Examination of Witnesses (Questions 240
- 259)
WEDNESDAY 17 JUNE 2009
HUW IRRANCA-DAVIES
MP AND MR
MARTIN HURST
Q240 Chairman: The reason I ask is
that you people mentioned it in your evidence. I am assuming that
because you mentioned, you know how it works. Mr Hurst is going
to enlighten us.
Mr Hurst: I hope to do so. I reinforce
what the Minister has said: the Change Protocol is not a Defra
document; it is an Ofwat process. Ofwat have a duty to ensure
the financing of statutory obligations on the water companies.
I think it is going to be a rather unusual price review because
the number of things that could come up between the two price
reviews is quite big with potentially big bills. Just to sketch
out a few of them, you have mentioned Anna Walker's Review, and
I will explain a little bit about the mechanism of how that might
work later. The climate adaptation projections will be out very
shortly and Ofwat has said that they will take them on board as
soon as they reasonably can but that might be between price reviews.
The water resource management plans from the industry are currently
under scrutiny by the Environment Agency and the Secretary of
State and that may give approval for things which will require
spend between price reviews. We have a significant package for
the Water Framework Directive in the national environment part
of the price review, but there may be more between price reviews
as we learn more. The whole of the Flood and Water Management
Bill will become law and if that requires action between 2009
and 2014, we potentially go to the Change Protocol. There is also
one very big infraction in the European courts. We have had the
hearing. We expect the announcement in the next few months on
the Urban Wastewater Treatment Directive. If we were to lose that
and the Commission and the court were to find that we had to take
action very quickly, that could mean significantly large amounts
of money over the next five years in addition. What happens is
that you get a statutory duty on the water industry, either through
the Floods and Water Management Bill or through section 2.2 of
existing European Law. Ofwat then have to assure themselves that
the way the water industry is implementing that is cost-effective.
Providing that the cost is, if I remember correctly at the moment,
more than 2% of their turnover, then the firm in question in the
water industry could put a bid in to the Change Protocol for finance
for that. If Ofwat agreed, then the money would be added to bills,
to my understanding, during or immediately after the five-year
period.
Q241 Chairman: So we could expect
to see a sort of health warning from Ofwat, bearing in mind what
you were talking about in terms of the court proceedings. There
is going to have to be a health warning given if for no other
reason than the City needs to be aware of potential contingent
liabilities in whatever Ofwat finally make their determination
to be?
Mr Hurst: I would have said, bearing
in mind that Ofwat have already published their Change Protocol
for consultation, I would be very surprised if the City did not
know about it and had not worked out the pricing.
Q242 Chairman: It might not know
what the items were that could change.
Mr Hurst: That is true. If I have
inadvertently misrepresented some part of the process, we will
of course correct that in writing.
Q243 Chairman: That is a good way
to start. Let us move on. Your department has a very important
role in the field of sustainability but I was intrigued to learn
from our water company witnesses about the volume of paper which
they had to produce. I think Yorkshire Water told us that the
draft business plan that they submitted to Ofwat was 7,000 pages
long, and I am sure they sent more than one copy. I would love
to meet the people who have the patience to read a document of
7,000 pages. I just wondered, in terms of the dialogue, Minister,
that you have with Ofwat, much as one has to provide a lot of
detail in this highly litigious world that we live in, whether
you felt that the burdens on companies having to produce that
kind of volume of detail really was necessary, simply because
I do worry that volume can sometimes be a substitute for important
attention to the detail. Is there a need to sort this process
out and make it bit less burdensome?
Huw Irranca-Davies: There is an
issue I think of a very good relationship but a maturing relationship
between the regulator in any environment, but particularly in
this environment, and the companies. As part of that, particularly
as Martin was saying, some of the significant challenges we have
ahead of us are going to need a way ahead that, yes, in respect
of what you were saying, the paperwork does actually tick the
boxes and makes sure that the water companies are doing what needs
to be done, but also allows some dynamism within the structure
as well so that water companies can react to climate change imperatives,
carbon footprint imperatives, the Water Framework Directive, and
so on and so forth. I have to say that I do not want to trespass
directly on the relationship between the regulator and the companies,
and it is not for me to do that, but I think there is a maturity
developing within that relationship that will allow for some dynamism
and, if you like, some confidence between the regulator and the
companies in the way that they take this forward.
Q244 Chairman: There is one word
missing from what you said and that is "transparency".
