45 Provision of statistical information to consumers etc (1) After section 38A of the WIA there is inserted- '38B Publication of statistical information about complaints (1) It shall be the duty of the Council to publish, in such form and manner and with such frequency as it thinks appropriate, such statistical information as it considers appropriate relating to complaints made by consumers about any matter relating to the activities of water undertakers or licensed water suppliers and the handling of such complaints. (2) In subsection (1) above, 'complaints' includes complaints made directly to water undertakers or licensed water suppliers (or anyone carrying on activities on their behalf) and complaints to the Authority, the Council, the Assembly or the Secretary of State.' (2) After section 95A of the WIA there is inserted- '95B Publication of statistical information about complaints (1) It shall be the duty of the Council to publish, in such form and manner and with such frequency as it thinks appropriate, such statistical information as it considers appropriate relating to complaints made by consumers about any matter relating to the activities of sewerage undertakers and the handling of such complaints. (2) In subsection (1) above, 'complaints' includes complaints made directly to sewerage undertakers (or anyone carrying on activities on their behalf) and complaints to the Authority, the Council, the Assembly or the Secretary of State.' 46 Consumer complaints (1) For section 29 of the WIA (duties of customer service committees) there is substituted- '29 Consumer complaints (1) This section applies to a complaint which any person ('the complainant') has against a relevant undertaker or a licensed water supplier in relation to any matter connected with the functions of that undertaker or the services provided by that licensed water supplier. (2) Where a complaint to which this section applies (other than one appearing to the Council to be frivolous or vexatious) is referred to the Council by or on behalf of the complainant, the Council shall (subject to subsections (3) and (8) below) investigate the complaint for the purpose of determining whether it is appropriate to take any action under subsection (9) below. (3) Where it appears to the Council that the complaint is one the Authority would be required to investigate under section 181 below, the Council shall, instead of investigating the matter to which it relates, refer the complaint to the Authority. (4) Where it appears to the Council that the complaint relates to a matter in respect of which a function under section 18 or 22A above is or may be exercisable by any person, the Council shall (unless it considers that that person already has notice of the matter) refer the matter to that person. (5) Where it appears to the Council that the complaint relates to a matter which constitutes or might constitute an offence, the Council shall refer the matter- (a) to the Assembly, if the matter relates to a relevant undertaker whose area is wholly or mainly in Wales or to services provided by a licensed water supplier using the supply system of a water undertaker whose area is wholly or mainly in Wales; or (b) to the Secretary of State, in any other case. (6) Where it appears to the Council that the complaint relates to a matter which constitutes a dispute of a kind which can be referred to the Authority for determination under any provision of this Act, the Council shall, if the complainant consents, refer the matter to the Authority. (7) A referral under subsection (6) above shall have effect for the purposes of section 30A below as if it were a referral by the complainant of a dispute for determination by the Authority. (8) The Council is not required to investigate any matter if it appears to the Council that- (a) it is unlikely that the complaint could be resolved by action taken by the relevant undertaker or the licensed water supplier; (b) the relevant undertaker or the licensed water supplier has not been given a reasonable opportunity to deal with the complaint; or (c) in a case mentioned in subsection (4) or (5) above or (where the complainant does not consent to the matter being referred to the Authority) subsection (6) above, it is inappropriate to do so. (9) Where it appears to the Council to be appropriate to do so with a view to assisting in reaching a satisfactory resolution of a complaint referred to it under this section, the Council shall make representations on behalf of the complainant to the relevant undertaker or the licensed water supplier about anything to which the complaint relates. (10) After investigating a complaint the Council may make a report to the Authority, the Secretary of State or the Assembly. (11) A report under subsection (10) above may include information about- (a) any representations made by the Council under subsection (9) above; and (b) the response of the relevant undertaker or the licensed water supplier to the complaint or any such representations. (12) No report under subsection (10) above or information about a complaint referred to the Council under this section, from which the complainant may be identified, shall be published or disclosed by the Council, the Authority, the Secretary of State or the Assembly in the exercise of any power under this Act without the consent of the complainant. (13) Where a representation made to the Authority, the Secretary of State or the Assembly about any matter (other than a representation appearing to the person to whom it is made to be frivolous or vexatious) appears to that person- (a) to be about a matter which is or amounts to a complaint to which this section applies (other than one which, in the case of the Authority, it is its duty to investigate under section 181 below); and (b) to have been made by or on behalf of the complainant, that person shall refer the matter to the Council.' (2) Section 30 of the WIA (duties of Director with respect to complaints) shall cease to have effect. 