Water Act 1989 (c. 15)

(The document as of February, 2008)

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its functions relating to sewage disposal; and

(b)

its functions by virtue of the [1937 c. 40.] Public Health (Drainage of Trade Premises) Act 1937, Part V of the [1961 c. 64.] Public Health Act 1961 and sections 43 to 45 of the [1974 c. 40.] Control of Pollution Act 1974;

"urban development area" means any area so designated under Part XVI of the [1980 c. 65.] Local Government, Planning and Land Act 1980.

74 Control of exercise of trade effluent functions in certain cases

(1) The provisions of the Public Health (Drainage of Trade Premises) Act 1937, Part V of the Public Health Act 1961 and sections 43 to 45 of the Control of Pollution Act 1974 shall have effect in relation to trade effluent to which this section applies subject to the provisions of Schedule 9 to this Act.

(2) This section applies to any trade effluent if--

(a) prescribed substances are present in the effluent or are present in the effluent in prescribed concentrations; or

(b) the effluent derives from a prescribed process or from a process involving the use of prescribed substances or the use of such substances in quantities which exceed the prescribed amounts.

Chapter IV Charging for Services Etc. Provided by Undertakers

75 Powers of undertakers to charge

(1) Subject to the following provisions of this Chapter, the powers of every water undertaker and of every sewerage undertaker shall include power--

(a) to fix charges for any services provided in the course of carrying out its functions and, in the case of a sewerage undertaker, charges to be paid in connection with the carrying out of its trade effluent functions; and

(b) to demand and recover charges fixed under this section from any persons to whom the undertaker provides services or in relation to whom it carries out trade effluent functions.

(2) The powers conferred by subsection (1) above shall be exercisable--

(a) by or in accordance with a scheme under section 76 below; or

(b) by or in accordance with agreements with the persons to be charged;

but paragraph (b) above shall have effect in relation to the exercise of those powers with respect to charges in connection with the carrying out of a sewerage undertaker's trade effluent functions only in so far as provision for the fixing, demanding or recovery of such charges may be contained in an agreement entered into in accordance with section 7 of the [1937 c. 40.] Public Health (Drainage of Trade Premises) Act 1937.

(3) Except in so far as this Chapter otherwise provides, a water undertaker or sewerage undertaker may fix charges under this section by reference to such matters, and may adopt such methods and principles for the calculation and imposition of the charges, as appear to the undertaker to be appropriate.

(4) The powers in relation to which this section has effect shall not be exercised so as to contravene any local statutory provision which expressly provides that no charge shall be made for a particular service.

(5) Nothing in subsections (1) to (4) above or in any scheme under section 76 below shall affect any power of a water undertaker or sewerage undertaker to fix charges under any power conferred otherwise than by virtue of this Chapter.

(6) References in this section to a sewerage undertaker's trade effluent functions are references to its functions under the Public Health (Drainage of Trade Premises) Act 1937, Part V of the [1961 c. 64.] Public Health Act 1961 and sections 43 to 45 of the [1974 c. 40.] Control of Pollution Act 1974.

76 Charges schemes

(1) A water undertaker or sewerage undertaker may make a scheme (in this section referred to as a "charges scheme") which does any one or more of the following, that is to say--

(a) fixes the charges to be paid for any services provided by the undertaker in the course of carrying out its functions;

(b) in the case of a sewerage undertaker, requires such charges as may be fixed by the scheme to be paid to the undertaker where, in the circumstances set out in the scheme--

(i) a trade effluent notice is served on the undertaker under the [1937 c. 40.] Public Health (Drainage of Trade Premises) Act 1937;

(ii) such a consent as is necessary for the purposes of that Act is given by the undertaker; or

(iii) a discharge is made in pursuance of such a consent;

and

(2) The persons who may be required by a charges scheme to pay any charge fixed by virtue of paragraph (b) of subsection (1) above shall be the person who serves the notice, the person to whom the consent is given or, as the case may be, any person who makes a discharge in pursuance of the consent at any time during the period to which, in accordance with the scheme, the charge relates; and a charges scheme which requires the payment of charges where a discharge has been made in pursuance of such a consent as is mentioned in that paragraph may impose--

(a) a single charge in respect of the whole period for which the consent is in force;

(b) separate charges in respect of different parts of that period; or

(3) A charges scheme may--

(a) make different provision for different cases, including different provision in relation to different circumstances or localities; and

(b) contain supplemental, consequential and transitional provision for the purposes of the scheme;

and such a scheme may revoke or amend a previous charges scheme.

