Public Business. - Electricity (Supply) (Amendment) Bill, 1944—Committee Stage (Resumed— Amendment No. 4).
Thursday, 8 February 1945
Dáil Éireann Debate
Mr. Norton: When this Bill was under discussion last night, Sir, I moved to report progress. I was then advising the Minister to retain in the existing section the provision whereby, when compensation falls to be paid to a person, whose property has been acquired or whose business has been interfered with as a result of the activities of the Electricity Supply Board, the amount of compensation should be calculated on a basis of 3 per cent. in interest. The effect of Deputy Hughes's amendment is that the calculation of interest should be carried out at the rate of 6 per cent. It seems to me that to calculate on a basis of 6 per cent. compensation on  money outstanding by the State is simply asking that this matter of compensation should be trowelled on the State which, as everybody knows, usually calculates these matters on a fairly generous basis. Deputy Hughes said that in the case of a man whose property is compulsorily taken over in the interest of the State, that man might have to wait for a long period— possibly, two or three, or even more years—before he got compensation, or before he could get alternative accommodation, even after he had got compensation; and he held that in that case 3 per cent. interest was hardly fair. It would seem to me, however, that that surely is a case against paying compensation immediately.
Deputy Hughes's amendment might have some validity if he were asking that compensation should not be paid for two, three or more years after the award, so as to enable the man to get his money pending the time that he could get alternative premises, if that were necessary as a result of the acquisition of his property by the Electricity Supply Board. I think, however, that compensation at the rate of 3 per cent. is equitable, in this year of 1945, when money can be got by this State at 3 per cent., and, in a neigh-bouring country, at substantially less than 3 per cent. That, in my view, is treating those who may be affected by the Bill in a very reasonable way. As the Minister rightly said, the Bill has been drawn with due advertence to the price that money is costing on the market to-day and the price at which the public is willing to lend money, and my strong advice is that the Minister should stand by the section in the Bill, as drawn.
Mr. Coogan: It seems to me, Sir, that the argument put forward by Deputy Norton just now is rather specious. It is not a question of giving the person concerned time to procure alternative premises. The position is that, having regard to the fact that, whilst awaiting payment of his money he may be out of business or out of production, the amount of interest provided for in the section is too small, and that he should be given something over and above that in order to compensate  him for the time during which he is not in a position to earn a livelihood.
Minister for Industry and Commerce (Mr. Lemass): The only question at issue here is the rate of interest which should be taken into account in determining the additional amount to be paid to a person, in excess of the amount of compensation, as a result of any delay in awarding compensation. There is no question here of the amount of the compensation, which, presumably, would be determined with due regard to the amount of disturbance caused to the person concerned. The question here is the matter of possible delay, but that delay might be due to a variety of causes. It might, for instance, be due to the action of the person claiming compensation. If agreement cannot be reached, then the question of the amount has to be determined by arbitration. It seems that arbitration proceedings can be instituted by the person claiming compensation, and it is, therefore, open to the individual concerned to take appropriate action to ensure that there will be no delay. Now, if we were to give more than the market rate, it appears to me that would be offering an inducement to people to delay the matter further. I think that no inducement should be held out to people which might lead them to delay matters because they are offered a higher rate of interest than the ordinary market rate at the time, and, in that connection, I may say that all previous Bills have followed the same line.
Mr. Norton: I think that what Deputy Coogan has said provides a classic example of this kind of thing. This Bill provides for payment of compensation to a person whose property has been acquired or whose business has been affected by the activities of the board. Let us suppose that a man's property or business is taken over on a certain day in the week, and that the matter is decided on the following Monday. The property or business concerned may be only a field or, possibly, a house which he has rented to somebody else, and it is the “somebody else” who may be the sufferer; but if a man goes to court on, say, Monday, is awarded compensation, and his property is taken over on Tuesday, there is no case there.
Mr. Norton: I suggest that the Electricity Supply Board, knowing the direction their lines will have to follow and knowing the routes which they will have to travel, will say that such-and-such a property must be acquired or that such-and-such a thing must be done and that, accordingly, they may settle the amount of compensation in advance, and before they actually reach the area to be affected by this. The persons concerned may not be very much affected at all. It might be merely a question of the right to run wires through a field, or some such thing as that, which might not affect that person's business to any extent at all. Yet, the proposal in the amendment is to put a premium of 6 per cent. on the payment of compensation. I may say that I do not know where any person in this State to-day can get 6 per cent. interest, and it seems to me that the payment of 3 per cent. in the circumstances would meet the situation reasonably.
Mr. Lemass: The purpose of amendments Nos. 6 and 7, which appear in Deputy Hughes's name, is to extend the minimum period within which the board can take possession of land or a dwellinghouse. I would ask that these amendments should not be pressed, because, if we were to extend the periods to the extent suggested here, it  would seriously hamper or delay the rate at which the board could proceed. I can assure the House that the board will give as long a notice as possible to persons who may be disturbed in their property or business, and I think it is merely necessary to provide, as a safeguard for the individuals concerned, that the notice shall not be less than what is provided for in the Bill: namely, one month or three months in the case of lands or dwellings, respectively. To increase the period to six months or 12 months, I think, would mean that the immediate works which are in contemplation would be very seriously delayed.
Mr. Norton: The Minister must know that there is a difference in the circumstances between this and the other case, and that it might be very difficult to get alternative accommodation in the space of a few months. I can see the difficulty of providing a substantially higher minimum than that provided for in the section, but will the Minister give an undertaking on behalf of the board, that they will give sympathetic consideration in any case where the minimum set out here would cause hardship to those affected? Will the Minister undertake, on behalf of the board, that such cases will get sympathetic consideration?
Mr. Lemass: I think I can give that assurance. In fact, it is not at all unlikely, in the circumstances now existing, that the board will meet with unusual delays in proceeding with the work and will give ample notice on that account owing to difficulties in proceeding with the work as rapidly as they would like, I can assure the Deputy that not only will notice be given longer than the minimum set out in the Bill but the longest possible notice will be given and due account taken of  exceptional circumstances in individual cases.
(4) In the case of a person who is compelled under the foregoing provisions of this section to vacate a dwellinghouse or a dwellinghouse and farm or surrenders such an area of land as to make the remainder of his holding uneconomic, the board shall either pay monetary compensation or if the individual so desires provide a dwellinghouse or a dwellinghouse and lands as the case may be economically equal in every way to the original property and subject to the arbitration provisions of Part IV of this Act.
I think the Minister should favourably consider this amendment. The most recent scheme under which people were dispossessed of holdings was the Liffey hydro-electric scheme, and while a fair number of people were dispossessed, because it was a water scheme, many were seriously inconvenienced and left without homes until compensation was paid. Considerable delay did attend some cases, particularly where people were disturbed in holdings in which they had been allowed to remain for some time. As the Minister appreciates, these people were moved from homes in which they had lived for generations, and while they might have got as economic or as good holdings of land, or as large houses as they had previously, there was something in the fact that these families had lived so long in the former places. A number of farms were affected by the pipe-line connecting the Liffey scheme with County Wicklow, County Dublin and portion of Kildare. The owners were also adversely affected by large banks of mud left on the land when the scheme was completed. The compensation paid to many of these people did not take sufficient cognisance of that fact. I presume people are always dissatisfied  with the compensation they get and think they should get more, but I know cases where they were seriously inconvenienced by banks of mud that were left on their holdings, and that the compensation did not take cognisance of the deleterious effects of such material on the land. Acceptance of this amendment would alleviate some of the hardships under which they suffered.
