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Dept of Trade and Industry

Answer

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 Societe Generale 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.

Secondary information

Type

Written question

Reference

2308; 284 c585-6W;284 c585W

Session

1996-97

Subjects

Competition Judgements Monopolies and Mergers Commission Water Utilities Water companies Subsidiary companies General Utilities Mid Kent Holdings Mid Kent Water