the very barest information contained in company reports. You come up against a blank wall.
We also know the problems the public have. The public are suspicious of bodies like An Bord Gáis, because they have no direct feed-in. If we had a two-tier board it would get over these sorts of problems and help not only to expose the operations of a semi-State body, such as An Bord Gáis, to the light of day but also it would give the lower tier—the purely executive and management board—the freedom to work under the supervision of a larger body in the way they deemed appropriate. It would free them from some of the constraints that exist at present because of the way we set up our semi-State bodies. This is a plea in particular for An Bord Gáis. I know it is unlikely to be accepted but I hope it will have some effect on further deliberations. There are always possibilities that the structure of this body may have to be amended by further legislation if it proves unsuitable. The type of ideas I have outlined would be much more suitable for a body which is going to play, we all hope, such an important role in future developments of this country. I would like the Minister to take these ideas into account even if he does not, at this stage, feel that he can effect changes in the board along the lines I suggested.
The points raised by Senator West are very interesting and deserve to be looked at. But they would need to be looked at in the context of a new board being set up without any consultation with other semi-State bodies, or without consultation with other Departments who have semi-State bodies under their control and who would have an interest and would have a contribution to make as to how a second tier board should be established.
The principle of establishing Board Gáis Éireann was established by the Seanad last week when they passed the Second Reading of the Bill to establish the board and we are now dealing with the details. When I use the word "details" I do not mean to make the idea that we establish a second tier board under the nominated board by the Minister, sound unimportant. Under the Bill as it stands, the nominated board would have the power to establish, if they saw fit, a second tier board—the management board— inside Bord Gáis. That applies to any semi-State body which was established during the last 50 years. They all have the power to establish such a second tier managerial board under, what you might call, the policy or the government representative board which has been appointed by the relevant Minister.
The point made by Senator West is something all Ministers are conscious of, and indeed certainly all management and board directors and semi-State boards are looking into it at the moment. To try to write it in or to make provisions for it in one newly established company without at least opening the door to allow every State company to do it, is wrong. This is not the place to do it. I am not out of sympathy with what the Senator suggests.
I do not intend to labour the point. I am basically in agreement with the Minister. I do not think he could be expected to accept the amendments. Even if I had a whole sheaf of complicated amendments concerning the composition of the board I do not think he could be expected to accept them. Perhaps he could give some impetus to this unfortunate committee—the committee to deal with semi-State bodies—which for a number of Governments has been in the process of being set up and has never got to the stage of being set up. That is the place where these problems could be debated in the wider context in which we really should debate them. I take the Minister's point. He says that this is not the place to do this and that we cannot really expect him to make substantive changes in An Bord Gáis now. That is perfectly right but I think a much bigger problem is at stake here. The problems I am talking about will affect the Minister in his relationships with An Bord Gáis, and other Ministers too. It is a wide context problem. Would the Minister give some impetus to the setting up of a committee which has been thought about and talked about for so long but nobody has ever got around to doing anything about it?
I accept the point made.
I move amendment No. 1:
In subsection (9), page 7, after line 51 to add the following:—
"(e) the Office of Public Works,
(f) the National Museum,
(g) the Department of Lands."
I raised this point the last day on Second Stage. It relates to the amendments I have tabled there. I wish to add three other bodies to the list of bodies to be consulted. An Bord Gáis, as it stands, have to consult the Harbours Authority, the ESB, CIE or a gas undertaker. It seems that subsection (9) expresses concern for flora and fauna or any building site or feature which is of particular architectural, historical, archaeological, geological or natural interest. In other words, the principle and the spirit of the Bill demands that care and concern be expressed for the landscape in terms of its cultural, tourist, historical and archaeological amenities. It seems unfortunate that it is not laid upon the board specifically to consult those statutory bodies which are set up for the preservation and maintenance of these amenities. I suggest that to that schedule should be added, the Office of Public Works, in relation to the repercussions of such a pipeline or well on the draining of rivers and the erection of bridges, which is part of their concern, and their concern for ancient buildings; the National Museum, with regard to archaeological sites; the Department of Lands, in relation to flora, fauna, wild life, and all kinds of tourist and landscape amenity.
It strikes me as perfectly natural that when a firm of contractors start laying a pipeline they would be very severely tempted to ignore, defile, destroy or inadvertently tamper with the amenities I am talking about. There is not enough protection in the Bill to make it necessary for them to come back to the board, and for the board to consult these bodies. These are not maverick bodies, they are statutory bodies. I know the Minister has concern for these matters and in an informal way the Minister will always be concerned about them. But I am distressed that there is so little formal concern in the Bill for these amenities, which are threatened in all kinds of ways. This situation highlights the need for a Ministry of the Environment. If one looks at Wood Quay or Lough Sheelin, or at many other things all over the country, it can be seen that the kind of patchwork legislation that we have protecting our amenities—archaeological, historical and natural—is only stopgap.
I would like to see a Gas Board such as this, before they set about their business at all, at every stage in the drawing up and implementation of plans having to apply to a Department of the Environment, who would send their experts to vet the area and to show the perimeters within which the Gas Board could work.
I think this amendment is unnecessary because the bodies named are ones that must be consulted. There is an obligation on me under section 9. An Bord Gáis, if they wish to lay a pipeline, must apply to the Minister for Transport and Power of the day for permission to lay that pipeline and nominate the route for it. Section 9 states:
...and after consultation with such other Minister of State (if any) as appear to the Minister to be concerned.
If the Minister for Education, the Minister for Lands or any other Minister appeared to the Minister for Transport and Power of the day to be concerned and to have an interest in this the Minister for Transport and Power would be obliged to consult with him in that regard. There is a further safeguard in the National Monuments Act, 1930, section 23, subsection (1), which states:
Every person who finds any archaeological object shall within fourteen days after he has found such object, make a report of such finding to a member of the Garda Síochána.
This Act would be binding on the Gas Board. They would be obliged to report such a finding and not to proceed with work until a decision has been made on the disposal of, or the preservation of such an archaeological object. The National Museum see some difficulty in applying the amendment if it was accepted. It would obligate them as a body to inspect every route themselves. They would prefer the present position as it is written into the Bill, where Bord Gáis Éireann are compelled to notify whoever would be concerned with this. If this amendment were accepted the National Museum would feel they had an obligation to inspect the route to see that nothing of national historical or archaeological value was destroyed by the laying of the pipe. Any doubts or misgiving that any member of the Seanad or the public might have is fully catered for in the section as it stands. What Senator Martin proposes does not add anything and might in the case of the National Museum seem to remove some of the obligations of Bord Gáis Éireann to take care in the laying of their pipes and to protect archaeological finds.
I take the Minister's point. Laws in general are aimed at preventing people who are either careless or malicious from doing things which they should not do. If the Minister is a good Minister and if it is a good board, then everything will be fine. Section 9 states:
...after consultation with such other Minister of State (if any) as appears to the Minister to be concerned, by order...
This lays the weight very much on the Minister. I would be very happy if the present Minister were perpetually in office. I would feel that our amenities would be taken care of. As it stands, at the moment, it depends on goodwill more than on the rigour of good copperfastened legislation.
It seems to me that if it were desired to provide for consultation with the Office of Public Works, the National Museum and the Department of Lands, this would not be the place to insert their names. This subsection deals only with the harbour authority, ESB and so on, in so far as the route is crossing lands owned by those bodies. It does not seem likely to me that a gas route would run through the National Museum. While I appreciate the idea —and the Minister has answered it by reference to section 9—if it was desired to press this by way of an amendment, it would not be an amendment to this subsection.
Senator Martin says he would be very happy if I were permanently in office so that he could be sure this would be enacted. The Minister, in this sense, does not mean a person; it means the Department of Transport and Power and that, presumably, will be there forever.
I will speak totally in the spirit of Senator Martin's amendment but I agree with the Minister here that the onus is put over squarely on the board here under subsection (9). I think it is better that way, that the onus is on them to ensure the proper protection, conservation and environmental measures that are required. That is the best way to have it rather than shifting it the other way. If you read subsection (9) in full it says:
...the Board shall take all reasonable measures to protect the natural environment and to avoid injuring the amenities of the area...take all reasonable steps to prevent injury to any building, site, flora, fauna feature...
But that means that any citizen, not just the National Museum or the Office of Public Works or the Department of Lands can pin the responsibility on the board under the section as it stands. The onus is squarely on the board to discharge these responsibilities and any citizen, not just the agencies mentioned in the amendment, can move against the board in the event that they are not discharging the responsibility. I think it is better that way.
It seems to me that it would be extremely easy for them to plead ignorance in the matter if you did not make it necessary for them to consult the people who are competent. For instance, I am thinking not so much of the civil service itself but I am thinking of a contractor doing the job. He could smash a passage grave in the course of an afternoon and say afterwards that he thought it was only a collection of stones.
The board are responsible for their servants. I think they would have an obligation to see that any route they would choose would not contain anything that might be damaged.
That was my idea that if he make it incumbent on them to entrust only people who are—but I will not press it because there is no point in holding up the proceedings.
I am trying to think of some example recently where some public body was not obliged in this regard to report a find. It does not come to mind now. It was afterwards the people said they did not know that the public body involved were going ahead with this work; they had not seen it and, therefore, they could not object to it. Under this Bill the board would actually have no such excuse.
They must take account of anything that is involved.
This is the key section in the Bill in the sense of prescribing the various functions of the board in certain detail and in particular in subsection (1) spelling out that.