Mr. Lemass: So far as dwelling-houses are concerned, the board are given power in Section 29 to construct alternative dwellings for the persons concerned, if they so agree. So far as a farm is concerned, the Deputy will appreciate the difficulty of putting on the board the obligation to provide another farm in the same locality or of the same character.
Mr. Lemass: In the case of the Liffey scheme, the Land Commission did co-operate, by endeavouring to provide, for those whose lands were submerged in the area, alternative holdings in the same vicinity. It is only the Land Commission could do that. As it happened, there were some estates in the hands of the Land Commission in the locality which were available for that purpose. Clearly, while that obligation could be put on the Land Commission, it could not be put on the Electricity Supply Board. If the effect of the acquisition of part of a holding rendered the balance of the holding so uneconomic as seriously to interfere with its working, that factor would be taken into account in determining the amount of compensation payable. I think that is as far as we could go in putting such an obligation on the Electricity Supply Board. If it is a question of buildings, and if the person concerned agrees, the board will construct other buildings in lieu of compensation. If it is a question of a farm, the board will, no doubt ex gratia, endeavour to meet the requirements of the land holder and solicit the co-operation of the Land Commission in that respect. It is impracticable to extend the statutory  obligation to pay adequate compensation, which will take into account not merely disturbance caused by acquisition of the land but the effect of that acquisition upon the working of the remainder of the holding, if only part of it is taken. That is as far as we could go with the Electricity Supply Board.
Mr. Lemass: Not exactly. We are applying to this process of acquisition the provisions of the Acquisition of Lands Act. In so far as the arbitrator appointed under this Act has the obligation to determine arbitration on certain principles, that will apply.
Mr. Lemass: I want to make it clear that precisely the same procedure will apply in respect to land acquired in future for hydro-electric schemes as applied in the past. The same statutory basis for the valuation of compensation will apply.
Mr. Cosgrave: I have not the Lands Clauses Consolidation Act here, but I think its provisions are much more vague than the amendments. Consider a case where portion of a farm is utilised, or may no longer be suitable for cultivation. In such a case there may be buildings suitable for a larger holding than that now in possession of the owner and on which he will pay a larger valuation. Would the Minister consider bringing in an amendment on the Report Stage or in the Seanad to reduce such valuations? While compensation would be payable the owners would be saddled with higher valuations on smaller holdings.
Mr. Lemass: Anything of that kind will have to be done by an alteration under the Valuation Acts. There is the Acquisition of Land (Assessment of Compensation) Act which applies to cases where land is acquired for public purposes. It would obviously be undesirable  to effect any modification of the terms of that Act in the case of the Electricity Supply Board. In so far as that Act offers a fair basis for assessing compensation, it applies in all cases where land is acquired, and the Electricity Supply Board should operate under that Act the same as any public organisation.
Mr. Sheldon: With regard to the point the Minister made about the Acquisition of Land Act, I think that, as Deputy Cosgrave said, the Act is very vague. I am not a lawyer, so I do not pretend to be able to give an exact reading of it, but it seems to me that the Act does not take into consideration at all such an eventuality as I foresee, of a farm of 100 acres, 50 acres of which will go. The buildings on that farm were erected to suit a farm of 100 acres, but the owners will be left with 50 acres. I am not, as I say, a lawyer, so I could not give any judgment on it, but, reading the Acquisition of Land Act, it struck me that such an eventuality is not covered.
Mr. Lemass: I do not want to be taken as expressing any opinion upon the Acquisition of Land (Compensation) Act, or the desirability of any modification or amendment of that Act. The point I want to make is that the incorporation of that Act in this Bill is reasonable. I see no reason why the Electricity Supply Board  should be required to pay compensation on any basis other than the basis on which any other public authority acquiring land for its purposes has to pay compensation. If land is acquired for a waterworks or for a rural housing undertaking by a public authority, it is that Act which applies in assessing the compensation in default of agreement. I think the Electricity Supply Board should be subject to the same Act as these other authorities. It may be that somebody could argue in favour of a modification of the terms of that Act. On that I can express no opinion, but whatever modifications might at any time be made in the provisions of that Act should apply not merely to the Electricity Supply Board but to public authorities and other persons acquiring land under it.
Mr. Lemass: The fact that the Act has been applied in all this type of legislation since the State was established and that no real case of hardship has ever been shown is, I think, an indication that its provisions do give arbitrators full scope in assessing compensation.
Mr. Lemass: There was at one stage dissatisfaction arising out of the fact that provision was not made for the payment of interest when the payment of compensation was delayed. That cause of dissatisfaction is being removed by specific clauses in Acts introduced since, including the specific clause in this Bill.
Mr. Lemass: There is an objection to this. It is that if a letter is sent by registered post it must be delivered to the address registered, and if the person is not there it cannot be delivered to him at all. If it is sent by prepaid post the Post Office will endeavour to deliver it to him in case of a change of address. That is why it is always provided in these Acts that in cases of this kind delivery shall be by prepaid post.
Mr. Allen: I do not know whether the Minister has adverted to this point or whether it is covered by the Bill. The Town Planning Act may be in operation and a local authority may come in under that Act in the matter of any land the board is acquiring. I wonder if that point is covered?
Mr. Lemass: The Town Planning Act requires that any intention of a local authority to apply the Act has to be notified to the Department of Industry and Commerce. Plans must be submitted to the Department, so that the possibility of a conflict is minimised. I am providing in a later amendment that land occupied by the Electricity Supply Board for the purpose of its undertaking cannot be compulsorily acquired by anybody else.
Mr. Lemass: The board is being made immune from the compulsory acquisition by any authority of land occupied by the Electricity Supply Board, except with the consent of the Minister for Industry and Commerce.
Mr. Corish: In accordance with the Town Planning Act, they have to submit their plans to the local authority the same as any other body and must conform to the regulations made by the town planning authority?
Mr. Corish: If the Town Planning Act is adopted by any council, the same law prevails so far as I know. It is, I think, rather an important matter. There is very little use in a local authority endeavouring to secure that decent buildings are put up in various parts of its area, if the Electricity Supply Board is immune from the Act.
In sub-section (4), line 47, before the word “such” to insert the following words, “the offices of the local authority or local authorities for the county or counties in which the scheme is situated and at”.
I think it desirable that a copy of the plan should be deposited in the local offices of the county council or local authority concerned, so that both the people concerned and the officials will have easy access to it. If the plans are deposited only in the offices of the board, or are available on application those affected might find that the plans interfered with their rights only when the actual works were about to be put into operation.
Mr. Lemass: The public authority will have full access to the plans, if they wish to see them. The aim is to ensure that individuals whose property may be affected will know what is the intention of the board.
Mr. Corish: It is not a question of a local authority being able to see them if they wish. Under the Town Planning Act, everybody is obliged to submit plans before proceeding with any building. I want to know will the Electricity Supply Board do that or can they override an Act of Parliament. Is there anything here which will enable the board to override the Town Planning Act?
Mr. Cosgrave: Deputy Dockrell yesterday moved an amendment dealing with an amenities committee and a  fisheries committee, and, while I do not think there is much to be said for an amenities committee, the Minister might consider consulting certain bodies like a board of conservators where fishery rights are concerned. I understand that the procedure at present is to consult the Minister for Agriculture who is also Minister for Fisheries, but there are a number of boards throughout the country who do rather good work and who are very well informed as to an area's requirements, and I think that it might be no harm to bring in an amendment on Report Stage to make it obligatory on the board to consult those people and have their opinion.
Mr. Lemass: The Deputy can take it that the Minister for Agriculture will do so. The Minister for Agriculture is being given the obligation of protecting the fisheries, so far as possible, when a river is being developed for power purposes.
