§ Mr. MichaelTo ask the Secretary of State for the Environment, further to his answer on 18 December,Official Report, column 116, what notice water companies will be required to take of any guidelines produced by the Director of Water Services following the current consultative process and what sanctions are available (a) to him, (b) to the Director of Water Services and (c) to consumers if the guidelines and criteria are disregarded.
§ Mr. BaldryWater companies have powers to fix charges and make charges schemes under sections 75 and 76 of the Water Act 1989. Although each company has discretion about how it structures its charges, it is required by condition E of its instrument of appointment (licence)
to ensure that no undue preference is shown to, and that there is no undue discrimination against, any class of customers or potential customers".It is the responsibility of the Director General of Water Services to ensure that each company complies with the conditions of its licence.
The Secretaries of State for the Environment and Wales and the director general have duties under section 7(3) to ensure that the interests of all customers are protected. It is the duty of the director general to keep under review matters relating to the carrying out of their functions by water companies. However, the Secretaries of State may give general directions indicating the considerations to which the director general should have regard in determining the order of priority in which matters are to be brought under review.
Following the consultation, the director general will draw up general guidelines for companies to consider in drawing up their charges and charging schemes. These guidelines are likely to cover both issues on which the director general has legal powers and other, broader issues on which the consultation paper has given customers an opportunity to contribute to a public debate about future policy.
Should a company fix charges or make charges schemes which appear to the director general to contravene its licence conditions, he can take enforcement action under section 20 of the Act. If he considers that any actions of the company operate against the public interest, he may refer the matter to the Monopolies and Mergers Commission, so that it can consider modifications to the conditions of the company's licence.
Enforcement of licence conditions is a matter for the director general. However, an individual customer may seek judicial review if he thinks that the director general has failed to take appropriate action. Finally a customer may challenge a company in the courts if he considers a charge levied by the company has not been properly determined by reference to a charges scheme.