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Mr. Wiggin: The new clause would require the water services regulation authority to publish a statement of policy on its determination of charges. The statement would have to include how it had carried out its duties, the applied methodology and the extent to which functions had been performed. Six months before publishing the statement of policy, the authority would also have to consult relevant undertakers about the determination of charges, which would allow each relevant person the opportunity to make an oral representation on any objections. If the authority did not meet such conditions as are laid out in proposed subsection (8), the policy would be referred to the Competition Commission for determination. The new clause would hold the authority accountable for publishing its intentions of determined charges in order to make the process more open, transparent and inclusive for the water industry.

New clause 6 seeks to ensure that health and safety is maintained in the functioning of all relevant water bodies and undertakers by regular monitoring. That would be carried out through consultation between the Secretary of State, the National Assembly for Wales, the authority and the Health and Safety Commission. The Secretary of State, the Assembly and the authority must take on board any advice given about any safety issue in carrying out their functions. I am concerned that the Bill does not address safety carefully enough, but the new clause would ensure that it does so.

New clause 7 seeks to expand the appeals mechanism through which water undertakers can challenge enforcement orders. Any enforcement order proved to be an error of law or unreasonable, where that is agreed by the High Court, will either be quashed or varied so that it is correct. As the Bill stands, there are not enough provisions for appeal against enforcement orders. New clause 7 would make the arrangements fairer by allowing affected businesses to continue their work if there is an unreasonable or unlawful confirmation of order.

Amendment No. 14 follows best practice in regulatory structures by seeking to ensure that the chairman and chief executive of the water services regulation authority cannot be the same person. I am concerned that combining the posts would give one person too much power over regulation of the water industry, which could be dangerous and which the Bill addresses. A wider range of options is surely more desirable—after all, the Environment Agency separates the posts. In Committee, the Minister said that he would consult the Secretary of State to provide on Report clear guidelines on the exact structure of the procedure and on the views of the Welsh Assembly. I look forward to hearing about that. The amendment would ensure more open, diverse and discursive procedures in the structure of the water services regulation authority—for the good of not only the industry, but the consumer, whom I am, as usual, keen to protect.

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Amendment No. 17 reflects my concern that although the new consumer council's access to information about licensed water suppliers is welcome, the availability of that information is too restricted. At present, the Secretary of State has the power to make regulations prescribing circumstances in which water companies or suppliers may refuse the council information. We are worried that there will be fewer duties to provide information than under the Freedom of Information Act 2000. The criteria by which a request for information can be refused should be in the Bill. Up-to-date information is essential if the council is to act in the best interests of consumer protection. As consumers have no choice of supplier in the first place, they should be able to access information to resolve any problems. My amendment would enable the council to publish information if the benefit to the consumer was greater than the prejudicial effects on the interests of the body. Moreover, it reflects the view of the consumer council for water, which welcomes an independent consumer council, but wants the Bill to ensure that it has the right powers and resources to improve consumers' representation.

Mr. Andrew Lansley (South Cambridgeshire): I am grateful for the opportunity to speak to new clause 10 and the other amendments in my name. The Minister will be familiar with the arguments that surround them, although in some cases I have tried to draft them more accurately—and perhaps more acceptably, from the Minister's point of view—to reflect my intentions.

New clause 10 would require that where the water services regulation authority undertakes something of significance in relation to the industry and water undertakers, and where it is not a matter of urgency, it is under an obligation to carry out and to publish regulatory impact assessments. I shall not dwell on the subject of what those should cover, but hon. Members will note that subsection (5) of the new clause would require the authority to


That would include the Cabinet Office guidance that was updated in the latter part of last year. There have been some helpful innovations in respect of regulatory impact assessments, not least the inclusion of a competition assessment. The quality of such documents is a matter of continuing debate that I shall not explore further. It is important, however, that regulators should themselves have regard to the impact assessment process.

The text of the new clause is modelled directly on section 7 of the Communications Act 2003, reflecting the duty that the Government properly laid on that sector's new regulator—Ofcom—to undertake regulatory impact assessments. I cannot see why there should be a distinction between the manner in which Ofcom is to undertake its responsibilities as a new regulator and the manner in which the new water services regulation authority is to do so. I am therefore—perhaps over-optimistically—hopeful that the Minister will say, "Thank you very much", and agree to it.

Amendment No. 19 would insert into schedule 1 the provision that the new water services regulation authority should have not only a chairman, but a chief executive—with the implication, of course, that they

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should be two separate people. That is in line with current regulatory best practice. It is also increasingly regarded as best practice in the corporate sector. Although I do not suggest that everything in the Higgs report is right, the importance of distinguishing between the roles of chairman and chief executive did not cause great controversy.

It is important for business to distinguish between the person who is responsible for strategy and the person who has responsibility for the body's executive functions. It is even more important for regulatory bodies. As my hon. Friend the Member for Leominster (Mr. Wiggin) suggested, there is a danger—it is not theoretical; it has been demonstrated in the past—that a regulator who is one person can be the subject of speculation about personal views and, when a new regulator is appointed, about the way in which the policy will change simply as a consequence of a change of personality.

We cannot remove the problem entirely but the Better Regulation Task Force's report on economic regulators said that it was desirable to move away from having the regulator as one person and that an element of greater regulatory certainty was introduced if the regulator was perceived as a corporate body rather than a personality. We are moving towards the water services regulation authority being a corporate body by looking to an authority rather than a single person such as the director general. It is no reflection on Philip Fletcher as the director general of the Office of Water Services and the way in which he has done his job that all regulators are moving in that direction. It is a retrograde step to reintroduce speculation by combining in one person the role of chairman and chief executive. If I remember rightly, the new combined code for companies reflects the desirability of distinguishing between the role of chairman and chief executive.

Amendments Nos. 20 and 21 would establish that a majority of the new authority should be non-executive members. Amendment No. 20 would establish that, in addition to the chairman and chief executive, there should be a minimum of three additional members, thus making a minimum of five and rendering practical a non-executive majority in an authority of five. Again, that is in line with best practice in corporate governance terms in the companies sector and is reflected in the structure of most regulators, including, to give a recent example, Postcomm.

Paddy Tipping: The hon. Gentleman rehearses arguments that we had in Committee. He and the Minister will recall that voices from all parties in Committee called for best practice. Amendments Nos. 19, 20 and 21 reflect good practice. Although there is no need for the Minister to change the Bill, he gave an undertaking in Committee to reflect on the points that were made and give us more information on Report.

Mr. Lansley: The hon. Gentleman is right. In Committee, he suggested that I should quit while I was ahead. Having engaged his support, if I may interpret his remarks in that way, I shall quit while I am ahead on the amendments. It is in the nature of things that we have to table the amendments again to stimulate the

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debate. As the hon. Gentleman says, the Bill does not have to look different to produce a different outcome in the composition of the authority. I hope that when the Minister replies to the debate, we may have some good news from him. On the assumption that I am quitting while I am ahead, I shall keep moving and hope that I can win again. I appreciate that I have not won yet, but I hope to do so.

Amendment No. 18 would take account of the fact that when the Better Regulation Task Force considered economic regulators, its recommendations reflected the fact that several regulators had been given a range of additional objectives and statutory duties that could at times come into conflict. At that time, that was not true of the director general of water services. However, we are now incorporating into the legislation some additional objectives and duties for the new water services regulatory authority—not least in relation to the pursuit of consumers' interests whenever appropriate through competition, and to environmental and social objectives.


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