§ Mr. MarlowTo ask the Secretary of State for the Environment how the water industry will be guided on the development of Government policy for the regulation of charges for water and sewerage services during preparations for its forthcoming reorganisation and privatisation.
§ Mr. RidleyI am sending to the chairman of the Water Authorities Association and the president of the Water Companies' Association a series of letters setting out the details of various aspects of the policy settled in the light of the discussions and consultations that have taken place to date. I have placed a copy of the first of these letters, "Utility Company Charges Regulation for Core Services (WRP 1)," in the Libraries of both Houses. The main features of charges regulation will be as follows
—Customers should be protected against the ability of the water authorities, as monopolies, to charge high prices;—Existing statutory safeguards covering the structure of water charges will remain in force after privatisation. The utilities must avoid undue discrimination between classes of customers and charges must have regard to the utilities' costs of providing water and sewerage services;—Charges increases are to be related to movements in the RPI, adjusted to take account of factors affecting the efficiency and financial requirements of the privatised water utilities;—A new, independent Director General of Water Services will be appointed to oversee the "utilities charges and to protect customers' interests".