SELECT COMMITTEE ON PUBLIC ENTERPRISE AND TRANSPORT díospóireacht -
Wednesday, 10 Dec 1997

Vol. 1 No. 1

Estimates for Public Services 1997.

Vote 32: Department of Public Enterprise (Supplementary).

Chairman

While the committee shall consider Estimates, it is not open to it to alter, amend or vote on any aspect of an Estimate under consideration by it. The committee's role is confined to discussing and teasing out the various aspects of the Estimates referred to it under Standing Order 145. They will be subsequently moved and decided on in the Dáil.

The Estimate to be considered is as published in the revised Book of Estimates. When a committee has considered an Estimate or a group of Estimates which has been referred to it, the Clerk to the committee sends a written message to this effect to the Clerk of the Dáil. The Ceann Comhairle communicates such message to the Dáil at the first convenient opportunity.

Time limits for speakers should be agreed before commencement.

Sitting suspended at 2.06 p.m. and resumed at 2.09 p.m.

Chairman

The items before us are: subhead 4 - Farm electrification grant schemes - on which the Minister for Public Enterprise, Deputy O'Rourke, will make an opening statement; subhead D3 - Essential air services programme. The Minister will also make an opening statement on that; and subhead B6 - Certain expenses arising from independent legal proceedings relating to BNFL. The Minister of State, Deputy Jacob, will make an opening statement on that matter. That will be followed by opening statements by each party.

I want to get agreement on the time limit for each speaker.

Mr. Yates

Is there provision for a question and answer session?

Chairman

Yes.

Mr. Sargent

Unfortunately at 2.30 p.m. I will be required to leave to attend the Dáil for question time. I wish to apologise in advance.

Chairman

Thank you, Deputy. The usual time limit is five or ten minutes.

Mr. Daly

I propose a limit of five minutes.

Chairman

Is that agreed?

Mr. Yates

Most of my comments relate to subhead B6 so I would like to give more time to that than the other subheads.

Chairman

We will allow ten minutes per speaker for that and five minutes per speaker for the other subheads. I call on the Minister to make her opening statement.

Minister for Public Enterprise (Mrs. O’Rourke)

Thank you, Chairman. I congratulate you, the Vice-Chairman and all the Members on their inaugural meeting. I know you held an earlier one but this is your first business meeting. I am glad the committees have been tailored to Departments. It is a sound idea and means that Members will have a greater chance to scrutinise matters relating to the Department of Public Enterprise, previously the Department of Transport, Energy and Communications. I want the committee to be seen as an intrinsic part of the proper running of the business of Government and Opposition. I look forward to working closely with the Chairman and his colleagues on the committee and I am glad to be here today.

Chairman

I thank the Minister.

Mrs. O’Rourke

These are Supplementary Estimates which do not involve the incurring of extra expenditure but rather the movement of available money between subheads to meet shortfalls. Subhead B.4 is the farm electrification grant scheme and D.2 is the essential air services programme. The Minister of State, Deputy Jacob, will deal with the BNFL matter.

Many of our colleagues have occasional dealings with people who apply for grants under the farm electrification scheme. It is an admirable one dating from when a programme ended in 1990. The scheme provides financial assistance to farmers who wish to provide or increase electricity supply to their farms. It covers 80 per cent of the cost subject to eligibility criteria. The ESB meets 60 per cent of the cost and the Department 20 per cent. The reason for the Supplementary Estimate under this subhead is the amount allocated for 1997 was £100,000 but it is expected £236,000 will be required during the year. The scheme is demand-led so one never knows how much will be needed. There will be a shortfall of £136,000 under the subhead because of the applications already received which have been deemed eligible and await payment.

Mr. Stagg

If I had my way I would abolish this scheme immediately because there is no need for it. I am not aware of any area where farmers have not had adequate advantage and time to provide electricity for their premises if they want to do so. Does the Minister have any estimate of the number of farmers remaining who do not have electricity at this stage? What number applied in 1997? The justification for the continuation of the scheme in the brief handed to us is nonsense. I do not know who penned it. It will not affect the price of electricity to the public and I believe the Minister will agree with me on that. The net result of the scheme will not have this wonderful effect suggested. It is time to review the scheme as it is no longer a necessity or a requirement. It is a hangover from previous times. We introduced a scheme to make use of EU money and when it finished we introduced a local scheme to replace it. Will the Minister state the number of farmers who have applied, the number outstanding who do not have electricity and why they do not have it?

Mr. Daly

I welcome the Minister, the Minister of State and their delegation and thank them for attending this meeting which shows co-operation with the committee.

Mr. Stagg

I should have done so as well; it was remiss of me.

Mr. Daly

I am sorry to disagree immediately with Deputy Stagg about the scheme of which he has been very critical. The total expenditure for 1997 was about £250,000, which is a very small amount. It is critical that the scheme be continued. It has worked in an excellent fashion and has targeted the people for which it was intended. If there is any examination of the scheme, it should be in the context of expanding it to families in remote areas who still find it difficult to have electricity installations developed further because of the expense involved. This is an excellent scheme which has been very successful and should be continued. It should be extended to other less well off sections of the community.

Mr. Creed

I wish to be associated with the words of welcome to the Minister and I congratulate the Chairman and the vice-Chairman. This scheme probably reflects constituency experience. Will the Minister say where the greatest number of applications are from, if she has such information to hand? I suspect very few come from Kildare but in my constituency I would have had numerous representations from individuals for whom the cost of having an electricity installation provided in a remote rural location was such that they would have been unable to take up residence and provide electrical facilities on their farms had such a subsidy not been available. At a time of considerable difficulty for those living in rural Ireland, farmers especially, this scheme, while insignificant in terms of the numbers it benefits, means a lot to those people. We should be doing everything to facilitate its continued existence in rural Ireland.

