Mr. Douglas Millican:

I will kick off with the Scottish-specific questions. The way charges are calculated is straightforward in the sense that for any given six-year period, which used to be a five-year period, we have a service to deliver and a whole set of improvements we need to make through investment that are set for us through a process of ministerial direction reflecting the priorities of our customers and water quality and environmental regulators. We prepare a business plan as to what we think that will take and what it will cost and we then go through a process to agree that with our economic regulator and customers. Then what is called the "determination" is set. That sets the maximum charges we can levy on our customers each year for the next six years. It is that and that alone that determines what goes into any individual's bill. It has nothing to do with local authority finance raising at all. It is purely through a discrete water process.

In terms of the issue of charging and the European Commission, that would be handled between the Commission and the Scottish Government rather than with Scottish Water. However, I am certainly not aware of any particular pressure on the Scottish Government around our arrangements for charging. To pick up the last question on the transfer I need to go back 21 years ago to April 1996 when water transferred from local authorities to Scottish Water. What happened then was that it was a clean transfer of all the assets, rights and liabilities, including any loan debt. At that point, it was transferred from the then 12 regional authorities into three regional water authorities.