Speech of An Taoiseach, Leo Varadkar, T.D., at the ESB 90th Anniversary Dinner

Introduction

Distinguished guests, ladies and gentlemen, good evening. It is a great pleasure to speak to you tonight in the newly extended National Gallery, proof positive of the Government’s commitment to the arts and culture.

Six weeks before Michael Collins was assassinated he set out a remarkable vision for the future of the country. In a memorandum to Desmond FitzGerald, he explained his belief that we should look to the continent to see how hydropower could provide electricity for every home in the country. At the time it seemed as ambitious – as unreal - as John F. Kennedy predicting in 1961 that before the end of the decade an American would set foot on the moon. But it was achieved, and tonight we celebrate the 90th anniversary of the founding of the company that made it possible.

At the time there was much debate and disagreement about how to go about this. Some believed coal-generated electricity was better. Others argued that the Liffey should be developed for hydro-power, even though it would probably only provide for the people in Dublin. And more still were convinced that it was ‘a white elephant’ and would never be built. Starting as they meant to go on, the Department of Finance didn’t want to spend the money. So there were many obstacles!

The courage of a small group of far-seeing people achieved the impossible. In the Dáil, Patrick McGilligan, articulated a vision for how the state could play a leading role, and do what could not be achieved by private enterprise alone.

It was ‘a chance’ he said, ‘here at last, of utilising one of the great natural resources of the country for the good of the people of the country’.

This was the context for the creation of Ireland’s first state-owned enterprise - the Electricity Supply Board. The Government believed in what it was doing and invested five million pounds, the equivalent of 20% of GDP at the time.

It is impossible to overstate the psychological significance of the project. It was called at the time ‘an act of faith and hope in the country’, an assertion that Ireland could do great things on her own, that independence meant something real and tangible.

The opening of Ardnacrusha in 1929 was reported around the world.

As Taoiseach I am proud to be able to celebrate 90 years of achievement of the ESB. And watching the videos tonight of the history of ESB and Ardnacrusha remind me that we should also celebrate what those achievements meant for the wider development of state enterprises in Ireland.

In the years ahead, inspired by the success of the ESB, the state was emboldened to develop similar state enterprises. The Agricultural Credit Corporation was set-up a few months later to provide finance to agriculture. Its success led to the Industrial Credit Corporation to provide finance to industry. We had no airline, so Aer Lingus was created to connect Ireland to the world. Aer Rianta built Ireland’s airports. Bord na Móna developed the peatlands of Ireland, drained bogs, and provided massive employment in the Midlands. The VHI gave people the option of health insurance. Port companies across the country helped transport ships, goods and passengers around the world. Bord Gáis provided natural gas across the country and was born out of the failure of private firms.

Raidió Teilifís Éireann connected homes across the country by radio and then television, and is even credited with bringing sex to modern Ireland. More recently, TG4 has revitalised the Irish language through its television channels for young and old alike.

Innovation has been a defining feature of the work of the ESB from the beginning – it had to be or it would never have succeeded.

The semi states have been some of the first Irish companies to have major overseas operations. ESB International. Likewise, Aer Riana International.

The Shannon Free Zone was the world’s first free trade zone. It has become a model followed in other parts of the world to drive economic growth, and has been the inspiration for China’s Special Economic Zones.

Speaking in 1961, the Taoiseach, Seán Lemass, set-out eloquently the role of state-owned enterprises. He declared that ‘even the most conservative among us understands why we cannot rely on private enterprise alone. State enterprise in fields of activity where private enterprise has failed, or shown itself to be disinterested, has not only been accepted but is expected.’

However, as time has gone on, state enterprise in major fields of activity seems to be rarely expected and is not always accepted.

This is a mistake, for state enterprises - both existing and new - will play an important role in the future economic and social development of Ireland.

The words of Seán Lemass I have quoted are as true today as they were when he spoke them.

Where private enterprise fails or lacks interest or ambition, then state enterprises are required.

The danger, though, is when state enterprises, founded at times of pressing need or with great ambition, forget these roots. Then we end up in a situation where the state enterprise becomes just another company, albeit with the state as the shareholder. My vision for the commercial state companies is greater than that. We want dynamic enterprises that succeed commercially, but also take the risks to deliver a broader benefit to the state and the public. My vision is one where their mission is commercial, and also about serving the country and society, for example through sponsorship of sports, the arts, and major events.

We see it in the way Dublin Port recently opened up its HQ as a public realm, re-integrating the port with the city. This is a good example for others to follow.

We face new challenges, and the next generation of state-sponsored bodies offer new solutions. The Strategic Banking Corporation of Ireland has created a more competitive and dynamic environment for SME funding.

