§ Mr. Jim CunninghamTo ask the Secretary of State for Environment, Food and Rural Affairs what powers Ofwat has to control monopolies in water and sewerage companies. [66627]
§ Mr. Meacher[holding answer 3 July 2002]The Director General of Water Services' powers and duties are set out in the Water Industry Act 1991. He uses his powers to place conditions on companies that, among other things, set their annual price limits. The Director General also has powers to make enforcement orders to secure companies' compliance with their conditions of appointment or with other requirements.
The Director exercises his powers and duties in a manner which he believes facilitates competition and promotes economy and efficiency. In the absence of a fully competitive market for water and sewerage services, the Director uses proxies for market competition, primarily comparative competition.
Any mergers between existing water and sewerage companies would result in the loss of a comparator and are automatically referred to the Competition 701W Commission. In considering the effects of the proposed merger on the public interest, the Commission is required by the Water Industry Act 1991 to have regard to the principle of avoiding prejudice to Ofwat's ability to make comparisons between different water enterprises.
§ Mr. Jim CunninghamTo ask the Secretary of State for Environment, Food and Rural Affairs what powers Ofwat has to control the level of charges for services provided by water and sewerage companies. [66628]
§ Mr. Meacher[holding answer 3 July 2002]The Director General of Water Services has powers to set price limits. Within its price limit, each company is responsible for deciding individual charges. Under the Water Industry Act 1999, companies must publish these charges annually in a charges scheme, for which they must obtain the Director General's approval. Companies are prohibited from charging household customers other than in accordance with an approved charges scheme.