The Water Services etc. (Scotland) Act 2005 (Consequential Provisions and Modifications) Order 2005

Made: 10th November 2005

Coming into force: 11th November 2005

In accordance with section 115 of, and paragraphs 1, 2 and 3 of Schedule 7 to, that Act, a draft of this Order was laid before Parliament and approved by a resolution of each House of Parliament.

Citation, commencement and extent

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• (1) This Order may be cited as the Water Services etc. (Scotland) Act 2005 (Consequential Provisions and Modifications) Order 2005 and shall come into force on the day after the day on which it is made.

• (2) Articles 2 to 10 extend to Scotland only.

• (3) The modifications specified in the Schedule have the same extent as the provisions being amended or repealed.

Interpretation

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• (1) In this Order–

• “the 2002 Act” means the Water Industry (Scotland) Act 2002[^f00002];

• “the 2005 Act” means the Water Services etc. (Scotland) Act 2005[^f00003];

• “article 3(2) or (3) reference” means a reference under article 3 following a request under article 3(2) or (3) and includes any variation of any such reference under article 3(8);

• “article 3(4) reference” means a reference under article 3 following a request under article 3(4) and includes any variation of any such reference under article 3(8);

• “the CMA” means the Competition and Markets Authority;

• ...

• “determination” means the WIC’s determination of maximum amounts of charges under section 29B(1)(a) of the 2002 Act[^f00004];

• “revised determination” means a determination as revised under section 29F(3)(b) of the 2002 Act[^f00005];

• “sewerage services licence” means a licence granted under section 6(3) of the 2005 Act;

• “sewerage services provider” means a person who holds a sewerage services licence;

• “water services licence” means a licence granted under section 6(1) of the 2005 Act;

• “water services provider” means a person who holds a water services licence; and

• “the WIC” means the Water Industry Commission for Scotland.

• (2) A reference in this Order to anything done in writing or produced in written form includes a reference to an electronic communication, as defined in the Electronic Communications Act 2000[^f00006], which has been recorded in written form and is capable of being reproduced in that form.

References to the Commission

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• (1) Where paragraph (2), (3) or (4) applies, the WIC shall, as soon as practicable, make a reference to the CMA in accordance with this article.

• (2) This paragraph applies where–

• (a) a water services licence or a sewerage services licence has been granted; and

• (b) the person to whom it is granted or Scottish Water has, within one month of the date on which a copy of the licence was sent under section 7(6) of the 2005 Act, requested in writing that the WIC makes a reference.

• (3) This paragraph applies where–

• (a) a condition included in a water services licence or a sewerage services licence has been modified in terms of paragraph 2 of Schedule 2 to the 2005 Act; and

• (b) a water services provider or a sewerage services provider whose licence has been modified or Scottish Water has, within one month of the date on which the modification has effect, requested in writing that the WIC makes a reference.

• (4) This paragraph applies where–

• (a) the WIC has–

• (i) made a determination;

• (ii) made a revised determination; or

• (iii) decided not to revise a determination; and

• (b) Scottish Water has, within 2 months of the date on which–

• (i) a determination was sent to it under section 29B(1)(b) of the 2002 Act;

• (ii) a revised determination was notified to it under section 29F(7) of that Act; or

• (iii) it received notification of a decision not to revise a determination under section 29F(6) of that Act,

requested in writing that the WIC makes a reference.

• (5) An article 3(2) or (3) reference shall be so framed as to require the CMA to investigate and report on the questions–

• (a) whether any matters which–

• (i) relate to the carrying out of activities authorised or regulated by or under a water services licence or a sewerage services licence, as the case may be; 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 modification of the conditions of such a licence.

• (6) An article 3(4) reference shall be so framed as to require the CMA to investigate and report on such questions as are specified in the reference and which relate to whether a different determination or revised determination shall be substituted for that of the WIC.

• (7) In determining, for the purposes of–

• (a) an article 3(2) or (3) reference whether any particular matter operates, or may be expected to operate, against the public interest, the CMA shall take account of the WIC’s powers and duties set out in section 1 of the 2002 Act and sections 7 and 11 of, and Schedule 2 to, the 2005 Act; and

• (b) an article 3(4) reference that a different determination or revised determination should be substituted for that of the WIC, the CMA shall do so in accordance with the WIC’s powers and duties set out in sections 1 and 29C(2)[^f00007] of the 2002 Act.

• (8) The WIC may at any time, by notice given to the CMA, vary a reference by–

• (a) adding to the matters specified in the reference; or

• (b) excluding from the reference some of the matters so specified,

and on receipt of any such notice the CMA shall give effect to the variation.

• (9) The WIC may specify in a reference, or a variation of a reference, for the purpose of assisting the CMA in carrying out an investigation–

• (a) in relation to an article 3(2) or (3) reference–

• (i) any effects adverse to the public interest which, in its opinion, the matters specified in the reference have or may be expected to have; and

• (ii) any modifications of the conditions of a water services licence or a sewerage services licence by which, in the WIC’s opinion, those effects could be remedied or prevented; or

• (b) in relation to an article 3(4) reference, any modifications of the determination or the revised determination, which, in the WIC’s opinion, would answer the questions specified in the reference.

