Select Committee on Delegated Powers and Regulatory Reform Twelfth Report


80 Transfer of discharge consents

New 6A to WRA Schedule 10 Paragraph 11

Power conferred on:    Secretary of State

Power exercisable by:    Statutory Instrument

Parliamentary procedure:    Negative Resolution

It is proposed to create a power for the Secretary of State to make regulations making provision about the information required if discharge consents are to be transferred from one consent holder to another under paragraph 11 of Schedule 10 to the Water Resources Act 1991. It is submitted that regulations governed by the negative resolution procedure is appropriate to allow for changes in the information required.

TRADE EFFLUENT CONSENTS

81 Trade effluent consents

New Section 139(1)(a) WIA

Power conferred on:    Secretary of State

Power exercisable by:    Statutory Instrument - order

Parliamentary procedure:    Negative Resolution

It is proposed to give powers to the Secretary of State to make orders that would clarify the trade effluent consenting regime in respect of whether or not discharges to sewers resulting from different types of activity need to be regulated by the sewerage undertakers.

The proposal would repeal the section 139 order making power. It would be replaced with a new order making power of a similar nature and extent, but enabling a greater ability to deal with matters on a more finely tuned basis. This is by allowing that the Secretary of State could modify the meaning of "trade effluent" and "trade premises" for the purpose of the trade effluent consent regime under the Water Industry Act 1991. The overall effect of this measure will result in better regulation of the trade effluent discharge process by bringing under control the discharge of small volumes of potentially harmful substances to the water environment.

Part 4 - Supplementary

Part 4 of the Bill deals with devolution, consequential amendments, supplementary and transitional provisions and powers to make orders and regulations.

94 Specific transitional and transitory provisions

Power conferred on:    Secretary of State

Power exercisable by:    Statutory Instrument

Parliamentary procedure:    Negative Resolution

This clause provides for very specific transitional and transitory provisions. Where a licence is granted under such transitional arrangements, then one effect of this clause is that the Agency would be freed from certain pre-existing statutory limitations, for example, the obligation not to derogate from other abstractor's protected rights. This does not mean that no such limitations will apply. A list of the provisions which are to be disapplied in this way is set out in subsection (5). In the unlikely event that other enactments would provide a similar obstacle to giving proper effect to this Bill, the Secretary of State is given a power which would enable her to extend that list. This power is therefore a very limited one, and given its highly technical nature and the circumstances in which it may be used, it is made subject to the negative resolution procedure.

95 Powers to make further supplementary, consequential and transitional provision, etc

Power conferred on:    Secretary of State

Power exercisable by:    Statutory Instrument

Parliamentary procedure:    Negative Resolution

Clause 95 [j0281d] provides a power to make regulations for such supplementary, incidental or consequential provision, or such transitory, transitional or saving provision as the Secretary of State considers necessary or expedient. To the extent that this power includes provision to amend primary legislation, then it is a "Henry VIII" power. It should be read with clause 96 [j303] which provides general provisions in respect of regulations under the Bill.

It is proposed that regulations made under this power should be subject to the negative, rather than affirmative, resolution procedure. We are aware that, in so far as the power allows for incidental, consequential and similar provision to be made, then this would not normally be the Committee's expectation. The reasons for this choice are set out below.

In so far as this power enables transitory, transitional or saving provision to be made, it is fairly standard in form. Such provision is normally made by regulations under the negative resolution procedure, and it is appropriate that the same should be the case here.

The wording of the power as it relates to supplementary, incidental and consequential provision is also familiar, as is the choice of the negative resolution procedure (see, e.g., Enterprise Act 2002, s. 277; Health and Social Care Act 2001, s. 65). The provisions to which the power applies are very complex, and highly technical. They themselves amend already highly technical statutes. The provisions also relate to both economic regulation of the water industry and to the regulation of water resources within diverse and unpredictable local and regional contexts. A wide range of consequential amendments will be needed to existing legislation, which may have to be adapted for local circumstances, particularly as pressures on water resources change. To have included all these matters on the face of the Bill, even if they could be predicted in detail, would have substantially increased the Bill's length and complexity, and would have taken up further Parliamentary time. When provision is made, it too will be highly complex, and it will not involve matters of principle but matters of technical detail. With concerns of Parliamentary time in mind, it is appropriate to make the power subject to the negative resolution procedure. This is so even where the power is exercised to amend or repeal any enactment since such provision will arise in consequence of provisions of this Bill. Similar concerns informed section 109 of the Utilities Act 2000.