Mr. Sargent

Mar a dúirt na Teachtaí eile, ba mhaith liom fáilte a chur roimh an Aire agus comhghairdeachas a ghabháil leis an ChathaoirÍleach agus an Leas-Chathaoirleach. This scheme reminds me of the one in Denmark which has more to do with offering people living in rural communities the opportunity to generate much of their own electricity and have ownership of that part of the economy. It also reduces the cost of transmission if renewable energy resources in a locality are harnessed rather than what seems to be the case with this scheme which is to extend the transmission network to isolated areas which are far removed from the point of generation of the power. Will the Minister say where the scheme is going? Is it envisaged it might give way to the scheme in Denmark I mentioned or some such similar scheme where wind generated power is in the ownership of local communities who in turn sell it to the central grid? I know this is happening in Ireland in some cases but there are more opportunities for it to happen.

Mr. Yates

I also wish to be associated with the congratulations to the vice-Chairman, Deputy Daly, and with the welcome to the Minister and her officials. We look forward to working constructively and dealing with matters to hand.

I have no problem with subhead B.4. My understanding of the reason for the grant scheme is the high cost of provision and connection of electricity to areas with low density farms and houses. Another way of dealing with this issue relates to the obligations on the ESB. The Minister is aware of the consultation paper published last May by the Department on the future of electricity generation. That document makes much reference to the ESB's public service obligation. My understanding is that the obligation on the ESB is that it provide everyone with a service, regardless of where they live. Someone living in a rural area wishing to be connected could be given a quotation of, for example, £8,750. If they go to their local representative or the ESB and state that they cannot afford this they may be told that the payment can be spread over five years. One cannot go to anyone other than the ESB for electricity. What are the terms of the PSO in relation to supply? What obligations is the Minister empowered to place on the ESB to charge a reasonable sum? If a job could be done at a reasonable rate by the ESB this would avoid the need for grants.

Another way of dealing with this is to establish a regulator of electricity utilities. The regulator would oversee the capital sum the ESB was charging a farmer or householder. When is it proposed to establish a regulator for the electricity generating sector as we are obliged to do under EU legislation?

Chairman

It is vital that this scheme continues. West of Ireland farmers are those most dependant on it. They live in remote, scattered areas and, in many instances, the cost could be prohibitive without this support. The scheme can make the difference between a person continuing in farming or getting out.

Mr. Stagg

The Department is an inappropriate vehicle for paying local grants to farmers. If there is a requirement to assist farmers with electricity or augmented electricity, the ESB or a local authority would be a more appropriate vehicle. This is the only grant scheme operated by this huge Department. It is a hangover from previous days. If it is still required, it should be located in a different body.

Mrs. O’Rourke

I am glad to hear a refined proposal from Deputy Stagg.

Mr. Stagg

It is the collective wisdom of the committee.

Mrs. O’Rourke

It is powerful what it can engender. One would need to live in an area which is deemed disadvantaged for cultural purposes to know the extent to which the scheme is put. These are in counties Cavan, Clare, Donegal, Kerry, Leitrim, Mayo, Monaghan, Roscommon and Sligo. Members seem to have a fair amount of knowledge of this. Deputy Stagg suggested that the scheme should be under another Department or heading.

Mr. Stagg

The ESB.

Mrs. O’Rourke

We will see. I am sure that the Deputy expressed these views forcefully when he was in the Department. Deputy Daly called for an expansion rather than a diminution or abolition of the scheme. This is borne out of constituency work. We have made an arrangement for a modest but helpful provision for alternative energy.

From the introduction of the scheme in 1994, £424,000 have been paid in grant aid. This is hardly largesse but it is a welcome ingredient in rural life. Since September 1994, 3,077 people have been assisted by the scheme. Most of the grants concerned milking parlours and slatted sheds. It also includes the supply of electricity to farm dwellings and the installation of water pumps. Europe and the Government have taken a position that rural life should be vibrant with decent conditions provided for living there. The scheme is very modest as shown by the numbers assisted and the amount of money given. However, each application provides more decent standards.

The report mentioned by Deputy Yates will be made available soon. There will be a regulator. Regulators will be the order of the day for all utilities. The report will include the PSO and, eventually, there will be competition with which the ESB will have to cope. The regulator will be established in about two years. There will be another Etain Doyle and many others down the line. Eventually I will be redundant but I hope that will not be for some time.

Mr. Currie

Where has most of the money been spent?

Mrs. O’Rourke

I do not have those details but I will let the Deputy know. It is for those counties deemed disadvantaged.

Mr. Currie

I was interested if it applied to Border counties cut off from their hinterland where it might not have been possible to follow the normal supply routes and, therefore, the cost would have been higher. I represent an urban constituency but that was not always the case. I remember how much attention I paid to electricity. It has been a revolution in Ireland. Things did not change for centuries until the advent of electricity. When I see that some dreadful murder has occurred and see the premises where the person has been living, invariably if the house is in a dreadful condition it is because there is no electricity. Electricity transforms a house and the attitude of families. I am not one of those who favour a reduction in the amount of money used to help provide electricity to an area, no matter how remote.

