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Water Act 1989

Type Public General Act

Publication 1989-07-06

Last updated 2026-04-06

State In force

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Part I — Preliminary

The National Rivers Authority and the advisory committees

Functions of the Authority in relation to fisheries.

1

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) The provisions of Schedule 1 to this Act shall have effect with respect to the Authority and its finances.

Regional rivers advisory committees

2

Advisory Committee for Wales

3

(1) The Secretary of State shall establish and maintain a committee for advising him with respect to matters affecting or otherwise connected with the carrying out in Wales of the Authority’s functions by virtue of this Act.

(2) The committee established and maintained under this section—

(a) shall consist of such persons as may be appointed by the Secretary of State; and

(b) shall meet at least once a year.

(3) The Secretary of State shall, out of money provided by Parliament, pay to the members of the committee established and maintained under this section such sums reimbursing them for loss of remuneration, for travelling expenses and for other out-of-pocket expenses as he may with the consent of the Treasury determine.

The transfer of the water authorities’ functions etc.

Transfer of the water authorities' functions etc

4

(1) Subject to the following provisions of this Act, on such day as the Secretary of State may by order appoint as the transfer date—

(a) the functions of the water authorities shall, in accordance with those provisions, become functions of the Authority, of water undertakers or of sewerage undertakers; and

(b) schemes under Schedule 2 to this Act for the division of the property, rights and liabilities of those authorities between their successor companies and the Authority shall come into force.

(2) The Secretary of State shall, by order made before the transfer date, nominate a company in relation to each water authority as that authority’s successor company; but a company shall not be so nominated unless it is a limited company and, at the time when the order is made, is wholly owned by the Crown.

(3) Subject to subsection (4) below, each water authority shall continue in existence after the transfer date until such time as they may be dissolved by order made by the Secretary of State.

(4) On the transfer date the chairman and members of each water authority shall cease to hold office; and on and after that date each such authority—

(a) shall consist only of a chairman appointed by the Secretary of State and, if the Secretary of State thinks fit, such one or more other persons as the Secretary of State may appoint as members of that authority; and

(b) shall have only the functions which fall to be carried out by that authority under any scheme under Schedule 2 to this Act with respect to that authority.

(5) The Secretary of State shall not make an order under subsection (3) above in relation to any water authority unless he is satisfied, after consultation with the water authority and with the Authority and the water authority’s successor company, that nothing further remains to be done by the water authority under any scheme under Schedule 2 to this Act.

(6) The power to make an order under this section shall be exercisable by statutory instrument and such an order shall not be amended or revoked—

(a) in the case of an order under subsection (2) above, on or after the transfer date; or

(b) in the case of an order under subsection (3) above, after the dissolution of the water authority to which the order relates.

The Director General of Water Services and the customer service committees

The Director General of Water Services

5

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) The provisions of Schedule 3 to this Act shall have effect with respect to the Director.

Customer service committees

6

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) The provisions of Schedule 4 to this Act shall have effect with respect to customer service committees.

General duties

General duties with respect to water supply and sewerage services

7

General environmental and recreational duties

8

(1) It shall be the duty of each of the following, that is to say, the Secretary of State, the Minister, the Director and every relevant body, in formulating or considering any proposals relating to the functions of any relevant body or, as the case may be, that body—

(a) so far as may be consistent with the purposes of any enactment relating to the functions of that body and, in the case of the Secretary of State and the Director, with their duties under section 7 above, so to exercise any power conferred on him or it with respect to the proposals as to further the conservation and enhancement of natural beauty and the conservation of flora, fauna and geological or physiographical features of special interest;

(b) to have regard to the desirability of protecting and conserving buildings, sites and objects of archaeological, architectural or historic interest; and

(c) to take into account any effect which the proposals would have on the beauty or amenity of any rural or urban area or on any such flora, fauna, features, buildings, sites or objects.

(2) Subject to subsection (1) above, it shall be the duty of each of the following, that is to say, the Secretary of State, the Minister, the Director and every relevant body, in formulating or considering any proposals relating to the functions of a relevant body or, as the case may be, that body—

(a) to have regard to the desirability of preserving for the public any freedom of access to areas of woodland, mountains, moor, heath, down, cliff or foreshore and other places of natural beauty;

(b) to have regard to the desirability of maintaining the availability to the public of any facility for visiting or inspecting any building, site or object of archaeological, architectural or historic interest; and

(c) to take into account any effect which the proposals would have on any such freedom of access or on the availability of any such facility.

(3) Subject to obtaining the consent of any navigation authority, harbour authority or conservancy authority before doing anything which causes navigation which is subject to the control of that authority to be obstructed or otherwise interfered with, it shall be the duty of every relevant body to take such steps as are—

(a) reasonably practicable; and

(b) consistent with the purposes of the enactments relating to the functions of that body,

for securing, so long as that body has rights to the use of water or land associated with water, that those rights are exercised so as to ensure that the water or land is made available for recreational purposes and is so made available in the best manner.

(4) Without prejudice to its other duties under this section, it shall be the duty of the Authority, to such extent as it considers desirable, generally to promote—

(a) the conservation and enhancement of the natural beauty and amenity of inland and coastal waters and of land associated with such waters;

(b) the conservation of flora and fauna which are dependent on an aquatic environment; and

(5) It shall be the duty of a relevant body, in determining what steps to take in performance of any duty imposed by virtue of subsection (3) or (4)(c) above, to take into account the needs of persons who are chronically sick or disabled.

(6) Nothing in this section or the following provisions of this Act shall require recreational facilities made available by a relevant body to be made available free of charge.

(7) In this section—

“building” includes structure; and

“relevant body” means the Authority, a water undertaker, a sewerage undertaker or an internal drainage board;

and references in this section to a water undertaker or sewerage undertaker or to the functions of such an undertaker shall be construed as if those functions included the management, by the company holding an appointment as such an undertaker, of any land for the time being held by that company for any purpose whatever (whether connected with the carrying out of the functions of a water undertaker or sewerage undertaker or not).

Environmental duties with respect to sites of special interest

9

(1) Where the Nature Conservancy Council are of the opinion that any area of land—

(a) is of special interest by reason of its flora, fauna or geological or physiographical features; and

(b) may at any time be affected by schemes, works, operations or activities of a relevant body or by an authorisation given by the Authority,

the Council shall notify the fact that the land is of special interest for that reason to every relevant body whose works, operations or activities may affect the land or, as the case may be, to the Authority.

(2) Where a National Park authority or the Broads Authority is of the opinion that any area of land in a National Park or in the Broads—

(a) is land in relation to which the matters for the purposes of which section 8 above has effect are of particular importance; and

(b) may at any time be affected by schemes, works, operations or activities of a relevant body or by an authorisation given by the Authority,

the National Park authority or Broads Authority shall notify the fact that the land is such land, and the reasons why those matters are of particular importance in relation to the land, to every relevant body whose works, operations or activities may affect the land or, as the case may be, to the Authority.

(3) Where a relevant body has received a notification under subsection (1) or (2) above with respect to any land, that body shall consult the notifying body before carrying out, or (in the case of the Authority) carrying out or authorising, any works, operations or activities which appear to that relevant body to be likely—

(a) to destroy or damage any of the flora, fauna, or geological or physiographical features by reason of which the land is of special interest; or

(b) significantly to prejudice anything the importance of which is one of the reasons why the matters mentioned in subsection (2) above are of particular importance in relation to that land.

(4) Subsection (3) above shall not apply in relation to anything done in an emergency where particulars of what is done and of the emergency are notified to the Nature Conservancy Council, the National Park authority in question or, as the case may be, the Broads Authority as soon as practicable after that thing is done.

(5) In this section—

“the Broads” has the same meaning as in the Norfolk and Suffolk Broads Act 1988;

“National Park authority” means a National Park Committee or a joint or special planning board for a National Park; and

“relevant body” has the same meaning as in section 8 above.