96 Regulations and orders

Power conferred on:    Secretary of State

Power exercisable by:    Statutory Instrument

Parliamentary procedure:    Negative Resolution

Clause 96 sets out that powers to make orders and regulations under this Act are exercisable by statutory instrument and the manner in which such powers may be exercised. A negative resolution procedure has been considered appropriate because this power is likely to address a number of detailed and technical amendments, many of which are likely to have local effect.

97 Interpretation, commencement, short title, and extent

Power conferred on:    Secretary of State

Power exercisable by:    Statutory Instrument

Parliamentary procedure:    Negative Resolution

Clause 97 allows the Secretary of State provide by order a particular date on which this Act shall come into force.

SCHEDULES TO THE BILL

Schedule 2 — The Consumer Council for Water

Paragraph 12 (4)

Power conferred on:    Secretary of State

Power exercisable by:    Guidance

Parliamentary procedure:    Nil

Regional Committees of the new Consumer Council for Water are to be set up. The relevant authority (the Secretary of State or, where appropriate NAW) can give guidance as to the appointment of members to the Regional Committees. It is submitted that this is an appropriate safeguard.

Schedule 4 — Licensing of water suppliers

Section 17A (Subsection 10)

Power Conferred on:    Authority, with approval by the Secretary of State

Power exercisable by:    Guidance

Parliamentary Procedure:    None

Section 17A establishes that new water suppliers can only supply non-household premises consuming above a certain consumption threshold of water. In order to assess these factors, first the water supplier needs to define the premises it is supplying. Section 17A (10) enables the Authority, with the approval of the Secretary of State (after consultation with the Assembly), to issue guidance on what factors are to be taken into account in deciding what constitutes a premises.

Definitions of the exact extent of a single premises are essential to the question of eligibility of supply to that premises. Guidance on how to define a premises has to be very detailed but also has to remain flexible to allow for unforeseen circumstances and developing situations. The Authority will be regulating this activity and will give practical guidance so that those operating in the market will have a clear idea of what the view of the Authority is in relation to the wide range of circumstances that may arise. For this reason such guidance is not best suited to primary legislation. The guidance will be developed by the Authority, with approval by the Secretary of State to ensure consistency with other policy areas.

Section 17C

Power Conferred on:    Secretary of State/Assembly

Power exercisable by:    Regulation

Parliamentary Procedure:    Negative Procedure

Section 17A(3) establishes that new water suppliers can only supply non-household premises using above a certain consumption threshold. Section 17C enables the Secretary of State to make regulations to define whether a person has his home in (part of) the premises. The Secretary of State will also define what factors can be taken into account in determining the principal use of the premises if they are mixed in function.

The National Assembly for Wales is to have corresponding powers to make regulations in relation to premises supplied by distribution systems wholly or mainly in Wales. The Secretary of State's powers apply to all other customers

Deciding whether the principal use of a premises is household or non-household is essential to the question of eligibility for supply by water suppliers and supply to a household by a licensed supplier will be a criminal offence under the new provisions. New section 17C (Meaning of household premises) defines "household premises" for the purpose of proscribing supply to such premises by licensed water suppliers. However, it will be very difficult to predict all possible eventualities or circumstances that we will need decide either are or are not household premises for these purposes. It is a matter of practical regulation. Because it is appropriate to retain flexibility regarding definitions for a criminal offence to ensure no premises is unwarrantedly excluded from, or included in the competitive market, the Bill makes provision for the Secretary of State/National Assembly for Wales to make regulations so that we have certainty in difficult cases.

