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Ofwat

Volume 450: debated on Tuesday 24 October 2006

To ask the Secretary of State for Environment, Food and Rural Affairs what response his Department has made to the Ofwat Position Paper on the capital restructuring of Thames Water; and if he will make a statement. (96779)

DEFRA offered no response to this paper. This is a matter for Ofwat as part of its independent economic regulation of the water industry in the interests of consumers. I note that Ofwat was able to approve proposals put forward by Thames and that the interests of consumers were furthered by the introduction of a ring-fencing condition in line with best practice in other sectors.

To ask the Secretary of State for Environment, Food and Rural Affairs what discussion has taken place in the last two years between Ofwat and his Department on the appointment of officers to the Customer Services Committee covering the London region; and what steps he is taking to monitor their performance in protecting the interests of customers. (96780)

Customer Service Committees were replaced by the Consumer Council for Water (CCWater) on 1 October 2005. Under the new arrangements, Ofwat is no longer involved in the appointment of consumer representatives. I regularly meet with the National Chair of CCWater to discuss matters of interest to consumers, including matters of particular interest to consumers in the Thames Water area.

To ask the Secretary of State for Environment, Food and Rural Affairs what responsibility Ofwat has to (a) monitor, (b) report and (c) intervene in relation to investment commitments of utilities; and if he will make a statement. (96781)

Each year companies provide, in their June return submissions to Ofwat, a range of financial information including levels of investment to meet agreed outputs. This information is published in Ofwat’s “Financial performance and expenditure of the water companies in England and Wales” 2005-06 report. A copy of this report has been placed in the Library of the House.

The choice of capital structures is for the management of the companies, not the regulator. Ofwat has no powers to approve or reject individual company proposals. In each case it considers whether the ring-fence around the regulated company should be strengthened as a means to protect customers from any undue risk.