§ Mr. WigleyTo ask the Secretary of State for the Environment what agreements were entered into with water companies at the time of privatisation regarding charging bills at a scale which would accumulate money for future use; if he will make it his policy to require use of surplus funds to be devoted to reduction of water bills; and if he will make a statement. [17254]
§ Mr. Atkins[holding answer 21 March 1995]: No agreements were entered into at the time of privatisation regarding accumulation of funds for future use. Initial price limits were set at a level to ensure water companies were able to finance the proper carrying out of their functions, in accordance with the requirements of legislation. This function is now the responsibility of the Director General of Water Services who, in his recent periodic review of price limits, has set new limits for future increases in charges which assume improved efficiency and lower rates of return by the companies. He has stated that any additional savings should be shared with customers through increased spending on discretionary service improvements or lower charges.