To ask the Secretary of State for the Environment what was the inflationary factor used when determining the new infrastructure charge limits agreed for the new water companies; and if he will make a statement.

[holding answer 18 May 1990]: In determining the infrastructure charge limits it was assumed that construction costs would move relative to the RPI as follows

	Per cent.
1990–91	+3·6
1991–92	-0·2
1992–93	-3·7
1993–94	-4·6
11994–95	0
1 and subsequent years.

and that the RPI would increase by 5 per cent. in 1990–91. After 1990–91 the limits may increase by the RPI unless they are subject to review by the director general in the context of a review of the general charges limits.