It shall be the duty of the Board to develop and maintain a system for the supply of natural gas being a system which is both economical and efficient and which appears to the Board to be requisite for the time being.
Then it goes into various details. I agree with the Minister in his attitude in the Dáil in regard to amendments on the question of liquification. There was an amendment put down to ensure that the board would have any liquification plants sited or located in this country to ensure that this liquification or any processing of natural gas took place here. I think there are ample powers here under which all that can be done. I agree with that. I am all for the sort of powers set out in particular in subsection (3).
I am for this board having greater freedom than other people might want. I feel that if it is the duty of the board to develop and maintain a system for the supply of natural gas which is economical and efficient and if it is properly going to embark on the various specific functions given under subsection (3), to transmit and distribute natural gas and to purchase, or otherwise acquire natural gas, liquify or otherwise prepare, process or treat natural gas, to provide for the piping of it and so on, I feel they should be given the greatest freedom possible in this area. It is to that end subsequent amendments of mine are directed, not to have the State coming in to restrict the distribution of natural gas in the Exchequer interest, as is suggested in a later section or, indeed, by reason of the limited funds being made available, merely to confine them for the present under this legislation to the work involved in distributing the gas to NET plants and to the proposed ESB power station at Whitegate.
We should have greater freedom of management in regard to a board such as this. The classic example of it is that if what is spelled out here under subsections (1) and (3) of section 8, was applying currently I believe we would not have the unwarranted decision made to allocate 60 per cent of the natural gas to an outlet in power station terms which means a 70 per cent wastage of that gas. I feel that a board properly constituted—and not just the interim board or company responsible to the Minister—performing the functions envisaged here under subsections (1) and (3) would never dream of adopting a policy in regard to the conversion of natural gas to power generation purposes as was suggested in regard to 60 per cent of the production of natural gas. I would like to hear from the Minister what his views might be on board decisions in the future in regard to further natural gas finds, which will undoubtedly arise on the information I have, if they decide under subsection (1) of section 8 that they will discharge their duties to develop and maintain the system of natural gas in an economical and efficient way and if they decide in pursuance of that mandate to follow on and purchase, liquify and lay pipelines under subsection (3) of section 8. I would like to hear from the Minister on that because this is fundamental; either we are setting up a board or we are not setting up a board.
The major mistake that has arisen so far has arisen here. Although Senator Quinlan took a cavalier view of it here the last day, it is a major, catastrophic mistake on the assessment of all scientists and experts in this area that we are wasting this natural resource in the manner that I am describing. I am astounded, candidly, that we have not heard more from our university Senators and people generally concerned with the conservation and preservation in this respect. Here, for the first time we have a major, natural resource and we are wasting it, not just according to what I would say or what experts in Ireland would say but we are wasting it according to all the criteria and the assessments made by people who are concerned about maintaining and conserving natural resources throughout the world. We are the only country doing this deliberately in 1976.
The Minister, I know, has technical "outs" under the EEC directive, but we are doing it in contravention of an EEC directive that is designed to conserve such resources for the benefit of the community and, indeed, for the benefit of the world at large. It is not just a European problem; it is a world problem to ensure that what natural resources are available should be developed to the maximum extent in the most efficient manner, in accordance with the mandate here imposed under subsection (1) of section 8 on the new board. It has not been contravened. The Minister has made a case that it is necessary to get the thing moving. He said on the last occasion on Second Stage that he had to make a business decision, that the buck stopped with him and that the business decision was to get the thing moving as quickly as possible. That is the most narrow short-term point of view I can think of and the Minister has a mandate from the public to take a longer view than that. Throwing away a natural resource to the ESB so that the ESB can generate power at a reduced cost for a few years ahead, throwing away 60 per cent of a natural resource in the most wasteful possible way in the pretence of translating that into practical use for the benefit of the community, is nothing short of disgraceful.
There has not been sufficient light brought to bear on this by the media or by those who should be expressing themselves positively on this matter because it has been confined to the experts and the scientists. Everybody who knows anything about the subject agrees with what I am saying, but the public at large do not appear to have brought any interest to bear on the matter. This is one of the most shocking things that has happened in recent times here. This is a stupid decision—that is pejorative—but it was a decision made two years ago by the Government as an interim arrangement to make sure the necessary contractual arrangements were carried out by Marathon and translated into contractual arrangements with the ESB and NET.
As I said on Second Stage, the NET conversion is efficient. Everybody agrees that the conversion of natural gas into petro-chemical outlets is completely valid. The other valid way to do it is to convert the gas into domestic and industrial use by means of a national grid for premium purposes—in other words, for 100 per cent utilisation purposes with a profit outlet, a profit outlet substantially below what the ESB outlet in the industrial, commercial and domestic area charge thereby cutting costs to what would be in the region of one-eighth of what the ESB charge at present and will be likely to charge up to 1980. What I should like from the Minister is an admission that a mistake was made. That mistake has been made because a board was not established, as is envisaged here, with its back-up of experts and research people. A quick decision was made two years ago by the Government, the Minister and the ESB. I asked the Minister on the last occasion to consider withdrawing from this arrangement and he declined to do that—he had made a decision and that was that. That is negative thinking on the part of a Minister charged with the grave responsibility of making the maximum use of a natural asset, an asset likely to grow in the future.
The ESB is basically part of the overall State apparatus, and the Government can go to the ESB and say: "We made a mistake two years ago. Let us stop now and let us go ahead with Whitegate on the basis of oil conversion. Let us forget about this natural gas conversion. We are convinced now by the overwhelming weight of the evidence that this is not the way to convert natural gas, that the logical way is to conserve it until we develop a grid for domestic and commercial purposes into which to feed it and gain up to 100 per cent benefit".
The Minister indicated on the last day that he is going ahead with the mistaken decision made two years ago. The most important ability politically and, indeed, from the business point of view is the capacity to acknowledge when a mistake has been made. Everybody concerned with energy conversion knows that a grave mistake has been made here. I could understand people having to live with an irretrievable mistake but the mistake here is not in that category because the ESB can be dictated to and can be ordered by the Minister to adopt a community attitude in the national interest and they will do that. The Minister knows he can telephone the board of the ESB and tell them the score and they will accept that. What is so serious is the fact that the Minister is not willing to acknowledge a mistake has been made. I wish this section had been in existence two years ago. I should like to make it clear that I welcome the board with all the powers given under section 8.
The board is being endowed with the necessary finance to set itself up and provide the necessary back-up of expertise. Under section 8 (1) the board, in maintaining a system for the supply of natural gas in the most economical and efficient manner, undoubtedly make decisions on the future utilisation of natural gas totally at variance with the mistaken decision to which I referred but this decision will be hung on the board because of the recalcitrance of the Government in acknowledging that a mistake was made in not making an arrangement with the ESB that would get the board out of this situation of having to give them this gas for wasteful conversion into electricity, instead of getting on with the job envisaged under subsection (1).
As sure as night follows day, when Bord Gáis Éireann is rightly established it will decide under subsection (1) of section 8 to devise a scheme for the efficient and economical utilisation of gas, for the development and maintenance of a system to ensure such utilisation of it, and the first thing the board will do is say: "We are hung with this stupid Government decision. We will have to carry on with it because of a, b, c, d, e, but, as regards the future utilisation of natural gas, we will not dream ever again of utilising natural gas for the generation of electric power". If that is the situation, may I take it that there will be no Government interference with any such decision, rationally reached by a sensible board established by the Minister, using the independent and open advice available to them as to how natural gas should be utilised? In other words, may I take it that this mistaken decision is a once-and-for-all effort and, as far as future decision by Bord Gáis Éireann are concerned, there will be no ministerial interference with a decision that will go 100 per cent towards the utilisation of natural gas in every area, petro-chemical, industrial, commercial and domestic but not electricity. If that decision is made, will the Minister or the Government of the day go along with it?
This argument has gone on for two years but it has been concentrated more recently in the Dáil and in the Second Reading debate in the Seanad. Last week, on Second Reading, I told Senator Lenihan that there was an interesting and very informative conference held on the use of natural gas last April in Dublin, and certainly all the experts were not on the side of Senator Lenihan and the angels. There is a body of opinion which agrees with the decision taken by the Government. That decision was not taken in a hurry nor were the Government stupid. If a mistake was made, I would not have the slightest hesitation in admitting it. If I can get five out of nine decisions correct, I am doing very well.
I agree with the Minister.
This was one of the five. As I explained the last time, it is a provable fact that the use of natural gas for the generation of electricity at the point of conversion is wasteful. However, at the point of end use electricity is far more efficient than most other forms of energy. This is the view of a large body of experts.
If this is so and if some future Minister decides that the ESB should not generate natural gas for electricity because there is some other method of generating electricity—it seems that electricity is the most acceptable form of energy from the consumer's point of view and it reduces the country's dependence on imported oil which was one of the important reasons I put forward and which influenced the Government in their decision—then the contract entered into by Bord Gáis Éireann and the Electricity Supply Board can be interrupted. There is no necessity to return to the Dáil or Seanad for permission to break the contract. It is a contract that can be interrupted. At that stage, the Government or Bord Gáis Éireann can write a letter to the board of the ESB and state that as from such and such a date they will discontinue supplying the board with natural gas for the generation of electricity. A Senator spoke about solar energy recently and this can also be provided for.
The thinking behind the drafting of this Bill was that the board and the Government of the day should be as free as possible, that no option should be closed in the utilisation of any further finds of natural gas. The board now being established will deal only with one known find of natural gas. Any option is open to any government or any board in the future if there are further finds of natural gas or if the circumstances warrant it. I suggest that the amendments put down by Senator Lenihan in other respects would have the effect of curtailing the freedom of the board.