Codes of practice with respect to environmental and recreational duties

10

(1) The relevant Minister may by order approve any code of practice issued (whether by the relevant Minister or another person) for the purpose of—

(a) giving practical guidance to the Authority or to water undertakers and sewerage undertakers with respect to any of the matters for the purposes of which sections 8 and 9 above have effect; and

(b) promoting what appear to him to be desirable practices by the Authority or such undertakers with respect to those matters,

and may at any time by such an order approve a modification of such a code or withdraw his approval of such a code or modification.

(2) A contravention of a code of practice as for the time being approved under this section shall not of itself constitute a contravention of any requirement imposed by section 8 or 9 above or give rise to any criminal or civil liability, but the Secretary of State and the Minister shall each be under a duty to take into account whether there has been or is likely to be any such contravention in determining when and how he should exercise his powers by virtue of this Act in relation to the Authority or any water undertaker or sewerage undertaker.

(3) The power of the relevant Minister to make an order under this section shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.

(4) Except in the case of an order made before the transfer date, the relevant Minister shall not make an order under this section unless he has first consulted the Authority, the Countryside Commission, the Nature Conservancy Council, the Historic Buildings and Monuments Commission for England, the Sports Council, the Sports Council for Wales and such water undertakers, sewerage undertakers and other persons as he considers it appropriate to consult.

(5) In this section “the relevant Minister” means—

(a) in relation to the Authority, the Secretary of State or the Minister; and

(b) in relation to a water undertaker or sewerage undertaker, the Secretary of State.

Part II — Water Supply and Sewerage Services

Chapter I — Appointment and Regulation of Water and Sewerage Undertakers

Making and conditions of appointments

Appointment of undertakers

11

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9) In the House of Commons Disqualification Act 1975, in Part III of Schedule 1 (other disqualifying offices), there shall be inserted (at the appropriate place) the following entry—

Director of a company for the time being holding an appointment under Chapter I of Part II of the Water Act 1989 or of such a company’s holding company, being a director nominated or appointed by a Minister of the Crown or by a person acting on behalf of the Crown.

;

and the like insertion shall be made in Part III of Schedule 1 to the Northern Ireland Assembly Disqualification Act 1975.

Restrictions on making replacement appointments

12

Procedure for replacement appointments

13

(1) An application for an appointment or variation to which section 12 above applies shall be made in such manner as may be prescribed; and, within fourteen days after making any such application, the applicant shall—

(a) serve notice of the application on the existing appointee and on every local authority whose area includes the whole or any part of the area to which the application relates; and

(b) publish a copy of the notice in such manner as may be prescribed.

(2) Before making an appointment or variation to which section 12 above applies, the Secretary of State or the Director shall give notice—

(a) stating that he proposes to make the appointment or variation;

(b) stating the reasons why he proposes to make the appointment or variation; and

(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 appointment or variation may be made,

and shall consider any representations or objections which are duly made and not withdrawn.

(3) A notice under subsection (2) above shall be given—

(a) by publishing the notice in such manner as the Secretary of State or, as the case may be, the Director considers appropriate for bringing it to the attention of persons likely to be affected by the making of the proposed appointment or variation; and

(b) by serving a copy of the notice on the existing appointee and on every local authority whose area includes the whole or any part of the area to which the proposed appointment or variation relates.

(4) Before making an appointment or variation to which section 12 above applies, the Secretary of State shall consult the Director.

(5) As soon as practicable after making an appointment or variation to which section 12 above applies, the Secretary of State or the Director shall—

(a) serve a copy of the appointment or variation on the existing appointee; and

(b) serve notice of the making of the appointment or variation on every local authority whose area includes the whole or any part of the area to which the appointment or variation relates.

(6) Schedule 5 to this Act shall have effect with respect to the making of transitional provision for the purposes of, or in connection with, the making of an appointment or variation to which section 12 above applies.

(7) In this section “the existing appointee”, in relation to an appointment or variation to which section 12 above applies, means the company which is the existing appointee for the purposes of that section in relation to any area to the whole or any part of which the appointment or variation relates or, where there is more than one such company, each of them.

Conditions of appointment

14

Modification of appointment conditions

Modification by agreement

15

(1) Subject to the following provisions of this section, the Director may modify the conditions of a company’s appointment under this Chapter if the company consents to the modifications.

(2) Before making modifications under this section, the Director shall give notice—

(a) stating that he proposes to make the modifications and setting out their effect;

(b) stating the reasons why he proposes to make the modifications; and

(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.

(3) A notice under subsection (2) above shall be given—

(a) by publishing the notice in such manner as the Director considers appropriate for the purpose of bringing the notice to the attention of persons likely to be affected by the making of the modifications; and

(b) by serving a copy of the notice on the company and on the Secretary of State.

(4) The Director shall not under this section make any modifications which the Secretary of State has, within the time specified in the notice under subsection (2) above, directed the Director not to make.

(5) The Secretary of State shall not give a direction under subsection (4) above in relation to any modification unless—

(a) the modification is a modification of provision contained in the appointment for the purposes of section 12(2)(c) above;

(b) the modification is a modification of a provision of the appointment which relates to the disposal of, or of interests or rights in or over, a company’s protected land and is stated in the appointment to be a provision which cannot be modified; or

Modification references to Monopolies Commission

16

(1) The Director may make to the Monopolies Commission a reference which is so framed as to require the Commission to investigate and report on the questions—

(a) whether any matters which—

(i) relate to the carrying out of any function which is a function of any company by virtue of an appointment of that company under this Chapter; and

(ii) are specified in the reference,

operate, or may be expected to operate, against the public interest; and

(b) if so, whether the effects adverse to the public interest which those matters have or may be expected to have could be remedied or prevented by modifications of the conditions of the company’s appointment.

(2) The Director may, at any time, by notice given to the Monopolies Commission vary a reference under this section by adding to the matters specified in the reference or by excluding from the reference some or all of the matters so specified; and on receipt of any such notice the Commission shall give effect to the variation.

(3) The Director may specify in a reference under this section, or a variation of such a reference, for the purpose of assisting the Monopolies Commission in carrying out the investigation on the reference—

(a) any effects adverse to the public interest which, in his opinion, the matters specified in the reference or variation have or may be expected to have; and

(b) any modifications of the conditions of any appointment mentioned in the reference or variation by which, in his opinion, those effects could be remedied or prevented.

(4) As soon as practicable after making a reference under this section or a variation of such a reference, the Director shall—

(a) serve a copy of the reference or variation on the company whose appointment is mentioned in the reference or variation; and

(b) publish particulars of the reference or variation in such manner as he considers appropriate for the purpose of bringing the reference or variation to the attention of persons likely to be affected by it.

(5) It shall be the duty of the Director, for the purpose of assisting the Monopolies Commission in carrying out an investigation on a reference under this section, to give to the Commission—

(a) any information in his possession which relates to matters falling within the scope of the investigation, and which is either—

(i) requested by the Commission for that purpose; or

(ii) information which, in his opinion, it would be appropriate for that purpose to give to the Commission without any such request;

and

(b) any other assistance which the Commission may require, and which it is within his power to give, in relation to any such matters;

and the Commission, for the purpose of carrying out any such investigation, shall take account of any information given to them for that purpose under this subsection.

(6) In determining for the purposes of this section whether any particular matter operates, or may be expected to operate, against the public interest, the Monopolies Commission shall have regard to the matters as respects which duties are imposed on the Secretary of State and the Director by Part I of this Act.

