Byatt faces water review row ahead of utilities Green Paper
Friday 27 February 1998
Mr Byatt set his face firmly against any profit-sharing formula for the industry and also said that the companies would be allowed to delay returning efficiency savings to customers for longer than expected.
The announcement cheered the markets and prompted sharp upward movements in the share prices of a number of water companies. Anglian Water rose 51p to 843p while Thames added 50p to close at 895p and Severn Trent closed 35p higher at 929p.
But the regulator's stance threatens to run counter to that of the Government which is expected to outline proposals for a tax on "excess" utility profits when it publishes its Green Paper on utility regulation next month.
Mr Byatt said that his review of prices from 1999 would be based on the existing RPI-X formula remaining in place and not being replaced or complemented by any formal profit sharing scheme.
He also said that companies would be allowed to retain efficiency savings from their investment programmes for five years rather than the two years mooted in earlier discussion papers. Customers will also have to pay for improvements in the quality of water supply up front, rather than when the improvements have been delivered, a move which would have meant greater risk and therefore a higher cost of capital for companies.
However, Mr Byatt stuck by his proposal for a big one-off reduction in water bills in 2000 and said he was "sympathetic" to the idea that prices should not rise by more than inflation thereafter.
Mr Byatt said he accepted that his proposals would be subject to any legislative changes arising from the DTI review of utility regulation. He also said that future price levels would depend on the extent to which ministers imposed new environmental and drinking water standards on the industry and whether consumers would be prepared to forego price cuts to pay for them.
An Ofwat spokeswoman denied that there was any significance in the timing of Mr Byatt's announcement - just a fortnight before the Government Green Paper is expected. She said it had always been planned to issue the price review document in late February and that Ofwat could only work on the basis of government policy as it stood.
Outlook, page 23
- 1 Russell Brand accuses FOX News anchor Sean Hannity of terrorism after aggressive Israel-Gaza debate
- 2 Pope Francis issues top 10 tips for happiness – including don’t try to convert other people
- 3 Arturo Vidal to Manchester United: Midfielder set to force through move to Louis van Gaal's Red Devils - reports
- 4 Disney heiress Abigail disowns her share of family profits in West Bank company
- 5 Israel's propaganda machine is finally starting to misfire
Russell Brand accuses FOX News anchor Sean Hannity of terrorism after aggressive Israel-Gaza debate
Pope Francis issues top 10 tips for happiness – including don’t try to convert other people
Sabina Altynbekova, the girl branded 'too good looking' for volleyball, says social media obsession with her is a 'bit much'
Justin Bieber posts Instagram photo of Orlando Bloom crying after Ibiza fight 'over Miranda Kerr'
Disney heiress Abigail disowns her share of family profits in West Bank company
The secret report that helps Israel hide facts
Land for gas: Merkel and Putin discussed secret deal could end Ukraine crisis
Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
Putin is 'thuggish, dishonest and reckless', says British ambassador to US
Richard Dawkins tweets: 'Date rape is bad, stranger rape is worse'
Boozy, ignorant, intolerant, but very polite – Britain as others see us
- < Previous
- Next >
iJobs Money & Business
£20000 - £24000 per annum: Harrington Starr: A leading provider of web based m...
£28000 - £32000 per annum: Ashdown Group: Secretary (Sales Team Support) - Mat...
Competitive (DOE): Guru Careers: We are looking for an Assistant Management Ac...
£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...