47 Investigations by the Council After section 29 of the WIA there is inserted- '29A Power of Council to investigate other matters (1) The Council may investigate any matter (not being a matter which it is its duty to investigate under this Part) which appears to it to be a matter relating to the interests of consumers. (2) Before undertaking an investigation under this section the Council shall consult the Authority, the Secretary of State and the Assembly. (3) Where the Council has investigated a matter under this section it may make a report on that matter to the Authority, the Secretary of State, the OFT, the Assembly or any other public authority whose functions appear to the Council to be exercisable in relation to that matter. (4) Subject to subsection (5) below, the Council may- (a) send a report on any matter investigated under this section to any person who appears to the Council to have an interest in that matter; and (b) publish any such report in such manner as the Council thinks appropriate. (5) Information which relates to the affairs of any particular individual or body of persons (corporate or unincorporate)- (a) shall not be included in a report which is to be sent to any person under subsection (4)(a) above, unless one or more of paragraphs (a) to (c) of subsection (6) below applies; and (b) shall be excluded from any such report which is to be published under subsection (4)(b) above, unless one or more of paragraphs (a) to (c) of subsection (7) below applies. (6) Information relating to a particular individual or body may be included in a report to be sent under subsection (4)(a) above if- (a) that individual or body has consented to the disclosure; (b) it is information that is available to the public from some other source; or (c) it is not information the disclosure of which would or might, in the opinion of the Council, seriously and prejudicially affect the interests of that individual or body. (7) Information relating to a particular individual or body may be included in a report to be published under subsection (4)(b) above if- (a) that individual or body has consented to the publication; (b) it is information that is available to the public from some other source; or (c) it is not information the publication of which would or might, in the opinion of the Council, seriously and prejudicially affect the interests of that individual or body. (8) Before deciding to include in such a report any information relating to a particular individual or body in pursuance of subsection (6)(c) or (7)(c) above, the Council shall- (a) consult that individual or body; and (b) have regard to any opinion expressed by the Authority as to the application of subsection (6)(c) or (7)(c) above to the information or as to the desirability or otherwise of its inclusion in the report; and paragraph (b) applies whether the opinion is given in relation to the information itself or to information of a description which applies to that information. (9) The Council shall not include in any report to be sent under subsection (4)(a) above or published under subsection (4)(b) above any information which it considers relates to any matter which is, or is likely to be, the subject of criminal proceedings. (10) In considering whether information relates to any matter as mentioned in subsection (9) above, the Council shall have regard to any opinion expressed (whether in relation to the information itself or to information of a description which applies to that information) by the Secretary of State, the Assembly or the Director of Public Prosecutions.' Enforcement of obligations 48 Financial penalties (1) After section 22 of the WIA there is inserted- 'Financial penalties 22A Penalties (1) Where the Authority is satisfied- (a) in the case of any company holding an appointment under Chapter 1 of this Part, that the company- (i) has contravened or is contravening any condition of the appointment; (ii) has caused or contributed to, or is causing or contributing to, a contravention by a company holding a licence under Chapter 1A of this Part of any condition of the licence; or (iii) has failed or is failing to achieve any standard of performance prescribed under section 38(2) or 95(2) below; or (b) in the case of any company holding a licence under Chapter 1A of this Part, that the company- (i) has contravened or is contravening any condition of the licence; or (ii) has caused or contributed to, or is causing or contributing to, a contravention by a company holding an appointment under Chapter 1 of this Part of any condition of the appointment, the Authority may, subject to section 22C below, impose on the company a penalty of such amount as is reasonable in all the circumstances of the case. (2) Where the Authority, the Secretary of State or