The Ireland Strategic Investment Fund (ISIF) has supported economic activity and employment in Ireland. And uniquely, it is offering a permanent and patient source of long-term capital. I think it should focus not on competing with private capital for good investments but rather on good investments that don’t attract private capital especially in the regions.

Irish Water

The creation of the ESB involved merging some smaller companies. We saw the same approach in the creation of Irish Water. This involved transferring water services functions from thirty four local authorities to a single utility.

Since 2014 Irish Water has reduced the number of people on water supplies requiring remedial action by 200,000. It has also taken 20,000 people off long-term boil water notices.

Despite the criticisms, Irish Water has an ambitious plan for what our public water system should look like by 2021, and it is already delivering on that vision. I don’t believe it will ever be abolished.

In fact, I believe in time we will be able to celebrate Irish Water’s achievements as enthusiastically as we celebrate ESB tonight.

Home Building Finance Ireland

So, the state continues to invest in the future, to do what private enterprise is unable or unwilling to achieve. A perfect example is Home Building Finance Ireland, the new body announced by the Minister for Finance in Budget 2018.

It is evident that there is market failure by existing financial institutions in providing funding to home-builders.

So, the government has taken the decision to establish HBFI. It will provide finance at commercially competitive rates to developers with sites ready to go. With a proposed allocation of up to €750m, it is estimated that HBFI will fund the building of 6,000 new homes in the coming years.

It is an organisation that clearly meets the Lemass test.

The ESB Today

The success of the ESB gave people confidence in this country’s future and encouraged governments to attempt to achieve more. In the twenty-first century the ESB continues to serve the people of Ireland.

When disasters strike, character is revealed. The character of the ESB, and especially your network’s staff across the country, was revealed during Storm Ophelia when your people worked so heroically to restore power to those badly affected, and despite the strain maintained power across most parts of the country.

It is predicted that these high intensity events will become more frequent due to climate change.

The ESB’s commitment to maintaining a robust network infrastructure means we can be confident the lights will stay on no matter what the weather brings.

Climate change affects us all and the ESB has long played a leadership role in the delivery of cleaner energy to the Irish people. For instance, the ESB has successfully removed oil - a comparatively dirty fuel - from its portfolio. I know ESB is committed to leading the change to a low-carbon economy and that tomorrow you will co-host a conference which will generate debate on what that challenge will entail. This is another great example of state enterprises offering new solutions.

And I know you are thinking deep thoughts about Moneypoint.

You have developed a first-class national electric vehicle charging infrastructure.

You are investing in solar power and there are 19 wind farms to reduce dependency on fossil fuels.

The Government wants to see 40% of our electricity come from renewable resources by 2020. We are also determined to reduce greenhouse gas emissions in line with our EU targets, and our long-term national transition objective, which seeks deep decarbonisation of our economy by 2050.

Investing in the Future

When defending the role of the state-owned enterprises in 1961, Lemass joked that ‘nobody thinks of us as doctrinaire socialists’. It would take a different Fianna Fáil Taoiseach at a later time to claim those particular clothes. I don’t think anybody today would call me a doctrinaire socialist. But, like Lemass, I recognise the role of the state in doing the kind of work that would be impossible otherwise. Those who think private enterprise is the answer to everything, are asking the wrong set of questions.

Like you, this Government believes in investing in the future. We recognise that for Ireland to succeed we need to think long-term and so we are prioritising investment in infrastructure.

Central to this is the new National Development Plan and the new Ten Year Capital Plan for the country that the Government will approve before the end of the year.

Here we will set out our public investment priorities, including by commercial semi-state companies.

We want to provide clarity, coherence and certainty in relation to planning for the future, and we want the capital plans of the semi-states to inform our work. This will facilitate a sustainable and long term approach to meeting Ireland's future investment needs.

We are ambitious for the future. We want a new runway at Dublin airport. We want to expand the ports to prepare for greater trade in merchandise, and perhaps for Brexit and altered rules of trade. Over the next twenty years renewable energy and smart grids will change our world in the way the internet and mobile phones did in the last, and we intend to be at the forefront of these changes.

Conclusion

To conclude, the great success story that is the ESB reminds us of all that can be achieved when the state and public enterprise work together.

It is worth remembering that the ESB contributes almost €2 billion annually to the Irish economy through dividends, investments, taxes and jobs.

Ninety years ago a group of dreamers believed that nothing was impossible for the new Irish state and they made that dream a reality.

In the twenty-first century we have a new dream and a new ambition to revolutionise the economic and social life of the state. Your distinguished history makes me confident that we will succeed.

As this is a celebration, I hope it is appropriate to propose a toast to the ESB. To all who have served – and to all who continue to serve the organisation - and to the many benefits it delivers for the Irish people.

Thank you.