(4) Nothing in any charges scheme shall affect--

(a) any power of a water undertaker or sewerage undertaker to enter into such an agreement with any person in any particular case as determines the charges to be made for the services provided to that person by the undertaker; or

(b) the power of a sewerage undertaker to enter into any agreement under section 7 of the Public Health (Drainage of Trade Premises) Act 1937 (agreement as to discharges of trade effluent) on terms that provide for the making of payments to the undertaker.

77 Liability of occupiers etc. for charges

(1) Subject to the following provisions of this section and except in so far as provision to the contrary is made by any agreement to which the undertaker is a party--

(a) supplies of water provided by a water undertaker shall be treated for the purposes of this Chapter as services provided to the occupiers for the time being of any premises supplied; and

(b) sewerage services provided by a sewerage undertaker shall be treated for the purposes of this Chapter as provided to the occupiers for the time being of any premises which--

(i) are drained by a sewer or drain connecting, either directly or through an intermediate sewer or drain, with such a public sewer of the undertaker as is provided for foul water or surface water or both; or

(ii) are premises the occupiers of which have, in respect of the premises, the benefit of facilities which drain to a sewer or drain so connecting.

(2) Subject to subsection (3) below, charges which, under the preceding provisions of this Chapter, are fixed in relation to any premises by reference to volume may be imposed so that a person is made liable in relation to those premises to pay charges for services provided by a water undertaker or sewerage undertaker after that person has ceased to be the occupier of the premises.

(3) A person shall not be made liable by virtue of subsection (2) above for any charges fixed in relation to any premises by any water undertaker or sewerage undertaker, except where--

(a) he fails to inform the undertaker of the ending of his occupation of the premises at least two working days before he ceases to occupy them; and

(b) the charges are in respect of a period ending no later than with whichever of the following first occurs after he ceases to occupy the premises, that is to say--

(i) where he informs the undertaker of the ending of his occupation of the premises less than two working days before, or at any time after, he ceases to occupy them, the twenty-eighth day after he so informs the undertaker;

(ii) any day on which any meter would normally have been read in order for the amount of the charges to be determined;

(iii) any day on which any other person informs the undertaker that he has become the new occupier of the premises.

(4) Where--

(a) any person who is the occupier of any premises to which a supply of water is provided by a water undertaker has served notice on the undertaker for the purposes of section 49(1)(c) above; and

(b) that notice is given otherwise than in connection with that person's ceasing to be the occupier of the premises in a case in which provision is made by virtue of subsection (2) above for a person who has ceased to be the occupier of the premises to be made liable for any charges,

then, notwithstanding that that person continues to be the occupier of those premises, he shall not be liable to the undertaker (otherwise than in pursuance of a demand for a supply made since the service of the notice) for any charges in respect of any supply of water to those premises after whichever is the later of the expiry of the notice and the end of the period of two working days beginning with the service of the notice.

(5) In this section--

(a) any reference to the fixing of charges in relation to any premises by reference to volume is a reference to the fixing of those charges by reference to the volume of water supplied to those premises, to the volume of effluent discharged from those premises, to both of those factors or to one or both of those factors taken together with other factors; and

(b) any reference to two working days is a reference to a period of forty-eight hours calculated after disregarding any time falling on a Saturday or Sunday or on Christmas Day, Good Friday or any day which is a bank holiday in England and Wales under the [1971 c. 80.] Banking and Financial Dealings Act 1971.

78 Provisions relating to charging by volume

(1) Schedule 10 to this Act shall have effect for the purpose of securing the installation of meters and of making other provision in relation to meters and the premises where they are installed.

(2) The Secretary of State may by regulations make such provision, supplementing the provisions of this Chapter, as he considers appropriate with respect to the installation of meters, with respect to the connection, disconnection, use, maintenance, authentication and testing of meters and with respect to any related matters.