Bearing in mind that a lot of people would like to know what is
going on, this seems to be a somewhat opaque way of doing it.
The idea of putting on the Internet for example 7,000 pages of
evidence and expecting people to dip in and out seems to be beyond
the realms of reality.
Huw Irranca-Davies: Certainly
as a Minister, I know this as well with the reams of information
that are put in front of me. For customers and for business users
as well—and everybody has an interest in this field—the
necessity actually to translate in an easily readable way what
are quite a lot of complex issues that water companies and the
regulators are dealing with is a valid point. I do not know whether
you have engaged in this with the regulator when they were here,
but it is a valid point: how do people understand when we have
some extremely complex "asks" of water companies with
the regulator, how those are being delivered consistently over
time and also, as you point out, when some of these will change
and mutate, or there will be additional ones that will come? You
have probably touched on a real issue. It is not necessarily one
that I as a Minister want to dictate, nor should I, but it is
a genuine issue about how the regulator and companies jointly
articulate what they are doing, where the costs lie, the transparency
of how you slice into those to say to a customer. "You are
paying a certain amount in your end bill for these public goods
and a certain amount for that". Certainly in the survey information
that we have seen recently where end-users, customers, were asked,
there was generally a high degree of acceptability of prices that
people are paying but it varied a lot when you asked people across
different regions and different water companies: "How do
you feel about the amount that is going to this part or
that part". That does argue for a way to make it clearer
and more transparent so that people can make their views known.
Mr Hurst: By way of more information,
I would direct the Committee to paragraph 2.2.8 of the social
and environmental guidance that the Government formally gave to
Ofwat. That says that Ofwat is expected to contribute to its statutory
duty to have regard to principles of best regulation. It should
develop this duty by developing proportionate and innovative regulatory
solutions and take a similar approach to regulated burdens. It
specifically mentions proportionality and transparency. So the
government guidance to Ofwat is very much along the lines that
you are suggesting. In Ofwat's defence, they have an extremely
important duty to make sure that water customers do not pay for
things they do not need to pay for and that the bills are kept
to a minimum to deliver duties that water companies need to deliver.
In a monopoly system, you can only do that with evidence and that
evidence must come from the companies. So you are never going
to get to a position where I think monopoly regulation is as a
light touch as regulation where there is competition or market.
The Committee suspended from 3.18 pm to 3.30
pm for a division in the House
Paddy Tipping: Minister, I have had a
chance to think about this; that is always a bad sign. You have
talked about your relationship with the regulator. Would it be
too intrusive to ask, first of all, how often you meet the regulator
and what kinds of things you talk about? More specifically, I
guess you have had loads of letters from scout groups, churches
and sports clubs. Not to put too fine a point on it, this is a
political mess. What are you doing to sort it out?
Chairman: You said in the Chamber that
you thought, with all the discussions that were going on, that
matters could be resolved and the House hung upon your every word.
David, did you want to put your two pennyworth on this?
David Taylor: I think Paddy has really
picked it up that the Minister's boss has stated that he is very
concerned about what has happened, "there is clearly something
wrong with bills increasing like that". I know that he had
the Minister in mind in terms of resolving that in an effective,
economic and politically acceptable way.
Q245 Chairman: So, Minister, how
are you going to fix it?
Huw Irranca-Davies: First of all,
it is worth making it clear. I do not think it is down to me to
fix it. Let me explain because I want to be absolutely clear.
We have four companies currently that have introduced regimes
for surface water drainage charging: Yorkshire, Severn, Northumbria
and United Utilities areas. They have all been done under the
same regulatory regime. They have all been done under the same
social and environmental guidance. Just to come to the point before
I kick in to where I think we are going with this about how often
we meet, we meet the Minister quite regularly. We discuss a range
of issues and we have discussed this on a number of occasions
because of the importance of this to voluntary groups, local clubs
and scout associations. I have also taken the opportunity, because
I speak to many water company directors as well, to speak to the
Chairman of United Utilities as well on this on a couple of occasions.
The reason I say that it is not for me to fix it but I think it
can be fixed, and I made it clear, is because it is fundamentally
to do with when we produce our social and environmental guidance.