Mr. Yates

What is the PSO on the ESB? I understand that if someone wants a service they must apply for it. The ESB can get around this by giving a prohibitive quotation. Therefore, the PSO is meaningless. Is the PSO laid down by the Department or by statute? Is it defined in the original Act? It could be prohibitive.

Mrs. O’Rourke

I agree. I have often dealt with young couples who wished to build houses in remote areas and made representations to the ESB on their behalf. However, it never lowers its price. It might stagger the pricing arrangement or put it to tender, which is not really a tender because only one firm can tender. The public service obligation is to provide supply but it is not based on a particular costing. I do not know if that will change. I expect it was originally couched in legislation.

Mr. Yates

I appreciate the Minister's comments. Perhaps her Department could notify me about the matter. The Department must have a section that could monitor this. People could write to the Minister or to the Department who could demand some degree of accountability and transparency from the ESB to ensure it meets its public service obligation in a meaningful way. In a remote area this issue is a problem.

Chairman

I remind the committee we are dealing with the subhead. The discussion is wandering from the subject.

Mr. O’Flynn

I compliment the Minister on maintaining and supplementing this scheme. Are there plans to expand it? People who wish to live in rural areas find it extremely difficult to do so because of the high cost of bringing electricity to a private dwelling. Will the Minister consider dealing with that? I dealt with a case recently in which the cost of bringing electricity to a house being built on a site four miles from Cork city was between £5,000 and £6,000. Are there plans to develop the scheme? It would encourage more people to live in rural areas and thus help rural development.

Mrs. O’Rourke

There are no plans to extend it in the way envisaged by the Deputy. This question is related to that of Deputy Yates. The scheme applies to the counties originally involved in the western package. When the European scheme ended I presume there was great pressure to continue some schemes to help people who had benefited under the original scheme. However, the scheme is designed for those whose income is drawn substantially from farming. One can have a supplementary income but it must be much smaller in a commercial sense.

Many people are moving to rural areas and there are resettlement programmes in various counties. If people move to rural areas in the counties deemed to be disadvantaged and are engaged in agricultural pursuits from which they draw their income, they qualify under the scheme.

Mr. Stagg

I asked the Minister about the number of farmers who had applied in the past year and who did not have electricity previously. The scheme appears to have been utilised mainly for upgrading supply and covering the cost of extra supply for milking parlours and so forth.

Mrs. O’Rourke

It was mainly used for enhancement of supply. However, that is not to rule out cases where there was no previous supply. The enhancement of supply was usually required for agricultural and living purposes for people whose income is mostly derived from farming.

Mr. Stagg

The budget proposal on tax for AAR should be of assistance. Its intention is not to assist small schemes but larger ones. I support that objective as it is highly desirable. It is worth examining how groups of farmers might get together to provide an electricity supply in their own areas. There are examples of that being done in Denmark which would be worthy of examination.

The Minister referred to the regulator. Regulators are extremely dangerous animals. Appointing regulators means giving power to people who will take large chunks of power from the Oireachtas and place it outside the democratic control of the public. They will not be accountable in a democratic sense. The Minister appears to think the regulation of the electricity industry is inevitable. Before she brings forward legislative proposals to give more power to people outside the democratic system, I advise her to examine the proposal seriously. Regulators, such as those envisaged by the last Government, would have more power than Ministers and, collectively, more power than the Cabinet over a range of areas. They would be outside democratic control.

The Minister should consider retaining the regulatory system within Government and examine hiving off the shareholding in that context. This is the first time a Labour Party Deputy has been heard to declare that the Government should get rid of the shareholding and retain the regulation. However, it must be seriously considered if we wish to retain democratic control and regulation of a range of utilities, including electricity. Otherwise a huge democratic deficit will be created. People in quangos outside the Dáil will have real power while the Minister will be left with a shareholding that has no value.

Mrs. O’Rourke

The policy making function rests with the Government and the Oireachtas. The utilities are owned by Government. The regulator for telecommunications was appointed on foot of a European directive which was implemented by the last Government. I have a degree of sympathy with the view expressed by the Deputy.

Etain Doyle is the regulator of telecommunications and it might be interesting for the committee to meet her. She is a fine person who knows her brief and the road she must follow. She can operate independently but is aware of the parameters of her role. She is the only regulator under the auspices of my Department and, in the course of her courtesy visits to me, I found her to be well aware of her role. However, policy remains a function of the Government.

Mr. Stagg

I cannot ask the Minister a question in the House about the role of a regulator - I am not decrying the regulator in question - and his or her huge responsibilities. If other responsibilities are given to regulators, they can come before the House but Deputies will be able to do nothing about them. The public can sack the Minister but cannot sack the regulator.

Under the regulatory system, we will give the main power to the regulators. Claiming one will retain control of policy is nonsense. The regulators will make policy through their daily actions. It is a huge and dangerous area which the Minister, who is responsible for most utilities, must examine carefully. The Minister must retain that power for the people she represents and for the democracy we all support.

Chairman

The committee is discussing the subhead.

Mrs. O’Rourke

It is an issue that could usefully be given a lengthier airing at another time.

Mr. Yates

I met the regulator. To whom is the regulator accountable? It would not be unreasonable that a regulator should be accountable to this committee. Under the legislation which established her office, is the regulator accountable to this committee? If so we could write to her. Multi-channel TV is an issue of great concern to me and, as she has responsibility for licensing TV deflectors, MMDS and so forth, the clerk should write to her to ask her to come before the committee in 1998 to discuss those matters.

