Mr. Andy StewartTo ask the Secretary of State for the Environment what assessment he has made of the potential effect of the threatened legal action by local authorities against the water and sewerage plcs on the flotation of the companies.
§ Mr. HowardNone.
On the basis of legal advice, including advice from leading counsel, we are confident that the threatened action is groundless and that there is no legal foundation for it. It was Parliament's clear intention in 1973 that all the pre-1974 local authority assets connected with the functions of the new water authorities should be vested in the water authorities. Similarly, in 1989, the vesting schemes under the 1989 Act were designed to ensure that such of those assets remaining in the ownership of the water authorities and not required for the functions of the 233W National Rivers Authority should be vested in the water service companies. We are satisfied that in both cases the legislative provisions fully achieved those objectives.
None the less my hon. Friend the Parliamentary Under-Secretary of State for Wales and I have today put before Parliament departmental minutes describing indemnities which the Government propose to grant to the water and sewerage companies appointed under the Water Act 1989. Under these, the companies would be indemnified against any material additional expenditure incurred as a result of legal claims, of the kind understood to be planned by a consortium of local authorities, against the proceeds of sales of assets which cease to be used for water and sewerage functions.
We believe that such indemnities are extremely unlikely to be called upon. But we nevertheless feel duty bound to protect the interests of taxpayers by securing flotation on the basis that Parliament intended.
§ Mr. EvennettTo ask the Secretary of State for the Environment when he proposes to make an order specifying the amounts eligible for capital allowances to successor water companies under section 95 of the Water Act.
§ Mr. HowardMy right hon. Friend the Secretary of State for Wales and I propose, and Her Majesty's Treasury consents, to make an order today under section 95 of the Water Act, specifying the amounts eligible for capital allowances on plant and machinery and on industrial buildings in respect of the qualifying assets transferred from the water authorities to the successor companies.
The total amounts eligible to be specified for each company will be:
Industrial buildings £'000s Plant and machinery £'000s Anglian Water Services Limited 80,681 1,149,424 Northumbrian Water Limited 56,348 344,428 North West Water Limited 83,748 1,076,092 Severn Trent Water Limited 43,995 1,018,365 Southern Water Services Limited 36,710 559,525 South West Water Services Limited 33,695 281,621 Thames Water Utilities Limited 58,016 1,031,962 Wessex Water Services Limited 6,575 460,925
Community charge benefit: Net income at which minimum CCB of 50 pence is payable Annual Community Charge Single under 25 working Single 25 to 29 working Single Pensioner aged 60–74 not working Pensioner Couple aged 60–74 not working Couple 2 children under 11 working 1989–90 Benefit rates £250 54.72 62.22 68.42 119.81 142.76 £300 59.85 67.35 73.55 130.07 153.02 £350 64.98 72.48 78.68 140.32 163.27 1990–91 Benefit rates £250 56.11 64.06 70.86 123.58 147.68 £300 61.26 69.20 75.97 133.78 157.90 £350 66.36 74.26 81.06 144.05 168.15