Mr. Lemass: I think the Deputy can take it that he will consult local fishery interests, whether commercial or sporting. His sole function in relation to this matter will be to secure, so far as possible, that the board and its contractors will avoid injury to fisheries or execute such works, as part of the scheme, as will minimise any damage that may be done to fisheries.
Mr. Sheldon: May I say that an Independent Deputy is placed in a very awkward position by the Committee Stage of such a Bill as this coming to shortly after the Second Reading? He has to rely on himself and has to deal with all Bills, whereas members of a Party can divide their labours. I intended to put in an amendment to this section for the  purpose of getting information, but I did not get it in in time. Sub-section (1) of this section states that all works executed by the board shall be free from rates. Then sub-section (3) states
I should have thought, from sub-section (1), that any land acquired by the board would be subject to the assessment which it bore before the board acquired it, but sub-section (3) raises a certain doubt in my mind as to the intention of the Minister. Is it the intention that, as soon as the board acquires any land or property, it will cease to be assessed to rates?
Mr. Sheldon: Sub-section (1) refers to “all works executed by the board”. There is nothing in the section which would free the board from an assessment on the land as land. I take it that it could still be assessed to the amount at which it was assessed before the board took it over. If the board were to acquire my farm, so far as I can see, rates would still have to be paid on it as a farm.
Mr. Sheldon: I should not like to do anything to increase the cost of electricity to the users. I agree, generally, that any local authority which is fortunate enough to have in its area a river which can be developed for electrical purposes should not benefit at the expense of the general users of electricity. But I also think that it is a bit unfortunate that a local authority should actually lose portion of its revenue. Would it not be more equitable to provide that the land should continue to bear its previous assessment?
Mr. Lemass: This point was fought out on many occasions in the past. My predecessor succeeded in persuading me that this was a good principle. At the time that the Shannon works were being constructed, I did not think that it was a good principle but I fought the same battle myself when the Liffey works were being constructed. We have now, I think, succeeded in establishing that the property of the Electricity Supply Board used in connection with the generation or transmission of electricity should be exempt from local rates. Sub-section (3) is inserted to make clear that the board, which is also an operator of fisheries, will not be exempted from rates in connection with that enterprise.
Mr. Allen: He would not have the curse of any of them. I support Deputy Sheldon's suggestion that the agricultural-land value of the acquired area should still be assessed to rates, without reference to the works or buildings thereon. The Electricity Supply Board should pay rates on the value of the land as agricultural land, irrespective of the buildings or the works erected.
Mr. Corish: There is a good deal in what Deputy Sheldon and Deputy Allen say. In some areas, are there not grants in aid of rates, based on half the valuation? Am I to understand that the Electricity Supply Board are completely free of rates?
Mr. Corish: I can visualise a situation in which there would be a revaluation of a certain farm and in which the portion left would be more highly rated than the whole farm. I think that there might be something in that point if there were a revaluation.
Mr. Lemass: The areas involved in County Wicklow and County Clare were much larger. There is this factor to be taken into account—that the mere existence of these works in the locality does, in fact, increase the value of land and property in their vicinity. I am quite sure that they will result in developing the tourist business in the Erne locality to a greater extent than was previously the case.
An Ceann Comhairle: Regarding amendments Nos. 12 and 13 which relate to the acquisition of fisheries, they seem to stand together. Amendment No. 12 can, however, be regarded as separate, if the Deputy wishes to propose the net point it involves.
An Ceann Comhairle: I have told Deputy McGilligan that amendment No. 13 is out of order. I may mention that amendment No. 23, in the name of Deputy Sheldon, is also out of order inasmuch as it proposes to grant relief to the Electricity Supply Board from the repayment of moneys advanced which, of course, is equivalent to a charge. Amendment No. 13 would empower the Minister for Agriculture to purchase certain fisheries. There is no provision here for that purpose and, if there were, it would require a money resolution.
 To delete all words after the word “fishery” in line 7 down to and including the word “Agriculture” in line 8 and in lieu thereof to insert the following words: “the board shall consult with the Minister for Agriculture and if the Minister for Agriculture”.
Mr. Lemass: It is not quite a question for any Minister. The position that we are trying to provide against here did, in fact, arise in the Shannon. The board was obliged by the Shannon Development Act to pay compensation to all persons whose fisheries were damaged or destroyed or to all persons who lost their livelihood because of the destruction of the fisheries there. So many cases of dispute and argument arose that, when I became Minister for Industry and Commerce, I decided to endeavour to resolve the protracted disputes that had proceeded by giving the board power, in lieu of determining to pay compensation for damage, to acquire the fishery on the basis of what it had been worth before the works were constructed. Eventually, the Electricity Supply Board acquired all the fisheries in the Shannon and became itself the only owner and manager of the fisheries there. Now, it is possible that on the Erne, or some other rivers that may be subsequently developed, a similar situation may arise in which the simplest and cleanest method of disposing of individual claims will be not to try to assess the damage done to the fishery which, as the Deputy will understand, may not be easily determinable—certainly not determinable for a number of years—but in lieu of paying compensation on the basis of damage, and to acquire the fishery for what it was undoubtedly worth before the works were begun.
The problem in assessing compensation in respect of damage to fisheries arises from the fact that it may be many years before even an expert will decide whether, and to what extent,  damage has been done. That is the problem that arose in the Shannon, and that is the problem that may arise elsewhere. If there is that element of doubt, that impracticability of determining the compensation, then the board, in lieu of paying compensation, may acquire the fishery, in which case, in default of agreement, the arbitrator will only have to take into account what, in fact, the fishery was worth, having regard to the profits earned. The purpose of the section is to give the board the right, in lieu of paying compensation, to acquire the fishery outright. It is the board that, in fact, will take the decision.
The purpose of the amendment, I take it, is to provide that the board will not acquire the fishery without consulting the Minister for Agriculture. This is not altogether a fishery matter. From the point of view of the Minister for Agriculture and his interests in fisheries, it does not much matter whether the fisheries are owned by one person or another, by a private individual or the board, he will have the same obligation in regard to the fisheries, namely, to protect them and further develop them. In this matter we are really concerned with a very practical difficulty—determining the amount of compensation in individual cases. We are, therefore, giving the board this power to acquire outright in lieu of assessing damage and paying compensation on the assessment.
Mr. Cosgrave: Suppose, for example, that a disease, such as that which affected fish in the Liffey, did not manifest itself for some time, would the board take into consideration the loss which the owners of the fishery rights had sustained?
Mr. Lemass: That was a problem in the Shannon. I think there were even cases where the board contended that the fishery, instead of being damaged, had been improved, but, naturally, the owner of the fishery who was suffering an immediate loss would not, perhaps, agree. Again, it seemed to me that in such cases the fairest thing was to buy him out altogether. The Liffey was a  different problem altogether. I think that for pleasure purposes fisheries on the upper reaches of the Liffey were substantially improved by the impounding of the waters. It was due to accidental causes that this new disease, which affects the fisheries, developed there. The Shannon and the Erne are important fisheries. They are salmon fisheries and could be quite seriously interfered with by the impounding of the water. In fact, the board hope to make the Shannon salmon fisheries more valuable in the future than they ever were in the past by reason of their unified control of them and power of development. Possibly a similar situation will arise in the case of the Erne, but I could not attempt to forecast that.
Question proposed: “That Section 23 stand part of the Bill.”
Mr. Cosgrave: I suppose we may take it that the existing licences will not be reduced while the licensees are alive, and that the Minister might issue new licences to all existing licensees.