Chairman

Under the terms of reference the question of whether she can be invited to appear before the Select Committee or the Joint Committee must be decided. If she is to appear before the Joint Committee it must meet before making that decision. We will note the Deputy's suggestion and put it to the Joint Committee. We will proceed to subhead D3.

Mrs. O’Rourke

Subhead D3 covers the essential air services programme and a Supplementary Estimate of £410,000 is required. The six regional airports are Donegal, Sligo, Knock, Galway, Kerry and Waterford and they are part of the economic infrastructure of the regions. The programme of Exchequer subvented flights was introduced in January 1995 linking Donegal, Sligo, Galway and Kerry to Dublin. Earlier in 1993 the then Department of Transport, Energy and Communications had a consultancy study which stressed that the regional airports contribute significantly to regional development. It is a macro example of what happened as a result of the farm electrification scheme.

There has been significant Exchequer support of over £15 million during the 1980s and European support of over £10 million under the 1989-93 round of Structural Funds. The six regional airports have received Exchequer support of £2.34 million for the period of 1996-9 for marketing and promotion. Recently the Minister for Finance announced that between the Estimate and the budget an extra £5 million will be provided for infrastructural work at Galway, Knock, Sligo, Donegal and Waterford airports.

Following a competitive tendering process the operating contracts for Galway-Dublin and Kerry-Dublin were awarded to Aer Lingus for a period of three years. I believe this is a good programme and I am looking for a supplementary estimate for the essential air services programme.

Mr. O’Flynn

I support the policy of connecting different regions by air and subventing flights, but I would draw the Minister's attention to the fact that Shannon and Cork airports, which are operated by Aer Rianta, do not have subvented flights. I am not aware of any service from Cork-Shannon and Cork-Dublin which is subvented. These two regional airports are at a disadvantage because there are no subvented flights to the regions. They are also competing for inward traffic in tourism and business. Will the Minister include these two airports under the scheme she has adopted for other regional airports?

I hope the Minister will prevent the demise of duty free. If she cannot it will have a detrimental effect on airports, especially Cork which generates most of its revenue from duty free. Another bone of contention in County Cork is that a flight from Cork-Dublin is expensive while other regional airports have cheaper airfares.

Mr. Yates

I recollect that the former Tánaiste was very interested in this topic in terms of having an air link between Farranfore and Dublin.

Mrs. O’Rourke

He used it often enough.

Mr. Yates

The question of access to regional airports requires some scrutiny because we would all like to see the development and successful expansion of regional airports. In recent discussions I had with Aer Lingus and Ryanair I discovered that they could not see an economic route development taking place. These airports would only continue on the basis of a subvented social welfare type scheme. Will the Minister continue this scheme? The Minister is aware that the Galway-Dublin and Kerry-Dublin routes were the only routes that worked. If you read the notes, the Dublin-Sligo and Dublin-Donegal routes did not succeed at all. The Dublin-Sligo route required three competitions. EI Air Exports foundered because they could not get a suitable aircraft. Aer Lingus happened to be operating a scheduled route at a loss of £650,000 and it was given the money. Where does the Minister see the future of this scheme?

I support the scheme but the de facto situation is nobody will run a scheduled service, be it private or Aer Lingus, without a subsidy on a continual year round basis. Given that the most successful routes from Galway-Dublin and Kerry-Dublin ran from 9 January 1995 and will expire on 9 January 1998 does the Minister intend to continue or expand this scheme? There has been a big capital investment in regional airports and Knock airport was subject to huge controversy. However, there is not a strong economic or commercial focus to this scheme. Therefore, the very survival of these airports, apart from a small amount of leisure or chartered commuter traffic, will be very difficult. If the airport revenues are undermined their overheads etc. will go out of line. Does the Minister have any development plans for regional airports? Does she propose to continue this scheme? What level of subvention will be required to continue the scheme for the next two to three years?

Mr. Daly

I support the development and upgrading of regional airports. It is one of the most important developments that has been made and has a major impact on regional development and the development of the tourism business. I would like to ask the Minister about the Exchequer subvention of flights especially those to Dublin as distinct from Shannon. I am sure the Minister would be very disappointed if she did not get some message from the Shannon lobby which is never slow to react to anything which might be disadvantageous to Shannon. I notice most of the Exchequer subvented flights are to Dublin. If Shannon airport is to retain its position as a major international airport then it should not be at any disadvantage. I am not sure of the extent of Exchequer subvented flights but we have had complaints from Shannon about it being put at a comparative disadvantage. It is desirable that Shannon Airport continues to develop. Dublin Airport is expanding to the stage where it is almost impossible to cater for the increase in traffic and business. I would prefer to see both Shannon and Dublin Airports feature in this rather than have a subvention for Dublin which is unnecessary at this stage.

Mr. Stagg

I support the scheme. It is a system of supporting regional areas outside the capital city. There is validity in the point made by Deputy Daly. Dublin is important and should be supported. We should continue this scheme as required. It is a system of supporting regional areas which do not have the population structures to make them commercial. While that pertains we should be prepared to support them in the same way as we would support rail lines to Westport, Tralee or anywhere else we spoke about.

Air traffic is in the same category and I am particularly pleased about the relative success of Knock Airport. I remember Knock from when I was an altar boy there. The development in the region around Knock Airport is an economic miracle. I visited Knock Airport on many occasions. People who go to England to work by choice rather than necessity arrive at Knock Airport when they come home for the weekend and do so at a relatively cheap price and in a short time. As it is approximately only a two hour flight from Birmingham to Knock it is quicker than getting the train to Dublin. I congratulate the Minister on the allocations.