(3) Without prejudice to the generality of subsection (2) above, regulations under that subsection may--

(a) regulate the positioning, whether inside or outside the building or other premises in relation to which the meter is to be used, of any meter or of any pipes or apparatus appearing to any water undertaker or sewerage undertaker to be required for the purpose of facilitating the use of any meter;

(b) make any other provision which appears to the Secretary of State to be appropriate with respect to any such pipes or apparatus;

(c) provide for a reading from a meter to be proved in such manner as may be prescribed and for a reading from a meter to be such evidence as may be prescribed of the volume of water supplied to, or of effluent discharged from, any premises;

(d) fix the method of determining the amount of the charges to be paid where it appears that a meter has given, or may have given, an incorrect reading;

(e) require a person who is not a water undertaker or sewerage undertaker to pay the expenses incurred by a water undertaker or sewerage undertaker in doing anything under the regulations or to pay contributions towards those expenses;

(f) provide for the payment of compensation in respect of anything done by a water undertaker or sewerage undertaker under the regulations;

(g) require disputes arising under the regulations to be referred to arbitration;

(h) repeal or amend any local statutory provision.

(4) In this section "meter" means any apparatus for measuring or showing the volume of water supplied to, or of effluent discharged from, any premises.

79 Restrictions on power to make connection and certain other charges

(1) Subject to subsection (2) below, nothing in this Chapter or in any other enactment shall entitle any water undertaker or sewerage undertaker to fix, demand or recover an initial charge for its becoming, or for its taking steps for the purpose of becoming--

(a) the person who provides a supply of water for domestic purposes to any premises; or

(b) the person who provides sewerage services for the purposes of the drainage for domestic purposes of any premises.

(2) Subject to subsection (3) below, nothing in subsection (1) above or in any other enactment shall be construed as prohibiting the fixing, demand or recovery by a water undertaker or sewerage undertaker of--

(a) a charge for the connection to a water supply of premises which have never at any previous time (whether before or on or after the transfer date) been connected to a supply of water provided for domestic purposes by a water undertaker or by any other authority or body which at that time provided supplies of water in the course of carrying out functions under any enactment; or

(b) a charge for the connection to a public sewer of premises which have never at any previous time (whether before or on or after the transfer date) been connected to a sewer used for the drainage for domestic purposes of those premises by a sewerage undertaker or by any other authority or body which at that time provided sewerage services in the course of carrying out functions under any enactment.

(3) Nothing in this Chapter or in any other enactment or in the terms of any agreement under section 18 of the [1936 c. 49.] Public Health Act 1936 (agreements to adopt sewers and works) shall authorise a sewerage undertaker to require any payment to be made to the undertaker in respect of the making by the undertaker of any declaration of vesting under Part II of that Act or in respect of any agreement to make such a declaration.

(4) Nothing in this Chapter or in any other enactment shall authorise a sewerage undertaker to require any payment to be made to the undertaker by a highway authority in respect of the drainage of any highway or the disposal of the contents of any drain or sewer used for draining any highway.

(5) The preceding provisions of this section, so far as they restrict the making of certain charges, are without prejudice--

(a) to enactments by virtue of which a water undertaker or sewerage undertaker may recover expenses incurred by it in carrying out works; and

(b) to the power of any such undertaker, by virtue of section 75(3) above, to fix the amount of any of its other charges by reference to such matters as it thinks appropriate.

(6) The references in this section to domestic purposes, in relation to the drainage of any premises, shall be construed as references to any of the purposes mentioned in subsection (2)(a) of section 71 above.

80 Prohibition on charging by rateable value

(1) Charges and other amounts to which this section applies shall not, by virtue of anything contained in this Chapter, in any local statutory provision, in any scheme under section 76 above or in any agreement entered into on or after the transfer date, be recoverable by a water undertaker or sewerage undertaker from any person if they have been fixed wholly or partly by reference to a rating valuation list or are otherwise determined, whether directly or indirectly, by reference to any value or other amount specified at any time in such a list.

(2) This section applies to--

(a) charges in respect of any services provided at any time after the end of 31st March 2000 by a water undertaker or sewerage undertaker in the course of carrying out its functions; and

(b) amounts of any other description which such an undertaker, in exercise of any power conferred by or under any enactment, requires any person to pay in respect of any period ending after that date or in respect of anything done after that date.

(3) In this section "rating valuation list" means a list which is or has at any time been maintained for the purposes of rating under section 41 or 52 of the [1988 c. 41.] Local Government Finance Act 1988, section 67 of the [1967 c. 9.] General Rate Act 1967 or any other enactment.