Section 17D (Subsections 3 - 6)

Power Conferred on:    Authority

Power exercisable by:    Guidance

Parliamentary Procedure:    None

Section 17D describes the threshold eligibility requirement. Subsections 3-6 empowers the Authority, subject to the approval of the Secretary of State (after consultation with the Assembly) to issue guidance on how to estimate quantities of water supplied to a premises in order to assess eligibility. Guidance will include the factors to be taken into account, assumptions and methods of calculation.

Clarity and consistency in estimating quantity of water supplied to a premises will be essential in making sure licensees establish the eligibility of customers without frequent recourse to the Authority for determination. Guidance on how to estimate consumption will have to be clear whilst remaining flexible to allow for unforeseen circumstances and developing situations. There may for instance be a questions as to how the estimated quantity should be arrived at for new premises. This is essentially a regulatory matter not appropriate for Parliamentary scrutiny. The guidance will be developed by the Authority for the purposes of regulating this activity, with the Secretary of State ensuring that the approach is consistent with other policy concerns.

Section 17D (Subsection 7)

Power conferred on:    Secretary of State/Assembly

Power exercisable by:    Regulations/Statutory Instrument.

Parliamentary procedure:    Negative Procedure.

Section 17D (subsection 7) enables the Secretary of State to make regulations that to provide that the circumstances in which a licensed water supplier will not be treated as entering into a new undertaking with a customer for the purposes of section 17D (2).

This is to provide for cases where there is no real change in the supply relationship but a new contract is needed - for instance on a corporate re-organisation.. We do not want the eligibility threshold test to be reapplied where it is inappropriate to do so and do not think it possible to spell out every single circumstance where this may occur.

The National Assembly for Wales is to have corresponding powers to make regulations regarding entering into new undertakings for licensed suppliers using undertaker's distribution systems wholly or mainly in Wales. The Secretary of State's powers apply to all other customers.

Section 17D (Subsections 8-13)

Power conferred on:    Secretary of State/Assembly

Power exercisable by:    Order/Statutory instrument.

Parliamentary procedure:    Affirmative resolution.

Section 17D subsection 8 enables the Secretary of State to alter the level of the eligibility threshold by Order. This power permits the Secretary of State to modify the eligibility consumption threshold for customers of licensees. A Statutory Instrument made by the Secretary of State under this clause can only be made if approved by an affirmative resolution of each House of Parliament

The National Assembly for Wales is to have corresponding powers to change the eligibility threshold for customers supplied by distribution systems wholly or mainly in Wales. The Secretary of State's powers apply to all other customers.

The Secretary of State is likely to exercise this power if, upon experience of the impact in practice of proposed legislation on the Government's objectives for the water industry, it is considered that the existing threshold needs adjustment. Such adjustment will not apply retrospectively to existing customers of licensees.

Before proposing an amendment to the threshold, the Secretary of State (or NAW) must consult the Authority and other persons as the Secretary of State (or NAW) considers appropriate.

The power has been sought as part of secondary legislation to allow flexibility in adjusting the threshold without resorting to primary legislation. Such flexibility may be required in order to react more quickly to the impacts of competition, which to an extent are unpredictable. The level of the threshold is likely to have a significant impact on the water industry and therefore the power will only be exercised in the light of consultation with all relevant parties and with the affirmative resolution of both Houses of Parliament. Power is only sought to adjust the level of the threshold, but the basis for measuring the threshold remains in primary legislation.

Precedents for these powers to amend eligibility thresholds exist in other legislation. The Gas Act 1986, Section 8A allows the Secretary of State to make an order amending the threshold for eligibility for supply by licensed gas suppliers. This is analogous to the proposed clause in the Water Bill. The Water Industry Act 1991 Section 7 (6) (as inserted by the Competition and Services (Utilities) Act 1992) also allows the Secretary of State to make regulations regarding the eligibility thresholds of premises receiving supplies of water from undertakers.