With regard to the amendment which has not been ruled out of order, relating to the amount of money available to boards, it would have the effect of not making that board accountable to the two Houses of the Oireachtas as soon as possible. Any decision regarding the policy of the board must, hopefully, if there is another find of natural gas, be debated in the Dáil and in the Seanad. Any decisions that the board or government of the day may take as to the use of further finds of natural gas are open to them under this Bill, including the one Senator Lenihan proposes of interrupting the supply to the ESB and diverting it to some other use. It is possible to do this under the contract, apart from the Bill.
There is nothing in the Bill which refers to the fact that parts of the present find of natural gas is being supplied to the ESB, nor is there anything in the Bill which says that this must be so in the future, that the ESB are entitled in the future to 40 per cent of the Kinsale Head gas find. This was a Government decision conveyed to the board of BGE, through the Minister of the day. The supply can be interrupted. The ESB will not be entitled in law or in any other way to a continuation of that supply of gas. Any fears felt now or any circumstances which may arise in the future as to the use of natural gas are catered for in the Bill by the board and the Government of the day.
I am reassured by the Minister's statement. As far as the future is concerned, it is important that the board should be arbiters in this difficult area. I will not argue anymore about the rights or wrongs of the decision taken two years ago; I think it was a wrong one, the Minister thinks it was correct. That decision was taken two years ago without the back-up facilities, the research or the expertise now available. I welcome the establishment of such a board. It is a difficult area, one in which expensive research and developmental costs are involved. It is important that the options be weighed in a proper cost-benefit analysis by the people concerned.
All that specialised expertise, at the geological exploration stage and all the research is not available at present to the Government. This expertise can only be made available through an agency such as this. If this expertise had been available two years ago that decision would not have been made. However, I have received from the Minister a complete assurance that the board will be in a free position, uneneight cumbered by the Government to carry out the mandate——
No. I did not say that.
If a decision is made by a board of this kind, I do not want to see it frustrated for short-term Exchequer reasons of expediency, or frustrated because the ESB may require cheap gas to cut down import bills over the next year or two, or frustrated because the Exchequer wants to put its hand in the till. I want to see a board established which will discharge the independent functions envisaged under section 8. This board will be charged with utilising natural gas found off the coasts to the maximum benefit of the State in accordance with the full, scientific and market criteria available to it. I do not want any Government to interfere with the board and compel them not to discharge the functions we are now giving them.
I can see situations where in the national interest, it would be necessary for a Government to step in and direct a board to feed their gas into another resource, for example, if there was another fuel crisis. We still tend to live in a fool's paradise as far as the availability of oil and petroleum from the Arab States is concerned. It could easily be either through the price mechanism, through a Middle Eastern war or through some other unforeseeable situation that we would not have the supplies of petroleum from abroad that we might need. It might be very necessary that the Government should redirect a number of our natural resources to uses of the most national importance.
Although I can sympathise with Senator Lenihan, it is not just a simple matter of giving people on the board an entirely free hand to decide what they do with their resources. I agree with him in general principle that if we do not give the board as much freedom as is possible, given this overriding situation, then the board will not be able to function efficiently or well.
Senator West has made the point I wanted to make. The board should have as much freedom as possible. But the Government of the day must accept responsibility in certain circumstances, and it would be a dereliction of their duty—they were elected to govern—if they were to hand their power in this regard over to a non-elected board. Subsection (3) of section 14 states:
The Minister may from time to time require the Board to prepare and submit to the Minister particulars of its plans regarding the performance of its functions in the future, and any requirement made by the Minister under this subsection shall be complied with by the Board.
That subsection should stay in any Bill relating to any State company. A Minister of the day, acting on behalf of the Government, must give directions in certain circumstances to a board as to how they use their functions under the Act in which the board is set up.
I would like to ask the Minister about the revocation of orders referred to in line 15, subsection (2). Does the revocation of an order require the making of another order? Is an order revoked by means of an order?
If another Minister is involved I can only make an order having consulted with him, but having made that order I may not revoke it on my own without going back to the other Minister in question.
What I am inquiring about is the mechanism for revocation of an order.
An order when it is made usually has a time limit on it. If it is revoked within that time that is all there is to it, but it must end at the date specified in that order when it is made.
Yes, but any other revocation does not have to be laid before the Houses of the Oireachtas?
No, it does not. Question put and agreed to.
This is another section on which I would again make general comments in line with those that I made on section 7. The section reads: "...it shall be the duty of the board..." and then that:
its operating expenditure, including all charges properly chargeable to revenue, shall not be greater than its revenue.
This is a meaningless section. This is no more than a vague outline because I would guess, without having checked up the specific Acts, that precisely such a section is included in the Acts setting up other bodies, such as Córas Iompair Éireann.
That is the precedent for them all.
The ESB is the precedent.
It is interesting to trace not just the foundation of the Shannon scheme but the passage of the original Act as piloted by Mr. MacGilligan through the Oireachtas. It is a very interesting exercise. It is one of the things that we could look at to see the number of precedents that have arisen from the initial foundation of semi-State bodies.
This is really a nebulous section. It is a sort of general guideline. If it is the duty of the board in performing their functions, what is to happen if the board fail in their duty, as has happened in the case of other semi-State bodies? They have failed lamentably. It was not necessarily their fault. They could not help but fail in the circumstances. If a board fail in their duty which is set down in the Act what is likely to happen? If nothing happens to the board when they fail in their duty, is there any point in having such a section except from the point of view of acting as a general guideline for the board?
The thinking behind it—it goes back to the ESB Act of 1927—is to ensure there is some kind of broad, yet not too constraining, influence on the financial structures of the board—the ESB in that case and in this case Bord Gáis Éireann—to ensure that their pricing policy was such that it would meet their outgoings in any one year and also to ensure that their outgoings did not lift above what the Government of the day might decide what their price should be.
There was a very crude and broad attempt to balance, so that the books would balance inside the one year. Other State bodies who have a similar constraint on them and who are out of line—and the balance sheets are drawn up any day—on that day, they are expected to get into line, bring the two together again in the succeeding year. There is at least one very outstanding example where this did not happen for very understandable reasons and through no fault of the board involved. I must say that quite clearly, as I do not wish to seem to be criticising them.
It was accepted by the Parliament of the day, the Dáil and the Seanad, that there were good reasons why it should not happen in this case. It was just accepted that they could not operate within the constraints placed on them. It is advisable that we, acting here on behalf of the people, who are providing the money for this, should put some kind of broad but not too restrictive constraint on semi-State bodies in their financial operations.
I take issue in the same sort of way with the phrase "a reasonable return on any capital". That is so nebulous as to mean anything. Of course, it would vary from time to time depending on interest rates. Could the Minister say what he would expect a reasonable return, given current rates of interest, would be?
Does the Senator want me to explain?
I am not asking the Minister to tie it down but to give himself a margin of 3 per cent or 4 per cent.
I would think that any capital should provide a return that will pay the interest on any loans which the company may have, plus providing a profit of more than zero on the total operation after that.
That is a nebulous phrase, too.
Perhaps we could take amendments Nos. 2 and 3 together. They come to the same principle although they are expressed in different ways.
Amendments Nos. 2 and 3 may be taken together.
I move amendment No. 2:
In page 8, subsection (2), line 38, after "direction" to add "provided that not more than twenty-five per cent of such profits in such a year shall be applied for the benefit of the Exchequer other than repayment of advances or interest thereon".
This amendment is quite clear. Subsection (2) reads:
The Minister may, from time to time, with the consent of the Minister for Finance direct that the profits of the Board in a year specified in the direction shall be applied in such manner (including application for the benefit of the Exchequer) as is specified in the direction.
The amendment seeks to limit that authority which is given to the Minister for Transport and Power with the consent of the Minister for Finance by adding to such direction from the Minister to the board that not more than 25 per cent of such profits in such a year shall be applied for the benefit of the Exchequer other than repayment of advances or interest thereon. We are seeking to control the Minister in regard to what he can do to the board and to the profits of the board for the benefit of the Exchequer. The section is very open ended and could lead to a situation where, putting it quite bluntly, the Minister of the day in the interest of Exchequer exigencies can simply rape the board in regard to its profits and in regard to developmental or other funds that it may propose to leave aside for the purpose of the development of natural gas. It is a very crude and obvious insertion. I do not mind the Minister for Transport and Power and Finance having certain powers in regard to how profits should be used. I would envisage a Bill such as this when it becomes law particularly having regard to the rather wide powers with which I agree, laying down the very wide and proper functions of this board. If this is followed to its ultimate in section 11 (2) the Government can, if they wish, by applying under direction for the benefits of the Exchequer or the profits of the board, effectively muzzle and, indeed, rape the board in regard to carrying out the functions that I have mentioned and which I applaud under section 8.
