§ Mrs. Helen JacksonTo ask the Secretary of State for the Environment what discussions he has had with OFWAT as to the cost of water in the next financial year; and what are the criteria by which he will decide on the level of 'K' in OFWAT's price fixing.
§ Mr. Yeo[holding answer 7 June 1993]: My right hon. Friend's predecessors have from time to time had discussions with the Director General of Water Services. Under the Water Industry Act 1991 the Director General has the duty to set limits to the prices companies may charge: my right hon. Friend has no powers to interfere in any way with the exercise of that responsibility.
The 1993–94 price limits have already been settled and are being implemented by the companies. The companies' licences set out the criteria for the scope of variations in price limits between periodic reviews. The Director General has published a number of consultation papers concerning his approach to setting price limits at the first full review in 1994, which will take effect from 1 April 1995. Under section 2 of the Water Industry Act 1991, the Director General must enable companies to obtain the funds to finance their duties while protecting the interests of their customers.