Section 17F (Subsection 2-5)

Power conferred on:    Secretary of State

Power exercisable by:    Regulation/Statutory instrument.

Parliamentary procedure:    Negative Procedure.

Section 17F describes the procedure for granting water supply licences. The Secretary of State may prescribe the manner, timing and form of application, as well as the procedures for refusal of the application. The Secretary of State may also by the provision disapply any of the application procedures normally due to new applicants.

The power to determine the manner of applications for water supply licences will ensure that licensing application follows clearly established time frames and procedures. These will include times set out for consultation and targets for reply to the applicants as well as what sort of notice about the application the Authority will have to publish and what it should contain. As the Authority's experience of the licensing process develops it may be necessary to make minor changes to the timing of applications and to the details or manner of publication of applications. This will be allowed by this power. Precedents for powers to prescribe licence application procedures are found in the Gas Act 1986 (Section 7B) and the Electricity Act 1989 (Section 6A). Disapplication will remove onerous demands on applicants in certain cases. As an example, when a combined licensed water supplier ceases to put water into the undertaker's network and then supplies its customers only from wholesale water bought from the undertaker, it may want to give up its supplementary authorisation (to put water into the network). It may not be appropriate to require it to go through the full licensing application process achieve this.

Section 17H (Subsection 9)

Power Conferred on:     Secretary of State

Power exercisable by:    Direction.

Parliamentary Procedure:    None.

Subsection (1) of clause 17H provides that such conditions as may be determined by the Secretary of State (having consulted the Assembly), and published by him shall be standard conditions of licences for all water supply licences of the kind in question. The Secretary of State must determine and publish such conditions before the first licence of the kind in question is issued. Licence conditions are complex and technical, and it would not be appropriate to set them out in primary legislation. Drafts of the proposed standard conditions will be published for consultation, and all comments will be taken into account before the conditions are finalised. This follows the precedent laid down in the Utilities Act. The power of the Secretary of State to determine standard conditions lapses once licences are issued. Standard conditions will normally be included in all licences issued but the Authority is able to decide not to include a standard condition in a particular case. A power is included for the Secretary of State to direct the Authority not to modify or exclude a standard licence condition when issuing a licence. The Secretary of State will be authorised to direct the Authority not to modify or exclude (part of) a licence condition if he sees fit, as long as this is done within the notice period announced by the Authority for consultation on the modification/exemption.

The Authority in making its decisions about excluding or modifying licence conditions a licence will have regard to its role in regulating competition. The Secretary of State has regard to wider concerns for the water industry, such as environmental or social concerns and may decide that certain exclusions or modifications are incompatible with the wider public interest. It is therefore necessary to enable the Secretary of State to give directions to prevent the exclusions or modifications to be made under these conditions. A similar power exists in section 8 of the Gas Act 1986 as substituted by Section 8 of the Gas Act 1995.

Section 17I (Subsection 5)

Power conferred on:    Secretary of State

Power exercisable by:    Direction

Parliamentary procedure:    None

Power for the Secretary of State to direct the Authority not to modify or exclude a licence: Licences to supply water will generally have the same conditions, depending on the type of licence. In some cases the Secretary of State, or more generally, the Authority, will modify by agreement the licence of a particular licensed water supplier, as long as this does not give it an advantage or disadvantage with respect to other licensed suppliers. The Secretary of State will be authorised to direct the Authority not to modifying a licence if he sees fit, as long as this is done within the notice period announced by the Authority for consultation on the modification/exemption.

The Authority in making its decisions about modifying a licence will have regard to its role in regulating competition. The Secretary of State has regard to wider concerns for the water industry, such as environmental or social concerns and may decide that certain exclusions or modifications are incompatible with the wider public interest. It is therefore necessary to enable the Secretary of State to give directions to prevent the exclusions or modifications to be made under these circumstances. A similar power exists in section 23 of the Gas Act 1986 as substituted by Schedule 3 of the Gas Act 1995.