(7) Sections 70 (time limit for report on merger reference), 81 (procedure in carrying out investigations) and 85 (attendance of witnesses and production of documents) of the Fair Trading Act 1973, Part II of Schedule 3 to that Act (performance of functions of the Monopolies Commission) and section 24 of the Competition Act 1980 (modifications of provisions about performance of such functions) shall apply in relation to references under this section as if—

(a) the functions of the Commission in relation to those references were functions under the said Act of 1973;

(b) the expression “merger reference” included a reference under this section;

(c) in the said section 70, references to the Secretary of State were references to the Director and the reference to three months were a reference to six months;

(d) in paragraph 11 of the said Schedule 3, the reference to section 71 of the said Act of 1973 were a reference to subsection (2) above; and

(e) paragraph 16(2) of that Schedule were omitted.

(8) For the purposes of references under this section the Secretary of State shall appoint not less than eight additional members of the Monopolies Commission; and, if any functions of that Commission in relation to any such reference are performed through a group—

(a) the chairman of that Commission shall select one or more of those additional members to be members of the group; and

(b) the number of regular members to be selected by him under paragraph 10 of Schedule 3 to the Fair Trading Act 1973 shall be reduced by the number of additional members selected.

Reports on modification references

17

(1) In making a report on a reference under section 16 above, the Monopolies Commission—

(a) shall include in the report definite conclusions on the questions comprised in the reference together with such an account of their reasons for those conclusions as, in their opinion, is expedient for facilitating a proper understanding of those questions and of their conclusions;

(b) where they conclude that any of the matters specified in the reference operate, or may be expected to operate, against the public interest, shall specify in the report the effects adverse to the public interest which those matters have or may be expected to have; and

(c) where they conclude that any adverse effects so specified could be remedied or prevented by modifications of the conditions of a company’s appointment under this Chapter, shall specify in the report modifications by which those effects could be remedied or prevented.

(2) Where, on a reference under section 16 above, the Monopolies Commission conclude that a company holding an appointment under this Chapter is a party to an agreement to which the Restrictive Trade Practices Act 1976 applies, the Commission, in making their report on that reference, shall exclude from their consideration the question whether the provisions of that agreement, in so far as they are provisions by virtue of which it is an agreement to which that Act applies, operate, or may be expected to operate, against the public interest; and paragraph (b) of subsection (1) above shall have effect subject to the provisions of this subsection.

(3) Section 82 of the Fair Trading Act 1973 (general provisions as to reports) shall apply in relation to reports of the Monopolies Commission on references under section 16 above as it applies to reports of the Commission under that Act.

(4) A report of the Monopolies Commission on a reference under section 16 above shall be made to the Director.

(5) Subject to subsection (6) below, the Director—

(a) shall, on receiving such a report, send a copy of it to the company to whose appointment under this Chapter the report relates and to the Secretary of State; and

(b) shall, not less than fourteen days after that copy is received by the Secretary of State, publish another copy of that report in such manner as he considers appropriate for bringing the report to the attention of persons likely to be affected by it.

(6) If it appears to the Secretary of State that the publication of any matter in such a report would be against the public interest or the commercial interests of any person, he may, before the end of the period of fourteen days mentioned in paragraph (b) of subsection (5) above, direct the Director to exclude that matter from every copy of the report to be published by virtue of that paragraph; and the Director shall comply with any such direction.

Modification following report

18

(1) Where a report of the Monopolies Commission on a reference under section 16 above—

(a) includes conclusions to the effect that any of the matters specified in the reference operate, or may be expected to operate, against the public interest;

(b) specifies effects adverse to the public interest which those matters have or may be expected to have;

(c) includes conclusions to the effect that those effects could be remedied or prevented by modifications of the conditions of a company’s appointment under this Chapter; and

(d) specifies modifications by which those effects could be remedied or prevented,

the Director shall, subject to the following provisions of this section, make such modifications of the conditions of that appointment as appear to him requisite for the purpose of remedying or preventing the adverse effects specified in the report.

(2) Before making modifications under this section, the Director shall have regard to the modifications specified in the report.

(3) Before making modifications under this section, the Director shall give notice—

(a) stating that he proposes to make the modifications and setting out their effect;

(b) stating the reasons why he proposes to make the modifications; and

(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.

(4) A notice under subsection (3) above shall be given—

(a) by publishing the notice in such manner as the Director considers appropriate for the purpose of bringing the matters to which the notice relates to the attention of persons likely to be affected by the making of the modifications; and

(b) by serving a copy of the notice on the company whose appointment it is proposed to modify.

(5) The Director shall not under this section make any modification of any provisions of a company’s appointment under this Chapter which—

(a) are contained in that appointment for the purposes of section 12(2)(c) above; or

(b) being provisions relating to the disposal of, or of interests or rights in or over, a company’s protected land, are stated in the appointment to be provisions which cannot be modified.

Modification by order under other enactments

19

(1) Subject to subsection (3) below, where in the circumstances mentioned in subsection (2) below the Secretary of State by order exercises any of the powers specified in Parts I and II of Schedule 8 to the Fair Trading Act 1973 or section 10(2)(a) of the Competition Act 1980, the order may also provide for the modification of the conditions of a company’s appointment under this Chapter to such extent as may appear to him to be requisite or expedient for the purpose of giving effect to or taking account of any provision made by the order.

(2) Subsection (1) above shall have effect where—

(a) the circumstances are as mentioned in section 56(1) of the said Act of 1973 (order on report on monopoly reference) and the monopoly situation exists in relation to the carrying out of any of the functions of a water undertaker or sewerage undertaker;

(b) the circumstances are as mentioned in section 73(1) of that Act (order on report on merger reference) and the two or more enterprises which ceased to be distinct enterprises were both engaged in carrying out functions of a water undertaker or sewerage undertaker; or

(c) the circumstances are as mentioned in section 10(1) of the said Act of 1980 (order on report on competition reference) and the anti-competitive practice relates to the carrying out of any of the functions of a water undertaker or sewerage undertaker.

(3) No modification shall be made by virtue of this section of any provisions of a company’s appointment under this Chapter which—

(a) are contained in that appointment for the purposes of section 12(2)(c) above; or

(b) being provisions relating to the disposal of, or of interests or rights in or over, a company’s protected land, are stated in the appointment to be provisions which cannot be modified.

(4) In this section expressions which are also used in the said Act of 1973 or the said Act of 1980 have the same meanings as in that Act.

Enforcement orders

Orders for securing compliance with certain provisions

20

(1) Subject to subsections (2) and (5) and section 21 below, where in the case of any company holding an appointment under this Chapter the Secretary of State or the Director is satisfied—

(a) that that company is contravening—

(i) any condition of the company’s appointment in relation to which he is the enforcement authority; or

(ii) any statutory requirement which is enforceable under this section and in relation to which he is the enforcement authority;

(b) that that company has contravened any such condition or requirement and is likely to do so again,

he shall by a final order make such provision as is requisite for the purpose of securing compliance with that condition or requirement.

(2) Subject to subsection (5) below, where in the case of any company holding an appointment under this Chapter—

(a) it appears to the Secretary of State or the Director as mentioned in paragraph (a) or (b) of subsection (1) above; and

(b) it appears to him that it is requisite that a provisional order be made,

he may (instead of taking steps towards the making of a final order) by a provisional order make such provision as appears to him requisite for the purpose of securing compliance with the condition or requirement in question.

(3) In determining for the purposes of subsection (2)(b) above whether it is requisite that a provisional order be made, the Secretary of State or, as the case may be, the Director shall have regard, in particular, to the extent to which any person is likely to sustain loss or damage in consequence of anything which, in contravention of any condition or of any statutory requirement enforceable under this section, is likely to be done, or omitted to be done, before a final order may be made.