the Assembly is satisfied- (a) in the case of any company holding an appointment under Chapter 1 of this Part, that the company- (i) has contravened or is contravening any statutory or other requirement which is enforceable under section 18 above and in relation to which he or it is the enforcement authority; or (ii) has caused or contributed to, or is causing or contributing to, a contravention by a company holding a licence under Chapter 1A of this Part of any such requirement; or (b) in the case of any company holding a licence under Chapter 1A of this Part, that the company- (i) has contravened or is contravening any statutory or other requirement which is enforceable under section 18 above and in relation to which he or it is the enforcement authority; or (ii) has caused or contributed to, or is causing or contributing to, a contravention by a company holding an appointment under Chapter 1 of this Part of any such requirement, he or it may, subject to section 22C below, impose on the company a penalty of such amount as is reasonable in all the circumstances of the case. (3) In a case in which- (a) subsection (1) above applies by virtue of paragraph (a)(ii) or (b)(ii) of that subsection, or (b) subsection (2) above applies by virtue of paragraph (a)(ii) or (b)(ii) of that subsection, references in the following provisions of this section and sections 22B and 22C below to a contravention include references to causing or contributing to a contravention. (4) Before imposing a penalty on a company under subsection (1) or (2) above the Authority, the Secretary of State or the Assembly (the 'enforcement authority') shall give notice- (a) stating that it proposes to impose a penalty and the amount of the penalty proposed to be imposed; (b) setting out the condition, requirement or standard of performance in question; (c) specifying the acts or omissions which, in the opinion of the enforcement authority, constitute the contravention or failure in question and the other facts which, in the opinion of the enforcement authority, justify the imposition of a penalty and the amount of the penalty proposed; and (d) specifying the period (not being less than twenty-one days from the date of publication of the notice) within which representations or objections with respect to the proposed penalty may be made, and shall consider any representations or objections which are duly made and not withdrawn. (5) Before varying any proposal stated in a notice under subsection (4)(a) above the enforcement authority shall give notice- (a) setting out the proposed variation and the reasons for it; and (b) specifying the period (not being less than twenty-one days from the date of publication of the notice) within which representations or objections with respect to the proposed variation may be made, and shall consider any representations or objections which are duly made and not withdrawn. (6) As soon as practicable after imposing a penalty, the enforcement authority shall give notice- (a) stating that he or it has imposed a penalty on the company and its amount; (b) setting out the condition, requirement or standard of performance in question; (c) specifying the acts or omissions which, in the opinion of the enforcement authority, constitute the contravention or failure in question and the other facts which, in the opinion of the enforcement authority, justify the imposition of the penalty and its amount; and (d) specifying a date, no earlier than the end of the period of forty-two days from the date of service of the notice on the company, by which the penalty is required to be paid. (7) The company may, within twenty-one days of the date of service on it of a notice under subsection (6) above, make an application to the enforcement authority for him or it to specify different dates by which different portions of the penalty are to be paid. (8) Any notice required to be given under this section shall be given- (a) by publishing the notice in such manner as the enforcement authority considers appropriate for the purpose of bringing the matters to which the notice relates to the attention of persons likely to be affected by them; (b) by serving a copy of the notice on the company; (c) by serving a copy of the notice on the Council; and (d) where the notice is given by the Secretary of State or the Assembly, by serving a copy of the notice on the Authority. (9) Any sums received by the enforcement authority by way of penalty under this section shall be paid into the Consolidated Fund. (10) The power of the enforcement authority to impose a penalty under this section is not exercisable in respect of any contravention or failure before the commencement of this section. (11) No penalty imposed by an enforcement authority under this section may exceed 10% of the turnover of the company (determined in accordance with provisions specified in an order made, after consulting the Assembly, by the Secretary of State). (12) The power of the Secretary of State to make an order under subsection (11) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament. (13) An enforcement authority shall not impose a penalty under this section where it is satisfied that the most appropriate way of proceeding is under the Competition Act 1998. 