One can have all the excellent functions in the world allocated to the board as set out in section 8. A situation may arise where the profits properly made by the company for the benefit of the community are proposed by the company to be applied for research purposes, development purposes or further exploration purposes, the laying of pipeline and so on. We are not talking about any mickey-mouse operation here. Once we get out of this £25 million category we will be talking about a very big organisation. My information is that this is the way it is going to be. To think that a mickey-mouse organisation of that kind can be milked in the way it is proposed here under this subsection that in effect, the profits that such board will accumulate for the benefit of the community and for the further enhancement of the community by the full provision of natural gas converted to its proper use in the most efficient and effective way possible. That such a board could be slapped down and told: "No, you cannot exercise any of the functions envisaged under section 8 because we propose to take over your profits for the relief of the Exchequer." That can be done under the section as it now stands. The two Ministers can direct that the profits of the board in a year specified in the direction be applied for the benefit of the Exchequer. If the board make £X million in the year and properly performing their functions under section 8 decide that that £X million should be devoted to any of the uses I have mentioned already—further pipeline construction so as to develop underdeveloped parts of this country, further pipeline construction that would ensure the provision of cheap natural gas for industrial utilisation, the giving of employment and the bulding up of industrial estates in key parts of the country, the provision of a proper network of cheap energy supply which is so lacking at present in our industrial framework, the running of such cheap energy supply for the housing estates going up beside such industrial estates—this type of projection and this type of possibility should not be knocked immediately if any such board attempted to do that because of the particular financial exigency or revenue problem of a particular Government at a particular point in time.
That this Government would proceed to milk its own company for the purpose of providing some form of totally inefficient or totally ridiculous type of promise, or giving some form of goodies or behaving in an irresponsible way in a budgetary situation to frustrate an enterprise of this kind for that particular purpose, is abhorrent. But it can be done under the section as it stands. Not so long ago, in late 1974, we had a rushed budget providing £35 million overnight in order to relieve an Exchequer situation so that our petrol prices for domestic and industrial consumption should be on the same level as in Northern Ireland. We had a tax slapped on overnight to provide £35 million for the relief of the Exchequer. In December, 1974, we were told that we could not have two pricing systems operating in regard to oil and petrol on two sides of the Border. We have two pricing systems operating now. They are operating in the reverse way. We had to have the same pricing system and £35 million was brought into the Exchequer. It is that sort of opportunistic grading of areas of economic activity that has got the Government into the sort of mess in which they now find themselves.
This section does lend itself to that type of undesirable governmental activity. We are talking about an important board, a board that is going to have substantially more functions to perform than we can even think of at present. In this Bill we are going to allow the two Ministers concerned to direct that the profits in a particular year—not in any sort of planned way— can suddenly be raided. A hand can be put into the till in the interests of the Exchequer and applied for the benefit of the Exchequer. This means that you could throw out the whole research and development plans or any sort of plans you can think of for the proper and effective utilisation of natural gas. You could throw them out the window overnight by a single Government decision to direct their two Ministers to put their hands into the Gas Board's till, take out the money, and out goes section 8 (1), which rightly states:
It shall be the duty of the Board to develop and maintain a system for the supply of natural gas being a system which is both economical and efficient and which appears to the Board to be requisite for the time being.
Section 8 sets out the system whereby the board may transmit and distribute gas, where it may acquire it, liquify it, operate and maintain stations and off-take stations, provide pipelines and so on. All of this can be set at nought by a Government who decide to exercise section 11, subsection (2) and direct the two Ministers concerned to grab the profits of the board and apply them to Exchequer use, to reduce a Government deficit, apply them to produce some goodies to keep somebody quite for the time being, apply them for the benefit of some crazy scheme that may have some headline possibilities—anything that one can think of. It was done to some degree in December, 1974, in one area where £35 million was grabbed overnight from the petrol users of the country.
This sort of thing is not on if we are serious about the board we are establishing here. Whatever about the Government doing it in regard to normal methods of taxation—they may at any time put on tax on a certain commodity—that is the Government's business. But here in this Bill we are setting up a board of this kind which has very serious and responsible functions and we are allowing under subsection (2) that the Minister for Finance and the Minister for Transport and Power can move in and direct the board to give them the money because they want to relieve the Exchequer. The board can then sit back and be in a position of being unable to perform any of the admirable functions allocated to it under section 8.
This is very fundamental and for that reason we have suggested in amendment No. 2 that some curb be put on this and that it is not set out in the blanket and crude form in which it exists at the moment where all the profits in a year can be taken for the Exchequer on a direction given by the Minister for Transport and Power with the consent of the Minister for Finance. There should be some control on this sort of blanket power. We should add the word "direction" to ensure that direction is at least exercised to some degree in a responsible manner and that any such direction cannot provide for more than 25 per cent of such profits in a year being applied for the benefit of the Exchequer other than repayment or advance or interest thereon.
That, in effect, means that we limit the take or the pull on the part of the Government of the day on the profits of the company to not more than 25 per cent of the profits in a year. We envisage such a board not being a profit-making board in that sense. I want to make that quite clear. The profits in that sense—for a State-sponsored organisation of this kind as envisaged under section 8—will not be profits in the normal commercial sense. These will be profits that will have to be discharged for the various developmental functions of such a board. It would not be a question of taking profits from some commercial organisation that is making an excessive profit out of our natural asset. What we are talking about here in terms of profits is the State putting its hand in the till in regard to profits that are being devoted to purposes set out in this legislation under section 8— developmental, research and other purposes for the benefit of the community as a whole to convert natural gas in an economic and effective manner.
We are not talking about profits that are profits per se but about the State taking all the profits in a current year that must be devoted by the board to the various developmental purposes on behalf of the community. In other words, we are talking about a developmental organisation that can be plundered for short-term Exchequer considerations of the necessary finance to build up its proper organisation and distribution of natural gas, that can be kept down and plundered in that way in order to redress a budget deficit or in order to provide some goodies or to initiate some made scheme that can get a headline before some general election.
What we are trying to do in this amendment is to ensure that not more than 25 per cent of such profits—profits being in inverted commas, not really profits in a commercial sense— only can be applied for the benefit of the Exchequer. Under the section as it now stands 100 per cent of profit necessary to reinvest and redevelop various areas of the board's activities can be raided for Exchequer purposes.
In amendment No. 3 we are seeking, in another way, to come about it. On page 8, line 47 at the end of the page we want to insert a new subsection which reads:
In giving directives under this section the Minister shall seek to ensure that the price of gas shall be kept as low as is feasible having regard to its cost, even if it is significantly lower than the price of other forms of energy.
That brings in the sideways point—I think the two can go together—that, as was declared by the Minister in the other House, it would be undesirable to have this cheap form of energy side by side with other forms of energy. The Minister is all wrong in that approach. Surely it is highly desirable that we should have this form of energy that can be available to bring down costs with regard to industrial, commercial and domestic overheads. I know this controversy is going on in Britain at the moment where certain interests in the electricity and coal areas want the price of gas topped up deliberately by the State so as to ensure that the electricity and coal interests are kept competitive.
That is like Alice in Wonderland at the Mad Hatter's tea party. At a period of time when the biggest single problem we have is costs and in particular, so far as employment is concerned, industrial costs and overheads, when a cheap form of energy is available to Ireland and Britain, the British are talking seriously about deliberately increasing the cost of natural gas in order to ensure that the coal and electricity interests are not in any way hurt. The British Minister concerned, Mr. Wedgewood Benn, has rightly resisted any such pressures up to now. I could not contemplate a situation whereby we would in some way try to top up the price of natural gas and increase the major cost of industry's overheads. It can be argued that the supply of such cheap energy would benefit certain areas as against others but I still do not see the point. If proper planning is made one can surely achieve some form of equalisation between the two, but to think of topping up the price of a cheap form of energy just because we have inefficient forms of energy side by side in the whole national grid system at the same time seems nothing short of daft to me.
That is why we suggest in amendment No. 3 that in giving directives under the section, which the Minister has the power to do, the price of gas should be kept as low as is feasible having regard to its cost even if it is significantly lower than the price of other forms of energy. If it is significantly lower. I do not see what is wrong with that. If a situation arises where other industries within the jurisdiction have to work with more expensive forms of energy then some form of subsidisation of those industries might be envisaged. But to think of topping up the price of gas, thereby substantially increasing the overall business costs of industries benefiting from natural gas strikes me as being nothing short of lunacy in the light of our present economic situation.
We are seeking to avoid either of those two situations in amendments Nos. 2 and 3. I should like to hear the Minister's views on this aspect. If what we are seeking to cure by amendment No. 2 is allowed in its present crude form it is left wide open to the State to plunder what is potentially a tremendous boom to industry. Our industrial costs at present are running so far ahead that our export competitive position is being reduced in a very substantial and serious way. This is our biggest single headache. We have an opportunity to survive by having a low cost energy overhead inducted into the whole energy system, vis-á-vis supplying industrial consumers and commercial interests. It is an opportunity for us to reduce our costs substantially and thereby be able to export effectively. It would seem to be extremely dangerous if we were to misuse this opportunity by having the State step in for short-term interest or having the State step in to lift up the costs so as to make sure there was artificial parity between natural gas costs and costs in regard to electric power.
The purpose of the amendments is to ensure that no matter what Government are in power, they would be circumscribed and prevented from taking action along the lines mentioned which would be highly irresponsible. We have an opportunity here to cut the costs and put ourselves in a competitive position. We can throw this all out the window if the Exchequer, or the Government, are allowed behave in a totally unimpeded way. These two amendments are designed to ensure that whatever Government are in power they will be forced to behave in a responsible manner in these areas.
