My Lords, I declare my interests as set out in the register. The best proxy for distributable reserves is retained profits. This is the profit and loss reserve on a company’s balance sheet. Company boards are responsible for determining how much of their profit and loss reserves is distributed. The Government have not carried out an exercise to calculate each company’s distributable reserves. Where a company in cash lock-up breaches its licence by paying a dividend, Ofwat will take enforcement action.