81 Exemption from charges for water for fire fighting

(1) Notwithstanding anything in section 75 above or in any scheme under section 76 above or in any agreement as to charges in respect of any supply of water, no charge may be made by any water undertaker in respect of--

(a) water taken for the purpose of extinguishing fires or taken by a fire authority for any other emergency purposes;

(b) water taken for the purpose of testing apparatus installed or equipment used for extinguishing fires or for the purpose of training persons for fire-fighting; or

(2) This section shall not prevent the making of charges in respect of work carried out at the request of or for the benefit of any person receiving a supply of water for the purposes mentioned in paragraph (a) or (b) of subsection (1) above.

(3) This section shall not have the effect, where any water is used or made available for any of the purposes mentioned in paragraph (a) or (b) of subsection (1) above, of requiring a reduction in the charges imposed in respect of the provision for other purposes of the supply from which that water is taken.

(4) In this section "fire authority" has the same meaning as in the [1947 c. 41.] Fire Services Act 1947.

82 Fixing maximum charges for services provided with the help of undertakers' services

(1) The Director may from time to time by order fix maximum charges which a person who is not a water undertaker or sewerage undertaker may recover from another such person in respect of water supplies or sewerage services provided to that other person with the help of services provided by a water undertaker or sewerage undertaker.

(2) For the purposes of this section water supplies or sewerage services are provided to a person with the help of services provided by a water undertaker or sewerage undertaker if--

(a) a facility for that person to have access to a supply of water provided by a water undertaker in pipes, or to make use of sewerage services provided by a sewerage undertaker, is made available to that person otherwise than by the undertaker;

(b) that person is provided with a supply of water in pipes by a person to whom the water is supplied, directly or indirectly, by a water undertaker; or

(c) that person is provided with sewerage services by a person who, for the purpose of providing those services, makes use of sewerage services provided, directly or indirectly, by a sewerage undertaker.

(3) It shall be the duty of the Director to publish any order under this section in such manner as he considers appropriate for the purpose of bringing it to the attention of persons likely to be affected by it.

(4) An order under this section may make different provision for different cases, including different provision in relation to different persons, circumstances or localities, and may fix a maximum charge either by specifying the maximum amount of the charge or by specifying a method of calculating that amount.

(5) Where a person pays a charge in respect of anything to which an order under this section relates and the amount paid exceeds the maximum charge fixed by the order, the amount of the excess shall be recoverable by that person from the person to whom he paid the charge.

Chapter V Ownership and Finances of Successor Companies etc.

83 Initial Government holdings

(1) As a consequence of the vesting in accordance with any scheme under Schedule 2 to this Act of property, rights and liabilities of any water authority in that authority's successor company, that company shall issue such securities of the company as the Secretary of State may from time to time direct--

(a) to such limited company as may (whether before or after the transfer date) have been nominated by the Secretary of State by order made by statutory instrument as the nominated holding company of the successor company; or

(b) to the Secretary of State.

(2) As a consequence of the issue by virtue of any direction under subsection (1) above of any securities of a company to that company's nominated holding company, the latter company shall issue such securities of the nominated holding company as the Secretary of State may from time to time direct--

(a) to the Treasury or the Secretary of State; or

(b) to any person entitled to require the issue of the securities following their initial allotment to the Treasury or the Secretary of State.

(3) The Secretary of State shall not--

(a) make an order nominating any company as the nominated holding company of a successor company; or

(b) give a direction under subsection (1) or (2) above for the issue of securities,

except at a time when the company nominated by the order or, as the case may be, the company which is directed to issue securities is wholly owned by the Crown.

(4) Securities required to be issued in pursuance of this section shall be issued or allotted at such time or times and on such terms as the Secretary of State may direct.

(5) Shares in a company which are issued in pursuance of this section--

(a) shall be of such nominal value as the Secretary of State may direct; and

(b) shall be issued as fully paid and treated for the purposes of the application of the [1985 c. 6.] Companies Act 1985 in relation to that company as if they had been paid up by virtue of the payment to the company of their nominal value in cash.

(6) The Secretary of State shall not exercise any power conferred on him by this section, or dispose of any securities issued or of any rights to securities initially allotted to him in pursuance of this section, without the consent of the Treasury.