22B Statement of policy with respect to penalties (1) Each enforcement authority shall prepare and publish a statement of policy with respect to the imposition of penalties and the determination of their amount. (2) In deciding whether to impose a penalty, and in determining the amount of any penalty, in respect of a contravention or failure an enforcement authority shall have regard to his or its statement of policy most recently published at the time when the contravention or failure occurred. (3) An enforcement authority may revise his or its statement of policy and where he or it does so shall publish the revised statement. (4) Publication under this section shall be in such manner as the enforcement authority considers appropriate for the purpose of bringing the matters contained in the statement of policy to the attention of persons likely to be affected by them. (5) An enforcement authority shall undertake such consultation as he or it considers appropriate when preparing or revising his or its statement of policy. 22C Time limits on the imposition of financial penalties (1) Where no final or provisional order has been made in relation to a contravention or failure, an enforcement authority may not impose a penalty in respect of the contravention or failure later than the end of the period of twelve months from the time of the contravention or failure, unless before the end of that period- (a) the notice under section 22A(4) above relating to the penalty is served on the company under section 22A(8) above; or (b) a notice relating to the contravention or failure is served on the company under section 203(2) below. (2) Where a final or provisional order has been made in relation to a contravention or failure, an enforcement authority may not impose a penalty in respect of the contravention or failure unless the notice relating to the penalty under section 22A(4) above was served on the company under section 22A(8) above- (a) within three months from the confirmation of the provisional order or the making of the final order; or (b) where the provisional order is not confirmed, within six months from the making of the provisional order. 22D Interest and payment of instalments (1) If the whole or any part of a penalty is not paid by the date by which it is required to be paid, the unpaid balance from time to time shall carry interest at the rate for the time being specified in section 17 of the Judgments Act 1838. (2) If an application is made under subsection (7) of section 22A above in relation to a penalty, the penalty is not required to be paid until the application has been determined. (3) If the enforcement authority grants an application under that subsection in relation to a penalty but any portion of the penalty is not paid by the date specified in relation to it by the enforcement authority under that subsection, the enforcement authority may where he or it considers it appropriate require so much of the penalty as has not already been paid to be paid immediately. 22E Appeals (1) If the company on which a penalty is imposed is aggrieved by- (a) the imposition of the penalty; (b) the amount of the penalty; or (c) the date by which the penalty is required to be paid, or the different dates by which different portions of the penalty are required to be paid, the company may make an application to the court under this section. (2) An application under subsection (1) above must be made- (a) within forty-two days from the date of service on the company of a notice under section 22A(6) above; or (b) where the application relates to a decision of an enforcement authority on an application by the company under section 22A(7) above, within forty-two days from the date the company is notified of the decision. (3) On any such application, where the court considers it appropriate to do so in all the circumstances of the case and is satisfied of one or more of the grounds falling within subsection (4) below, the court- (a) may quash the penalty; (b) may substitute a penalty of such lesser amount as the court considers appropriate in all the circumstances of the case; or (c) in the case of an application under subsection (1)(c) above, may substitute for the date or dates imposed by the enforcement authority an alternative date or dates. (4) The grounds falling within this subsection are- (a) that the imposition of the penalty was not within the power of the enforcement authority under section 22A above; (b) that any of the requirements of subsections (4) to (6) or (8) of section 22A above have not been complied with in relation to the imposition of the penalty and the interests of the company have been substantially prejudiced by the non-compliance; or (c) that it was unreasonable of the enforcement authority to require the penalty imposed, or any portion of it, to be paid by the date or dates by which it was required to be paid. (5) If an application is made under this section in relation to a penalty, the penalty is not required to be paid until the application has been determined. (6) Where the court substitutes a penalty of a lesser amount it may require the payment of interest on the substituted penalty at such rate, and from such date, as it considers just and equitable. (7) Where the court specifies as a date by which the penalty, or a portion of the penalty, is to be paid a date before the determination of the application under this section it may require the payment of interest on the penalty, or portion, from that date at such rate as it considers just and equitable. (8) Except as provided by this section, the validity of a penalty shall not be questioned by any legal proceedings whatever. (9) In this section 'the court' means the High Court. 