It is quite clear, and let us make it clear, that that allows
for the flexibility to put forward a sensitive and sympathetic
way of charging, it does not go away at all from the principle,
which I think is absolutely right, that where you have a load
on a system through surface water run-off into a system, people
should be expected in one way or another to contribute, but there
is an issue of proportionality and fairness within this. I was
very pleased to see that UU, as a result of the discussions with
Ofwat and representations from a number of honourable colleagues
and others, as well as directly to them, imposed a moratorium
and they did that not on last year's prices but actually going
back a year; in effect, back to the pre-surface water draining
charges regime.
Q246 David Taylor: I am sorry to
interrupt. It is absolutely specific: The Government expects Ofwat
to ensure that companies charge in a way which is both fair and
protects vulnerable customers. It could not be more unambiguous
than that, could it? For Ofwat to pass the buck and say that they
either do not have the legal powers or it is down to the companies
is not acceptable.
Huw Irranca-Davies: You are absolutely
right. That is why I say, short of bringing through legislation
for exemptions, and I know some people are calling for that, there
are problems with exemptions that we have come across before,
not in this area but in other areas. For example, under the pre-surface
water drainage charges, you had partial exemptions, including
for organisations like petrol filling stations. What do we do
with private schools; what do we do with hospices? You are suddenly
into a very difficult area where some will be in and some will
be out. The reason I say that is we have four companies out there
at the moment, and we made this clear without a blame game at
all, within a regime where four companies have introduced it;
by and large, in three of those areas it has gone pretty well.
There is always room for discussion, change and so on but in three
areas it has gone well and one it has gone upside down. I am very
interested in the fact that they have introduced the moratorium
to enable them to have discussions with Ofwat over the last few
months. I am not taking my eye off the ball as to what the outcome
of those deliberations will be, but it certainly is within the
ability of Ofwat and United Utilities working together—and
I am aware that they have had some quite positive and constructive
discussion on this live time—to bring forward a regime that
will deal very sensitively with churches, scouts associations.
If there are others that fall outside of that as well, it is interesting
to look at some of the other examples, such as Severn Trent, where
those organisations which still feel that they are being put through
some pain and so on have gone back to Severn Trent and said, "We
are experiencing difficulty" and Severn Trent have said,
"We have a way within the regime to fix that. We can look
at flexibility through our hardship fund. We can look at some
sort of much more compassionate way of dealing with you".
That is what I expect as a minister, but it does come back to
what I am saying. That is what I expect as a minister and I am
absolutely clear that my guidance and that of the Secretary of
State and Michael Meacher's guidance previously when he was in
the role of Secretary of State made absolutely clear that there
is the ability to have some discretion here within the regime
that will allow the concerns of those groups to be properly addressed.
I am hopeful, but I am not taking my eye off it, that the very
good engagement that has been going on in recent weeks with UU
and Ofwat will actually provide fruit.
Q247 Paddy Tipping: Minister, are
you saying that the regulator and directors of UU and other companies
are now listening to you? Maybe you cannot fix it but maybe you
can guide, dare we say, a third way through this?
Huw Irranca-Davies: I can certainly
say that in response to all the representations that they have
had, both directly to them through this place, through conversations
that I and others have had with them, they are hugely seized of
the importance of fixing this and that I am actually hugely seized
of the importance of fixing this. If there were other companies
that want to introduce their own regime in future, they will be
looking to the example that comes out of these recent discussions
to see whether or not there is a workable model. I think there
is because we have seen it with other water companies under the
same regime, under the same guidance. I am not just keeping my
fingers crossed; we are actively in dialogue with the regulator
to encourage them with the water company actually to bring forward
a suitable model that avoids what we did see, which were these
quantum leaps in the charges to some voluntary groups or church
groups and so forth.
Q248 Mr Drew: I hear what you say,
Minister, but is this not a waste of your time? Is this not an
unnecessary campaign? We could virtually sort it out today if
Ofwat and the water companies make it clear that they will use
discretion and that they have hauled United Utilities in and told
them that what they did was wrong and we could all move forward?
Again, it is just one of those useless periods of unnecessary
lather that we all suffer from. We know that you are not going
to force the issue because it would be politically daft and inept
to do so, so let us move on from this and tell the scouts and
the churches and Lord knows who else that it is solvable?