(7) Any dividends or other sums received by the Treasury or the Secretary of State in right of or on the disposal of any securities or rights acquired by virtue of this section shall be paid into the Consolidated Fund.

84 Government financial assistance for companies wholly owned by the Crown

(1) Subject to section 92(1) below, the Secretary of State may, with the consent of the Treasury, lend such sums as he thinks fit to any company which is the nominated holding company of a successor company and is for the time being wholly owned by the Crown.

(2) The Secretary of State may, with the consent of the Treasury, guarantee, in such manner and on such conditions as he may think fit, the repayment of the principal of, the payment of interest on and the discharge of any other financial obligation in connection with any sum which is borrowed from any person by any company which--

(a) is a successor company or the nominated holding company of such a company; and

(b) is wholly owned by the Crown at the time when the guarantee is given.

(3) Subject to section 86 below, any loans which the Secretary of State makes to a company under this section shall be repaid to him at such times and by such methods, and interest thereon shall be paid to him at such rates and at such times, as he may, with the consent of the Treasury, from time to time direct.

(4) The Treasury may issue out of the National Loans Fund to the Secretary of State such sums as are required by him for making loans under this section.

(5) Any sums received under subsection (3) above by the Secretary of State shall be paid into the National Loans Fund.

(6) It shall be the duty of the Secretary of State as respects each financial year--

(a) to prepare, in such form as the Treasury may direct, an account of sums issued to him in pursuance of subsection (4) above and of sums received by him under subsection (3) above and of the disposal by him of the sums so issued or received; and

(b) to send the account to the Comptroller and Auditor General not later than the end of the month of August in the following financial year;

and the Comptroller and Auditor General shall examine, certify and report on the account and shall lay copies of it and of his report before each House of Parliament.

85 Transfer of successor company liabilities to holding companies

(1) The Secretary of State may by order made by statutory instrument transfer to that company's nominated holding company the liabilities of a successor company in respect of the principal of any relevant loan.

(2) Where the Secretary of State has made an order under subsection (1) above in respect of the liabilities of any successor company and he considers it appropriate to do so, he may give a direction under this subsection to that company and that company shall, as a consequence of the making of the order, issue such debentures of the company to its nominated holding company as may be specified or described in the direction.

(3) The Secretary of State--

(a) shall not exercise his power to make an order under this section except with the consent of the Treasury; and

(b) shall not make such an order transferring the liability of any company or give a direction under subsection (2) above to any company, except at a time when the company is wholly owned by the Crown.

(4) Subsection (4) of section 83 above shall apply for the purposes of this section as it applies for the purposes of that section.

(5) In this section "relevant loan", in relation to the successor company of a water authority, means any sum borrowed or treated as borrowed by the authority from the Secretary of State or the Public Works Loan Commissioners, being a sum the liability to repay which has vested in the authority's successor company in accordance with any scheme under Schedule 2 to this Act.

86 Conversion of certain loans

(1) The Secretary of State may by order made by statutory instrument extinguish all or any of the liabilities of the nominated holding company of a successor company in respect of the principal of any loan of either of the following descriptions, that is to say--

(a) a loan made to that company under section 84 above;

(b) a loan the liability to repay the principal of which has been transferred to that company under section 85 above;

and the assets of the National Loans Fund shall accordingly be reduced by amounts corresponding to any liabilities so extinguished.

(2) An order made under subsection (1) above in respect of any loan the liability to repay the principal of which was transferred to the nominated holding company of a successor company under section 85 above may extinguish all or any of the liabilities of that successor company under debentures issued in respect of the transfer under subsection (2) of that section.

(3) Where the Secretary of State has made an order under subsection (1) above and he considers it appropriate to do so, he may give a direction under this subsection to any nominated holding company whose liabilities are extinguished by the order and that company shall, as a consequence of the making of the order, issue such debentures of the company as may be specified or described in the direction--

(a) to the Treasury or the Secretary of State; or

(b) to any person entitled to require the issue of the debentures following their initial allotment to the Treasury or the Secretary of State.

(4) The Secretary of State shall not--

(a) make an order under subsection (1) above extinguishing the liability of any company; or

(b) give a direction under subsection (3) above for the issue of debentures,

except at a time when the company whose liability is extinguished by the order or, as the case may be, the company which is directed to issue debentures is wholly owned by the Crown.