22F Recovery of penalties Where a penalty imposed under section 22A(1) or (2) above, or any portion of it, has not been paid by the date on which it is required to be paid and- (a) no application relating to the penalty has been made under section 22E above during the period within which such an application can be made; or (b) an application has been made under that section and determined, the enforcement authority may recover from the company, as a civil debt due to him or it, any of the penalty and any interest which has not been paid.' (2) In section 195 of the WIA (keeping of a register), in subsection (2), the 'and' at the end of paragraph (d) is omitted, and after paragraph (e) there is inserted- '(f) every penalty imposed under section 22A(1) or (2) above and every notice under section 22A(6) above;'. 49 Enforcement of certain provisions (1) The WIA is amended as follows. (2) In section 18 (orders for securing compliance with certain provisions)- (a) in subsection (1)(b), for 'has contravened any such condition or requirement and is likely to do so again' there is substituted 'is likely to contravene any such condition or requirement', (b) for subsection (4)(a)(ii) there is substituted- '(ii) is likely to contravene any such condition or requirement;'. (3) In section 20 (procedure for orders made under section 18), in subsections (1)(c) and (4)(b), for 'twenty-eight' there is substituted 'twenty-one'. (4) Subsection (3) does not have effect in relation to- (a) a provisional order which has been made before the commencement of that subsection, or (b) a final order in respect of which notice has been given under section 20(1) of the WIA before the commencement of that subsection. Remuneration and standards of performance 50 Links between directors' pay and standards of performance After section 35 of the WIA there is inserted- 'Disclosure of arrangements for remuneration 35A Remuneration and standards of performance (1) This section applies to any company holding an appointment under Chapter 1 of this Part. (2) As soon as reasonably practicable after the end of each financial year of the company it must make a statement to the Authority- (a) disclosing whether or not remuneration has been paid or become due during that financial year to the directors of the company as a result of arrangements falling within subsection (3) below; and (b) where such remuneration has been paid or become due, describing the arrangements and the remuneration. (3) Arrangements fall within this subsection if they are arrangements for linking the remuneration of the directors of the company to standards of performance in connection with the carrying out by the company of the functions of a relevant undertaker. (4) A description under subsection (2)(b) above must include in particular- (a) a statement of when the arrangements were made; (b) a description of the standards of performance in question; (c) an explanation of the means by which the standards of performance are assessed; and (d) an explanation of how the remuneration was calculated. (5) The statement required by subsection (2) above must also state- (a) whether or not there are in force in respect of the financial year during which the statement is made arrangements falling within subsection (3) above; or (b) if not, whether the company intends that such arrangements will be in force at some time during that financial year, and if there are, or it is intended that there will be, such arrangements in force the statement must describe those arrangements. (6) A description under subsection (5) above must- (a) include in particular the matters listed in subsection (4)(a), (b) and (c) above; and (b) where the arrangements described are different from any arrangements described under subsection (2)(b) above, state the likely effect of those differences on the remuneration of each director of the company. (7) The statement required by subsection (2) above must be made to the Authority in such manner as may be required by the Authority. (8) The statement required by subsection (2) above- (a) must be published by the company making the statement in such manner as it reasonably considers will secure adequate publicity for it; and (b) may be published by the Authority in such manner as it may consider appropriate. (9) The duty of a company under this section applies in respect of any person who has at any time been a director of the company. (10) In this section- 'remuneration' in relation to a director of a company- (a) means any form of payment, consideration or other benefit (including pension benefit), paid or due to or in respect of the director; and (b) includes remuneration in respect of any of his services while a director of the company; 'standards of performance', in relation to any company, include any standards which are- (a) set by or under any conditions of the company's appointment under Chapter 1 of this Part; (b) contained in or prescribed by regulations made under section 38(1)(b) or (2) or section 95(1)(b) or (2) below; or (c) set or agreed to by the company. (11) Any requirement imposed by this section shall be treated as a statutory requirement enforceable under section 18 above by the