Mr. Lemass: The provisions in this section are similar to those contained in the Fisheries Acts. We are merely re-enacting, in relation to the rivers  that are brought under this electricity code, the same provisions that apply in the fisheries code generally in respect of other rivers not developed for that purpose. The Minister has this power to prescribe the maximum number of licences for fishing by drift nets and to make other regulations in relation to the issue of licences. That power of restricting the amount of fishing done in the rivers has been taken generally by the Minister for Agriculture.
Question put and agreed to.
Sections 24 and 25 agreed to.
Mr. Sheldon: I move amendment No. 14:—
In sub-section (1) to add at the end of the sub-section in line 14 the following words:—
“Provided that the official arbitrator under the said Act shall, where an agricultural holding is reduced in size by the acquisition of part of it by the board so that the remaining portion is uneconomic or the farm buildings on it are disproportionate in size for its future use as an agricultural holding, make allowance for the deterioration in value of such remaining portion.”
This point has been discussed already. When I came in I was quite hopeful about it, but the more the Minister was pressed the less hopeful it sounded to me. I wonder if he could go back to the original position, so that a sympathetic view would be taken in such a matter?
Mr. Lemass: I will endeavour to have, by the Report Stage, an authoritative statement of the powers given to an arbitrator under the Acquisition of Lands Act, as it has been interpreted heretofore. I am fairly satisfied in my own mind, from previous experience of the administration of that Act, that the arbitrator has power to take into account not merely the value of the property but also such items as the disturbance and the compensation which should be given in respect of disturbance or the diminution  of the value of the property left in the hands of the owners.
Mr. Sheldon: I am satisfied with that. The only reason I brought it up is that I read it—I may be wrong—as meaning that the arbitrator could not take disturbance into account.
Mr. Allen: The Minister might also look into the point as to whether the arbitrator should be entitled to revalue on the then existing basis.
Mr. Lemass: The arbitrator could not do it, but the Commissioners of Valuation could.
Mr. Allen: They can only revalue the buildings. All the commissioners can do is apportion between what is acquired and what is left. The buildings can be revalued, but the basis of revaluation may not allow the Commissioners of Valuation to reduce the valuation. The difficulty arises, from Deputy Sheldon's point of view, in that respect. You may have large buildings left, the letting value of which would be determined by the valuation which the commissioners put on it. They may not be entitled to alter or reduce the valuation.
Mr. Lemass: I will look into the point.
Amendment, by leave, withdrawn.
Section 26 agreed to.
Dr. O'Higgins: On behalf of Deputy Hughes, I move amendment No. 15:—
Before sub-section (2) to insert a new sub-section as follows:—
(2) All claims for compensation not settled by agreement shall be brought to arbitration by the board within one year from the date such claims are made.
Sub-section (1) lays down that all claims must be made within a year. The intention of the amendment, which is obvious, is that when the claim is put in, if there is no settlement of the claim or no agreement within a further year, it will be referred to arbitration.
Mr. Lemass: I think Deputy Hughes did not appreciate that reference to arbitration may be undertaken on the initiative of the person claiming. It is not merely a matter of the board referring the claims to arbitration. The individual himself can refer them if there is no agreement. The effect of the amendment would be to leave in doubt the power of the board to pay compensation if arbitration proceedings were not started within a year. I think the position is much better as it is. The board will make an offer, the person whose property is acquired will negotiate with the board or accept their offer, and is fully free to initiate arbitration proceedings himself if he is satisfied there is no likelihood of agreement or there is a possibility of delay in arriving at an agreement.
Dr. O'Higgins: He may even start arbitration before any offer is made?
Mr. Lemass: I presume the arbitrator would take a poor view of it if the claimant did not wait for an offer. However, there is nothing to prevent him.
Dr. O'Higgins: Deputy Hughes wished to cut out extreme delays.
Mr. Lemass: The better safeguard is to give the person whose property is acquired himself the right to go to arbitration at any time.
Amendment, by leave, withdrawn.
Section 27 agreed to.
Question proposed: “That Section 28 stand part of the Bill.”
Mr. Breslin: Would the Minister say if the time-limit of ten years for putting in claims applies to all the estuarine fishermen and any claims to compensation that they may have?
Mr. Lemass: Yes, it applies to all claims in respect of fisheries, including estuary fisheries.
Question agreed to.
Sections 29 and 30 agreed to.
 SECTION 31.
Dr. O'Higgins: On behalf of Deputy Hughes, I move amendment No. 16:—
To delete sub-section (4) (b), lines 31 and 32, page 18.
This seeks to delete paragraph (b) in sub-section (4)—the power to
“acquire, in whole or in part, any undertaking engaged in such manufacture...”.
Mr. Lemass: I would not say that that is desirable. We are proposing to give the board power under this Bill, subject to getting the sanction required by the Bill to manufacture apparatus, machinery or equipment, or to promote a company in which it would have an interest for the purpose of undertaking such manufacture. It seems to me that there is no reason why the board, if it is given the power to manufacture itself or to promote a company to undertake the manufacture of apparatus, should not also have the power to acquire some existing undertaking which might be developed into a larger undertaking for the manufacture of a wider range of apparatus or equipment.
Normally, I can say that the intention is that the board will not be authorised to commence manufacture where it is clear that some existing concern is doing the manufacture or is willing to do it or some private interest is prepared to undertake the manufacture on a satisfactory basis. It may be necessary, in relation to certain classes of apparatus, where the board would be the only customer, for the board to do the work itself and that is the reason we give it this power. In certain circumstances, it may facilitate the board to be able to acquire some existing concern which has a factory and equipment that could be adapted for this purpose, instead of putting the obligation on them in all cases to promote a new undertaking.
In any event, I think that if (b) were not there, the board could easily get around the point as, if it could not itself acquire the undertaking to do this work, it would only have to go through the procedure of promoting a company which would have the power  to acquire any undertaking already there.
Dr. O'Higgins: Does the Minister contemplate compulsory acquisition?
Mr. Lemass: No. There is no compulsory acquisition. It struck me that that was what Deputy Hughes thought. This merely enables the board to acquire an undertaking.
Amendment, by leave, withdrawn.
Dr. O'Higgins: On behalf of Deputy McGilligan, I move amendment No. 17:
At the end of sub-section (6), line 56, to add the words:—“and tests and may make in respect of such apparatus, machinery or equipment such regulations and establish such standards for securing the safety of the public as the board thinks proper”.
Mr. Lemass: I am not quite clear as to what Deputy McGilligan had in mind here. The section was drafted in consultation with the board and they are satisfied as to the powers they are given under it. It seems to me rather pointless to authorise the board to make regulations imposing standards on itself. On the other hand, if a certain undertaking is established under the Bill to manufacture, the necessary authorisation under the section would contain all the safeguards which might be proposed by the board. It seems to me, therefore, that the addition of these words would achieve nothing.
Amendment, by leave, withdrawn.
Section 31 agreed to.
Section 32 agreed to.
An Ceann Comhairle: Two amendments in typescript have been submitted by Deputy Sheldon. I do not know whether the Minister or the House would agree to take them, at such short notice.
Mr. Lemass: They were only drafting amendments. Perhaps I may ease any doubts in Deputy Sheldon's mind by saying that they could not be  accepted. There is a difference between a road and a bridge. A bridge would presumably be entirely within the area of one local authority but a road might be in the area of more than one local authority. That is why it is necessary to have different provisions for roads and bridges. The Deputy appears to assume that one comprehensive section would cover both roads and bridges. Clearly there is a possibility of different conditions applying in the case of roads and bridges so we must have two separate sections.
Mr. Sheldon: That is so. I had to draft this amendment in a hurry and I could not find a better method of meeting the point I wished to meet. It was drafted rather roughly. I can see the difficulty the Minister is in, but the difficulty I am in is that in paragraph (c) I wish to delete the words.
