Written question asked by Jim Cunningham (Labour) on Thursday, 27 June 2002, in the House of Commons. It was due for an answer on Monday, 8 July 2002. It was answered by Michael Meacher (Labour) on Monday, 8 July 2002 on behalf of the Department for Environment, Food and Rural Affairs.

Dept for Environment Food and Rural Affairs

Question: To ask the Secretary of State for Environment, Food and Rural Affairs, what powers OFWAT has to control monopolies in water and sewerage companies. - (Holding answer 3 July 2002).

Answer: Mr. Jim Cunningham: To 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 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.

Secondary information