Section 17J (Subsection 5)

Power Conferred on:    Secretary of State

Power exercisable by:    Direction

Parliamentary Procedure:    None

Power for the Secretary of State to direct the Authority not to modify a standard licence condition: Licences to supply water will generally have the same standard conditions, depending on the type of licence. In some cases the Secretary of State, or more generally, the Authority, will modify a standard condition (for all licences of that type), as long as this does not give any licensee particular advantage or a disadvantage with respect to other licensees. The Secretary of State will be authorised to direct the Authority not to modify a licence condition if he sees fit, as long as this is done within the notice period announced by the Authority for consultation on the modification/exemption.

The Authority in making its decisions about modifying licence conditions will have regard to its role in regulating competition. The Secretary of State has regard to wider concerns for the water industry, such as environmental or social concerns and may decide that certain modifications are incompatible with the wider public interest. It is therefore necessary to enable the Secretary of State to give directions to prevent the modifications to be made under these conditions. A similar power exists in section 23 of the Gas Act 1986 as substituted by Schedule 3 of the Gas Act 1995.

Section 17J (Subsection 6 to 11)

Power conferred on:    Secretary of State

Power exercisable by:    Order/Statutory instrument

Parliamentary procedure:    Affirmative resolution

Section 17 J enables the Secretary of State to make an order regarding modification of the water suppliers' licence standard conditions. Licences issued to licensed water suppliers refer to a series of standard conditions, modification of which will apply to all relevant licensees. This power permits the Secretary of State to make regulations that will specify the proportion of relevant licence holders required before standard conditions can be modified.

In other utilities' legislation secondary instruments are the means by which flexibility is built into the modification of distribution or supply licences. Such instruments contain definitions, voting rules, a description of what level of objection is required to block a modification and a method of weighting of the objections put forward by the licensees, depending on their customer numbers, volume of supply etc.

The Secretary of State will exercise this power in the first instance in order to develop the methodology for modification of licences. The regulation will be drafted after consulting the National Assembly for Wales and laid before Parliament after a full consultation process with relevant stakeholders. Licence holders will know that before voting rules can be changed an affirmative order is required.

A Statutory instrument made under this clause can only be made if approved by an affirmative resolution of each House of Parliament.

Flexibility in the methodology for making modifications to licences is required in order to make provision for changes in numbers of licensees as the market develops. As numbers of licensees increase the levels of objection required to block a modification may need to be changed. As the market develops it may also become clear that modified weighting systems may need to reflect changes in patterns of customers or of the sorts of activities of the licensed water supplier.

Precedents for the Secretary of State to make orders regarding standard condition modification rules already exist in legislation for the gas and electricity markets (Section 23 of the Gas Act 1986 as inserted by section 82 of the Utilities Act 2000, section 11A of the Electricity Act 1989 as inserted by section 35 of the Utilities Act 2000).

Section 17K (subsection (6))

Power conferred on:    Secretary of State

Power exercisable by:    Direction

Parliamentary procedure:    None

Power for the Secretary of State to direct the Competition Commission not to proceed with a reference (or a variation of a reference): This is essentially a regulatory matter not appropriate for Parliamentary scrutiny. Where the Secretary of State, or more generally, the Authority, propose to modify the standard conditions of water suppliers' licences, the modification can be referred to the Competition Commission for investigation. The Secretary of State will be authorised to direct the Competition Commission not to proceed with a reference from the Authority as long as this is done within a 28-day notice period. Similarly, the Secretary of State can direct the Competition Commission not to proceed with a variation of a reference as long as this is done within the notice period.

The Authority and the Competition Commission in making decisions on referrals regarding standard licence conditions will have regard to their roles in regulating competition. The Secretary of State will have regard for wider concerns for the water industry, such as environmental or social concerns and may therefore decide that certain referrals are incompatible with these wider interests. It is therefore necessary to enable the Secretary of State to give directions to prevent Competition Commission referrals proceeding under these circumstances. A similar power exists in section 24 of the Gas Act 1986, as amended by Schedule 3 of the Gas Act 1995, and section 12 of the Electricity Act 1989.