Authority.' Miscellaneous 51 Reasons for decisions After section 195 of the WIA there is inserted- '195A Reasons for decisions (1) This section applies to the following decisions of the Authority, the Secretary of State or the Assembly, namely- (a) the modification of the conditions of an appointment under Chapter 1 of Part 2 of this Act or the variation of the area to which an appointment relates; (b) the modification of the conditions of a licence under Chapter 1A of that Part; (c) the termination of such an appointment or the revocation of such a licence; (d) the giving of any directions or consent in pursuance of a condition included in such an appointment by virtue of section 12(1) above or in such a licence by virtue of section 17G(3)(a) or (b) above; (e) the determination of a question referred in pursuance of a condition included in such an appointment by virtue of section 12(2) above or in such a licence by virtue of section 17G(3)(c) above; (f) the making of a determination under section 17E or 66D(1) above; and (g) the making of a final enforcement order, the making or confirmation of a provisional enforcement order or the revocation of a final order or of a provisional order which has been confirmed. (2) As soon as reasonably practicable after making such a decision the Authority, the Secretary of State or the Assembly shall publish a notice stating the reasons for the decision in such manner as it considers appropriate for the purpose of bringing the matters to which the notice relates to the attention of persons likely to be interested. (3) A person publishing a notice under subsection (2) above shall serve a copy on the company holding the appointment or licence to which the decision relates. (4) A person preparing a notice under subsection (2) above shall have regard to the need for excluding, so far as that is practicable, any matter which relates to the affairs of a particular individual or body of persons (corporate or unincorporate), where he considers that publication of that matter would or might seriously and prejudicially affect the interests of that individual or body. (5) This section does not apply in relation to a decision of the Authority resulting in any provision which the Authority was directed under section 195(3) above not to enter in the register required to be kept under that section.' 52 Co-operation between water regulators (1) This section imposes duties on each of the following- (a) the Secretary of State, (b) the Assembly, (c) the Environment Agency, and (d) the Water Services Regulation Authority. (2) It is the duty of each of those mentioned in subsection (1) to make arrangements with each of the others with a view to promoting, in the case of each pair of them- (a) co-operation and the exchange of information between them, and (b) consistency of treatment of matters which affect both of them. (3) That duty relates only- (a) in the case of the Water Services Regulation Authority, to its functions under the WIA relating to the regulation of water and sewerage undertakers and licensed water suppliers, (b) in the case of the Secretary of State and the Assembly, to their functions of the description referred to in paragraph (a), and to their functions under the WIA relating to the quality of water supplied by water undertakers and licensed water suppliers, (c) in the case of the Environment Agency, to its functions concerning water resources and water pollution so far as they relate to water and sewerage undertakers and licensed water suppliers. (4) As soon as practicable after agreement is reached on any arrangements required by this section, the parties must prepare a memorandum setting them out. (5) The parties to any such arrangements must keep them under review. (6) As soon as practicable after agreement is reached on any changes to arrangements under this section, the parties must revise their memorandum. (7) Parties to arrangements required by this section must send a copy of their memorandum (and any revised memorandum) to each person mentioned in subsection (1) who is not a party to the arrangements set out in it. (8) The Secretary of State must lay before each House of Parliament a copy of every memorandum (and revised memorandum) under this section. The Competition Commission 53 Specialist members of the Competition Commission (1) In section 104(1) of the Utilities Act 2000 (c. 27) (appointment of members of the Competition Commission)- (a) the 'or' at the end of paragraph (a) is omitted, and (b) after paragraph (b) there is inserted '; or (c) section 12, 14, 16A, 17K or 17P of the Water Industry Act 1991.'