(4) Subject to subsection (5) and section 21 below, where the Secretary of State or the Director has made a provisional order, he shall confirm it, with or without modifications, if—

(a) he is satisfied that the company to which the order relates—

(i) is contravening any condition or statutory requirement in relation to which he is the enforcement authority; or

(ii) has contravened any such condition or requirement and is likely to do so again;

and

(b) the provision made by the order (with any modifications) is requisite for the purpose of securing compliance with that condition or requirement.

(5) Neither the Secretary of State nor the Director shall be required to make a final order or provisional order in relation to any company or to confirm a provisional order so made if he is satisfied—

(a) that the contraventions were, or the apprehended contraventions are, of a trivial nature;

(b) that the company has given, and is complying with, an undertaking to take all such steps as it appears to him for the time being to be appropriate for the company to take for the purpose of securing or facilitating compliance with the condition or requirement in question; or

(c) that the duties imposed on him by Part I of this Act preclude the making or, as the case may be, the confirmation of the order.

(6) Where the Secretary of State or the Director, having notified a company that he is considering the making in relation to the company of a final order or provisional order or the confirmation of a provisional order so made, is satisfied as mentioned in paragraph (a), (b) or (c) of subsection (5) above, he shall—

(a) serve notice that he is so satisfied on the company;

(b) publish a copy of the notice in such manner as he 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; and

(c) in a case where the Secretary of State is satisfied as mentioned in the said paragraph (b), serve a copy of the notice and of the undertaking given for the purposes of that paragraph on the Director;

but the requirements of the preceding provisions of this subsection shall not apply, in the case of any proposed order or confirmation in respect of a direction under section 170 below, to the extent that the Secretary of State directs that they should not be complied with in the interests of national security.

(7) A final or provisional order—

(a) shall require the company to which it relates (according to the circumstances of the case) to do, or not to do, such things as are specified in the order or are of a description so specified;

(b) shall take effect at such time, being the earliest practicable time, as is determined by or under the order; and

(8) For the purposes of this section and the following provisions of this Act—

(a) the statutory requirements which shall be enforceable under this section in relation to a company holding an appointment under this Chapter shall be—

(i) such of the requirements of section 8 or 9 above as are imposed on that company in consequence of that appointment; and

(ii) such of the requirements of any other enactment or of any subordinate legislation as are so imposed and are made so enforceable by that enactment or subordinate legislation;

(b) the Director shall be the enforcement authority in relation to the conditions of an appointment under this Chapter;

(c) the Secretary of State shall be the enforcement authority in relation to the requirements imposed by sections 8 and 9 above; and

(d) the enforcement authority in relation to each of the other statutory requirements enforceable under this section shall be the Secretary of State, the Director or either of them, according to whatever provision is made by the enactment or subordinate legislation by which the requirement is made so enforceable;

and the requirement to comply with an undertaking given for the purposes of subsection (5)(b) above shall be treated as a statutory requirement enforceable under this section by the Secretary of State or, with the consent of or in accordance with a general authorisation given by the Secretary of State, by the Director.

(9) In this section and sections 21 and 22 below—

“final order” means an order under this section other than a provisional order;

“provisional order” means an order under this section which, if not previously confirmed in accordance with subsection (4) above, will cease to have effect at the end of such period (not exceeding three months) as is determined by or under the order.

(10) Where any act or omission constitutes a contravention of a condition of an appointment under this Chapter or of a statutory requirement enforceable under this section, the only remedies for that contravention, apart from those available by virtue of this section, shall be those for which express provision is made by or under any enactment and those that are available in respect of that act or omission otherwise than by virtue of its constituting such a contravention.

Procedural requirements

21

(1) Before making a final order or confirming a provisional order, the Secretary of State or the Director shall give notice—

(a) stating that he proposes to make or confirm the order and setting out the effect of the order;

(b) setting out—

(i) the condition or requirement for the purpose of securing compliance with which the order is to be made or confirmed;

(ii) the acts or omissions which, in his opinion, constitute or would constitute contraventions of that condition or requirement; and

(iii) the other facts which, in his opinion, justify the making or confirmation of the order;

and

(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 order or proposed confirmation may be made,

and shall consider any representations or objections which are duly made and not withdrawn.

(2) A notice under subsection (1) above shall be given—

(a) by publishing the notice in such manner as the Secretary of State or, as the case may be, the Director 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; and

(b) by serving a copy of the notice, and a copy of the proposed order or of the order proposed to be confirmed, on the company to which the order relates and, where the notice is given by the Secretary of State, on the Director.

(3) Neither the Secretary of State nor the Director shall make a final order with modifications, or confirm a provisional order with modifications, except—

(a) with the consent to the modifications of the company to which the order relates; or

(b) after complying with the requirements of subsection (4) below.

(4) The requirements mentioned in subsection (3) above are that the Secretary of State or, as the case may be, the Director shall—

(a) serve on the company to which the order relates such notice as appears to him to be requisite of his proposal to make or confirm the order with modifications;

(b) in that notice specify the period (not being less than twenty-eight days from the date of the service of the notice) within which representations or objections with respect to the proposed modifications may be made; and

(5) As soon as practicable after making a final order or making or confirming a provisional order, the Secretary of State or, as the case may be, the Director shall—

(a) serve a copy of the order on the company to which the order relates and, where this subsection applies in the case of an order made or confirmed by Secretary of State, on the Director; and

(b) publish such a copy in such manner as he considers appropriate for the purpose of bringing the order to the attention of persons likely to be affected by it.

(6) Before revoking a final order or a provisional order which has been confirmed, the Secretary of State or the Director shall give notice—

(a) stating that he proposes to revoke the order and setting out its effect; and

(b) 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 revocation may be made,

and shall consider any representations or objections which are duly made and not withdrawn.

(7) If, after giving a notice under subsection (6) above, the Secretary of State or the Director decides not to revoke the order to which the notice relates, he shall give notice of that decision.

(8) A notice under subsection (6) or (7) above shall be given—

(a) by publishing the notice in such manner as the Secretary of State or, as the case may be, the Director 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; and

(b) by serving a copy of the notice on the company to which the order relates and, where the notice is given by the Secretary of State, on the Director.

(9) The requirements of the preceding provisions of this section shall not apply, in the case of any order in respect of a contravention of a direction under section 170 below, to the extent that the Secretary of State directs that they should not be complied with in the interests of national security.

Validity and effect of orders

22

(1) If the company to which a final or provisional order relates is aggrieved by the order and desires to question its validity on the ground—

(a) that its making or confirmation was not within the powers of section 20 above; or

(b) that any of the requirements of section 21 above have not been complied with in relation to it,

the company may, within forty-two days from the date of service on it of a copy of the order, make an application to the High Court under this section.

(2) On any such application the High Court may, if satisfied that the making or confirmation of the order was not within those powers or that the interests of the company have been substantially prejudiced by a failure to comply with those requirements, quash the order or any provision of the order.

(3) Except as provided by this section, the validity of a final or provisional order shall not be questioned in any legal proceedings whatsoever.

(4) The obligation to comply with a final or provisional order shall be a duty owed to any person who may be affected by a contravention of the order.

(5) Where a duty is owed by virtue of subsection (4) above to any person any breach of the duty which causes that person to sustain loss or damage shall be actionable at the suit of that person.

(6) In any proceedings brought against any company in pursuance of subsection (5) above, other than proceedings in respect of so much of a contravention of any order as consists in a breach of the duty imposed by virtue of section 52(1)(a) below, it shall be a defence for the company to show that it took all reasonable steps and exercised all due diligence to avoid contravening the order.

(7) Without prejudice to any right which any person may have by virtue of subsection (5) above to bring civil proceedings in respect of any contravention or apprehended contravention of a final or provisional order, compliance with any such order shall be enforceable by civil proceedings by the relevant enforcement authority for an injunction or for any other appropriate relief.

(8) In subsection (7) above “the relevant enforcement authority”, in relation to any final or provisional order, means the Secretary of State or the Director or either of them according to who is the enforcement authority in relation to the condition or requirement compliance with which was to be secured by the order.