Section 17N (subsection 14)

Power conferred on:    Secretary of State

Power exercisable by:    Direction

Parliamentary procedure:    None

This gives a power for the Secretary of State to direct the Authority to exclude certain matters from reports produced by the Competition Commission on referrals. This is essentially a regulatory matter not appropriate for Parliamentary scrutiny. Where the Competition Commission has produced a report on a referral on a modification of licence conditions, the Secretary of State can direct the Authority not to publish certain parts of the report. The Secretary of State will receive the report 14 days before the relevant licence holder(s) do(es). During this period only, he will be able to direct the Authority to exclude certain matter(s) from the report.

The Competition Commission has, in making decisions on referrals, to consider a variety of information. Some of this information will be commercially sensitive or not in the public interest to be revealed. In making its report to the Authority the Competition Commission may need to refer to this sensitive information. The Secretary of State will be able to direct that certain matters in the report on a licence modification should not be published, being commercially sensitive or against the public interest. A similar power exists in section 25 of the Gas Act 1986 as amended by Schedule 3 the Gas Act 1995, and section 13 of the Electricity Act 1989 as amended by section 37 of the Utilities Act 2000.

Section 17P (subsection (2))

Power conferred on:    Secretary of State

Power exercisable by:    Direction

Parliamentary procedure:    None

Power to direct an extension of the period during which the Competition Commission can require a change to the Authority's notice of modifications after a referral report. This is a procedural matter not appropriate for Parliamentary scrutiny. Once the Authority receives a referral report from the Competition Commission it will publish a notice with its proposals for making licence modifications in accordance with the referral report. The Competition Commission has a period of 4 weeks in which to direct the Authority to make amendments to the modifications proposed in its notice. If more time is needed to consider the modifications the Authority has proposed in its notice, the Commission can seek a further two-week extension. This is done by application to the Secretary of State to make a direction to this effect.

The Competition Commission may need more time to consider the implications of detailed modifications proposed by the Authority in response to a referral report. The mechanism proposed allows a two-week extension of the statutory period with the agreement of the Secretary of State and only on application of the Competition Commission. A similar mechanism exists in section 26 of the Gas Act 1986 as amended section 83 of the Utilities Act 2000, and section 14A of the Electricity Act 1989 as amended by section 39 of the Utilities Act 2000.

Section 66H (Subsection 3)

Power conferred on:    Secretary of State/Assembly

Power exercisable by:    Regulation/Statutory instrument

Parliamentary Procedure:    Negative Procedure

Section 66H(3), enables the Secretary of State to make regulations to prescribe exceptions to the criminal offences created by Section 66H(4). These offences include the supply of water to a customer's premises if the supplier is not a water undertaker or a licensed supplier acting outside its licence conditions (i.e. not supplying to a household premises).

This would be used to except an activity that would normally be an offence from being so, and might be used where it was found that the prohibition had unintentionally caught a particular activity and prohibited it. The regulation making power would provide the ability to ensure that activities which it is not appropriate to licence, do not require a licence. It is an important aid to flexibility in the regulatory regime that the exemptions system should be controlled through secondary legislation.

The National Assembly for Wales is to grant exceptions in relation to any supply using undertakers' distribution systems wholly or mainly in Wales. The Secretary of State's powers apply to all other customers.

Section 66 I (Subsection 3)

Power Conferred on:    Secretary of State/Assembly

Power exercisable by:    Regulation/Statutory instrument

Parliamentary Procedure:    Negative Procedure

Section 66I(3), enables the Secretary of State to make regulations to prescribe exceptions (further to those specified in subsection 3) to criminal offence created by Section 66I(4). The offence includes the introduction of water into the undertaker's network other than by the undertaker itself, a licensed supplier in accordance with its licence or another undertaker without the relevant agreements.