I should like to make one point in regard to Senator Lenihan's second amendment. In Ireland at present one of the things we lack most are resources for research and for experiment. Our universities are denuded of this resource and they have to search for it from foundations and from commercial and industrial interests. It is true to say that the opportunities for research granted to semi-State bodies are not very great at the moment. We have expertise, excellent engineers, chemists and physicists to carry out this research and it would be a pity if an Bord Gáis's profits were totally despoliated by the Exchequer for the reasons outlined by Senator Lenihan. I am certain that the intentions of the Minister, and of the Government, can be quite as flippant or irresponsible as Senator Lenihan suggested but he has a substantial point. If the intention behind the Bill was to see to it that if the Gas Board, generated too much profit these profits would be taken off for other reasons, even for good social reasons, it would be a pity. In this vital area of energy we have unique difficulties and unique opportunities. If an organisation such as the Gas Board has a surplus for research it should not be interfered with lightly.
Similar amendments were put down in the Dáil. Listening to Senator Lenihan this afternoon one would not think he read all Dáil debates on this. The arguments I put forward in answer to similar amendments and similar contributions from Opposition speakers in the Dáil are irrefutable. Deputy O'Malley made the same point as Senator Lenihan about the arguments taking place in Britain regarding the possibility of topping up the gas price to allow coal and electricity to become competitive with it. He quoted the Minister for Energy in Britain as having resisted up to now any moves in this regard. The Minister for Energy in Britain initiated the conference that took place two or three weeks ago in Britain on energy and this was one of the major debating points.
Deputy O'Malley quoted extensively from that debate and pointed out that the Chairman of the British Coal Board had argued in favour of raising the price of gas so that coal could remain competitive. That is a much more significant argument in Britain than it is here because we have no great coal deposits. Deputy O'Malley said that if such a power existed in British legislation the Minister there was free to use it but he had not used it. Evidently, Deputy O'Malley did not bother to look up the British Act which controls the British Gas Board, the Gas Act, 1972. Section 16 of that Act states:
If in any financial year of the Corporation there is an excess of the revenue of the Corporation over the total sums properly chargeable by them to revenue account the Secretary of State may, with the approval of the Treasury, direct the Corporation to pay over to him so much of that excess as appears to him,...
Exactly the same power exists in the British Gas Act, 1972, as we are writing into this Bill.
Senator Lenihan spoke about the necessity to equalise in the event of one industry, because it was getting cheap gas, being more competitive than its neighbour who had not the benefit of this cheap gas. He felt a subsidy should be given to the second industry. That is acting in a very circular manner to achieve an equalisation result. We are dealing here with the future; we are not dealing with the present find of natural gas. We are dealing with something that will happen in the future. Suppose the next find of natural gas was in Cork and industries in Cork were given that natural gas at a cheap rate their competitors in Limerick would say they could not compete because they had not got natural gas available and they would demand a subsidy from the Exchequer in order to make them competitive with industries in Cork. The Exchequer then taxes the whole population, the Waterford and Dublin industries, to subsidise the Limerick industry and make it competitive with the industries in Cork. That is really Alice in Wonderland. That would make any Government look ridiculous.
In this Bill we are allowing an argument on the price of natural gas. The Senator says he is coming part of the road with me, that he is only insisting on: "provided that not more than 25 per cent of such profits...". He says these are not real profits, that they are sums used for development work. They are not. They are real profits. The development work is part of the expense of the Gas Board and will be undertaken by them as part of their normal development programme. The excess over that is the profit. If you accept Senator Lenihan's definition, then you start a gas pipe, and the Government of the day step in and say: "you can run that gas pipe up as far as from Cork to Portlaoise but, after that, we are taking it because that is the 25 per cent". That is silly. It would make the Government look ridiculous to have a section like that in the Bill.
Amendment No. 3 reads:
In page 8, after line 47, to add a new subsection as follows:
(5) In giving directives under this section the Minister shall seek to ensure that the price of gas shall be kept as low as is feasible having regard to its cost, even if it is significantly lower than the price of other forms of energy.
Section 11 (4) is designed to prevent the Minister of the day from looking after one of his pals by giving him cheap gas while his competitors have to pay more. Exactly the same type of subsection exists in the Electricity Supply Act to prohibit a Minister from giving to a particular customer energy at a particular price. I see what the Senator is trying to do in this amendment but I do not think it is really applicable to that subsection in section 11. It is different.
We are dealing with something which we do not know will exist, or in what quantities, or where it will be, or what it will be valued at, or what the then market situation will be like and we must not restrict a future Government or Minister for Finance in this legislation. We may be talking about something that may happen. We are only dealing with gas. We are not dealing with oil here. It might be ten or 20 years before another gas find is made. We are trying to visualise what the situation will be at that time.
What we should be seeking to do here, and what this legislation does, is to leave every option open in that regard so that any Government, any Minister in the future, will have the option of raising the price of gas, and there is an argument to be made for raising the price of gas. In fact, the Netherlands insist that gas is sold at a comparative price with other forms of energy and that it does not have an inside track on the energy market. Other Governments have adopted different policies. We want to ensure that the argument can continue, the debate can continue, and a decision can be made in the future, because we are talking about the future, allowing either course to be adopted. I think it right that the legislation should be broad in that sense and not confined.
The amendment proposed by Senator Lenihan would make far more sense if it said 75 per cent or 100 per cent, or all the profits. To specify 25 per cent really does not mean a thing. If you disapprove of the principle of the Exchequer taking the profits why restrict it to 25 per cent? Why say: "25 per cent is all right for you, but you cannot have 30 per cent, or you cannot have 27½ per cent"? Would it not be much more honest to say the Exchequer cannot touch the profits or it can take all of the profits, or it need not take either, which is what is proposed in the legislation? The Exchequer is free either to allow the Gas Board to devote those profits for future research, or development, or exploration, or to take all the profits, or to take portion of them. Every option is open under the section as drafted. A number of options would be closed if this amendment were accepted by me. I regret I cannot accept it.
I should like to ask the Minister if the phrase: "including application for the benefit of the Exchequer" has appeared in similar legislation dealing with semi-State bodies or is it a new departure?
I do not know. In other Irish legislation or in legislation dealing with gas?
The point I should like to establish—it may not be possible— is that this phrase indicates a new departure. It is, in a sense I suppose, a new situation in that here we have a semi-State body which could end up with large profits in years to come if things work out very well. Is this a situation which we have never encountered before in setting up other semi-State bodies? Were any of them designed to make a profit?
They were all intended to make a profit. The Senator is asking me if this phrase is included in any other legislation. I just do not know.
We are all conscious of the fact that the cost of power, the cost of electricity, of gas, and so on, for the consumer are going up rapidly, are going up all the time. In any development of the kind envisaged and provided for in this Bill, any development of our natural resources, in the use of our natural resources, the paramount consideration should be that it would be for the benefit of the country in general and also for the benefit of the consumer, for the benefit of the citizen. Consequently where we are talking about profits over and above what is necessary for repayment of capital and interest, and so on, our efforts should be directed towards bringing down the cost of gas and, of course, they should also be directed towards extending development so as to ensure that we have adequate supplies of energy. These supplies should be provided for the consumer at a reasonable price. They should not be used—and this is really what the amendment is designed to deal with— to solve the financial problems of the Government. That is the danger in this Bill.
I am not suggesting the Minister intends this, but it is the kind of thing that can happen in the future. We are all familiar with the kind of unofficial budgets introduced in the past few years in which money is raised for the State without the necessity of a budget, where there are increases in posts and telegraphs prices, increases in a hundred-and-one areas. In this situation on the one hand the Minister for the time being can give a direction to the board to increase the price of gas thereby ensuring that there is a very considerable profit or, perhaps, a quite exorbitant profit as far as the Gas Board are concerned, and on the other hand, having ensured that there will be a very large profit, he is empowered to direct that this is applied to the Exchequer, that this is taken by the Government, that there is another unofficial budget in which money is raised to shore up the finances of the Government in a way not provided for in any official budget. This is what the amendment is designed to prevent. Even if the Minister does not intend to do that, he must realise that is the kind of thing that can be done. Even if his intentions are the very best, he should realise there may be other Ministers in the future who would do it.
Is this amendment unreasonable? In the past few years when there was criticism of our economic situation, when it was said there was really no hope for the future of this country because of the way the economy was going, we were referred again and again to our natural resources, to possible finds of oil and gas, and so on. All of us hope that will happen but if it does happen, it should not be availed of in this way, that a Minister may increase the price of gas to an exorbitant price and then take the profits into the Exchequer.
The amendment is a very reasonable one. Does the Minister intend, after providing for all repayments of capital and interest and so on, that the Exchequer should take more than 25 per cent of the profits? This is, by any test, a reasonable return, and most ordinary companies would be more than happy if, having allowed for capital investment and repayment, they could be sure of a profit of 25 per cent, and most of them have to do with a great deal less than 25 per cent. Why then should the Minister resist an amendment which allows the Exchequer a maximum of 25 per cent profit over and above repayment of advances and interest thereon? Either the Minister envisages a situation where that would occur or he does not. If he does not, and if he accepts the reason behind this amendment, that 25 per cent is the most the Government should be expected to take, then he must see that it is a very reasonable amendment.
This is the kind of thing that most Ministers of Transport and Power would welcome, because the Minister for Transport and Power should be primarily concerned with the development of energy, of natural resources, and to ensure that the country would have a plentiful supply, at reasonable prices, of gas, electricity and so on. He should be glad if there is pressure being put on him by the Minister for Finance, so that he can say: "I cannot put up the price; I cannot ensure that there are exorbitant profits and hand them over to the Exchequer because I am curtailed by this Bill". We should be happy to be in a position to be protected by this Bill, so as not to be forced to do something which would be outside his responsibilities as Minister for Transport and Power. No matter what way one looks at this amendment, it seems to be a reasonable one, reasonable from the point of view of the citizen, reasonable from the point of view of the Exchequer and very reasonable and very necessary from the point of view of the Minister for Transport and Power.
