Each district would be run by commissioners, with powers to acquire all of the waterworks within their area, and to manage both them and the rivers for water supply and the prevention of flooding and pollution.

"[3] Toplis's far-sighted ideas were not implemented immediately, but the first moves towards more widespread management of river basins in England and Wales were enshrined in the Land Drainage Act 1930.

It had also recognised that the supply of water to non-domestic consumers was part of an integrated policy, and had introduced the concept of abstraction licensing.

The Secretary of State for the Environment had appointed the Management Structure Committee in 1972, which suggested a two-tier approach, with a regional headquarters and smaller divisional units.

[13] However, they suggested that some external regulation was necessary, as performance judged purely on price could be achieved by reductions in water quality.

[14] The water industry was somewhat different to telecoms and gas, in that there was no national distribution network, and regulation of the environment worked against making profits.

[15] With a general election scheduled to take place in 1987, the Conservative Party manifesto included their intent to privatise the water industry.

The main difference between their plans and the previous discussion paper was the removal of pollution control, land drainage and flood protection from the remit of the companies.

The Act also specified that responsibility for the regulation of the quality of drinking water was with the Secretary of State for the Environment, it defined the role of the National Rivers Authority for the management of pollution and environmental control, and established the Director General of Water Services as the economic regulator.

Price limits were set by the Secretaries of State for the Environment and for Wales, with this duty being taken over by the Director General of Water Services after ten years.