Huw Irranca-Davies: It is absolutely
solvable. Let me just take one moment to remind the committee,
and I am sure they knew it, of the guidance that came through
in the Water Industry Act which says this. I have just underlined
some things because I went through this in quite some detail,
as you can imagine, over the last few months. In paragraph 2.4.4:
There are many non-household users who are not businesses, occupiers
of premises for public community functions, arts, education, et
cetera. It would be inappropriate to charge all such customers
as if they were businesses. Let me go on to another section: If
charged on the same basis as other non-household users, they could
face particularly high costs because of the disproportionate effect
of standing charges for low volume users. I could go on and on
and on. As far as I am concerned, the guidance from our side is
very clear; this is eminently fixable and I hope imminently fixable.
Whilst I say it is not for me to direct, and it is not, one of
the benefits of having an independent economic regulator is to
allow them to get on with it, but I think we have made it as clear
as we need to be that we think it is fixable and we hope that
they will fix it between them and the company. It is in the interests
of the end users.
Q249 David Lepper: In answering David
Drew's questions, you have covered some of the ground I wanted
to cover. So that I have it clear in my mind, so far as scout
groups in my area are concerned, Southern Water, who I believe
have not yet come to a conclusion about how they ought to deal
with this issue, ought to be very carefully looking at the outcome
of those negotiations and discussions that you have told us about
this afternoon where companies have managed to find a way of dealing
with this which does not penalise organisations like scout groups.
That is the advice you have given. Added to that, Ofwat do have
a role to play in guiding the water companies towards that kind
of conclusion you are telling us.
Huw Irranca-Davies: Yes, indeed.
I think they will be looking at this with interest, as I am. I
think the clarity of the guidance, some of which I have just read
out, is pretty specific. The fact is that we have three out of
four where, by and large, it has been introduced with a minimal
level of fuss and with an acceptance of the principle of it; the
fact is that if there is a load on the system, that load needs
to be recognised some way or the other but in a proportionate
way. Let me just extend this one facet further. There is an interest
on offer here, I have to say as a former President of the West
Glamorgan Scouts Association—no longer because I had to
pass that on when I stepped up to ministerial role—which
will take us forward a few years for those organisations that
have large grassed areas and so on. Those areas could actually,
with a little bit of help, support and guidance from the Environment
Agency and others, actually develop their own SUDs system so that
they do not put any load on it. I know it is a slightly different
thing but I think there is an opportunity here that we should
be encouraging, and we will do our best to say to Scouts associations,
churches and so on—
Q250 Chairman: Is it the birth of
a new scouting badge called "SUDS", is it?
Huw Irranca-Davies: Why not?
Chairman: We will have them all out there
digging out appropriate areas and we will see the minister in
charge.
Q251 Lynne Jones: We have just recently
completed an inquiry on fuel poverty. In that inquiry we learned
that there are five million households in fuel poverty. Do we
have any similar figures for those that might have difficult paying
their water bills?
Huw Irranca-Davies: We will see
if we get some inspiration on the actual figure. We do know that
the numbers of people who are facing issues of water affordability,
who are what you might term water poor, have increased. From recollection,
it has probably increased from something like 1% to 3%. I may
correct myself in a moment on that. We know the issue of affordability
is become an increasing one. We know that in some ways it is regionally
specific, although that does not mean it is just in one region.
We also know it is specific to certain types of households and
certain types of users. A lot can be done within things such as
the Vulnerable Groups Tariff and those sorts of initiatives where
you focus down to those people who either have specific medical
conditions that require an immense amount of water or, alternatively,
families with children at the poorest end of the spectrum, very
much tying in with what we are trying to do with the child poverty
and family poverty agenda. So there are ways in which we can target
it quite specifically. In her review, Anna Walker has gone on
road shows throughout the UK, including to one of the areas most
impacted by affordability issues, which is the south-west, and
she intends to go back down there I understand. From my brief
discussions with her (and the interim report will be out shortly)
I am hopeful that she will bring forward some quite innovative
ideas on how to tackle this issues, but not necessarily through
voting it into the tax and benefits system. We do have a tax and
benefits system which attacks child poverty, pensioner poverty
and so on. That is one facet. The issue becomes: how can we target
effectively those who are at the receiving end where a proportion
of their income and a large element of that is water bills, not
least in places like the south-west. I think Anna Walker's review
might well flag up some important ways forward for us.
Q252 Lynne Jones: One of the issues
is why should other water charge payers have to subsidise vulnerable
groups. Is that not really a matter for the taxpayer in general,
particularly if it is done on a company basis, as you say, in
a particular area where there is high water poverty because charges
are higher? The other water users are also paying high charges.
