HC Deb 27 July 1999 vol 336 cc306-7W
Mrs. Gilroy

To ask the Secretary of State for Trade and Industry if he will make a statement setting out the significant changes in the Government's proposals for the reform of utility regulation made since publication of the White Paper in July 1998. [93797]

Mr. Battle

Since July 1998, the Government have been working on the detail of its proposals for the reform of utility regulation. This further work has resulted in the modification of some of the proposals.

First, the Government originally concluded that, for the energy and telecommunications sectors, individual regulators should be replaced with full-time executive boards composed of a chairman and two others. In the light of further analysis, the Government have decided that Ministers should be able to appoint any number of board members, who may be full or part-time, and executive or non-executive, so that the size and composition of each regulatory board meets the requirements of each office, and can change, over time, in response to developments. For the water sector, where the demands and pressures on the regulator are somewhat different from the other sectors, the Government now intend to retain the existing provision for an individual regulator. However, the Government intend to introduce a provision requiring the individual regulator to be supported by an advisory panel appointed by Ministers.

Second, the Government originally concluded that they would introduce legislation to extend to all regulators powers of the type held by the gas regulator to impose monetary penalties for breach of overall and individual service standards. Those powers related only to current and likely future breaches of licence conditions and other relevant requirements. They would not, as currently drafted, allow the imposition of penalties in relation to breaches, however serious, which were discontinued by the company when an enforcement notice was issued, or which ceased before enforcement action could be taken. This significantly weakens the effectiveness of monetary penalties as an enforcement mechanism. The Government now intend, therefore, to give regulators powers to impose penalties for past as well as for continuing breaches of licence conditions and other statutory requirements (but not including breaches committed before the legislation to introduce the powers is enacted). These powers will not extend to likely future breaches. Similar powers have recently been proposed for the Strategic Rail Authority.

Back to