Special administration orders

Special administration orders in relation to water or sewerage undertakers

23

(1) If, on an application made to the High Court by petition presented—

(a) by the Secretary of State; or

(b) with the consent of the Secretary of State, by the Director,

that Court is satisfied in relation to any company which holds an appointment under this Chapter that any one or more of the grounds specified in subsection (4) below is satisfied in relation to that company, that Court may make an order under this section.

(2) An order under this section is an order directing that, during the period for which the order is in force, the affairs, business and property of the company shall be managed, by a person appointed by the High Court, for the achievement of the purposes of the order and in a manner which protects the respective interests of the members and creditors of the company.

(3) The purposes of an order made under this section in relation to a company holding an appointment under this Chapter shall be—

(a) the transfer to another company, or (as respects different parts of the company’s area or different parts of its undertaking) to two or more different companies, as a going concern, of so much of the company’s undertaking as it is necessary to transfer in order to ensure that the functions which have been vested in the company by virtue of its appointment may be properly carried out; and

(b) the carrying out of those functions pending the making of the transfer and the vesting of those functions in the other company or companies (whether by virtue of the transfer or of an appointment or variation to which section 12 above applies).

(4) The grounds mentioned in subsection (1) above are, in relation to any company—

(a) that there has been, is or is likely to be such a contravention by the company of a requirement imposed on the company by section 37 or 67 below, not being a contravention in respect of which a notice has been served under subsection (6) of section 20 above, as is serious enough to make it inappropriate for the company to continue to hold its appointment;

(b) that there has been, is or is likely to be such a contravention by the company of the provisions of any final order or provisional order under section 20 above, being an order which—

(i) is not for the time being the subject-matter of proceedings brought by virtue of section 22(1) above; and

(ii) if it is a provisional order, has been confirmed,

as is serious enough to make it inappropriate for the company to continue to hold its appointment;

(d) that, in a case in which the Secretary of State has certified that it would be appropriate, but for section 24 below, for him to petition for the winding up of the company under section 440 of the Companies Act 1985 (petition by the Secretary of State following inspectors’ report etc.), it would be just and equitable, as mentioned in that section, for the company to be wound up if it did not hold an appointment under this Chapter; or

(e) that the company is unable or unwilling adequately to participate in arrangements certified by the Secretary of State or the Director to be necessary by reason of, or in connection with, a proposal for the making by virtue of subsection (2)(c) of section 12 above of any appointment or variation to which that section applies.

(5) Notice of the petition for an order under this section shall be given forthwith to such persons and in such manner as may be prescribed by rules made under section 411 of the Insolvency Act 1986; and no such petition shall be withdrawn except with the leave of the High Court.

(6) Subsections (4) and (5) of section 9 of the said Act of 1986 (powers on application for administration order) shall apply on the hearing of the petition for an order under this section in relation to any company as they apply on the hearing of a petition for an administration order.

(7) Subsections (1), (2) and (4) of section 10 of the said Act of 1986 (effect of petition) shall apply in the case of a petition for an order under this section in relation to any company as if—

(a) the reference in subsection (1) to an administration order were a reference to an order under this section;

(b) paragraph (b) of that subsection did require the leave of the court for the taking of any of the steps mentioned in paragraphs (b) and (c) of subsection (2) (appointment of, and exercise of functions by, administrative receiver); and

(c) the reference in paragraph (c) of subsection (1) to proceedings included a reference to any proceedings under or for the purposes of section 20 above.

(8) Schedule 6 to this Act shall have effect with respect to orders under this section and Schedule 5 to this Act shall have effect with respect to the making of transitional provision for the purposes of an order under this section.

(9) In this section and section 24 below—

“business” and “property” have the same meanings as in the Insolvency Act 1986;

“security” has the same meaning as in Parts I to VII of that Act;

and for the purposes of this section a company is unable to pay its debts if it is a limited company which is deemed to be so unable under section 123 of the Insolvency Act 1986 (definition of inability to pay debts) or if it is an unregistered company which is deemed, by virtue of any of sections 222 to 224 of that Act, to be so unable for the purposes of section 221 of that Act (winding up of unregistered companies).

Restriction on winding-up etc. of water or sewerage undertaker

24

Government financial assistance where special administration orders made

25

(1) Where a special administration order is for the time being in force in relation to a company, the Secretary of State, may, with the consent of the Treasury—

(a) make to the company grants or loans of such sums as appear to him to be appropriate for the purpose of facilitating the achievement of the purposes of the order;

(b) agree to indemnify the person appointed to achieve the purposes of the order in respect of liabilities incurred and loss or damage sustained by that person in connection with the carrying out of his functions under the order.

(2) The Secretary of State may, with the consent of the Treasury, guarantee, in such manner and on such conditions as he may think fit, the repayment of the principal of, the payment of interest on and the discharge of any other financial obligation in connection with any sum which is borrowed from any person by a company in relation to which a special administration order is in force at the time when the guarantee is given.

(3) Without prejudice to any provision applied in relation to the company by Schedule 6 to this Act—

(a) the terms and conditions on which a grant is made to any company under this section may require the whole or part of the grant to be repaid to the Secretary of State if there is a contravention of the other terms and conditions on which the grant is made; and

(b) any loans which the Secretary of State makes to a company under this section shall be repaid to him at such times and by such methods, and interest thereon shall be paid to him at such rates and at such times, as he may, with the consent of the Treasury, from time to time direct.

(4) Any grant or loan made under this section and any sums required to be paid by the Secretary of State in respect of an indemnity given under this section shall be paid out of money provided by Parliament.

(5) Any sums received under subsection (3) above by the Secretary of State shall be paid into the Consolidated Fund.

(6) In this section “special administration order” means an order under section 23 above (whether made by virtue of that section or section 24 above).

Review of certain matters and investigation of complaints

Director’s duty to keep matters under review and to consider certain matters

26

(1) It shall be the duty of the Director, so far as it appears to him practicable from time to time to do so, to keep under review the carrying on both in England and Wales and elsewhere of activities connected with the matters in relation to which water undertakers or sewerage undertakers carry out functions.

(2) It shall also be the duty of the Director, so far as it appears to him practicable from time to time to do so, to collect information with respect to—

(a) the carrying out by companies appointed under this Chapter of the functions of water undertakers or sewerage undertakers; or

(b) any such company,

with a view to his becoming aware of, and ascertaining the circumstances relating to, matters with respect to which any power or duty is conferred or imposed on him by or under any enactment.

(3) The Secretary of State may give general directions indicating—

(a) considerations to which the Director should have particular regard in determining the order of priority in which matters are to be brought under review in performing his duty under subsection (1) or (2) above; and

(b) considerations to which, in cases where it appears to the Director that any of his powers under this Part are exercisable, he should have particular regard in determining whether to exercise those powers;

and it shall be the duty of the Director to comply with any such directions.

(4) It shall be the duty of the Director, where either he considers it expedient or he is requested by the Secretary of State or the Director General of Fair Trading to do so, to give information, advice and assistance to the Secretary of State or that Director with respect to any matter relating to the functions of water undertakers or sewerage undertakers or the carrying out of any such functions by a company holding an appointment under this Chapter.