“where the board constructs a permanent road and such road is, in the opinion of the Minister for Local Government and Public Health, substantially a reconstruction of a pre-existing road.”
I cannot see why a local authority should be called upon at any time to bear any part of the cost of such reconstruction. If the road was already there, and was presumably giving satisfactory service, and through the action of the board a new road has to be substituted for it, why should the local authority have to pay anything?
Mr. Lemass: The board may, for example, construct a concrete road to replace an ordinary water macadam road. That would release the local authority from considerable upkeep costs. The Deputy understands, of course, that it is only the proportion of the cost which the Minister for Local Government will decide is reasonable that the local authority will have to bear.
Mr. Sheldon: But there might be a number of local authorities who might not appreciate the attitude of the Minister for Local Government in the matter.
Mr. Lemass: In this matter the Minister for Local Government will have no interest except the protection of the rights of the local authority.
Mr. Sheldon: That is a debatable point. I wonder would the Minister re-examine the wording “substantially a reconstruction.” Could he not devise some better safeguard for the local authority? Where a road is improved in classification, say that it is transformed from a water macadam road into a concrete road, I think the local authority should bear some portion of the cost, but that is not what is in the Bill. It says “substantially a reconstruction of a pre-existing road”. I would say that the local authority should have to pay only in a case where the new road was better than the old one.
Mr. Lemass: I shall look into the matter from that point of view. In the case of a bridge it is provided that the bridge must be a better bridge.
An Ceann Comhairle: Without moving the amendment the Deputy has got his point.
Amendment not moved.
Amendment No. 18 not moved.
Mr. Lemass: I think Deputy Hughes can be assured that the Minister for Local Government will, in fact, consult the local authority.
Mr. Sheldon: On the section itself, is there anything in the section to compel the Electricity Supply Board to provide an alternative road? I understand that they must in all circumstances if they submerge a road provide an alternative road.
Mr. Lemass: They must provide a suitable alternative road but the alternative road need not necessarily be in the same place.
Mr. Sheldon: It could not be.
Mr. Lemass: No, but they must provide an alternative road.
Mr. Sheldon: Except that under sub-section (2) there may be exceptions.
Mr. Lemass: Yes, where it is not practicable to do it.
Section 33 agreed to.
Question proposed: “That Section 34 stand part of the Bill”.
Mr. Allen: What effect would this section have on adjoining land?
Mr. Lemass: If the board flood lands, they have to pay compensation.
Mr. Allen: But they may raise the level of a lake and there may be flooding at some time in future.
Mr. Lemass: If the board damages anybody else's property at any time they must pay compensation.
Mr. Allen: The damage may occur some time after the work has been completed.
Mr. Lemass: Apart from the obligation which rests on the board to pay for damage during the construction of the works, if they should damage the property of another person, they are under the same liability as anybody else to pay compensation for damage caused to property at any time and they can be required by an action in the courts to pay such compensation.
Question put and agreed to.
Section 35 agreed to.
Question proposed: “That Section 36 stand part of the Bill.”
Mr. Allen: There is no provision in this section for the payment of compensation in the usual way by arbitration.
Mr. Lemass: I do not get the point.
Mr. Allen: Will the Lands Clauses Act apply in the case of Section 36?
Mr. Lemass: The purpose of Section 36 is to give the board the same alternative which it is given in the case of fisheries, namely, to acquire the property outright rather than pay compensation.
Question put and agreed to.
 SECTION 37.
Mr. Norton: I move amendment No. 19:—
In page 22, before sub-section (3), to insert the following new sub-section:—
(3) Whenever the board contract with any person for the execution by him of the whole or any part of such works as are mentioned in this section it shall be mandatory on the board to insert in the contract made with such person a provision requiring such person to pay rates of wages and observe conditions of employment not less favourable to the persons employed under the contract than the wages paid and conditions of employment prescribed under trade union agreements applicable to work of a similar kind or in the absence of such trade union agreements the wages paid and the conditions of employment observed by good employers in the district in which the work is carried out.
There is a provision in this section of the Bill under which the board has power to employ contractors for the purpose of executing certain types of work which the board may desire to delegate to private contractors. The contractors so employed by the board can exercise all the powers that have been conferred on the board by the provisions of the Act. I have no doubt that the board, being a sensibly constituted board, and having now a pretty long record of service under trade union agreements, will wisely decide that it will for the purpose of carrying out its works enter into negotiations with trade unions and observe the conditions which result from these negotiations, but it is by no means certain that a private contractor will do the same. The object of the amendment is to ensure that where the board enters into a contract with any person it shall be mandatory on the board to insert in the contract made with such person a provision requiring such person to pay rates of wages and observe conditions of employment not less favourable to the persons employed under the contract than the wages paid and conditions of  employment prescribed under the trade union agreement applicable to work of a similar kind or, in the absence of such trade union agreement, the wages paid and the conditions of employment observed by good employers in the district in which the work is carried out.
The Minister knows that the early Shannon scheme had a rather unsavoury reputation from the point of view of wages paid and conditions of employment of most of the staff originally recruited. The desire here is to ensure that in this very comprehensive scheme nothing like that should recur. I hope, therefore, that the Minister, who I am sure accepts the principle of the amendment, will see that it is incorporated in the Bill so as to provide against the possibility that sub-contractors, by paying low rates of wages after they have received a contract from the board, may sully what would be otherwise known as a great national scheme.
Mr. Lemass: All contracts entered into by the board contain a fair wages clause. That has been the practice of the board in the past and it will be the practice in the future. The Shannon works to which the Deputy refers were not constructed by the Electricity Supply Board or by any contractors of the board; they were constructed by a contractor of the Minister for Industry and Commerce.
The only objection I have to inserting this provision in the Bill is the fact that it seeks to impose on the board a statutory obligation that does not attach to employers generally. I can assure the Deputy that the board imposes a fair wages clause in connection with all contracts and will continue to do so, and that if they, for any reason, should be reluctant to do so, they can be required to continue the practice by administrative action and will be so required. I have, however, an objection to imposing by statute this obligation upon one employer. If there is a case for imposing this obligation upon employers by statute, then, of course, the board will be included. I prefer to leave the situation as it is in which the board's adoption of the fair wages clause was  due, not to a statutory obligation, but to its own decision; and that its maintenance of the use of that clause will be similarly due to its own decision. I think that it is only fair that the board should be given that sense of independence of statutory obligation in that matter and certainly should not be subject to an obligation that does not attach to any other employer or any other people doing construction work of a similar character. The Government's position is quite clear.
Mr. Norton: I should like to point out that the board is in somewhat a different position from ordinary employers. This is a board into which the State or the community has poured a very considerable amount of capital and this Bill is for the purpose of giving the board further capital to discharge certain duties on behalf of the community. I take it from the Minister's attitude, and particularly from his speech last night, that the Minister would desire in this field of national endeavour that there should be a decent rate of wages paid and reasonable conditions of employment observed. It is regrettable, of course, that you cannot get every employer to pay a good rate of wages or observe decent conditions of employment. I think the case I am making is in tune with the Minister's mental make-up on this matter, but I think the State, when it pours money into an undertaking of this kind, ought to give some manifestation of its general desire that there should be decent wages paid and good conditions of employment observed by imposing this obligation on contractors carrying out the work.
This section may, in fact, not be any more efficacious than the existing practice but, from the point of view of the State setting a headline and declaring its mind on the matter, it is desirable in a national undertaking of this kind that the Minister should say: “Here is the State's headline under Article 45 of the Constitution. This is what we desire. We put it into legislation and that is the standard we set.” It may not be possible at present to compel all employers to do it, but I think the Minister will agree  that it is an objective to be aimed at and if there is no substantial objection —and I gather from the Minister that there is not—I think the Minister ought to move, if necessary, gradually, towards the objective of setting a headline of that kind for other persons.
