Schedule 2 - Water undertakers’ duties as regards water supply licencees

Part of Water Bill – in a Public Bill Committee at 2:45 pm on 5 December 2013.

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Photo of Dan Rogerson Dan Rogerson The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs 2:45, 5 December 2013

The amendments make changes to the various provisions dealing with Ofwat’s powers to produce rules on charges, including the requirements to consult relevant persons, and the power of Ministers to intervene in Ofwat’s charges rules.

In producing its rules relating to the various charging regimes addressed in the Bill, Ofwat is required to consult relevant persons. Amendments 15 and 22 require Ofwat to specify a consultation period for the proposed rules relating to agreements to adopt water and sewerage infrastructure under clauses 10 and 11. That will ensure that the consultees are aware of the length of time available to make those representations. That mirrors provision made elsewhere in the Bill for other charging regimes.

Amendments 16 and 23 allow for a ministerial veto in relation to Ofwat’s charging rules that relate to agreements for the adoption of water and sewerage infrastructure. That mirrors provisions elsewhere in the Bill for other charging regimes. The amendments specify a period of time within which the directions must be issued, and establish that the rules may not be published before that deadline. The Bill allows Ministers to direct Ofwat not to issue any set of rules within a specified period after its statutory consultation period. It provides a suite of linked duties and powers for Ministers to issue charging guidance—the hon. Member for Dunfermline and West Fife has said that he wishes to explore that as we move through our consideration of the Bill—to Ofwat on matters relevant to all charging regimes covered by the Bill. Ofwat will be required to publish all charging rules in draft and to consult all relevant persons about the draft. The amendments ensure consistency in requiring Ofwat to specify a consultation period for the proposed rules.

Ministers will have a power of veto over all charging rules issued by Ofwat. That will allow them, within 28 days of the conclusion of the statutory consultation period, to direct Ofwat not to issue any sets of rules. Such an intervention could require Ofwat to revise the rules, which must be made in accordance with ministerial guidance. The amendments make clauses 10 and 11 consistent with that approach.