Protection of customer interests

27

(1) It shall be the duty of a customer service committee—

(a) to keep under review all matters appearing to the committee to affect the interests of the persons who are customers or potential customers of the companies allocated to the committee, to consult each company so allocated about such of those matters as appear to affect the interests of the customers or potential customers of that company and to make to a company so allocated all such representations about any such matter as the committee considers appropriate;

(b) subject to paragraph (c) below, to investigate any complaint which—

(i) is made to the committee by any person who is a customer or potential customer of a company so allocated or is referred to the committee by the Director under subsection (2) below;

(ii) does not appear to the committee to be vexatious or frivolous; and

(iii) relates to the carrying out by that company of any of the functions of a water undertaker or sewerage undertaker;

(c) to refer to the Director every complaint which is made to the committee by any person in relation to a company allocated to the committee and consists in or amounts to a complaint which the Director would be required to investigate under section 162 below or an assertion that the company is contravening or has contravened—

(i) any condition of the company’s appointment under this Chapter; or

(ii) any statutory or other requirement enforceable under section 20 above;

(d) where the committee considers it appropriate to do so in connection with any such complaint as is mentioned in paragraph (b) above, to make representations on behalf of the complainant to the company in question about any matter to which the complaint relates or which appears to the committee to be relevant to the subject-matter of the complaint; and

(e) to refer to the Director or, as the case may be, back to the Director any such complaint as is so mentioned which the committee is unable to resolve.

(2) It shall be the duty of the Director—

(a) to consider whether any complaint which—

(i) is made to him by a customer or potential customer of a company allocated to a customer service committee; and

(ii) does not consist in or amount to a complaint which he is required to investigate under section 162 below or such an assertion as is mentioned in subsection (1)(c) above,

should be referred to that committee instead of being dealt with by him;

(b) to consider whether any complaint which does consist in or amount to such an assertion and is either made to him by such a customer or potential customer or is referred to him by such a committee should be referred by him to the Secretary of State;

(c) to consider any such complaint as is mentioned in paragraph (b) above which is not referred by him to the Secretary of State;

(d) to consider any complaint referred to him by virtue of subsection (1)(e) above;

(e) to consider any complaint made to him by a customer or potential customer of a company allocated to a customer service committee that the committee has failed to perform any duty imposed on it by subsection (1) above; and

(f) to take such steps in consequence of his consideration of any matter falling within any of paragraphs (a) to (e) above (including in a case falling within paragraph (d) or (e) above any step which could have been taken by the committee) as he considers appropriate.

(3) The only remedy for a breach by a customer service committee of a duty imposed on it by subsection (1) above shall be the making of such a complaint to the Director as is mentioned in subsection (2)(e) above.

(4) It shall be the duty of the Director to make such arrangements as he considers appropriate for facilitating the provision by one customer service committee to another of any such information as that other committee may require for any purpose relating to the carrying out of its functions.

Provisions with respect to competition

Functions of Director with respect to competition

28

(1) If and to the extent that he is requested by the Director General of Fair Trading to do so, it shall be the duty of the Director to exercise the functions of that Director under Part III of the Fair Trading Act 1973 so far as relating to courses of conduct which are or may be detrimental to the interests of persons who are consumers in relation to the supply of water by water undertakers or the provision of sewerage services by sewerage undertakers, whether those interests are economic or interests in respect of health, safety or other matters; and references in that Part to that Director shall be construed accordingly.

(2) There are hereby transferred to the Director (so as to be exercisable concurrently with the Director General of Fair Trading)—

(a) the functions of that Director under sections 44 and 45 of the Fair Trading Act 1973; and

(b) the functions of that Director under sections 50, 52, 53, 86 and 88 of that Act,

so far as relating to monopoly situations which exist or may exist in relation to commercial activities connected with the supply of water or the provision of sewerage services; and references in Part IV and sections 86, 88 and 133 of that Act to that Director shall be construed accordingly.

(3) There are hereby transferred to the Director (so as to be exercisable concurrently with the Director General of Fair Trading) the functions of that Director under sections 2 to 10 and 16 of the Competition Act 1980 so far as relating to courses of conduct which have or are intended to have or are likely to have the effect of restricting, distorting, or preventing competition in connection with the supply of water or securing a supply of water or with the provision or securing of sewerage services; and references in those sections and in section 19 of that Act to that Director shall be construed accordingly.

(4) Before either Director first exercises in relation to any matter functions transferred by any of the following provisions, namely—

(a) paragraph (a) of subsection (2) above;

(b) paragraph (b) of that subsection; and

he shall consult the other Director; and neither Director shall exercise in relation to any matter functions transferred by any of those provisions if functions transferred by that provision have been exercised in relation to that matter by the other Director.

(5) It shall be the duty of the Director, for the purpose of assisting the Monopolies Commission in carrying out an investigation on a reference made to them by the Director by virtue of subsection (2) or (3) above, to give to the Commission—

(a) any information which is in his possession and which relates to matters falling within the scope of the investigation, and which is either requested by the Commission for that purpose or is information which in his opinion it would be appropriate for that purpose to give to the Commission without any such request; and

(b) any other assistance which the Commission may require, and which it is within his power to give, in relation to any such matters;

and the Commission shall, for the purposes of carrying out any such investigation, take into account any information given to them for that purpose under this subsection.

(6) If any question arises as to whether subsection (2) or (3) above applies to any particular case, that question shall be referred to and determined by the Secretary of State; and no objection shall be taken to anything done under—

(a) Part IV or section 86 or 88 of the Fair Trading Act 1973; or

(b) sections 2 to 10 of the Competition Act 1980,

by or in relation to the Director on the ground that it should have been done by or in relation to the Director General of Fair Trading.

(7) Expressions used in this section which are also used in the Fair Trading Act 1973 or the Competition Act 1980 have the same meaning as in that Act.

Mergers of water or sewerage undertakings

29

References under section 29

30

(1) Subject to subsections (2) to (5) below, the Fair Trading Act 1973 shall have the effect in relation to any reference under section 29 above as if—

(a) any such merger of two or more water enterprises as is required to be the subject of such a reference were a merger situation qualifying for investigation; and

(b) a reference under that section were made under section 64 of that Act or, as the case may be, under section 75 of that Act (references in anticipation of a merger).

(2) Nothing in subsection (1) above shall have the effect in relation to any reference under section 29 above of applying—

(a) so much of Part V of the Fair Trading Act 1973 as requires the Monopolies Commission to consider any of the matters set out in subsection (1) of section 64 of that Act; or

(b) the provisions of sections 69(2) to (4) and 75(3) of that Act (power to restrict matters referred).

(3) In determining on a reference under section 29 above whether any matter operates, or may be expected to operate, against the public interest the Monopolies Commission—

(a) shall have regard to the desirability of giving effect to the principle that the number of water enterprises which are under independent control should not be reduced so as to prejudice the Director’s ability, in carrying out his functions by virtue of this Act, to make comparisons between different such water enterprises; and

(b) shall have regard to the desirability of achieving any other purpose so far only as they are satisfied—

(i) that that other purpose can be achieved in a manner that does not conflict with that principle; or

(ii) that the achievement of that other purpose is of substantially greater significance in relation to the public interest than that principle and cannot be brought about except in a manner that conflicts with that principle.

(4) No order shall be made under Part V of the Fair Trading Act 1973 in consequence of any merger reference made under section 29 above in respect of an actual merger unless the reference was made within the appropriate time limit; and if on such a reference the Monopolies Commission are satisfied that the reference was not made within that time limit their report on the reference shall state that fact and nothing else.

(5) For the purposes of subsection (4) above the appropriate time limit is—

(a) in the case of a reference in respect of a merger which took place before the passing of this Act, the period of six months beginning with the day on which this Act is passed; and

(b) in any other case of a merger which has taken place before the reference, the period of six months beginning with whichever is the later of—

(i) the day on which the merger took place; and

(ii) the day on which the material facts about the transactions which resulted in the merger first came to the notice of the Secretary of State or the Director General of Fair Trading or were made public within the meaning of section 64 of the Fair Trading Act 1973.

(6) In this section “water enterprise” has the same meaning as in section 29 above; and the reference to the number of water enterprises under independent control is a reference to the number of water enterprises there would be if two or more water enterprises counted as one enterprise wherever they would be treated for the purposes of Part V of the Fair Trading Act 1973 as having ceased to be distinct enterprises.

