HC Deb 06 November 1996 vol 284 cc584-5W
26. Mrs. Helen Jackson

To ask the President of the Board of Trade if he will list the occasions on which the Monopolies and Mergers Commission has been asked to intervene in the water industry in the last two years. [554]

Mr. John M. Taylor

Four mergers involving water companies have been referred to the MMC in the last two years. During the same period, the Director General of Water Services has made two price control references.

The merger references were:

  • Lyonnaise des Eaux/Northumbrian Water
  • General Utilities and SAUR Water Services/Mid Kent Holdings (inquiry still in progress)
  • Wessex Water/South West Water
  • Severn Trent/South West Water

The price control references were:

  • Portsmouth Water plc
  • South West Water Services Ltd.

Mr. Harvey

To ask the President of the Board of Trade what steps he(a) has taken and (b) intends to take to ensure that SAUR and Société Générale des Eaux comply with the undertakings made in 1991 following the Monopolies and Mergers Commission's review of Mid Kent Water; and what discussions he has had with regulators concerning the difficulties arising from regulating subsidiaries of multinational or conglomerate companies. [2308]

Mr. Taylor

When, in May, my right hon. Friend the President of the Board of Trade referred the proposed acquisition of Mid Kent by General Utilities and SAUR to the Monopolies and Mergers Commission, he concluded that it would not be appropriate to exercise his discretion at that stage to bring proceedings against General Utilities in relation to the undertakings given by it in 1991. He noted, however, that those undertakings remained in force. He decided to keep the position under review and, in particular, to consider further the options open to him in respect of the undertakings once he had received the report of the MMC. That remains the position. The MMC must report to the President by 9 December 1996.

It is for those issuing and enforcing licences—normally the sectoral regulator—to consider any specific issues relating to the regulation of subsidiaries. This subject has however arisen in the context of mergers in the electricity and water industries where, on a number of occasions, companies have given assurances to my right hon. Friend that they will agree to appropriate licence amendments in order to address regulatory concerns of the relevant director general.

In relation to telecommunications, where my Department acts as the licensing authority, a number of conditions in licences under the Telecommunications Act 1984 govern relations between the licensee and other parts of its corporate group. We consult with the Director General of Telecommunications on the terms of these, as of other, conditions.