Mr David Amess (Southend West, Conservative)

With this it will be convenient to discuss the following:

Amendment No. 104, in

clause 40, page 42, line 31, at end insert—

'(2A) The total payment that may be required of any company pursuant to section 11(1)(c) of the WIA and under this section shall not be increased by more than the amount by which that company is permitted to increase its regulated prices under its appointment.'.

New clause 5—Regulatory methodology—

'After section 2 of the WIA there is inserted—

''2B. Regulatory methodology

(1) The Authority shall prepare and publish a statement of policy with respect to its determination of charges in periodic reviews and interim determinations under all or any of the instruments of appointment of companies as relevant undertakers made by virtue of Part II of this Act.

(2) The Authority's statement of policy under this section shall include a statement of its policy with regard to the following matters—

(a) the carrying out of its duties under this Act insofar as they relate to its determination of charges;

(b) the matters to be taken into account and the methodologies to be applied in its determination of charges; and

(c) the extent to which the performance of functions by persons with powers and duties conferred or imposed by or under this Act or any other enactment are relevant to its determination of charges.

(3) The Authority shall determine charges in periodic reviews and interim determinations under a company's instrument of appointment as a relevant undertaker on the basis of the most recently published statement of policy.

(4) The Authority may revise its statement of policy and where it does so shall publish the revised statement.

(5) Publication under this section shall be in such manner as the Authority considers appropriate for the purpose of bringing the matters contained in the statement of policy to the attention of persons likely to be affected by them and shall not be made less than twelve months before a periodic review.

(6) When preparing or revising its statement of policy under this section, the Authority shall consult relevant undertakers and such other persons as it considers appropriate, subject to the requirements of subsection (7) below.

(7) For the purposes of subsection (6) above—

(a) consultation shall be by way of written notice given by the Authority not less than six months prior to the publication of the statement of policy which it is preparing or revising;

(b) such notice shall state—

(i) the matters which the Authority proposes to publish in its statement of policy and its reasons for including them in the statement; and

(ii) a period of not less than three months within which that person may give written notice of objection with respect to the matters referred to in the notice; and

(c) the Authority shall give each person a reasonable opportunity to make oral representations to it on the matters referred to in the notice.

(8) The Authority shall not issue or publish a statement of policy unless—

(a) no notice of objection to the policy is given to the Authority within the time period specified in its notice under subsection (7); or

(b) if one or more relevant undertakers gives notice of objection to the Authority within that time—

(i) the proportion (expressed as a percentage) of the relevant undertakers who have given notice of objection is less than such percentage as may be prescribed; and

(ii) the percentage given by subsection (9) is less than such percentage as may be prescribed.

(9) The percentage given by this subsection is the proportion (expressed as a percentage) of the relevant undertakers who have given notice of objection, weighted according to their market share in such manner as may be prescribed.

(10) If the conditions referred to in subsection (8) are not met, the Authority shall (within three months of its receipt of the first or only notice of objection) refer the policy to the Competition Commission for review.

(11) Where a reference is made to the Competition Commission under this section, it shall be the duty of the Competition Commission to determine whether the policy which is the subject of the reference operates in a manner best calculated to fulfil the duties of the Authority arising under this Act.

(12) Where a reference is made to the Competition Commission under this section, the Authority shall not prepare or revise its statement of policy other than on the basis of the determinations of the Competition Commission.

(13) The Secretary of State may by regulations make such provision as he considers appropriate for regulating the procedure to be followed with respect to any reference to the Competition Commission under this section.

(14) Without prejudice to the generality of the power conferred by subsection (13) above, regulations under that subsection may, in relation to any such reference, apply (with or without modifications) the provisions of any enactment relating to the references to the Competition Commission under the provisions of this Act, the Fair Trading Act 1973 (c.41) or the Competition Act 1998 (c.41).''.'.

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