HC Deb 08 January 2001 vol 360 cc378-9W
Mr. Loughton

To ask the Secretary of State for the Environment, Transport and the Regions (1) if he will make a statement on the new corporate structure proposed by Glas Cymru for the Welsh Water company Dwr Cymru; [144299]

(2) what assessment he has made of the (a) financial security, (b) ability to meet regulatory targets and (c) potential risks to customers of a wholly debt financed water company; [144301]

(3) what discussions he has had with the Director General of Water Services about wholly debt financed water companies; [144300]

(4) what assessment he has made of the comments by the Chief Drinking Water Inspector that any (water company restructuring) proposal must first guarantee that drinking water quality can be managed safely; [144454]

(5) if he plans to make a statement on the future of the water industry before the Director General of Water Services publishes his decision on the Glas Cymru model. [144337]

Mr. Mullin

The Government's prime interest is to ensure that any reorganisation in the water industry will bring direct and long-lasting benefits to customers, and that companies can continue to comply with their environmental and public health obligations, including the protection of drinking water quality.

The Director General of Water Services issued a consultation paper on the issues raised by Glas Cymru's proposals on 10 November 2000. The paper states that Dwr Cymru must remain capable of meeting all its statutory and licence obligations, including its responsibility for drinking water quality and environmental standards. The consultation period closed on 18 December 2000. The First Minister of the National Assembly for Wales has set out his views on the proposals in a response to the director general. I understand that the director intends to make a statement on the outcome of this consultation shortly.

As explained in the consultation paper that accompanied the draft Water Bill, the Government will continue to work with the industry regulators and all other interested parties so that any further restructuring proposals brought forward by the industry have been fully examined to ensure that customer interests, drinking water quality and the environment are fully protected and that the long-term implications for the future of the industry have been fully addressed. My right hon. Friend the Minister for the Environment met the director general on 29 November and discussed, among other issues, water industry restructuring.

We are still examining the options for extending competition in the water industry, taking into account recent developments such as restructuring proposals. As soon as we are in a position to do so we will make a statement of our conclusions.