I think what Senator Ryan says is not true, because if any Minister for Finance in the future wanted to take all the profits he could take them by introducing an excise duty on natural gas in the budget and that would be that. To argue that a curtailment of 25 per cent going to the Exchequer is a benefit to the Minister for Transport and Power is erroneous. Again we are talking about the future. We must not lose sight of the fact that we are really looking into a crystal ball; we do not know what is going to be there and in what circumstances this will be applied. To confine a Minister in that regard would be irresponsible in our case here.
Senator Ryan says the users of natural gas are entitled to it at a lower price. Perhaps that is so, and perhaps in the future if more gas is found the Minister of the day or the Gas Board will decide that that is so. But you must leave it open for a future Minister for Finance to say: "This gas is so cheap and it is so limited in quantity that we can only provide half of the population of Ireland with this cheap gas, and that is tough luck on the rest of you. You can pay the dearer price for coal or electricity or whatever it is. You do not happen to be where this pipeline is; therefore you will have to pay more and your cost of living will be higher". At that stage the argument would develop: should that be so and should we go on this circular tour that Senator Lenihan has suggested, of taxing the whole population to provide a subsidy for those who are not living in an area where this gas is available, or should the Exchequer say: "We will lift the price of the gas here so that there will not be this imbalance between the use of electricity or coal, on the one hand and gas, on the other hand, and we will apply the revenue derived therefrom to further exploitation through another agency to see if we can get more gas or another form of energy".
All I am saying is that we should not at this stage tie the hands of any Minister for Finance or any Government in the future when we do not know what circumstances will obtain. The acceptance by me of this amendment would tie the hands of the Exchequer.
I do not think the Seanad would want to tie the hands of any Government in 20 years' time, as to how they should use the resources or how they should apply the profit that would accrue to the Gas Board from the sale of the one existing gas find. It is much better that the Seanad should decide that a Government in the future would be free either to apply the profits through the Gas Board supplying cheap gas to those who are lucky enough to be in a position to get it, or take off those profits and apply them in some other way to the benefit of all the community, no matter what form of energy they use.
I can see quite clearly the Minister's point in regard to the disparity existing in regard to energy users in the one community, some people at some future date being lucky enough to be on a pipeline utilising natural gas and other people not being on such a pipeline and having to use electricity or some other source of energy. This bears on the point I was making, that what we have here is a blanket discretion as far as the Exchequer is concerned. Subsection (2) of section 11, which we are seeking to amend by applying a limitation of 25 per cent to it, simply says broadly in lines 35 and 36 :"...shall be applied in such manner (including application for the benefit of the Exchequer)...". There is no limitation on that. If there was a limitation on the lines suggested by the Minister, I would be in favour of that. If the limitation in regard to profits was such that the profits would be applied by the Exchequer for the equalisation of energy costs over industry as a whole, so that factories A, B, C, D and E that were utilising natural gas would give a profit to the Gas Board and the Gas Board would divert that profit towards the subsidisation of industries D, E, F, G, H that were not on the gas pipeline, this makes sense. I would envisage some form of compensation of that kind. The amendment we have put down to limit the Exchequer to a 25 per cent take is inspired by the global nature of the power that is given here. If there was some positive assurance in the Bill that Gas Board profits would be applied by the Exchequer towards minimising costs for non-natural gas users, it would make sense. But the provision as it stands means that the Exchequer can apply the moneys for the subsidisation of the distribution of coconuts to every person in the country or any unrelated Exchequer device, notion or scheme that you may think of. To put it bluntly, what can happen there under the section as it now stands is that, if the Government of the day runs into Exchequer problems caused for one reason or another, they have a deficit in their budget, they can raid the funds of this board and apply them to plug whatever deficit hole is emerging in current budget finances. That is what is wrong. That is what we are seeking to control by this amendment. It is too late now, but if something could be inserted to circumscribe that Exchequer power along the lines suggested by the Minister, with which I agree, it could be made definitive that these profits when taken by the Exchequer would be applied for the benefit of the industry as a whole. I dispute this being there because I know that any responsible board, appointed under section 7 and exercising their function under section 8, would utilise these profits for the benefit of the industry as a whole. I have no doubt about that.
If, in the broader interests of the economy or industry in general outside the gas industry it was necessary for the Exchequer to ensure that profits were applied, for example, to minimise costs in regard to commercial and industrial users of power other than natural gas, that I would welcome, but there is nothing to indicate that in the section. All the section states is that the profits can be applied for the benefit of the Exchequer. That includes the Exchequer right across the board. If the Exchequer, under the section, were delimited in the manner suggested by the Minister and myself I would welcome it and withdraw all opposition but that is not the case. We are bringing in this amendment to delimit this blanket power of giving 100 per cent authority to the Minister to direct in any way he wishes that all the profits in a year would go holusbolus to the Exchequer without any restriction or direction as to the mode of application. We take grave exception to this and there are inherent abuses in giving that blanket coverage to the Government of the day, no matter what Government it is.
I can see great merit in an equalisation system which, if there is a substantial quantity of natural gas, will enable the profits from the natural gas to be applied towards the reduction of power costs in industries which do not have natural gas. That makes tremendous sense. If the Exchequer applied profits in that manner I would have no objection whatsoever.
If the real trouble facing the Minister is what is causing great debate in Britain at present, the disparity in costs caused by cheap natural gas as against dear electricity, then, the profits should be allocated towards reducing the dearer electricity in competing industries which have the chance of utilising natural gas. By all means divert the profits in that direction but not to the general benefit of the Exchequer.
I am glad that Senator Lenihan has come a good way towards my point of view. If what he is now suggesting was what he wanted, his amendment should have been to delete the words in brackets: "including application for the benefit of the Exchequer" because the subsection reads:
The Minister may, from time to time with the consent of the Minister for Finance direct that the profits of the Board in a year specified in the direction shall be applied in such manner... as is specified in the direction.
In that situation the Minister could direct the board to apply their profits to an equalisation of costs of energy. "Including application for the benefit of the Exchequer" could cover a multitude of things.
That is the trouble.
Yes, exactly, and there may be desirable projects which we cannot visualise now. A Minister in 20 years' time might say: "I am taking the profits of the Gas Board for this year to drain the Shannon and provide more land". This would be a good thing, but to prevent that happening and not to give a Minister freedom in the future would be wrong. I am surprised the Senator is pressing this point so much. He has seen the merit of what I have been saying and I would ask him to go a little further and understand that in certain circumstances the Exchequer could put the money to good use. I know he does not believe that of the present custodians of the Exchequer.
However, we are nearly ad idem but the provision is too wide. As Senator West suggested, it is the first time such a provision has been made. The British one is more circumscribed and more careful. Our one says: “including application for the benefit of the Exchequer”. That covers a great deal and it is the first time that it has appeared in an Irish Statute. The section of the British Act which the Minister read out is far more careful in its phraseology. Nothing can be done about it now but I am issuing a warning that if at some future date this is used in any irresponsible manner——
Thunderbolts will fall.
Thunderbolts will fall. As it stands the provision is far too wide and gives too much power to the Exchequer to raid these profits willy-nilly at the behest of the Exchequer. If this power could be corralled and utilised for the benefit of industry as a whole as a compensatory system in energy costs I would go along with it but as it stands and will operate it leaves the gate wide open for considerable Government chicanery in abusing the Exchequer at a particular time and making use of a situation in regard to the Gas Board to relieve itself of its problems.
This is another point on which I wish to take issue with what is now common practice in semi-State bodies in the remuneration of the chief officer. As the Minister may know, this is already causing problems in other semi-State bodies. It is included in section 16 (3) where it says:
There shall be paid by the Board to its officers and servants such remuneration and allowances for expenses as the Board thinks fit, subject to, in the case of its chief officer (whether that officer is described as the Chief Officer or otherwise) the approval of the Minister given with the consent of the Minister for the Public Service.
This is wrong. The Minister for the Public Service or the Minister for Transport and Power should not have anything to do with fixing the remuneration of the chief officer. I know of a case in which a board put forward a proposal to increase the remuneration of its chief executive and the two Ministers took five years to agree to the increase. This is intolerable.
Is the Senator speaking of the present Minister?
No, I am not speaking of the present Minister, but this is a situation which causes great problems in semi-State bodies. It could easily cause a problem here. The Minister must know of situations where the chief officer of a semi-State body is paid less than some of the executives underneath him. This is because the board can fix their remuneration, but the remuneration of the chief officer must be approved by the two Ministers, in this case the Minister for Transport and Power and the Minister for the Public Service.
What we want to do—and I hope the Minister will agree with this—is to get some of the flair back into semi-State bodies, get the best people for the job, and so we want to be able to pay them proper salaries and we do not want the sort of haggling that has gone on in some semi-State bodies, as a result of which the chief officer was paid considerably less than he would be paid if he were working in a similar post in the private sector of industry. We want to get away from this. We want to pay our chief executives the proper remuneration and, I might say to the Minister, we want to break the vice-like grip that the civil service are getting over semi-State bodies.
That is one of the chief problems. We have talked of representation. The board consists mainly of civil servants. They are the only eligible group to serve on the board apart from people in industry. Members of the Oireachtas, the labour force, are not represented on the board. That is the substantive problem that I have been trying to get at all the time. It really should be looked at by this committee on semi-State bodies.
