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We are committed to the provision of a clear policy framework for the developing retail and upstream markets, and to guiding the way in which Ofwat regulates them. We know from experience that prescribing too much detail in legislation can stifle competition and prevent markets evolving. We responded to pre-legislative scrutiny by revising our approach to the ministerial guidance that we will issue to Ofwat about charging matters. With these amendments, Ministers will now have a duty to produce general guidance on charging matters.
These amendments clarify the hierarchy of charging guidance and charging rules that the Bill will establish. They make it clear that the Government’s guidance can cover all charging matters. Ministerial guidance must cover rules relating to water and sewerage companies’ charges schemes—that is, all charges to customers—and charges in the new competitive markets by water and sewerage undertakers to water supply and sewerage licensees. The amendments also make it absolutely clear that where the Government issue guidance, Ofwat must review and, if appropriate, revise and reissue its charging rules.
Amendments made: 104, in clause 36, page 71, line 34, leave out
‘Guidance relating to rules about’
and insert ‘General guidance on’.
Amendment 105, in clause 36, page 71, line 35, leave out from beginning to end of line 2 on page 72 and insert—
‘(1) The Minister must issue guidance about the principles to be applied by the Authority in determining the provisions of—
(a) rules under section 66E;
(b) rules under section 117I;
(c) rules under section 143B.
(1A) The Minister may issue guidance about the principles to be applied by the Authority in determining the provisions of—
(a) rules under section 40E;
(b) rules under section 51CD;
(c) rules issued in accordance with regulations under section 66M;
(d) rules under section 105ZF;
(e) rules under section 110F;
(f) rules under section 144ZA.
(1B) Guidance under subsection (1) or (1A) may include other guidance about the provisions of any of the rules mentioned in subsection (1) or (1A).
(1C) The Minister may issue guidance about the principles to be applied by the Authority in determining the contents of other documents produced by the Authority about charges that may be imposed by relevant undertakers or water supply or sewerage licensees.
(1D) Guidance under subsection (1C) may include other guidance about the contents of the documents mentioned in subsection (1C).’.
Amendment 144, in clause 36, page 72, leave out lines 4 and 5 and insert
‘when making rules to which the guidance relates (as well as to any guidance relating to those rules issued under another provision of this Act).’.
Amendment 145, in clause 36, page 72, line 5, at end insert—
‘( ) If—
(a) the Minister issues guidance under this section in respect of rules made under a particular provision, and
(b) the Authority, having regard to that guidance, considers that it is appropriate to revise rules made by it under that provision,
the Authority must issue revised rules under that provision.’.
Amendment 106, in clause 36, page 72, line 6, leave out ‘the guidance’ and insert ‘guidance under this section’.
Amendment 107, in clause 36, page 72, line 19, leave out ‘the guidance’ and insert ‘guidance issued under this section’.—(Dan Rogerson.)