Mr. Lemass: I have an objection and the objection is this: that I want the position to continue in which the board adopts the fair wages clause in all contracts of its own decision and not because it is required to do so by law. I assure the Deputy that the board are not going to depart from that practice and would, in any event, find it impossible to depart from it in so far as they must get approval of their schemes from the Minister for Industry and Commerce. I am resisting the amendment for the same reason that a similar amendment to the Arterial Drainage Bill was resisted. Again, in connection with the Government Department concerned, it is the practice to stipulate a fair wages clause in all contracts and there is no intention to depart from that practice. Because it has been established as a practice which was born of policy, we want to keep it on that plane rather than as a statutory obligation which people might be inclined to evade. I think there is something to be said from the point of view of the board, in their dealings with employees and contractors generally, that they should be in the position that they are adopting this fair wages clause as their policy and not as something they are required to do by legislation.
Mr. Norton: I think if the Minister looks up the Housing Act of 1932 he will find there is a similar obligation written into that Act.
Mr. Lemass: There is also a similar obligation in respect of industries established under reserved commodities licences and other private persons who are getting some positive advantage from legislation. Because these private persons were getting, from legislation, positive advantages of one kind or another, we imposed this obligation on them. That is a reasonable thing to do and I would normally adopt that practice in any further legislation  of a similar kind. But we must regard the Electricity Supply Board, however, as being something of the same character as a Government Department. There is no likelihood that the policy which obtains will change and I think it ought to be kept on the basis of a policy and not upon the basis of a statutory obligation.
Mr. Norton: Do I take it, as the Minister must approve of schemes submitted by the board, that so far as he is concerned he will ensure that, in any contract undertaken by the board or any contracts delegated to sub-contractors, both the board and the sub-contractors will observe the fair wages clause?
Mr. Lemass: I will give the Deputy that undertaking.
Amendment, by leave, withdrawn.
Section put and agreed to.
Sections 38 and 39 agreed to.
An Ceann Comhairle: There are three amendments on the Order Paper in the names of Deputies Hughes, Sheldon and McGilligan, and I suppose they can all be taken together.
Mr. Coogan: On behalf of Deputy Hughes, I move amendment No. 20:—
In sub-section (1) to delete all words after the word “interest” in line 5 to the word “Finance” in line 6 and substitute therefor the following words “at ¼ per cent. over the rate at which the Minister for Finance has borrowed such money”.
Under Section 40, the Minister for Finance may prescribe the rate of interest on advances.
An Ceann Comhairle: These are three alternative amendments and they will be tested together on the question that the provision concerning the rate of interest stand as set out in the section.
Mr. Coogan: The purpose of the amendment is to fix the rate, with the object of preventing the Minister for Finance making a handsome profit out  of any advances made to the board. It would seem undesirable that the Minister should have the right to fix the rate on these advances when he may be able to find money at a very cheap rate. We consider that the rate of interest charged on the advances should not be more than would enable him to cover administrative costs. I take it that that was the purpose for which Deputy Hughes put down the amendment.
Mr. Lemass: With that point of view I agree, but I do not think you will find it easy to provide for it in legislation. If Deputies want to question the method of lending followed by the Minister for Finance, I think they must do so on a finance measure. In so far as this Bill is concerned, we can only provide that the money will be advanced at such a rate as may be prescribed by the Minister for Finance. We cannot prescribe the actual rate, as Deputy Sheldon suggests, without knowing at what rate, the Minister will be able to borrow, nor can we prescribe fixed conditions, such as are suggested by Deputy Hughes or Deputy McGilligan. In practice, the board gets advances from the Minister for Finance only as it requires the money. It is clearly uneconomic for the board to get advanced to it, say, the total capital sum it expects to expend upon the Erne works until it has to pay out sums to contractors and providers of material, etc. Therefore, it draws only from the Exchequer as it requires it and thus avoids having to pay an uneconomic interest or having the money lying idle. The rate at which the Minister for Finance will borrow will vary from time to time. Deputies spoke about the 5 per cent. which the board has paid upon past advances. But a great deal of money which was borrowed by the Minister for Finance and advanced to the board was borrowed by him at 5 per cent. These various advances are made to the board out of different borrowings by the Exchequer at varying rates of interest which are determined by market conditions. That is why it is not practicable to say in this Bill that all the money required by the Electricity Supply Board for these development  works will be advanced either at a named rate of interest or at a rate which will have some relation to the prevailing market rate or which will not be more than a certain amount above the prevailing market rate, because the market rate changes from time to time.
We are proposing to authorise the Electricity Supply Board to proceed forthwith with the construction of the works on the Erne, but we know that the future is so uncertain that it may be three, four, five, perhaps six or seven years, before the board will be in fact able to complete these works and will require the money from the Minister for Finance and during these three, four, or six years, there may be wide fluctuations in the market rate for money and borrowings by the Exchequer at different rates. The function of the Minister for Finance is to advance the money to the Electricity Supply Board at such a rate as will recover for him the interest he himself has to pay plus the management expenses involved. If Deputies want to question his calculation of management expenses in respect of advances of this kind or the rate of interest at which he borrows or should borrow, they must do it on a finance measure. So far as this Bill is concerned, I do not think we can go further than to prescribe that the Minister for Finance can fix the rate.
I would agree fully with the principle that the Exchequer should not try to make a profit out of the Electricity Supply Board by charging an excessively high rate of interest upon the advances made by it, but you cannot really protect the Electricity Supply Board against that by a provision here. You can only protect that by ensuring that the general policy of the Minister for Finance in respect of advances of this kind, whether to the Electricity Supply Board or the Local Loans Fund or any other purpose, is such as to avoid the possibility of a profit.
An Ceann Comhairle: The Committee understands that the three amendments are being dealt with  together, being mutually exclusive alternatives to the proposal in the Bill.
Mr. Sheldon: My reason for putting down my amendment is not quite the same as that of the other two Deputies. I know the amendment is somewhat clumsy. I really wanted to raise a question which the Minister answered on the closing stages of the Second Reading. Satisfactory as that reply in respect of how the fixed annual charge is arrived at may be to the expert, there are elements of confusion in it to the man in the street and the man on the country roads. The Minister said on that occasion that to lower the rate of interest would not help the consumer but would save money to the Exchequer. That may be, but I should like a more explicit statement from the Minister on the question of these fixed annual charges. According to the report of the Electricity Supply Board, the fixed annual charge must meet the annual cost of the network alone, because the charge for the generating stations, and so on, goes into the charge for current. The Minister himself stated that. He said the cost of supplying current arises under two headings—one a fixed charge, which represents the capital invested in providing the network. I can quite see that, to get every consumer in the country linked up, a subsidy from the State is necessary, but I think that most people will confuse this subsidy and the rate of interest. If the rate of interest was lowered to 3 per cent. the figure of 12 per cent., on which the board's calculations were made, would be lowered to something less than 10 per cent., which would seem to bring that much nearer the figure at which the board calculated the trial areas would give a return somewhere in the region of 10 per cent. of the capital invested in those areas.
All that was calculated without any reference to the Minister's proposal in the Bill, that one-half of the moneys advanced for rural electrification will be a free gift. I suggest that if the rate of interest is lowered, and a subsidy of half the capital outlay on the network is given, it should surely be possible to lower the fixed annual charges. One of the things which  affects the criterion ratio is the number of persons linked up in any district. The fact that the board assumes that 20 per cent. of the rural population may not take electricity affects that figure, increasing it. Surely if the fixed annual charges could be lowered, the possibility of more people taking current would arise and it is possible that, financially, the thing would work out. I admit that there is an element of chance, but surely in a case like this we should leave nothing undone which would encourage the use of electricity. I am not clear as to the exact difficulties and I think the man in the street and the ordinary man throughout the country has the same difficulty in understanding why, if the rate of interest is lowered, he is not going to get electricity cheaper. I think the Minister should explain it further.