Is there not a role here for Government, however innovative you
might be in terms of rising block tariffs or whatever, for having
some kind of tariff? One of the problems with these tariffs is
that they are not generally made known and people have to get
into difficulty with their bills before they actually get help.
Huw Irranca-Davies: You raise
a fair point. We already do target quite effectively those who
are hit by poverty at a general level. There are those who have
real issues across a range of bills within their household to
meet those bills. We can do that through the tax and benefits
system.
Q253 Lynne Jones: You do it for,
say pensioners, but not for other people, say on unemployment
benefit, which is about half what pensioners get, and they do
not get other benefits.
Huw Irranca-Davies: That is why,
as you can sense from what I am saying, I am slightly reluctant
to go down that line or to commit DWP, but let us see what Anna
Walker comes forward with on the idea that we try to bolt somewhere
into the benefits and tax systems issues such as water bills and
so on. Whilst that is a very good and effective way of tackling
the core issues of poverty, it is only one way forward. I mentioned
the Vulnerable Groups Tariff. We know that there is a lot more
that can be done with that. You are right in saying that the uptake
of that is a significant issue. Roughly speaking, we had 16,000
households back in 2006-07 that had benefit from the Vulnerable
Groups Tariff. Last year it was up to 24,000. Defra, Ofwat and
CCW, the consumer body, are now focused on increasing the reach
and penetration of this. Anna Walker is also looking at that,
but she is also looking, I have to say, because it does impact
on the affordability issues, at issues about what we do with tariff
systems, what we do with metering systems. Whether she will bring
forward some more innovative ideas on tariffs or block tariffs
and what you build on to that, I am not quite sure, but let us
wait and see. There may be some quite clever ways to deal with
this issue that rather than taking a blanket approach will target
quite effectively those families and individuals most affected
by a high proportion of their bills going into water payment.
Q254 Lynne Jones: Are there any lessons
to be learned from the energy sector? Obviously one way of reducing
bills, particularly if there is a move toward metering, is to
reduce water consumption. We have recently recommended that there
should be—and I think the Government is going down this
line—an area-based approach. If we are having, for example,
energy efficiency measures, should we not also be looking at ensuring
that the programmes that deliver energy efficiency measures are
also delivering water efficiency measures?
Mr Hurst: I think that is a very
good point. One of the things we know about climate change for
example is that measures that save CO2 quite often also save large
amounts of water; hot water is 5 or 6% of all CO2 I think in the
UK. There are some differences between energy saving and water
saving. I think there are two main ones. If I remember correctly,
the average energy bill is almost £1,000; the average water
bill is £330. So it is not quite the same magnitude. The
other thing of course is that in the water industry we will not
disconnect vulnerable customers or anybody who cannot pay their
bills, whereas there is a different approach in energy. In terms
of absolutely hardship, it is government policy that we will not
even introduce things like trickle valves that I believe are used
in some other countries. The idea of saving water and at the same
time helping people through saving water to lower their bills
is an entirely legitimate one. That is what they do in energy.
I think it is one of the things that Anna Walker is looking at.
Q255 Lynne Jones: The trouble is
with there not being disconnections, there are also the "will
not pay" as opposed to the "cannot pay". Are you
looking at this area as the issue of landlords' responsibilities
and so on?
Huw Irranca-Davies: You are right
to make that distinction. We will have to wait to see what Anna
Walker brings forward, but I know in terms of the road shows that
she has been discussing this idea of rather than having the letter
that lands on the doorstep to the occupier, whoever that may be
and so on, that you fix it to the named individual, the landlord.
She may well have come forward with that or some other ideas as
well. We have to get through this difference between the cannot
payers and the will not payers.
Lynne Jones: I think I have inadvertently
strayed on to another responsibility there, so I will stop.
Q256 David Taylor: I think Lynne
Jones has dealt with most of this. Can I ask if there is recognition
of that kind, would it be possible to incorporate necessary changes
into the Flood and Water Management Bill do you think, depending
on time?
Huw Irranca-Davies: It is not
impossible. Anna Walker's interim review will be out very shortly.
I know that is ministerial speak but it is imminent. The full
report will probably be towards October after the recess. It is
not out of the realms of possibility that if there were significant
issues that we wanted to take forward in legislation, we could
do it. Because the consultation has been so extensive, it is not
out of the realms of possibility.