The Director’s register

31

Information and reports

Duty of undertakers to furnish information to the Secretary of State

32

(1) It shall be the duty of a company holding an appointment under this Chapter and, in relation to any time before the transfer date, of any statutory water company within the meaning of the 1973 Act to furnish the Secretary of State with all such information relating to any matter which—

(a) is connected with, or with any proposals relating to, the carrying out by that company of the functions of a water undertaker or sewerage undertaker; or

(b) is material to the carrying out by the Secretary of State of any of his functions under this Act,

as the Secretary of State may reasonably require.

(2) Information required under this section shall be furnished in such form and manner, and be accompanied or supplemented by such explanations, as the Secretary of State may reasonably require.

(3) The information which a company may be required to furnish to the Secretary of State under this section shall include information which, although it is not in the possession of that company or would not otherwise come into the possession of that company, is information which it is reasonable to require that company to obtain.

(4) A requirement for the purposes of this section shall be contained in a direction which—

(a) may describe the information to be furnished in such manner as the Secretary of State considers appropriate;

(b) may require the information to be furnished on a particular occasion, in particular circumstances or from time to time; and

(c) may be given to a particular company, to companies of a particular description or to all the companies holding appointments under this Chapter.

(5) The obligations of a water undertaker or sewerage undertaker under this section shall be enforceable under section 20 above by the Secretary of State.

Power to require information etc. for enforcement purposes

33

(1) Where it appears to the Secretary of State or the Director that a company which holds an appointment under this Chapter may be contravening, or may have contravened—

(a) any condition of its appointment; or

(b) any statutory or other requirement enforceable under section 20 above,

he may, for any purpose connected with such of his powers under sections 20 to 23 above as are exercisable in relation to that matter, serve a notice under subsection (2) below on any person.

(2) A notice under this subsection is a notice signed by the Secretary of State or the Director and—

(a) requiring the person on whom it is served to produce, at a time and place specified in the notice, to the Secretary of State or the Director or to any person appointed by the Secretary of State or the Director for the purpose, any documents which are specified or described in the notice and are in that person’s custody or under his control; or

(b) requiring that person, if he is carrying on a business, to furnish, at the time and place and in the form and manner specified in the notice, the Secretary of State or the Director with such information as may be specified or described in the notice.

(3) No person shall be required under this section to produce any documents which he could not be compelled to produce in civil proceedings in the High Court or, in complying with any requirement for the furnishing of information, to give any information which he could not be compelled to give in evidence in any such proceedings.

(4) A person who, without reasonable excuse, fails to do anything required of him by a notice under subsection (2) above shall be guilty of an offence and liable, on summary conviction, to a fine not exceeding level 5 on the standard scale.

(5) A person who intentionally alters, suppresses or destroys any document which he has been required by any notice under subsection (2) above to produce shall be guilty of an offence and liable—

(a) on summary conviction, to a fine not exceeding the statutory maximum;

(b) on conviction on indictment, to a fine.

(6) If a person makes default in complying with a notice under subsection (2) above, the High Court may, on the application of the Secretary of State or the Director, make such order as the Court thinks fit for requiring the default to be made good; and any such order may provide that all the costs or expenses of and incidental to the application shall be borne by the person in default or by any officers of a company or other association who are responsible for its default.

(7) Nothing in this section shall be construed as restricting any power of the Secretary of State or the Director under section 32 above or the conditions of an appointment under this Chapter to require a company holding such an appointment to produce any document to him or to furnish him with any information.

Publication of information and advice

34

(1) The Secretary of State may arrange for the publication, in such form and in such manner as he considers appropriate, of such information relating to any matter which is connected with the carrying out by a company holding an appointment under this Chapter of the functions of a water undertaker or sewerage undertaker as it may appear to him to be in the public interest to publish.

(2) The Director may arrange for the publication, in such form and in such manner as he considers appropriate, of such information and advice as it may appear to him to be expedient to give to any customer or potential customer of a company holding an appointment under this Chapter.

(3) In arranging for the publication of any such information or advice the Secretary of State or the Director shall have regard to the need for excluding, so far as that is practicable—

(a) any matter which relates to the affairs of an individual, where the publication of that matter would or might, in the opinion of the Secretary of State or (as the case may be) of the Director, seriously and prejudicially affect the interests of that individual; and

(b) any matter which relates specifically to the affairs of a particular body of persons, whether corporate or unincorporate, where publication of that matter would or might, in the opinion of the Secretary of State or (as the case may be) of the Director, seriously and prejudicially affect the interests of that body.

Reports by Director

35

(1) The Director shall, as soon as practicable after the end of the year 1989 and of each subsequent calendar year make to the Secretary of State a report on—

(a) his activities during that year; and

(b) the Monopolies Commission’s activities during that year so far as relating to references made by him.

(2) Every such report shall—

(a) include a general survey of developments, during the year to which it relates, in respect of matters falling within the scope of the Director’s functions; and

(b) set out any general directions given to the Director during that year under section 26(3) above.

(3) The Secretary of State shall lay a copy of every report made by the Director under subsection (1) above before each House of parliament and shall arrange for copies of every such report to be published in such manner as he considers appropriate.

(4) The Director may also prepare such other reports as appear to him to be expedient with respect to any matters falling within the scope of his functions.

(5) The Director may arrange for copies of any report prepared under subsection (4) above to be published in such manner as he considers appropriate.

(6) In making or preparing any report under this section the Director shall have regard to the need for excluding, so far as that is practicable, the matters specified in section 34(3)(a) and (b) above.

Reports by customer service committees

36

(1) A customer service committee—

(a) shall prepare a report on any such matter as the Director may require; and

(b) may prepare a report concerning any matter which appears to the customer service committee to affect the interests of the customers or potential customers of a company allocated to the committee,

and, as soon as reasonably practicable after preparing a report under this subsection, a customer service committee shall send a copy of the report to the Director.

(2) As soon as reasonably practicable after the end of each financial year, a customer service committee shall prepare a report on its activities during that year and shall send a copy of that report to the Director.

(3) The Director may arrange for any report which has been sent to him by virtue of this section to be published in such manner as he considers appropriate.

(4) In publishing any report under this section the Director shall have regard to the need for excluding, so far as that is practicable, the matters specified in section 34(3)(a) and (b) above.

Chapter II

General duties of water undertakers

General duty with respect to water supply

37

Standards of performance in connection with water supply

38

(1) For the purpose—

(a) of facilitating the determination of the extent to which breaches of the obligations imposed by the following provisions of this Chapter are to amount to breaches of the duty imposed by section 37 above; or

(b) of supplementing that duty by establishing overall standards of performance in relation to that duty,

the Secretary of State may by regulations provide for contraventions of such requirements as may be prescribed to be treated for the purposes of this Act as breaches of that duty.

(2) The Secretary of State may by regulations prescribe such standards of performance in connection with the provision of supplies of water as, in his opinion, ought to be achieved in individual cases; and such regulations may provide that if a water undertaker fails to meet a prescribed standard it shall pay such amount as may be prescribed to any person who is affected by the failure and is of a prescribed description.

(3) Without prejudice to the generality of the power conferred by subsection (2) above, regulations under that subsection may—

(a) include in a standard of performance a requirement for a water undertaker, in prescribed circumstances, to inform a person of his rights by virtue of any such regulations;

(b) provide for any dispute under the regulations to be referred by either party to the dispute to the Director;

(c) make provision for the procedure to be followed in connection with any such reference and for the Director’s determination on such a reference to be enforceable in such manner as may be prescribed;

(d) prescribe circumstances in which a water undertaker is to be exempted from requirements of the regulations.