I oppose this section because—and I am sure the Minister will agree— one of the reasons for the initial success of semi-State bodies in this country was that the very best people were encouraged to come in and run them. They came in from the private sector. As the Minister knows, this is not necessarily the case now. We must get back to the situation in which we have the very best brains from industry and from business coming in to take over the top jobs in our semi-State bodies. If we adhere to the precedent to which we have adhered, this will not be done. They are being too restricted.
My ideas are entirely directed to free the board, to give them more autonomy, to allow them to make their own conditions so far as payment of their chief executives is concerned. As everybody realises, this is a tremendously important post and it will be of tremendous importance to the future of the country and, therefore, I oppose subsection (3), especially the part where the Minister and the Minister for the Public Service must approve of the chief executive's remuneration.
I have had this problem in relation to the position of the Minister, and there are reasons for and against, which were teased out in the Devlin Report on this matter. The Department of the Public Service were established to ensure that this would work out to some degree of parity. I do not think, candidly, it works, for the practical reasons given by Senator West. When it comes down to the situation of appointing people with a certain type of expertise for particular boards, with a particular flair for State boards, you must go outside the normal channel of pay criteria.
It is a mistake to try to corral the chief executives of all State-sponsored bodies into the public service rating as far as remuneration is concerned. You might as well forget about the whole idea of having State-sponsored bodies if you push the argument advanced by Devlin and proposed by the Department of the Public Service to an extreme. The whole notion of setting up State bodies in the first place was to give them a degree of freedom and flexibility so that they could operate in certain specialised areas and not be subjected, apart from the Exchequer lending to them and so on, to overmuch restriction. The first and most important departure from that is to have pay control. If you start on that you might as well go the whole hog and set them up as executive agencies of Departments of State and forget about having independent boards with directors and chief officers.
It comes down to the question raised by Senator West of the anomalies created because the whole of a State-sponsored body has been brought under the civil service criteria of public pay and where the chief officer has been outside that and has had to be rewarded as is set out here, with the approval of the appropriate Minister subject to the Minister for the Public Service. At the same time, people under that chief officer have been getting rewards commensurate with the national pay agreement, when there was such an agreement. In the past two or three years many executives junior to the chief executive in such State bodies have been getting salaries in excess of the chief officer because the latter has had to wait until the Minister in charge of the State body and the Minister for the Public Service had agreed on his salary.
That is all wrong. It runs counter to every canon of known commercial practice and custom. If we are to have a State-sponsored body operating in a flexible way and doing their work properly in accordance with the whole theory of having State bodies, it is fundamental that the chief officer should have his salary fixed by his own board and it should not be a question of the appropriate Minister, with the Minister for the Public Service, being judge and jury in regard to the chief officer's salary while all other employees are getting awards under the national pay agreement.
That sort of thing has created anomalies in the recent past. I agree with Senator West that there were disparities which caused a certain amount of annoyance in the Departments concerned with such State bodies. It is the policy of envy which does not get anyone anywhere. I can see a reason for it but it does not appeal to me personally, although it was recommended in the Devlin Report. The thinking behind subsection (3) of this section means that State bodies will just become agencies of Departments and there will not be the drive and the initiative necessary and the type of people we want in such bodies will not be attracted to them.
This is a very large question which was debated in relation to the Devlin Report some time in the late sixties or early seventies. I do not know whether the report was given to the previous Government or whether they took a decision on it, but when we came to office it was one of the things on our table. We accepted the Devlin Report. I think it was also recommended in the Devlin Report that a section should be incorporated in legislation dealing with various State bodies, not controlling the actual amount but controlling the salary of the chief executive officer, inasmuch as the salary paid to him must be agreed by the Minister responsible for the particular State body, together with the Minister for the Public Service.
There are arguments on both sides. I see the argument Senator Lenihan is making. The other argument is, of course, that semi-State bodies are not strictly private enterprises and even though the hire and fire provision obtains in semi-State bodies there is not as much danger as if they were in the ordinary open market with their talents. Senator West and Senator Lenihan said that some officers junior to the chief executive had salaries which, because of wage rounds, put them above the level of the chief executive officer. The chief executive officer gets the benefit of wage rounds as well. The figures quoted in Devlin are the base at that time for the job. In some cases, subsequent wage agreements or wage rounds were renegotiated by the board or the company and the Minister for the Public Service, through the Minister, the intermediate Minister whoever he may be—the Minister for Transport and Power in relation to this board.
This is a new board and the Devlin Report does not apply to it. Therefore, the salary will be fixed in relation to similar boards, either under this or some other Department, in agreement with the Minister for the Public Service and fixed by the board. When you are dealing with public moneys in this regard there must be some regard to the public attitude towards salaries. Senator Lenihan used the word "envy". Perhaps it is envy, not to appreciate the value of the men who are giving their services to these companies. Recently, in some cases, salaries were given which were in excess of what the same people would earn in similar undertakings outside the semipublic service. Of course, the salary of the chief executive officer in any one of these boards will dictate the levels below him.
In this regard, I do not think there is a danger of officers junior to the chief executive officer being paid more than him. Once his salary has been fixed, the officers below him tend to slot in at steps below that highest level. The Government made a decision when we came into office to accept the recommendation in the Devlin Report that legislation going through the Oireachtas should contain a section similar to section 16 of this Act fixing the salary of a chief executive officer, after consultation by the board of the State company involved with the Minister involved, plus the Minister for the Public Service and that is what is incorporated here. I think I have put through two or, perhaps, three amendments to existing legislation where this was involved as well. It will be the norm for all legislation passing through the House relating to semi-State bodies from now on.
It should be reexamined. Just because it always has been, does not mean that it should be or that it is going to be. It is one of the points that should be considered in considerable depth again.
Would the Senator not think that a board who felt that the level fixed in the Devlin Report for their particular officer—suppose it was fixed at £5,000 and they felt it should be £8,000—would be more appropriate rather than amending the legislation already passed or seeking to re-examine the Devlin Report, that that board should come back to the Minister involved and the Minister for the Public Service and say that this salary of £5.000 is ridiculous and should be £8,000? That would seemingly be a more sensible approach to the problem of fixing the level of salary.
I disagree. I do not think one should do this piecemeal. I think it should be a general point which should be considered by the committee on the semi-State bodies and they should make some recommendation.
Again I disagree with what is behind this section because of the arguments I have already made. I do not intend to go into them again. I think there is a very important place for Members of the Oireachtas, and people who have been nominated for election to the Oireachtas, to serve on an upper tier of a two-tier board which would be appropriate to supervise the operations of many semi-State bodies. I have been pressing hard to get the Minister to have the Government do something about this committee which has been talked about for a year or 18 months or more. Nothing has happened. It is not necessarily this particular Government's fault. The previous Government talked about a committee and nothing ever happened. It seems to be one of the classic cases of Government by delay; but I think it is so important we should not delay it any longer. I would be happy if the Minister will say he will press his colleagues into setting up this committee to which they have already agreed in principle.
I do not agree with Senator West in this regard. I gather the point he is making is that Members of the Dáil and the Seanad should be free to sit on the upper-tier of these boards. With the ordinary constraints and balances we built into our system and this is a further constraint—the management are there, the Minister appoints a board to oversee the management and the Houses of the Oireachtas oversee, constrain and question the Minister on the operation of that board.
The Minister need not answer my question. This has always been the problem. The Minister always says "This is not my function. It is the function of the board ". This is the problem I am trying to get at. The Minister knows quite well that if I ask him a question——
The Minister is responsible for the general policy of the board in question. He has to come into the House frequently—and I will be bringing this point up again later on in another amendment—to answer for the policy of the board in question.
But he does not. This is the regrettable thing.
The Senator will vote with me?
Amendment No. 4 has been ruled out of order.
I appreciate that the amendment is rightly ruled out of order and, indeed, the two subsequent amendments to sections 23 and 25 that relate to the same point. The principle is quite clear as far as the House is concerned. I take it that the Bill proposes to limit to £25 million the extent of the finances that may be advanced by the Minister for Finance. I put down a figure of £100 million in the amendment, but I am easy on that. I think that the figure of £25 million at this embryonic stage of the development of the natural gas industry, having regard to its potentialities, is far too small. I am borne out on this by the Minister himself in his Second Stage contribution when he said that the £25 million was designed to cover the costs involved in providing for the on-shore facilities, piping the natural gas to the proposed outlets at the NET and ESB power stations near Cork and that that, in effect, will absorb the £25 million envisaged in this Bill.
I appreciate, of course, that the Minister can come to the House with another Bill to provide more funds if there is such a need in the future. But I think that is unnecessarily restrictive at this stage having regard to the very important board that has been established to utilise what I feel —and I am optimistic about the oil and gas situation, particularly the gas situation—will be a major boon to this country. It has already been agreed between the Minister's Department, through the agency of the company established by him to provide the gas in the manner we have described and criticised in the case of its provision to the ESB.