. (2) The persons who are, immediately before the commencement of subsection (1), members of the Competition Commission by virtue of appointments made under section 14(8) of the WIA shall continue as members of the Commission and their appointments shall be treated as having been made under section 104 of the Utilities Act 2000. (3) Section 14(8) and (8A) of the WIA (which are superseded by this section) shall cease to have effect. (4) The provision made by this section does not affect any group which has been selected, before the commencement of subsection (1), to perform functions of the Commission in relation to any reference under or by virtue of section 14 of the WIA. 54 Determination references under section 12 of the WIA (1) Section 12 of the WIA (determinations under conditions of appointment) is amended as follows. (2) After subsection (3) there is inserted- '(3A) For the purposes of subsection (3) above, where- (a) the question or matter referred to the Commission concerns the review of a price control imposed on the company holding the appointment; and (b) the Commission is to decide to what extent it is reasonable to take into account in its determination costs incurred or borne by the company in connection with the reference, the Commission shall also have regard to the extent to which, in its view, its determination is likely to support the company's (rather than the Authority's) claims in relation to the question or matter referred to it. (3B) Subsections (4) and (5) of section 14, and sections 16A and 16B, below apply to references to the Competition Commission under this section as they apply to references under section 14. (3C) A report of the Competition Commission on a reference under this section- (a) shall be made to the Authority; and (b) shall include definite conclusions on the questions or other matters comprised in the reference, together with such an account of their reasons for those conclusions as, in the opinion of the Competition Commission, is expedient for facilitating a proper understanding of those questions or other matters and of their conclusions, and subsections (5) and (6) of section 15 below apply to such a report as they apply to a report on a reference under section 14.' (3) Subsections (3)(b)(i), (4) and (5) shall cease to have effect. 55 Conditions of appointments under the WIA (1) The WIA is amended as follows. (2) In section 14(5) (modification references to the Competition Commission)- (a) after 'this section' there is inserted 'or in carrying out functions under section 16A below', (b) after 'the investigation' there is inserted 'or the carrying out of those functions', and (c) after 'such investigation' there is inserted 'or such functions'. (3) In section 16 (modification of conditions of appointment following report of Competition Commission), after subsection (4) there is inserted- '(4A) After considering any representations or objections made in response to proposals set out in a notice under subsection (3) above, the Authority shall give notice to the Competition Commission- (a) setting out the modifications it proposes to make to remedy or prevent the adverse effects specified in the report; and (b) stating the reasons for making the modifications. (4B) The Authority shall include with the notice under subsection (4A) above a copy of any representations or objections received in relation to the notice under subsection (3) above. (4C) If the period of four weeks from the date on which the notice under subsection (4A) above is given elapses without a direction under section 16A(1)(a) below having been given to it, the Authority shall- (a) make the modifications set out in the notice; or (b) if a direction under section 16A(1)(b) below has been given, make the modifications which are not specified in the direction.' (4) After section 16 there is inserted- '16A Commission's power of veto following report (1) The Competition Commission (in this section referred to as 'the Commission') may, within the period of four weeks after the date on which it is given a notice under section 16(4A) above, direct the Authority- (a) not to make the modifications set out in that notice; or (b) not to make such of the modifications as may be specified in the direction; and the Authority shall comply with any such direction. (2) The Secretary of State may, within the period of four weeks after the date on which the Commission is given a notice under section 16(4A) above and on the application of the Commission, direct that the period for giving a direction under subsection (1) above (and, accordingly, the period mentioned in section 16(4C) above) shall be extended by fourteen days. (3) The power to give a direction under subsection (1) above may only be exercised in respect of such of the modifications set out in the notice under section 16(4A)(a) above as appear to the Commission not to be the modifications which are requisite for the purpose of remedying or preventing all or any of the adverse effects specified in the report as effects which could be remedied or prevented by modifications. (4) If the Commission gives a direction under subsection (1) above, it- (a) shall give notice setting out the modifications proposed by the Authority, the terms of the direction and the reasons for giving it; and (b) shall itself make such modifications as appear to it to be requisite for the purpose of remedying or preventing- (i) if the direction was given under subsection (1)(a) above, the adverse effects specified in the report as effects which could be remedied or prevented by modifications; (ii) if the direction was given under subsection (1)(b) above, such of those adverse effects as are not remedied or prevented by the modifications made by the Authority under section 16(4C)(b) above. (5) In exercising its power under subsection (4)(b) above, the Commission shall have regard to the matters to which the Authority is required to have regard when determining the conditions of a company's appointment. (6) Before making modifications under subsection (4)(b) above the Commission shall give notice- (a) stating that it proposes to make the modifications and setting them