Mr. Lawlor

I support the scheme in that it is an economic led strategy for the regions. I hope an airport facility in the regions will provide the lead for other economic development. Such facilities would mean those regions would be considered for investment.

I presume a substantial amount of money will be paid from one hand of the State to the other due to landing charges at Dublin Airport being given back to Aer Rianta. There has been much debate in west Dublin vis-à-vis Baldonnel and whether it could be a type of Dublin regional airport. It might be a more economic option for this service on the basis that where there is excessive traffic movement in Dublin airport the charges are understandably higher due to the range of services available for international air traffic. The Baldonnel option as a State asset in the ownership of the Department of Defence could be looked at in the future.

The Ryanair debate at Dublin Airport has been on the cost of landing charges and so on. If a substantial amount of the subvention is going into the pockets of Aer Rianta perhaps some savings could be made by looking at the alternative, and possibly cheaper, option of Baldonnel?

Mrs. O’Rourke

I welcome the support for the programmes. The debate has widened from one on moneys for essential air services into a general one about regional airports. I suggest that, for subsequent meetings, questions be replied to individually subject to the Chairman's agreement.

Chairman

Will we agree that now?

Mrs. O’Rourke

Yes, that is agreed for the future. It will give greater weight to everybody's contribution.

Deputy O'Flynn spoke about the need for Cork and Shannon Airports to be involved in what is happening with regard to the regional airports. Cork and Shannon airports are strongly commercial and doing very well. Many people use their facilities. Aer Rianta supplies the infrastructure in those airports and has reasonably deep pockets - deeper than mine at present - out of which to provide for infrastructural developments and marketing.

If duty free is abolished it will have a huge effect on the main airports. I ask other countries to join us in trying to retain it. In 1998 there will be a build up of momentum in that campaign when it gains populist support.

Deputy Yates inquired about the future plan. The moneys in both the estimate and the budget are substantially more than what had been envisaged. There is a three year plan. There will be monitoring to see how the different airports are measuring up. The infrastructural work will have to be completed this year and they informed us that this will put them in a better position to operate more commercially. This will apply, particularly to Galway, which is getting a major sum of money. They met us, as did Boston Scientific and various industries. The tender process is under way at present for those who wish to tender for it. I share the Deputy's concern on the effect it will have if commerciality does not enter into it.

When the infrastructural works are completed and the full marketing plan comes into play we will be in a position to see if commerciality is at the heart of it, or if we should take a decision that regional airports must be sustained, within limits, as an arm of regional infrastructure support, just like as Deputy Stagg said, we subsidise rail transport in rural areas. That is our plan for the next three years and it will be monitored.

Deputy Daly welcomed the scheme and mentioned the Shannon lobby. Most lobbies build up and if something is achieved they subside for a while but the Shannon lobby remains at full throttle. They never let up and fair dues to them. The Deputy was present when Continental made its announcement. It is very good for Shannon. They recently presented a very good study. I will never be allowed to forget I am from the west of the Shannon. It is always mentioned to me, especially in correspondence. What Deputy Stagg said about support and continuing it as required is more or less what I said. Deputy Lawlor wondered about one State body, Aer Rianta, collecting airport landing charges from another body which is receiving a State subsidy. It does collect air charges from planes which land. The Deputy raised the subject of Baldonnel on which I need to be briefed.

Mr. Stagg

I did not raise the issue of duty free because I thought it would be out of order. However as the Minister referred to it, I will raise the issue briefly.

Chairman

It is out of order.

Mr. Stagg

The Taoiseach had a veto that could have allowed him to prevent the abolition of duty free but he voted for its abolition. I am not sure if the Minister met the protesting group outside the European Commission——

Mrs. O’Rourke

I did.

Mr. Stagg

——but the Minister for Finance was inside and he refused to come out to meet the group. I want to establish whether we are in favour of duty free or is one isolated Minister clearly in favour of its retention, for which she has my full support?

Chairman

In fairness to the committee members and the Minister, I would not have minded the Deputy straying a little, but this is a whole new ball game.

Mr. Stagg

One would think the Minister for Finance would support his own ministerial colleague.

Mrs. O’Rourke

On the technicality of whether the Minister could come out, I was in Brussels that day for another Council meeting. I met the delegation by arrangement and was glad to do so. I conveyed to them that the Minister for Finance was engaged at another meeting in important work for Ireland - discussing the setting of the corporation tax limit. The meeting was so intense that there were only Ministers present in the room. There were no officials. There was one listening room. I was in that room and heard the Minister pleading Ireland's case and our special rates for incoming industry, the IFSC, etc.

Mr. Stagg

That is a very weak excuse.

Mrs. O’Rourke

Deputy Stagg was not there.

Mr. Stagg

Does the Minister have a similar excuse for the Taoiseach voting to abolish duty free?

Chairman

I cannot allow Deputy Stagg to continue.

Mrs. O’Rourke

I could say a lot about what Deputy Quinn did during the six months if I wanted but I will not go against the chairman.

Mr. Stagg

We did everything we could to try to do what the Minister is doing now.

Mrs. O’Rourke

That could be the subject of another debate.

Mr. Stagg

Can we call in the Taoiseach to explain why he voted to abolish duty free?

Mrs. O’Rourke

That is up to the chairman who is very supportive of the Taoiseach.

Chairman

We have dealt with that subhead and we will now move on to subhead B6.