As in 66H, this would be used to except an activity that would normally be an offence from being so, and might be used where it was found that the prohibition had unintentionally caught a particular activity and prohibited it. The regulation making power would provide the ability to not to require a licence in circumstances where it is inappropriate to do so. It is an important aid to flexibility in the regulatory regime that the exemptions system should be controlled through secondary legislation.

The National Assembly for Wales is to grant exceptions in relation to any supply using undertakers' distribution systems wholly or mainly in Wales. The Secretary of State's powers apply to all other customers.

Section 66J

Power conferred on:    Secretary of State/Assembly

Power exercisable by:    Order/Statutory instrument

Parliamentary procedure:    Negative procedure

Section 66J enables the Secretary of State, by order, to grant exemptions from the offences of unauthorised supply of water, created by new section 66H, and unauthorised introduction of water, created by new section 66I. This will be done after consultation with Authority and any interested parties. The order, subject to negative resolution by Parliament, will allow exemptions for individuals or classes of persons who the Secretary of State may want to allow to carry on their activities without the penalty of the offence being imposed. The exemption will normally carry on for a specified period. The exemption may include particular directions and specific activities that allow it to be tailored to particular circumstances.

The Assembly, after consultation, will make orders under this section for persons acting within the area of an undertaker wholly or mainly in Wales.

The granting of exemptions allows for more flexibility in applying the new framework in unusual cases and changing circumstances. It is an important aid to flexibility in the regulatory regime that the exemptions system should be controlled through secondary legislation. This power is needed to deal with particular individual cases where it is not appropriate to require a licence. In imposing a new licensing system, we may catch some cases which we are not intending to licence because of the particular circumstances of the case. We need flexibility so that a licence is not required where it is felt one is not appropriate. There are procedural safeguards to ensure the power is exercised properly after consulting on the order and the reasons why the order is to be made. .

Section 6A of the Gas Act 1986 and section 5 of the Electricity Act 1989 make similar provision for exemptions. An exemption under the Gas Act has been granted in at least one case so far.

Section 66K

Power conferred on:    Secretary of State/Assembly

Power exercisable by:    Order/Statutory instrument/Direction

Parliamentary procedure:    Negative procedure

Section 66K enables the Secretary of State, by order, revoke an order by which an exemption has been issued under section 66J above. The order may also allow an exemption to be varied, and where more than one exemption issued under an order, terminate any of these. Directions may also be used where exemptions have been issued to classes of persons; the direction may withdraw the exemption from some of the persons within the class. In all cases the interested parties will be consulted, as will the Authority. An order would be subject to a negative resolution of Parliament.

Revocation of exemptions gives the Secretary of State flexibility in administering these. Revocations may be at the request of the exempted person, as part of the original order, or for some other reason, such as a breach of conditions by the exempted person.

The Assembly, after consultation, will make orders under this section for persons acting within the area of an undertaker wholly or mainly in Wales.

This follows provisions in section 6A of the Gas Act 1986 and section 5 of the Electricity Act 1989 make similar provision for revoking exemptions.

Paragraph 4

Power conferred on:    Secretary of State

Power exercisable by:    Direction

Parliamentary procedure:    None

The Authority is granted transitional powers for two years from commencement of Schedules 4 and 8 of the Water Bill in order to make necessary changes to the undertakers' conditions of appointment. This will be used to make provision for the entry of licensed water suppliers to the industry. The Secretary of State may give directions to the Authority regarding these changes.

In order to ensure the functioning of the competition framework established by the Bill, some changes will have to be made to undertakers' conditions of appointment. Under the provisions of the Water Industry Act, changes to conditions of appointment are normally made by agreement with the undertaker in question. In the case of changes needed due to the Water Bill, undertakers should not be able, by refusing to make the appropriate changes, to frustrate the will of Parliament. The Authority therefore has a transitional power for two years from commencement to make changes to undertakers' conditions of appointment, without agreement, if they are made in order to fulfil the provisions of the Water Bill. In making the changes the Authority will consult the undertakers and other interested parties. The Secretary of State will be able to direct the Authority to ensure that only changes appropriate to purposes of the Bill are made.


 
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