(5) Except as may be agreed between the Secretary of State and a company which is directed to issue debentures in pursuance of this section--

(a) the aggregate of the principal sums payable under the debentures to which the direction relates shall be equal to the aggregate of the sums the liability to repay which is extinguished by the order; and

(b) the terms as to the payment of the principal sums payable under the debentures to which the direction relates, and as to the payment of interest thereon, shall be the same as the corresponding terms of the loans specified in the order.

(6) For the purposes of subsection (5) above any express or implied terms of a loan shall be disregarded in so far as they relate to the early discharge of liabilities to make repayments of principal and payments of interest.

(7) Subsection (4) and subsections (6) and (7) of section 83 above shall apply for the purposes of this section as they apply for the purposes of that section.

87 Government investment in securities of the nominated holding companies

(1) The Treasury or, with the consent of the Treasury, the Secretary of State may at any time acquire--

(a) securities of the nominated holding company of a successor company; or

(b) rights to subscribe for any such securities.

(2) The Secretary of State shall not dispose of any securities acquired under this section without the consent of the Treasury.

(3) Any expenses incurred by the Treasury or the Secretary of State in consequence of the provisions of this section shall be paid out of money provided by Parliament.

(4) Any dividends or other sums received by the Treasury or the Secretary of State in right of, or on the disposal of, any securities or rights acquired under this section shall be paid into the Consolidated Fund.

88 Exercise of functions through nominees

(1) The Treasury or, with the consent of the Treasury, the Secretary of State may for the purposes of section 83, 86 or 87 above appoint any person to act as the nominee, or one of the nominees, of the Treasury or, as the case may be, of the Secretary of State; but--

(a) the issue in pursuance of section 83 above of securities of a successor company to any nominee of the Secretary of State appointed for the purposes of that section;

(b) the issue in pursuance of section 83 or 86 above of securities of such a company's nominated holding company to such nominee of the Treasury or the Secretary of State as is appointed for the purposes of that section or to any person entitled to require the issue of the securities following their initial allotment to any such nominee; and

(c) the acquisition by any nominee of the Treasury or the Secretary of State who is appointed for the purposes of section 87 above of any securities or rights under that section,

shall be in accordance with such directions as may be given from time to time by the Treasury or, with the consent of the Treasury, by the Secretary of State.

(2) Any person holding any securities or rights as a nominee of the Treasury or the Secretary of State by virtue of the preceding provisions of this section shall hold and deal with them (or any of them) on such terms and in such manner as the Treasury or, with the consent of the Treasury, the Secretary of State may direct.

89 Target investment limit for Government shareholding

(1) The following provisions of this section shall apply separately in relation to each company which is the nominated holding company of a successor company.

(2) As soon as he considers it expedient and, in any case, not later than six months after the company ceases to be wholly owned by the Crown, the Secretary of State shall by order fix a target investment limit in relation to the aggregate of the shares in the company which are for the time being held, by virtue of any provision of this Chapter, by any of the following, that is to say, the Treasury, the Secretary of State or any nominee of the Treasury or the Secretary of State (in this section referred to as "the Government shareholding").

(3) The target investment limit for the Government shareholding in the company shall be expressed as a proportion of the voting rights which are exercisable in all circumstances at general meetings of the company (in this section referred to as "the ordinary voting rights").

(4) The first target investment limit fixed under this section for the Government shareholding in the company shall not exceed, by more than 0.5 per cent of the ordinary voting rights, the proportion of the ordinary voting rights which is in fact carried by the Government shareholding in the company at the time when the order fixing the limit is made.

(5) The Secretary of State may from time to time by order fix a new target investment limit for the Government shareholding in the company in place of the one previously in force under this section; but--

(a) any new limit must be lower than the one it replaces in relation to the company; and

(b) an order under this section may only be revoked by an order fixing a new limit.

(6) It shall be the duty of the Treasury and of the Secretary of State--

(a) so to exercise their powers under section 87 above, any power to dispose of any shares held by virtue of any provision of this Chapter and their power to give directions to their respective nominees as to secure that the Government shareholding in the company does not carry a proportion of the ordinary voting rights exceeding any target investment limit for the time being in force under this section in relation to the company; and

(b) not at any time on or after the fixing of the first target investment limit in relation to the company to exercise any power to acquire, or to authorise any nominee to acquire, any shares in the successor company of which the company is the nominated holding company.