Mr. Lemass: I told the Deputy that the Government had decided on a criterion ratio of 16, which means this —that every rural dwelling will be supplied with electricity provided that the capital cost of bringing the connection is not more than 16 times what the fixed charge will be. That is the decision which has been made and it does not involve any assumption as to the rate of interest. The actual cost of connecting the dwelling will depend, no doubt, upon the price of materials, wages and similar matters, but every dwelling will be connected if the capital cost of connecting it is not more than 16 times the fixed charge that is going to come. We assumed that, on that basis, the board would not in fact recover sufficient money in fixed charges to meet its outgoings, taking into account not merely the interest charges the board will have to meet, but also the other administrative expenses that arise—the collection of the charges, the servicing of the line, and so forth. In order to enable the board to get what it requires, namely, the full recovery of its costs, it was assumed that it would require to get one half the total capital free of interest in order to enable it to work on a 16 criterion ratio. If, in fact, the rate of interest is lower than was taken into account in making that  calculation, then the Board will not require one half the capital as a free gift. If the other charges can be brought down, then similarly, the board will not require one half the capital as a free gift.
We decided, upon the basis of the knowledge that is available to us now, to fix the first advance to the board on the basis of one-half the total capital, but that advance to the board will be substantially less than the total cost of the scheme. We adopted that device to ensure that, before the scheme will be completed, the actual cost to the board of constructing the network and providing electricity in rural areas, the actual experience of the operation of the scheme, would enable a more accurate estimation to be made of the subsidy the board requires to work to a 16-criterion ratio. It may, in fact, prove that the board will need as a free gift less than half the capital, in which case, they will get less than half the capital. It is the taxpayer will be saved the contribution. So far as the rural consumer is concerned, his charge will be based upon the assumption that it must be not less than one-sixteenth of the capital cost of tying him in. We could not assume that the interest charge to the board will be 3 per cent. It may be 3 per cent.; it may be less than 3 per cent.; in the past it was more than 3 per cent., but I think it would be foolish to tie ourselves to any one figure now in view of the tremendous uncertainty as to the cost of capital in the future, and the possible wide variations in the price of capital before the scheme is completed.
Mr. Norton: I do not think the amendment submitted by Deputy Hughes or that submitted by Deputy McGilligan ties the Minister to a fixed percentage on the money advanced to the board. Deputy Hughes says: “Well, you are going to advance money to the board. If you do that, you ought to advance it at not more than a ¼ per cent. over the rate at which you borrow it.”
Mr. Lemass: I do not know whether that would be a fair percentage or not.
Mr. Norton: Perhaps not. There is no difficulty in any case in getting the machine to work, if you want it to work. I take it the Minister for Finance will know at what rate he borrows money, no matter how many times he borrows in the year. He will know from time to time what is in the Exchequer, where it came from, and the various rates at which he borrowed the money. It is quite possible for him, therefore, to say: “This money came into the Exchequer. It was raised at a certain rate. Whatever is advanced to the board is at a ¼ per cent. over the amount paid for the money in the open market.” That is the objective sought by Deputy Hughes, and it seems to me to be making reasonable provision for such accountancy costs as might arise in the ordinary accountancy methods of crediting money to the board and keeping a record of such credits.
Deputy McGilligan goes further. He wants money advanced to the board at a rate not greater than that at which the money is borrowed. There again it is a very simple calculation. The Minister may say: “I borrowed money during the year at 3 per cent.; I borrowed money at 3½ per cent.; I borrowed money at 4 per cent. I am willing to make an average allocation from those three sources, and I am willing to give the money to the Electricity Supply Board at the average at which I borrowed during the year.” There is no difficulty in making that work. The only thing is that the Minister may say: “I am not going to let the Electricity Supply Board away at the same rate at which I borrowed, or at ¼ per cent. over the rate at which I borrowed.” But, if he wants to, there is no reason why he cannot do it. It is the very simple device of adding ¼ per cent. in respect of the borrowed money which he advances to the board, or of saying to the board: “We got this money at such-and-such a rate, and we are giving it to you at such-and-such a rate,” and, in any case, the cheaper you give the board money the less probably you will have to pay the board in respect of the 50 per cent. subsidisation of rural electrification.
 I can, of course, see certain difficulty in inserting this provision in the Bill because of the fact that it is the Minister for Finance on whom the obligation to fix the rate of interest is placed. It may be difficult for the Minister for Industry and Commerce to assume, during a discussion on the Committee Stage of this Bill, a responsibility which properly devolves upon the Minister for Finance, but I think between now and the Report Stage of the Bill the Minister ought to consult his colleague with a view to getting some clarification of the State's attitude in respect of advancing money to the biggest undertaking we have in the country. If it is not desired to put in the provisions recommended in these two amendments, it is possible to draft an amendment in such a way as will tie the Minister for Finance down to bearing in mind the fact that in advancing money to the board he ought not to charge a rate of interest substantially higher than the rate at which he borrowed the money for the purpose of that advance.
Mr. Lemass: It is not as simple as that. We do not in this State work upon the basis of separate funds. We have the Central Fund into which go the proceeds of borrowing and taxation; into which also go repayments of past advances, and other non-tax revenues of various kinds. It would not be possible to determine at any time the rate paid by the Minister for Finance upon the funds available to him from which advances can be made. He could endeavour to ensure that the rate he fixes is such as to recover the interest he himself has to pay, and the administrative charges on the average over a period of time. He cannot just say to the board: “This £500,000 you are getting now was borrowed by me at 3 per cent., and I will charge you 3¼ per cent. This next £500,000 was borrowed by me at 3½ per cent., and I will charge you 3¾ per cent”. In fact, all the money he has under his control, whether it comes from borrowing, from taxation, or from non-tax revenue sources, goes into one fund, and from that one fund he makes his advances. That is the practical difficulty in determining what is the rate of interest at  which the Minister for Finance has borrowed. He knows the current market rate; he knows the rate of any recent loan; perhaps he can make a guess at what he will have to pay on the next loan; but at any rate he will fix his interest charge to the Electricity Supply Board upon some basis which on the average will not amount to more than the interest he has to pay.
Mr. Cosgrave: I think Deputy Hughes's amendment would prevent the Minister for Finance from charging more than ¼ per cent. over the average. I can quite see that the Minister does not get £1,000,000 for one purpose at one particular rate. It is all in one fund, as the Minister has pointed out, but he is able to get the average, and it is possible that he is able to assume what rate of interest he will pay for the next money he borrows. Over and above that, surely ¼ per cent. ought to be sufficient.
Mr. Lemass: A quarter per cent. over and above what?
Mr. Cosgrave: Above the rate at which the Minister for Finance has borrowed such money.
Mr. Lemass: My experience over 15 years is that there have been continuous arguments and no agreement as to whether the Minister for Finance was or was not making a profit on advances to the Electricity Supply Board.
Mr. Norton: What side were you on?
Mr. Lemass: I was on the side of the Electricity Supply Board. That was my administrative function. This is not something which can be mathematically determined. It is a matter of opinion, and in the long run the opinion of the Minister for Finance must operate, unless he can be persuaded to depart from it.
Mr. Cosgrave: But surely he is able to say, over a period of 12 months, what is the average rate of interest at which he borrowed money.