Minister of State at the Department of Public Enterprise (Mr. Jacob)

I wish the vice-chairman and all members of this committee well in this important and meritorious work.

The Supplementary Estimate of £100,000 is required to pay certain expenses to a group of four County Louth residents to assist them in their independent High Court action against BNFL. Since my appointment as Minister of State I have given my constant attention to the question of financial assistance to the County Louth residents. I met the residents on several occasions and discussed with them, on behalf of the Government, financial assistance towards their case.

In an effort to be co-operative and supportive in respect of the residents' efforts, particularly in their attempts to assemble research, the Government has made an offer of financial assistance of approximately £400,000. Three hundred and fifty thousand pounds of this amount is earmarked for research purposes and the remainder for IT purposes to assist with the discovery process and the management of data from the research projects that they propose to undertake.

This offer of assistance allows the residents complete discretion to identify the precise research which they see as a priority relating to their conduct of the case. On Monday of this week, BNFL sought to strike out the proceedings being taken by the four County Louth residents to produce a Statement of Claim against BNFL. At the hearing, counsel for the County Louth residents said that owing to the technical issues and the massive amount of discovery involved in the case, they required an additional four months in order to produce a comprehensive Statement of Claim. They were, in the event, awarded an extension of three months to early March 1998. If the plaintiffs failed to produce a Statement of Claim by that time the proceedings would be struck out. Costs were also reserved in the case.

The residents intend to use the research findings to support their Statement of Claim against BNFL. It is important therefore that my Department is in a position to dispense the funds that have been agreed with the residents as soon as possible to enable them to proceed with their research projects at an early date.

Mr. Yates

This is the Supplementary Estimate which is of most concern to me. There has been a debate in the Dáil on this issue and the Government accepted an Opposition motion. Considerable progress has been made since the first meeting the Minister of State had with the Louth residents' group. However, there are matters of serious concern and I advised the Minister of State I would keep in close contact with the residents' group arising from commitments made by him in the Dáil on 14 and 15 October and by the Taoiseach on the Order of Business on 16 October.

Can the Minister clarify the legal costs? The acceptance of the Opposition motion included the exact words "including legal costs". The Minister of State is aware that the Fianna Fáil election manifesto indicated it would "fully fund" this case against BNFL. In the last two meetings with the Louth residents' group, the Minister of State intimated that proposals to Government included the recruitment of a researcher and the provision of different research projects and IT technology to the cost of an unconditional £350,000. I understand the programme manager for the Taoiseach, Mr. Gerry Hickey, attended these meetings.

On the question of legal costs, I was told the Minister of State said to the residents that they would not be paid. Will the Minister clarify this? Does he not regard the Dáil motion as binding on him, his Department, the accounting officer and the Government? I have deliberately refrained from public comment on this issue over the past few weeks to allow the LRG and the Minister of State to develop a fruitful relationship. My only interest in this matter is a successful conclusion.

As the Minister said there was a hearing in the High Court where BNFL attempted to have a procedural knockout against the Louth residents' group. I am not satisfied with the extension of three months but that is the decision. If the Government is committed to supporting this case the question of legal costs cannot be fudged. To what extent will legal costs be funded? Given the overwhelming political consensus that because of the risk factor of an accident occurring at Sellafield, there being no economic benefit to Ireland from Sellafield and the known emissions recorded through the RPI, the only viable option is to move against BNFL and Sellafield.

In his introductory statement, the Minister did not mention legal costs. I am quite forensic in my approach to this. I am satisfied concerning consultancy, engineering and IT issues and the collating of information. However, there is the fundamental political issue of the acceptance in good faith of a Dáil motion which included the words "including legal costs". The matter is urgent because the hearing in December incurred legal costs. How can Mr. MacGuill and others coordinate research and the technical aspects and not know whether the people involved are covered? This is not about getting on the gravy train, these are bona fide expenses that will be invoiced and subject to scrutiny by the Chief State Solicitor's office. I hope the Minister will respond positively.

Mr. Jacob

I appreciate Deputy Yates realises that substantial progress has been made in this matter. I met these people on four occasions in the past nine weeks and we have established a very cordial and businesslike method of proceeding which is taken very seriously. I have the utmost support from the Minister for Public Enterprise and Transport, Deputy O'Rourke, the Cabinet and the Taoiseach. It is recognised at all levels that this is a serious matter and it is being treated as such. These people deserve our support and co-operation. There is no question of fudging. The Deputy mentioned that this is a fundamental political issue. There are also fundamental legal issues incorporated in our discussion here which leaves me in a difficult position with regard to elaborating on what has obtained between my officials, the Louth residents' group, their legal representative and myself. I am surprised at the level of Deputy Yates's information. Business has been done in a cordial and businesslike manner and that has obtained throughout a number of meetings. This is as a result of an arrangement to conduct the business in a confidential manner. It was not carried in the media and there were no revelations from either side, in accordance with a mutual agreement. The discussions are ongoing. At the moment I am awaiting a decision made in Cabinet yesterday, following which I will be in telephone communication with the legal representative of the four County Louth residents. There are very serious and complicated legal matters at issue. It would be most inappropriate of me to go into the matter in detail until I have concluded my discussions with the residents, in accordance with an understood arrangement.

