§ Mr. Charles Morrisonasked the Secretary of State for the Environment if he has set a financial target for the regional water authorities; if so, what it is; and how it will affect the level of water charges.
§ Mr. KingThe water industry's cash limit of£395 million for 1980–81 is based on authorities meeting an interim financial target. This consists of a compulsory appropriation to reserves one percentage point higher than the corresponding budgeted appropriation for the current year. This will apply to all authorities, including those that do not at present make an appropriation to reserves. I accept that the financial target is likely to have some effect on the level of water charges to the extent that authorities cannot meet it by increased efficiency.