Mr. Lemass: He must take into account the rate of interest which has been paid on past advances. He borrowed £10,000,000 for the Shannon scheme, say, at 5 per cent. He lent it to the board at 5 per cent. I do not know whether the loans that were floated at that period have been repaid since, but the board is now repaying to him at 5 per cent. Therefore, he is getting money into the Central Fund on a 5 per cent. basis. That, you may say, enables him to lend money at a lower rate, if he can now borrow money at 3 per cent., but there are so many factors to be taken into account that no one can precisely say at any point at what rate he can lend without losing, or gaining a profit. An opinion can be formed over a period of time, and, in fact, the practice up to the present has been to fix the rate of interest on advances to the board, and to maintain that rate for a number of years; then, if the general market conditions were improving, to fix a lower rate, a rate ½ per cent. or 1 per cent. lower, and to hold that rate for a number of years until the trend of the market can be more definitely interpreted.
Mr. Sheldon: Taking this doubt as to the rate at which the money is borrowed, is not that an argument in favour of my amendment that a fixed rate should be set by the Bill, and allow the equalisation, so to speak, to take place by means of the subsidy?
Mr. Lemass: After the last war the Government in Great Britain borrowed at 7 per cent. I do not know that the same situation will arise after this war, but, supposing it did, that is an argument against committing ourselves to make advances to the Electricity Supply Board at 3 per cent.
Mr. Sheldon: But this is only for a limited sum.
Mr. Lemass: Oh, no.
Mr. Sheldon: It is only for money borrowed under this Bill.
Mr. Lemass: That is £7,500,000 alone. It may be a limited sum, but it is a very substantial one.
Mr. Sheldon: The Minister has already pointed out that it is limited —that the whole project will cost much more.
Mr. Lemass: Oh, that is true.
Mr. Sheldon: Would it not be possible, by means of a variation in the subsidy, to allow for any losses on interest?
Mr. Lemass: This money, of course, is not for rural electrification only. Advances to the board here are for all its purposes.
Mr. Sheldon: I see that.
Amendment, by leave, withdrawn.
Amendments Nos. 21 and 22 not moved.
Question proposed: “That Section 40 stand part of the Bill.”
Mr. Cosgrave: I should like to make a few remarks in connection with the practice of charging on the valuation basis. Is the Minister satisfied that in respect of labourers' cottages the valuation basis is an equitable method of charging? While a labourer's cottage, in certain circumstances, may be no bigger than a small farmhouse, there are in labourers' cottages at least two rooms and the floor space of a cottage is fairly large. The charge is accordingly substantial and the rent and rates amount to 2/6, 3/- or 4/- a week. I wonder would there be any more equitable method of charging in respect of a labourer's cottage? Would it be possible to discriminate?
Mr. Lemass: It is possible. In fact, I think the Deputy knows that the Dublin Corporation made an arrangement with the Electricity Supply Board under which electricity is provided to tenants in corporation flats on a basis which permits of the rent covering the cost of current. That situation can be secured by an agreement between the local authority and the board. What the board must get is a fixed revenue, independent of the amount of current consumed. Whether it gets that by a floor-space charge on the individual  dwelling, or by an arrangement with the local authority is of no great importance to the board. An arrangement could be made. It has been done in Dublin.
Question put and agreed to.
Mr. Sheldon: The Chair has made a ruling with regard to amendment No. 23.
An Leas-Cheann Comhairle: That amendment is out of order.
Mr. Sheldon: The Chair intimated that I would be permitted to speak by way of explanation. With all respect, I think a mistake has been made. My amendment would not entail any charge on the Central Fund Section 40 provides that
“Every sum advanced out of the Central Fund to the board under this Act (other than sums which are repayable to the Central Fund out of moneys provided by the Oireachtas) shall be repayable by the board...”
Section 41 (3) sets out that half the total of the moneys advanced to the board shall be repaid to the Central Fund out of moneys provided by the Oireachtas. It is not necessary to say anything about the other half, because that is provided for under Section 40.
Mr. Lemass: There are two different sums, if the Deputy will look the matter up. Section 40 relates to a sum of £7,500,000 which will be advanced to the board for the construction of generation works and distribution works. Section 41 relates to another sum of £5,000,000 which will be advanced to the board for rural electrification. They are separate sums.
Mr. Sheldon: Section 40 says:—
“Every sum advanced out of the Central Fund to the board under this Act...”
That refers to all sums advanced under the Act and not under any particular section, except the half of the £5,000,000 referred to in Section 41. I take it the effect of sub-section (4) in that section would be that no repayment to the Central Fund could be  made until the total amount was expended. I merely put down this amendment to draw attention to this matter and to see if some way out could be found. Supposing it would take five years to deal with the £5,000,000, say there was £1,000,000 expended every year, would it not be preferable as each year's borrowing took place that half should be taken that year and not have to wait until all the money was expended?
Mr. Lemass: I assume the practice will be that we will vote here annually the amount the board will estimate they will require in that year.
Mr. Sheldon: “One moiety of the total amount of the moneys advanced to the board——”
Mr. Lemass: Will be repayable.
Mr. Sheldon: How will you know what half of the total is?
Mr. Lemass: The Deputy's point is that we will not know at any one time what one-half of the total advance is. We will advance a certain sum towards rural electrification and whatever it may be, one-half will be repaid.
An Leas-Cheann Comhairle: At any rate, the amendment is out of order.
Amendment No. 23 not moved.
Mr. Sheldon: I move amendment No. 24:—
In sub-section (4), line 46, to add at the end the words “by the erection of electric lines as defined in sub-section (2) of Section 46 of this Act.”
This is only to clarify the words used in the sub-section. The sub-section says that all the moneys advanced to the board by the Minister for Finance shall be expended by the board in the extension of the supply of electricity to rural areas. It struck me that even the Erne scheme might be considered an extension of the supply of electricity to rural areas. It is only to tighten up the wording that I submit the amendment and to ensure that this  sum of £5,000,000 will be used only for rural network.
Mr. Lemass: The “extension of the supply” would not cover the generation of electricity—any generation. The operative word is “extension”. There is a supply now and that is to be extended into areas at present not covered.
Mr. Sheldon: Section 46 refers to the erection of electric lines.
Mr. Lemass: It is clear, at any rate, that the extension of the supply would not cover generation.
Amendment, by leave, withdrawn.
Sections 41 to 46, inclusive, agreed to.
Mr. Lemass: I move amendment No. 25:—
After Section 47 to insert the following new section:—
Notwithstanding anything contained in any enactment, no person shall, without the previous consent of the Minister, acquire compulsorily any land or premises held by the board or acquire, terminate, restrict or otherwise interfere with compulsorily any easement, wayleave or other right whatsoever over or in respect of any such land.
The purpose of this amendment is to ensure that no other body which has the power of compulsory acquisition of land will exercise that power of compulsory acquisition against Electricity Supply Board property without the consent of the Minister for Industry and Commerce. We had a similar section in the Transport Act, as Deputies will remember. Certain public bodies of various kinds have the power of compulsory acquisition which they can use, if necessary, against one another. It is necessary to bring the Minister in to ensure that some decision will be made as to the most important use to which the land is to be devoted.
Mr. Coogan: How will you reconcile a conflict between the Drainage Commissioners and the board?
Mr. Lemass: By agreement, we hope.
Mr. Norton: Is this intended to prohibit a local authority, say the corporation, from acquiring an Electricity Supply Board shop for street widening purposes without the consent of the Minister?
Mr. Lemass: That is right.
Amendment agreed to.
Section 47, as amended, agreed to.
Title put and agreed to.
Bill reported with amendments.
Report Stage ordered for Wednesday, 14th February, 1945.
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