Mr. M. Brady

I welcome the assistance given to the Louth residents' group but we must realise that this is taxpayers' money. The offer allows the residents complete discretion to identify the precise research which they see as a priority. What conditions attach to the financial assistance? Deputy Yates has outlined that the residents will issue audited accounts and be accountable as and when required. I would like to have that matter clarified. I would like to know the make up of this committee. During previous discussions I had, no one could say what expertise these people had in the area of research. How was the legal person selected? If we are dispensing taxpayers' money, we have an onus to ensure value for money. We should not throw money at groups to placate them. I know the Minister is precluded from answering certain questions for legal reasons but I thank him for his comprehensive briefing on the matter.

Mr. Stagg

In light of the Fianna Fáil election manifesto that there would be full payment of legal costs in this and subsequent cases, motions were tabled in the Dáil because there did not seem to be a willingness in Government to fulfil that undertaking. I congratulate the Minister of State, Deputy Jacob, on pulling back from what was a sharp U-turn to a real progress position. He should get full credit for doing so because I know the hamstrings tied to a Minister of State and how senior Ministers can keep them in their place. The Minister of State, with the assistance of the Opposition, has achieved a very positive result in this matter. He has received a sum of money from Government which I did not think he would receive and I congratulate him. I appreciate his difficulty regarding the legal situation, particularly while the State remains a defendant in the case, but is there any indication from the Louth residents' group that they are willing to remove the State as a defendant? It was the position of the Minister of State, Deputy Jacob - it was my position when charged with the portfolio - that the State should be removed as defendant if we were prepared to support the residents. The Minister is now strongly supporting the residents, in the research and IT areas. There is a question mark over the legal support and I am not sure if he can answer the question put to him by Deputy Yates. We need some clarification on what will happen the £100,000. Will they get it before Christmas? Has it been spent already? What was it spent on? That information would be useful. The discussions between the Minister and the group were confidential. Since the motion was passed in the Dáil and the Government accepted it, I have not been contacted by the group. That would indicate that it is satisfied with the actions of the Minister because they are not going outside to complain about the Minister not delivering.

Mr. Lawlor

Fianna Fáil is meeting its promises.

Mr. Stagg

Obviously, but its tail had to be twisted before it did so. It accepted the Opposition motion on the matter. Do not try to knock the gloss off the praise I am giving the Minister of State.

Mr. Yates

Does the Deputy want to see the minutes of the first meeting?

Mr. Stagg

The Minister of State has now done all we asked him to do. The case will go before the court early in the new year. A case must be stated by a certain date in March. I will be interested to see that case stated. We should give every assistance to the Dundalk residents in this difficult task, not only in finding the money to state the case but in stating the case.

Mr. Jacob

I will bask in those kind words from Deputy Stagg. Although they may be short lived, I thank him nonetheless. I reiterate that I have had substantial support from all colleagues in Government. Deputy Stagg mentioned the assistance from the Opposition. I welcome assistance from whatever source on this serious business.

Deputy Stagg made an important point about removing the State as defendant. It is important that it is done. That was always at the forefront of his discussions and I assure the Deputy it has been at the forefront of mine. I have raised that point at every meeting. Up to now it has been put in the form of a request and not on a take it or leave basis. We are not at that stage or in that type of business. We are trying to be as cordial and as business like as we possibly can but I would aspire to reaching a stage where there would be agreement that the State be removed, in the light of substantial moneys which are forthcoming from the State to these people for their meritorious purpose.

Deputy Stagg also spoke about drawing down moneys. We are in the process of doing that. We are not entirely at one on this matter. It is not an insurmountable difficulty and I expect we will sort it out. There are procedures and proprieties to be observed. We do not want to make these procedures too difficult. As Deputy Brady said, we are dealing with taxpayers' money, of which we are aware. Certain procedures should and will be adhered to. We are making substantial progress. I express my thanks and appreciation for the tone of this meeting today. Within a short time, I hope I will have reached the stage in the negotiations where we can be more revealing or, indeed, all revealing when we sit at the table again.

Mr. Lawlor

We are all rightly concerned about winning the day. Deputy Yates understandably raised this matter in the House by tabling a Private Members' motion. The residents went to the Opposition to make the case. The Minister of State took the issue from there to where it is today. He is to be complimented because it appears real progress is being made.

As regards the funds available, I presume it is a meticulously calculated sum by officers of the State to ensure the residents may confidently carry out the preparation of a suitable case. When all the discovery work has been completed and an analysis carried out, if further funds are required to see the case through the High Court and possibly appealed to the Supreme Court or a European Court, we will be co-operative. The case may, however, strengthen or weaken during the discovery process. At that stage, the Minister and his officials will have to make value judgments on how we will proceed to win the case.

The call for a commitment by Government to totally fund the case at this juncture - that is the intent, but it must be prudently managed - is fairly compatible with what was said from the beginning. The programme for Government states we wanted the case to be taken and the residents to be supported. We must also keep an eye on getting value for money and ensure that we are not pursuing a complex and potentially costly case which does not have potential for success. I presume the Minister is taking it step by step and that after the completion of discovery and analysis of the information, more strategic decisions will be taken. If the Minister pursues the case, as he has outlined today, I hope it will result in a conclusive victory against Sellafield, which has been a cause for concern for so long.

Mr. Yates

The Minister did not answer my question. The first questions was specific and required a yes or no answer. Is the Government prepared to fund the legal costs element of this case?

Mr. Jacob

As I already stated, I am in the throes of discussing this issue with the residents. A document was placed before the Cabinet yesterday and I am waiting for a decision. When the decision is to hand this afternoon, I will communicate by telephone with the solicitor representing the County Louth residents. I will tell that individual first anything I have to say on this matter rather than the committee. I ask that be respected.