Q257 Chairman: As a follow up from
that, are you keeping your powder dry as Defra on your opinion
about water metering until you have read Anna Walker's report?
Huw Irranca-Davies: We have already
made clear that we are quite warm towards the idea of metering
for two reasons: one because of what it can do in terms of water
efficiency; and, secondly, also what it can contribute, in combination
with perhaps things like tariffs and so on, to address issues
of affordability, but I do not want to pre-empt Anna's report
in any way. I know she is looking at this. We are aware that there
are companies out there that are already significantly down the
line on metering. There are companies out there with 60, 65, 70%
and more of water meters in place; there are others that are way
back at 30% or, in one or two cases, at zero. Whatever comes out,
I doubt very much that it will be a case of flicking a switch
and saying that within year one or year two everybody will be
compelled to take on meters. I hope and I suspect that what Anna
will bring forward are some quite pragmatic and practical ideas.
The vision we have, which we have expressed previously, for 2030,
and it is worth citing this from the future water document, and
this a quote indirectly, is that we believe we will need near
universal metering before 2030 in water-stressed areas. That is
the important thing as well—water-stressed areas.
Q258 Chairman: So there is a hint
there in the same document about valuing water in a different
way than we have done at the moment but you would see the metering
solution as an important contributory element to valuing water
properly. It does have some perverse results, that if you optimise
the use of water, you start to reduce the cash flow to the water
company and therefore you could exacerbate the second point you
were making, which is that this is a way of dealing with the social
consequences, which are at the heart of Lynne Jones' questions.
You have a perverse circular argument which you are going to have
to deal with.
Huw Irranca-Davies: Yes, and curiously
this is why one of the possible solutions that has been mooted
recently on the issue of affordability, not least in the south-west,
is the idea of some spreading of either the taxation burden or
the water rates burden wider across the country. It is an interesting
idea but it has some potential downsides, and this is certainly
why I would not want to pre-empt any discussion on this subject
to Anna Walker. Some of the potential downsides with that are
that it actually takes away the incentive for a water company
locally within its area to drive down water efficiency, et cetera,
because you are saying that we are going to abrogate this around
the other regions of the nation. It also takes away the issue,
I have to say, in terms of room to pay. Your fundamental point
is right. One of the things we are looking to come out of PRO9
and the wider consultations we have is to get to the point where
we genuinely value water: we value water not because you simply
turn on the taps and it comes through; we value it not only because
of the costs of treatment but because of what we can do there
in terms of climate change, carbon footprint, clever innovation
within the water industry, driving down usage, and so on. It is
not only individual consumers but water companies and others who
need somehow to mark that value much more significantly.
Mr Hurst: This is one of the classic
economic problems of utilities that the short-run cost is very
different to the long-run cost. In the long run, you have the
cost of new reservoirs; you will not be building any in the next
year and therefore if you supply less water, many of your costs
are the same, although even there I noticed that Regina Finn told
you she did not think the water companies had a disincentive to
economise on water. In the long run of course it is very different.
If you do not economise on water, then you are going to need new
reservoirs, and they do not come cheap either. One of the reasons
why we have asked the water companies to do 25-year water resource
management plans is so they can explicitly make this trade-off
between long-term costs and short-term saving.
Q259 Mr Drew: We move on to the Cave
Review. Obviously Martin Cave gave evidence to us. I have to say
that it did seem to me to be a re-run of the privatisation of
the railways if I had been around at that time. Why is it that
the Government is obsessed with competition in this area? I know
there are ways in which you could save money round the fringes
but water is one of those resources that has to be publicly provided
and we have to trust those who provide it for us to do it as reasonably
as possible. What is the benefit of the drive towards more competition?
Huw Irranca-Davies: The proposals
that Martin Cave has brought forward, if we go back to first principles,
are only useful if they provide a benefit to end-users, either
in the short or the longer term. Those end users are individual
consumers, businesses and so on. That has to be the basis from
where we start. The Cave report has clearly come to the conclusion
that some elements of competition—retail separation and
so on—would actually provide benefits to those end users.
In that case, it is something that I think we are quite keen to
explore. In terms of the timing of these various things coming
down the track, we have made sure that Martin Cave's report is
out there in its entirety for consultation rather than in a piecemeal
way so that we can take views on it. Martin Hurst may want to
reply on the economics. Martin is by far the superior economic
expert in this area.
Mr Hurst: I do not detect any
obsession from Government about competition, I have to say.
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