(7) Notwithstanding subsection (6) above but subject to subsection (8) below, the Treasury or the Secretary of State may take up, or direct any nominee of the Treasury or of the Secretary of State to take up, any rights for the time being available to them or him, or to the nominee--

(a) as an existing holder of shares or other securities of the company; or

(b) by reason of the rescission of any contracts for the sale of any such shares or securities.

(8) If, as a result of anything done under subsection (7) above, the proportion of the ordinary voting rights carried by the Government shareholding in the company at any time exceeds the target investment limit for the time being in force under this section in relation to the company, it shall be the duty of the Treasury or, as the case may be, the Secretary of State to comply with subsection (6) above as soon after that time as is reasonably practicable.

(9) For the purposes of this section the temporary suspension of any of the ordinary voting rights shall be disregarded.

(10) The power to make an order under this section shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.

90 Responsibility for listing particulars of nominated holding companies

(1) Where--

(a) the same document contains listing particulars for securities of two or more nominated holding companies; and

(b) any person's responsibility for any information included in the document is stated in the document to be confined to its inclusion as part of the listing particulars for securities of any one of those companies,

that person shall not be treated as responsible for that information in so far as it is stated in the document to form part of the listing particulars for securities of any other of those companies.

(2) Sections 150 and 154 of the 1986 Act (advertisements etc. in connection with listing applications) shall have effect in relation to any information issued for purposes connected with any securities of a nominated holding company as if any reference to a person's incurring civil liability included a reference to any other person being entitled, as against that person, to be granted a civil remedy or to rescind or repudiate any contract.

(3) In this section--

"the 1986 Act" means the [1986 c. 60.] Financial Services Act 1986;
"listing particulars" means any listing particulars or supplementary listing particulars within the meaning of the 1986 Act;
"responsible" means responsible for the purposes of Part IV of the 1986 Act and "responsibility" shall be construed accordingly.

91 Statutory accounts of the group

(1) For the purposes of any statutory accounts of a water authority's successor company--

(a) the vesting effected in accordance with any scheme under Schedule 2 to this Act shall be taken--

(i) to have been a vesting in that company of all the property, rights and liabilities to which that authority was entitled or subject immediately before the end of their last accounting date and which, at that time, were not property, rights and liabilities relating to Part III functions; and

(ii) to have been effected immediately after that date;

and

(b) the value of any asset and the amount of any liability of that authority which is taken by virtue of paragraph (a) above to have been vested in that company shall be taken to have been the value or (as the case may be) amount assigned to that asset or liability for the purposes of the corresponding statement of accounts prepared by that authority in respect of the complete accounting year ending with that date.

(2) For the purposes of any statutory accounts of a water authority's successor company the amount to be included in respect of any item shall be determined as if the company had done anything not relating to Part III functions which has been done by that authority (whether by way of acquiring, revaluing or disposing of any asset or incurring, revaluing or discharging any liability, or by carrying any amount to any provision or reserve, or otherwise).

Accordingly (but without prejudice to the generality of the preceding provision) the amount to be included from time to time in any reserves of a water authority's successor company as representing the company's accumulated realised profits shall be determined as if any profits realised and retained by that authority had been realised and retained by the company.

(3) For the purposes of any statutory accounts of the nominated holding company of a successor company--

(a) a successor company which becomes a subsidiary of the holding company in the course of an accounting reference period of that successor company shall be assumed to have become such a subsidiary at the beginning of that period; and

(b) the value, at the time of its issue, of any security issued to the holding company in pursuance of section 83 or 85 above shall be taken--

(i) in the case of a share, to have been equal to its nominal value; and

(ii) in the case of a debenture, to have been equal to the principal sum payable under the debenture.

(4) For the purposes of this section the question whether any property, right or liability of a water authority, or anything done by a water authority, relates to Part III functions shall be determined in accordance with such principles for determining whether anything so relates as the Secretary of State--

(a) considers appropriate to apply in the case of that authority's successor company; and

(b) has notified to that company in writing.