Mr. Yates

First and foremost, the Minister is accountable to the Oireachtas. He is spending Oireachtas money. The Chairman, as a former member of Cabinet, will be aware that Mr. Frank Murray and those in the Government secretariat are not slow in drawing up the minutes and that following a meeting at 11 o'clock on a Tuesday a Secretary of a Department would know the exact position by lunch time. I hope the Minister is not being disingenuous or has information but is not passing it on to the committee. I would be very disappointed if his civil servants would allow him come before a committee without telling the position.

As of now the position is known. When the Taoiseach was asked the same question by Deputy John Bruton in the Dáil on the morning after acceptance of the motion, namely, whether legal costs would be covered, he answered yes. This is clear from the Official Report of the House for 6 October. I know exactly the difficulty in terms of the Attorney General's advice, but his advice has not changed. He always had a particular perspective on this matter. The advice of the Attorney General pertained when the motion was accepted by the Dáil and when the Taoiseach gave a positive answer to Deputy Bruton's question. Given that the facts were known, agreement to pay legal costs is a political question. A Government either accepts or rejects an Attorney General's advice. What happens if the Government decides not to act in accordance with the motion passed by the Dáil? Was it being disingenuous? Does the Minister know the current position and does he not feel the committee is entitled to know it? I accept there is agreement in principle to pay legal costs but that there are details to be worked out. Will the Minister say whether legal costs, in principle, in part of in full will be covered?

Chairman

The issue, while worthy in the view of Deputy Yates, does not constitute the business of today's meeting.

Mr. Yates

The issue arises under subhead B6.

Chairman

We are dealing with a Government decision of 1 October and financial aid of £350,000 for research purposes and £50,000 for IT costs. I am not making this point in an attempt to protect the Minister.

Mr. Yates

It sounds like the Chairman is ringing the bell before the round is over.

Chairman

The Minister is accustomed to the manner in which these meetings are chaired. Our brief is——

Mr. Yates

There has been more significant straying. The Chairman is now dotting 'i's and crossing 't's in terms of procedure in a manner that was not applied to any other subhead.

Mr. Jacob

The Chair would not endeavour to protect one who does not need protection. He is also familiar with chairing meetings and is able to gauge the situation. I assure the Deputy and the Chairman that I do not need protection and would be delighted to respond to Deputy Yates, particularly when he uses words such as "disingenuous". I have never been and never intend to be disingenuous. The Deputy is aware of this. I fully accept his point about being accountable to the House, something I mentioned on a previous occasion when this issue was discussed in the House. I am being very careful about this matter. Regarding what I said a few moments ago, I have not seen the decision which emanated from the Government yesterday. I have heard reports, but this is a complex issue and I am not going to communicate with the legal representative of the County Louth residents' group without having the accurate, written facts which emanated from the Government. I expected to have them by now, but a similar situation has arisen on a number of occasions over the past few weeks and it is usually Wednesday afternoon before I receive a written response from Government. Deputy Yates, who has experience as a senior Minister, would know more about this matter.

My position has been and will continue to be consistent with statements made in the Dáil.

Mr. Lawlor

I propose that we move on.

Mr. Yates

I accept in good faith the Minister's final comment. I am asking the Government to approve the legal costs. This is my only objective in raising the issue. I do not want to give the Minister a hard time. I take it from his remarks that he would not dream of being disingenuous and that he continues to act in accordance with the Dáil motion which is specific on this matter. I hope he will give Deputies who have shown an interest in this matter the appropriate information when he is in a position to notify the Louth residents' group, in order that we do not have to read about it in the newspapers.

Mr. Jacob

I will do so with pleasure.

Mr. Yates

I may have my own way of getting the information.

Chairman

I take it we have agreement on the subhead. In accordance with new Standing Order 78B, the committee clerk will send a message to the Clerk of the Dáil to the effect that the Select Committee has completed its consideration of the Supplementary Estimates for the Department of Public Enterprise. The Ceann Comhairle will convey that message to the Dáil at the earliest opportunity.

Two Bills are due to be considered by the committee. It is suggested that the Air Navigation (Amendment) Bill, 1997, be considered at a meeting on 18 December at 2 p.m. and that the Turf Development Bill, 1997, be considered on 19 January 1998.

Mr. Yates

As somebody concerned with amendments to the Air Navigation (Amendment) Bill, 1997, Committee Stage should be taken early in the new year. I do not wish to delay the legislation, but we are a new committee and there is only a short time before Christmas. I would like the Christmas period to consider this Bill.

Chairman

I suggest we consult with the Minister on the proposed change.

Mr. Yates

I am happy to attend for an extra day in January while the Dáil is in recess if that would be helpful.

Chairman

If it is not possible to postpone consideration of the Bill, then we have to agree that it be considered next week.

Mr. Yates

There are some Members who are not in attendance who may not be in attendance next Thursday. The Dáil goes into recess next Thursday. The availability of rooms should not dictate when we meet. We should have sovereignty over our business.

Chairman

I agree with the Deputy, but I do not want to be locked into a situation over which we do not have control. I will communicate the view of the committee that consideration of the Bill should be left until early January. Is that agreed? Agreed.

Mr. Lawlor

What about bringing some of those responsible for transport before the committee?

Chairman

That is a matter for the Joint Committee and it must be dealt with in that forum. Presumably there will be no meeting of the Joint Committee before Christmas.

The Select Committee adjourned at 3.40 p.m.