§ Mrs. GillanTo ask the Secretary of State for the Environment what discussions he has had with the chairman of OFWAT about the number of service companies in which the water companies have acquired an interest or which they have bought out since privatisation; and if he will make a statement.
§ Mr. MacleanThe director-general's role is to regulate the activities of the companies appointed as water or sewerage undertakers. He has no statutory powers in relation to any group holding company or any other company within a group. However, under the Water Industry Act 1991 the funds of the core water and sewerage businesses are ring-fenced and must be kept separate from any other activities. This separation is reinforced by section 50 of the Competition and Service (Utilities) Act 1992, which takes effect on 1 July. The director-general will now have a specific duty to ensure that customers' interests are protected as respects any activities outside the core business, in particular by securing that transactions between core and associated companies are undertaken at arm's length. He is in the process of introducing measures to enable him to fulfil this duty.