(5) References in this section to the statutory accounts of a company are references to any accounts prepared by the company for the purposes of any provision of the [1985 c. 6.] Companies Act 1985 (including group accounts); and in this section--

"accounting reference period" has the same meaning, in relation to a successor company, as in that Act;
"complete accounting year," in relation to a water authority, means an accounting year of the authority ending on 31st March;
"the last accounting date", in relation to any water authority, means the last day of the last complete accounting year of that authority to end before the transfer date; and
"Part III functions", in relation to a water authority, means the functions of that authority which are transferred to the Authority by virtue of this Act or correspond to any functions assigned to the Authority under this Act.

92 Temporary restrictions on borrowings etc. by the group

(1) The aggregate amount outstanding in respect of the principal of the relevant borrowing of a group to which a successor company belongs shall not, at any time when the company is wholly owned by the Crown, exceed £1,400 million or such greater sum, not exceeding £1,800 million, as the Secretary of State may specify by order made by statutory instrument.

(2) The power to make an order under subsection (1) above shall include power to specify different amounts in relation to different groups; and no order shall be made under that subsection unless a draft of the order has been laid before the House of Commons and has been approved by a resolution of that House.

(3) If articles of association of a successor company or of such a company's nominated holding company confer on the Secretary of State powers exercisable with the consent of the Treasury for, or in connection with, restricting the sums of money which may be borrowed or raised during any period by the group to which that company belongs, those powers shall be exercisable in the national interest notwithstanding any rule of law and the provisions of any enactment.

(4) For the purposes of subsection (3) above an alteration of the articles of association of a successor company or of such a company's nominated holding company shall be disregarded if the alteration--

(a) has the effect of conferring or extending any such power as is mentioned in that subsection; and

(b) is made at a time when that company has ceased to be wholly owned by the Crown.

(5) In this section--

"group", in relation to a successor company, means that company's nominated holding company and all of the nominated holding company's subsidiaries (including the successor company and its subsidiaries) taken together; and
"relevant borrowing", in relation to a group to which a successor company belongs, means--
(a)
such loans made or treated as made to any company in the group, including loans treated by virtue of the issue of debentures in pursuance of this Act as having been made to any such company, as are not loans made or treated as made by one company belonging to the group to another such company; and
(b)
any sums borrowed or treated as borrowed by local authorities in respect of the repayment of which, or the payment of interest on which, the successor company is required to make contributions by virtue of the transfer of any liability in accordance with a scheme under Schedule 2 to this Act.

(6) Where any amount outstanding in respect of the principal of any relevant borrowing of a group--

(a) is treated as repaid or extinguished in connection with the issue of any securities of a company belonging to that group; or

(b) would fall to be so treated, in the case of an extinguishment under section 86 above, if the Secretary of State had given a direction under subsection (3) of that section,

that amount shall be deemed for the purposes of this section to continue to be outstanding except to the extent that any amount payable by the company by reason of the issue of securities in connection with the repayment or extinguishment itself falls to be treated for the purposes of this section as an amount outstanding in respect of the principal of any relevant borrowing of the group.

93 Reserves of the successor companies

(1) Where the Secretary of State, at any time before the company ceases to be wholly owned by the Crown, so directs in relation to any successor company, such sums as may be specified in the direction shall, instead of being applied in any other way, be carried by the company to a reserve for the purposes of this section.

(2) A company having a reserve for the purposes of this section shall not apply it except in paying up unissued shares of the company to be allotted to members of the company as fully paid bonus shares.

94 Application of Trustee Investments Act 1961 in relation to investment in the nominated holding companies

(1) Subsection (2) below shall have effect for the purpose of applying paragraph 3(b) of Part IV of Schedule 1 to the [1961 c. 62.] Trustee Investments Act 1961 (which provides that shares and debentures of a company shall not count as wider-range and narrower-range investments respectively within the meaning of that Act unless the company has paid dividends in each of the five years immediately preceding that in which the investment is made) in relation to investment, during the first investment year or any following year, in shares or debentures of a company which is the nominated holding company of a successor company.

(2) The company shall be deemed to have paid a dividend as mentioned in the said paragraph 3(b)--

(a) in every year preceding the first investment year which is included in the relevant five years; and

(b) in the first investment year, if that year is included in the relevant five years and that company does not in fact pay such a dividend in that year.

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