The Bill is merely providing funds to deal with what is a fait accompli, in other words, to provide the funds to deal with what has been agreed. The Bill gives the board a far wider mandate, a far wider degree of function, which I hope to see exercised right through the 1980s. Having been given that mandate, I feel that something wider and more substantial in the way of financial allocation at this stage might be made, particularly in view of the fact that—as the Minister well knows—this financial allocation is only a question of the Minister for Finance on the recommendation of the Minister for Transport and Power advancing to the board up to the limit of £25 million. There is ample Exchequer control of the loan situation so that there will be nothing at all in the way of prejudice to the Exchequer involved in having this figure at a substantially higher figure. I suggest £100 million or upwards to indicate that the Government are serious about their business here, to indicate that this is not just another ad hoc board to deal with another small situation. This is very serious and in my view will be one of the most important boards operated by the Minister's Department dealing with a totally new and potentially exciting situation. Yet the only kind of lead that the Government are giving the board is to say that the only money they can get are up to the ceiling of what they have already agreed that they should expend, that is, to lay the pipeline to the NET premises and to the ESB power station. They cannot go any further. They are being confined to the parameters of what the Government have already agreed upon with these two organisations two years' ago. That is the only expenditure they can undertake and when that is undertaken, they must come back for more. I object to this because it is a negative approach.
If it was a positive approach there would be some indication on the part of the Minister that he was aware of the dynamic potential involved here to provide us with a cheap cost energy particularly in the industrial, commercial and domestic fields, the opporunity to provide a national grid with pipelines laid to developing areas and so on. There is no indication of that in this Bill. There is a limitation of £25 million on the loans that may be advanced and the loans are already committed to the work that has been described. I would suggest that the Minister should give a lead in this respect by providing a higher ceiling for the incoming board. If the Minister is to come back to the Houses of the Oireachtas for every development that the board are to undertake, it is a niggardly approach.
I am not one of these people who go all out for having a full parliamentary discussion on every move that is taken by every State board. Some of my colleagues might disagree with me on that. I am in a minority in this because I know that it is a popular thing now for most Deputies and Senators to say that we should have these State boards under greater parliamentary control, supervision and so on. If you limit them financially, limit them by having an over-degree of parliamentary control, limit them by having an over-control on their salaries and try to keep their salaries in line with civil servants, it will reduce the whole area of State-sponsored body activity to merely being another form of robot bureaucracy. We have enough bureaucracy in this country, which in my view is one of the most serious weaknesses of it.
One of the ways in which we can get some improvement is by having the State-sponsored bodies properly financed and properly structured and allowed to work in their own way. One thing which is lacking in this country is the spur of initiative and enterprise. One of the ways in which you can get that into the State service is by establishing these bodies, giving them a reasonable budget in regard to loan limits, staffing them in a reasonably independent way, and giving them reasonably flexible terms of reference.
This is very necessary in the field of natural gas development, conversion and exploitation generally in the national interest. It is disappointing to limit them merely in terms of funds to what has already been committed and to say that if they think up something else they can come back and get another £5 million and so on. We would be bringing in Bills here every second year to give them another £5 million or £10 million. That type of approach is wrong. I feel that bodies of this kind should be given a reasonable degree of autonomy in every sense but particularly in the financial sense.
The Minister, replying to the Second Stage debate, pointed out that the board would be quite happy with the £25 million in the initial stages. Another point is that where money is State guaranteed and there is not a wealth of experience behind the people who are going to take on the task—they may have experience on the financial side but in the actual functioning side they need to acquire more experience—it would be very wrong to exceed the amount that they think is quite adequate to meet the present needs. The increase being sought which would multiply the allocation of £25 million by four is out of the question.
This, of course, is an amendment which also came up in the Dáil. I see the point which Senator Lenihan has made, that the board should not have to come back and that they should not be too constrained. I do not agree with that but I am for giving them all the freedom possible and I think they have that generally. But I think that the Minister, under whose control they are, should come back to the Dáil and the Seanad reasonably frequently, not every second month or, perhaps, not even every year but, perhaps, every second year accounting for the allocations of money which the board was given the previous time, and accounting for the general activities of the board. I think that would be good for both the board and the Oireachtas. The Oireachtas should know what is going on in these semi-State boards. It is good for the boards to know that the Oireachtas will debate their general activities over a period.
The £25 million in question here is more than enough to bring the Kinsale gas find ashore and distribute it to the three customers involved and also pay for the cost of the investigation and the planning of the use of any further finds which I referred to in my Second Reading speech. If there is a further find of gas, it could not be developed with the change out of the £25 million therefore, whoever is the Minister at the time would have to come back to the Dáil and the Seanad and say why this extra money was required.
Originally, the Fianna Fáil opposition to this Bill generally centred around the use of the gas for the generation of electricity. I have had to justify in the Dáil and here that use of the gas. If the amendment proposed by Senator Lenihan to increase the amount of money available to the board from £25 million to £100 million was accepted and if there was a further find exactly the same size as the Kinsale Head find, I could allocate 100 per cent of that to the generation of electricity and not come back in here and not justify it to either the Dáil or the Seanad because there would be no legislation before the House that would allow a discussion on this matter. With the £25 milion, if there was a further find the same size as the Kinsale Head find, I would have to come back to the Dáil and the Seanad and seek an amendment to section 22, subsection (3) of the Act increasing the allocation by whatever amount is then appropriate to develop any further finds.
I hope that I will be back here in a short time looking for very large sums of money because that would indicate that there had been very large finds of gas. I would gladly do that. In the interests of the public, in general, as represented by the elected Members of the Dáil and the Seanad, it is right that Bord Gáis Éireann should be accountable to me and that I should come back when I want extra money for a particular company and justify the use to which that company has put the previous amount of money and the proposed use of the new amount of money. This is a good principle and I think it is very necessary. I am sure it is welcomed by most elected members and, indeed, by most members of the public—that State bodies and Ministers are seen to be accountable to the people whom they elected to represent them.
I move amendment No. 5:
In page 12, subsection (2), line 45, to delete, "£25,000,000" and substitute "£100,000,000."
Amendment No. 26 has been ruled out of order.
I move amendment No. 7:
In page 23, subsection (6), line 29, after "accordingly" to add "save and except that any contract already entered into between the Company and the ESB shall not be enforceable against the Board".
This amendment is designed to deal with the contract already entered into between the Minister's company and the ESB in regard to the provision of gas to the power stations in the Cork area. The Minister is well aware of my views in this regard. I am sure there has been a continuing running debate between advisers and various people in the whole area of natural gas conversion. The amendment seeks to ensure that the contract already made is not enforceable against the board. The Minister has met the point to some extent by saying that the contract is of such a nature that if, at any stage, the board decide to have the contract terminated then it is terminable at the request of the board. If it appears to the board to be proper that it should not continue what is considered to be a wasteful delivery or supply of natural gas to the ESB then the contract with the ESB is terminable at that stage. That being the situation I withdraw my amendment.
The purpose of the section is to transfer functions from the existing Bord Gáis Éireann Teoranta, which was the limited company set up by the Government 12 or 18 months ago to take over the negotiations with Marathon from the ESB and NET who were at that stage negotiating the price and then to redraw new contracts between Bord Gáis Éireann Teoranta and NET and the ESB. That company will go out of existence on the appointed day under this Bill. Bord Gáis Éireann will come into existence. Everything that Bord Gáis Éireann Teoranta were doing will be transferred and will be continued by the statutory board being set up. The contract signed by Bord Gáis Éireann with Marathon to buy the gas or the contract by Bord Gáis Éireann with NET and the ESB to sell the gas will be transferred to Bord Gáis Éireann. That contract between the ESB and Bord Gáis Éireann is an interruptible contract, not because the Government think the use of gas to generate electricity is wasteful but because it may be in the future that the Government will say that it is better that this gas be used for some other purpose because there is some other method of generating electricity at that stage. The amendment for this reason seems to be unnecessary. It will be possible at any future time to interrupt the contract between BGE and the ESB.
Is that unilateral? Can the board do that of their own decision?
It is written into the contract.
And terminated by the action of the board?
In that event, I shall withdraw the amendment.
Amendments Nos. 8 to 10 may be taken together.
I move amendment No. 8.
In article 2, page 26, line 8, to delete "six" and substitute "seven".
Very briefly my interest in introducing this amendment is very simple. The attempt is to substitute "seven" instead of "six" for the composition of the board to ensure that something is written into the Schedule to lay down what would be minimum notice for an ordinary meeting of the board and then to change the word "three" to "four" when it came to the question of having a majority decision. According to the present system one could envisage a situation where a meeting could be called at short notice and only three people would turn up and, on a majority decision—two voting against one—an issue could be carried. All that is needed for a quorum is three. The majority decision would carry an issue. Admittedly, that would be a very extreme case. Any gathering of less than four looks like a conspiracy not a meeting. A quorum of four, a majority of two where the chairman would be casting a vote and a guarantee that meetings would not be called at excessively short notice, are all I had in mind.
The Senator referred to giving adequate notice of a meeting. There are seven members on the board, the chairman and six members. The Senator evidently wants to make it the chairman and seven members. I do not think it makes that much difference. The Senator made the point that if there were only three members at a board meeting and that constituted a quorum, and if the chairman and one other member got together prior to the meeting and decided to push through something not in the interests of the board, they could do it in those circumstances. With four it would only need a chairman and one member because presumably the chairman would have the casting vote and he could put it through then. If a chairman of a board were to act in that way the Minister should be fired if he did not fire them first. Within 24 hours the Minister should be fired because that would be a reprehensible way to betray a public trust because to be appointed to a State board and be given—not for the money because the money that is paid to a director of any semi-State board is almost nugatory—the honour of the responsibility of running a semi-State board on behalf of the people is something that should not be treated lightly and should not be abused in this manner. It is conceivable that such a situation could arise but, if the director and chairman involved were not immediately fired, then the Minister who did not fire them should himself be fired within 24 hours and any Taoiseach who did not take that line would not, I believe, last very long himself.
These three amendments are interrelated and so I do not propose to move amendments Nos. 9 and 10.