out; (b) stating the reason why it proposes to make them; (c) specifying the period (not being less than twenty-eight days from the date of publication of the notice) within which representations or objections with respect to the proposed modifications may be made, and shall consider any representations or objections which are duly made and not withdrawn. (7) A notice under subsection (4)(a) or (6) above shall be given- (a) by publishing the notice in such manner as the Commission considers appropriate for the purpose of bringing it to the attention of persons likely to be affected by the making of the modifications; and (b) by serving a copy on the Authority and the company whose conditions of appointment it is proposed should be modified. (8) The Commission may not make any modification under this section which the Authority could not make under section 16 above. (9) After making modifications under this section the Commission shall publish a notice stating that the modifications have been made and setting them out, with the reasons for making them. (10) This section does not apply to the modification of the conditions of a company's appointment following a report of the Commission made before the commencement of section 55 of the Water Act 2003. 16B Commission's power of veto following report: supplementary (1) For the purposes of the law relating to defamation, absolute privilege attaches to any notice under subsection (4)(a), (6) or (9) of section 16A above. (2) In giving any notice under subsection (4)(a) or (6) of section 16A above, or publishing any notice under subsection (9) of that section, the Commission must have regard to the following considerations before disclosing any information. (3) The first consideration is the need to exclude from disclosure (so far as practicable) any information whose disclosure the Commission thinks is contrary to the public interest. (4) The second consideration is the need to exclude from disclosure (so far as practicable)- (a) commercial information whose disclosure the Commission thinks might significantly harm the legitimate business interests of the undertaking to which it relates; or (b) information relating to the private affairs of an individual whose disclosure the Commission thinks might significantly harm the individual's interests. (5) The third consideration is the extent to which the disclosure of the information mentioned in subsection (4)(a) or (b) above is necessary for the purposes of the notice. (6) The following sections of Part 3 of the Enterprise Act 2002 shall apply, with the modifications mentioned in subsections (7) and (8) below, for the purposes of any investigation by the Commission for the purposes of the exercise of its functions under section 16A above, as they apply for the purposes of any investigations on references under that Part- (a) section 109 (attendance of witnesses and production of documents etc); (b) section 110 (enforcement of powers under section 109: general); (c) section 111 (penalties); (d) section 112 (penalties: main procedural requirements); (e) section 113 (payments and interest by instalments); (f) section 114 (appeals in relation to penalties); (g) section 115 (recovery of penalties); and (h) section 116 (statement of policy). (7) Section 110 shall, in its application by virtue of subsection (6) above, have effect as if- (a) subsection (2) were omitted; (b) in subsection (4), for the words 'the publication of the report of the Commission on the reference concerned' there were substituted 'the publication by the Commission of a notice under section 16A(9) of the Water Industry Act 1991 in connection with the reference concerned or, if no direction has been given by the Commission under section 16A(1) of that Act in connection with the reference concerned and within the period permitted for that purpose, the latest day on which it was possible to give such a direction within the permitted period'; and (c) in subsection (9) the words from 'or section' to 'section 65(3))' were omitted. (8) Section 111(5)(b) shall, in its application by virtue of subsection (6) above, have effect as if for sub-paragraph (ii) there were substituted- '(ii) if earlier, the day on which a notice is published by the Commission under section 16A(9) of the Water Industry Act 1991 in connection with the reference concerned or, if no direction is given by the Commission under section 16A(1) of that Act in connection with the reference concerned and within the period permitted for that purpose, the latest day on which such a direction may be given within the permitted period.' (9) Provisions of Part 3 of the Enterprise Act 2002 which have effect for the purposes of sections 109 to 116 of that Act (including, in particular, provisions relating to offences and the making of orders) shall, for the purposes of the application of those sections by virtue of subsection (6) above, have effect in relation to those sections as applied by virtue of that subsection. (10) Accordingly, corresponding provisions of this Act shall not have effect in relation to those sections as applied by virtue of that subsection.' Licensing of water suppliers 56 Licensing of other water suppliers Schedule 4, which contains amendments to the WIA to provide for the licensing of suppliers of water other than water undertakers, is to have effect.

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