§ Mrs. Ann TaylorTo ask the Secretary of State for the Environment (1) what is the total gain per year to each of the water plcs as a result of writing off all their debt to the Exchequer;
(2) what is the loss to the Exchequer as a result of the non-payment of interest on loans to the water authorities which have been written off.
§ Mr. HowardThe write-off of debt owed to the Exchequer by the 10 water plcs is just one element of the capital restructuring of the industry, which is designed to enable the companies to carry out their functions within the new regulatory framework set up by the Water Act. The write-off will result in a corresponding reduction in the assets of the national loans fund, but the Government will have new assets mostly in the form of shares in the holding companies, proceeds from the sale of which will be paid to the Exchequer to the benefit of taxpayers. The size of these proceeds will depend on market conditions at the time of the sale of shares. It is not possible to make meaningful comparisons with what would have occurred had the previous capital structures and regulatory framework remained in place.