§ Mr. NorrisTo ask the Secretary of State for the Environment what indication he has had of the European Commission's view of the Government's proposals for a golden share in the water authorities after privatisation.
§ Mr. HowardThe Government have never been in any doubt about the legality of our policy on competition and merger in the water industry, and our proposals for a "Golden Share" to protect the new water plcs from takeover in their first five years in the private sector.
In view of the quite unjustified doubts raised by some critics of water privatisation, I welcome the European Commission's clarification of the position.
In a statement on 7 February, the Commissioner responsible, Sir Leon Brittan, said that having looked into the matter, the Commission 191W
has not found anything … which would raise problems as far as the Community law is concerned in the fields of competition or company capital structure".This is exactly as we had expected, since our proposal involves absolutely no element of discrimination as between different categories of potential investors. I recognise that this will disappoint those opposed to water 192W privatisation and therefore opposed to this sensible and temporary protection of the new plcs and their customers. Our proposals will simply avoid major and potentially damaging upheaval too early in their private sector existence, and provide a long-term safeguard against loss of comparative competition.