(4) Subject to subsection (5) below, the Secretary of State shall not make any regulations under subsection (1) or (2) above unless—

(a) the Director has made a written application to the Secretary of State which—

(i) sets out draft provisions proposed by the Director for inclusion in such regulations;

(ii) specifies the water undertaker or undertakers in relation to which it is proposed those provisions should apply; and

(iii) summaries the Director’s reasons for his proposals;

(b) the Secretary of State is satisfied that a copy of the application has been served by the Director on every water undertaker specified in the application;

(c) the regulations contain only the provisions proposed by the Director or those provisions with such modifications as the Secretary of State considers appropriate;

(d) the only modifications of the Director’s proposals to which effect is given by the regulations are modifications the proposal to make which has been notified to the Director and to any water undertaker appearing to the Secretary of State to be likely to be affected by the modifications;

(e) such period as the Secretary of State considers appropriate has been allocated for the making by the Director and by any affected water undertaker of representations or objections with respect to the Director’s proposals and any modifications proposed by the Secretary of State; and

(f) the Secretary of State has considered both the Director’s reasons for his proposals and every representation or objection which has been duly made with respect to those proposals, or any proposed modifications of those proposals, and has not been withdrawn.

(5) Subsection (4) above shall not apply in relation to any regulations made under subsection (2) above before the transfer date.

(6) The obligations imposed on a water undertaker by the following provisions of this Chapter and the remedies available in respect of contraventions of those obligations shall be in addition to any duty imposed or remedy available by virtue of any provision of this section or section 37 above and shall not be in any way qualified by any such provision.

Bulk supplies of water

Bulk supply between water undertakers

39

(1) Where, on the application of a water undertaker—

(a) it appears to the Director that it is necessary or expedient for the purposes of this Chapter that another water undertaker should give a supply of water in bulk to the applicant; and

(b) he is satisfied that the giving and taking of such a supply cannot be secured by agreement,

the Director may by order require the undertakers to give and to take such a supply for such period and on such terms and conditions as may be provided in the order.

(2) An order under this section shall have effect as an agreement between the water undertakers in question but may be varied or revoked by a subsequent order made by the Director on the application of either of those undertakers, as well as by agreement between the undertakers.

(3) The Director shall not make an order under this section which he considers affects the carrying out by the Authority of any of its functions unless he has first consulted the Authority.

(4) In determining what provision to make by an order under this section in respect of the giving of any supply by a water undertaker the Director shall have regard to the desirability of the undertaker’s recovering the expenses of complying with its obligations under this section and of securing a reasonable return on its capital.

Duties to provide supplies etc.

Requisitioning of water mains

40

(1) It shall be the duty of a water undertaker to provide a water main to be used for providing such supplies of water to premises in a particular locality in its area as (so far as those premises are concerned) are sufficient for domestic purposes, if—

(a) the undertaker is required to provide the main by a notice served on the undertaker by one or more of the persons who under subsection (2) below are entitled to require the provision of the main for that locality;

(b) the premises in that locality to which those supplies would be provided by means of that main are—

(i) premises consisting in buildings or parts of buildings; or

(ii) premises which will so consist when proposals made by any person for the erection of buildings or parts of buildings are carried out;

and

(2) Each of the following persons shall be entitled to require the provision of a water main for any locality, that is to say—

(a) the owner of any premises in that locality;

(b) the occupier of any premises in that locality;

(d) where the whole or any part of that locality is situated in a new town, within the meaning of the New Towns Act 1981—

(i) the Commission for the New Towns; and

(ii) the Development Board for Rural Wales or the development corporation for the new town, according to whether or not the new town is situated within the area for which that Board is for the time being responsible;

and

(e) where the whole or any part of that locality is situated within an area designated as an urban development area under Part XVI of the Local Government, Planning and Land Act 1980, the urban development corporation.

(3) A water undertaker shall not be in breach of a duty imposed by this section in relation to any locality unless—

(a) the period of three months beginning with the relevant day has expired; and

(b) the water undertaker has not, before the end of that period, so laid the water main to be provided as to enable service pipes to premises in that locality to connect with the main at the places determined under subsection (4) below;

and for the purposes of this subsection the period mentioned in paragraph (a) above may be extended by agreement between the undertaker and the person or persons who required the provision of the water main or, where there is a dispute as to whether the period should be extended, by an arbitrator on a reference under subsection (5) below.

(4) The places mentioned in subsection (3)(b) above shall be determined by agreement between the water undertaker and the person or persons who required the provision of the water main or, in default of agreement, shall be such places as are determined by an arbitrator, on a reference under subsection (5) below, to be the places at which it is reasonable, in all the circumstances, for service pipes to premises in the locality in question to connect with the water main.

(5) A reference for the purposes of subsection (3) or (4) above shall be to a single arbitrator appointed by agreement between the undertaker and the person or persons who required the provision of the water main or, in default of agreement, by the President of the Institution of Civil Engineers.

(6) The duty of a water undertaker under this section to provide a water main shall be owed to the person who requires the provision of the main or, as the case may be, to each of the persons who joins in doing so; and any breach by a water undertaker of any such duty which causes any person to whom the duty is owed to sustain loss or damage shall be actionable at the suit of that person.

(7) In any proceedings brought against a water undertaker in pursuance of subsection (6) above in respect of a breach of duty which has caused any person to sustain loss or damage it shall be a defence for the undertaker to show that it took all reasonable steps and exercised all due diligence to avoid the breach.

(8) In this section—

“local authority”, in relation to the Inner Temple and the Middle Temple, includes, respectively, the Sub-Treasurer of the Inner Temple and the Under-Treasurer of the Middle Temple;

“relevant day”, in relation to a requirement to provide a water main for any locality, means the day after whichever is the later of the following, that is to say— the day on which the conditions specified in section 41 below are satisfied in relation to the requirement; and the day on which the places where service pipes to premises in that locality will connect with the main are determined under subsection (4) above.

Financial conditions for water main requisition

41

(1) The conditions mentioned in section 40(1)(c) above are satisfied in relation to a requirement for the provision of a water main by a water undertaker if—

(a) such undertakings as the undertaker may have reasonably required in accordance with subsection (2) below have been given by the person or persons who have required the provision of the main; and

(b) such security as the undertaker may have reasonably required has been provided for the discharge of any obligations imposed by those undertakings on any person who—

(i) by virtue of section 40(2)(a) or (b) above required, or joined in requiring, the provision of the main; and

(ii) is not a public authority.

(2) The undertakings which a water undertaker may require for the purposes of subsection (1) above in respect of any water main are undertakings which bind the person or persons mentioned in that subsection (in the case of two or more persons, either jointly and severally or with liability to pay apportioned in such manner as those persons may agree) to pay to the undertaker, in respect of each of the twelve years following the provision of the main, an amount not exceeding the relevant deficit (if any) for that year on that main.

(3) For the purposes of this section the relevant deficit for any year on a water main is the amount (if any) by which the water charges payable for the use during that year of that main are exceeded by the annual borrowing costs of a loan of the amount required for the provision of that main.

(4) The annual borrowing costs of a loan of the amount required for the provision of a water main is the aggregate amount which would fall to be paid in any year by way of payments of interest and repayments of capital if an amount equal to so much of the costs reasonably incurred in providing that main as were not incurred in the provision of additional capacity had been borrowed, by the water undertaker providing the main, on terms—

(a) requiring interest to be paid and capital to be repaid in twelve equal annual instalments; and

(b) providing for the amount of the interest to be calculated at such rate, and in accordance with such other provision, as may have been determined either by the undertaker with the approval of the Director or, in default of such a determination, by the Director.

(5) The costs reasonably incurred in providing a water main (“the new main”) shall include—

(a) the costs reasonably incurred in providing such other water mains and such tanks, service reservoirs and pumping stations as it is necessary to provide in consequence of the provision of the new main; and

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