• (10) As soon as practicable after making a reference or a variation of such a reference, the WIC shall–

• (a) serve a copy of the reference or variation of that reference on–

• (i) all water services providers and sewerage services providers;

• (ii) Scottish Water; and

• (iii) the Scottish Ministers; ...

• (iv) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

• (11) The WIC shall, for the purpose of assisting the CMA in carrying out an investigation on a reference, give to the CMA–

• (a) any information in its possession which relates to matters falling within the scope of the investigation and which is either–

• (i) requested by the CMA for that purpose; or

• (ii) information which, in the WIC’s opinion, it would be appropriate for that purpose to give to the CMA without any such request; and

• (b) any other assistance which the CMA may require, and which it is within the WIC’s power to give, in relation to any such matters.

• (12) The CMA, for the purpose of carrying out any investigation on a reference, shall take account of any information given to it for that purpose under paragraph (11).

• (13) The functions of the CMA with respect to a reference under this article are to be carried out on behalf of the CMA by a group constituted for the purpose by the chair of the CMA under Schedule 4 to the Enterprise and Regulatory Reform Act 2013 (including functions relating to the making of modifications following a report on a reference, and functions under sections 109 to 115 of the Enterprise Act 2002, as applied by articles 5 and 10).

References: Time Limits

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• (1) In respect of every reference, the WIC shall specify a period (not longer than 6 months beginning with the date of receipt of the reference) within which a report on the reference is to be made.

• (2) A report of the CMA on a reference shall not have effect (and no action shall be taken in relation to it under article 8) unless the report is made before the end of the period specified in the reference, or such further period (if any) as may be allowed by the WIC under paragraph (3).

• (3) The WIC may, if it has received representations from the CMA on the matter, and is satisfied that there is good reason why the report cannot be made within the period specified in the reference, extend that period by not more than 6 months; and no more than one extension is possible in respect of the same reference.

• (4) The WIC shall, in the case of an extension made by it under paragraph (3)–

• (a) serve notice of the extension on–

• (i) all water services providers and sewerage services providers;

• (ii) Scottish Water; and

• (iii) the Scottish Ministers; ...

• (iv) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (b) publish details of the extension in such manner as it considers appropriate for the purpose of bringing it to the attention of persons likely to be affected by it.

References: powers of investigation

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• (1) The following sections of Part 3 of the Enterprise Act 2002[^f00008] shall apply, as they had effect immediately before the relevant date and with the modifications referred to in paragraphs (1A) to (4), for the purposes of references under article 3 as they applied immediately before that date for the purposes of 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);

• (h) section 116 (statement of policy);

• (i) section 117 (false or misleading information)[^f00009]; and

• (j) section 125 (offences by bodies corporate).

• (1A) Section 109 shall, in its application by virtue of paragraph (1), have effect as if—

• (a) for subsection (A1), there were substituted—

(A1) For the purposes of this section, a permitted purpose is assisting the CMA in carrying out any functions exercisable by it in connection with a reference under article 3 of the Water Services etc. (Scotland) Act 2005 (Consequential Provisions and Modifications) Order 2005.

, and

• (b) subsection (8A) were omitted.

• (2) Section 110 shall, in its application by virtue of paragraph (1), have effect as if–

• (a) subsection (2) were omitted;

• (aa) after subsection (3), there were inserted—

(3A) No penalty shall be imposed by virtue of subsection (1) or (3) if more than 4 weeks have passed since the publication of the report of the CMA on the reference concerned; but this subsection shall not apply in relation to any variation or substitution of the penalty which is permitted by virtue of this Part.

• (b) in subsection (7), for the words “statutory maximum” there were substituted “amount specified as level 5 on the standard scale”; and

• (c) in subsection (9), the words from “or section” to “section 65(3))” were omitted.

• (3) Section 111 shall, in its application by virtue of paragraph (1), have effect as if–

• (a) for subsection (4) there were substituted–

(4) No penalty imposed under section 110(1) shall– (a) in the case of a fixed amount, exceed £20,000; (b) in the case of an amount calculated by reference to a daily rate, exceed £5,000; and (c) in the case of a fixed amount and an amount calculated by reference to a daily rate, exceed– (i) in respect of a fixed amount, £20,000; and (ii) in respect of an amount calculated by reference to a daily rate, £5,000.

• (b) in subsection (5)(b), for sub-paragraph (ii) there were substituted—

(ii) if earlier, the day on which the report of the CMA on the reference concerned is made or, if no such report is made within the period permitted for that purpose, the latest day on which the report may be made within the permitted period.

• (c) for subsection (6) there were substituted–

(6) No penalty imposed under section 110(3) shall exceed £20,000.

• (4) Section 117 shall, in its application by virtue of paragraph (1), have effect as if–

• (a) in each of subsections (1)(a) and (2)–

• (i) the words “, OFCOM or the Secretary of State” were omitted;

• (ii) for “their” there were substituted “its”; and

• (iii) for “this Part” there were substituted “the Water Services etc. (Scotland) Act 2005 (Consequential Provisions and Modifications) Order 2005”; and

• (b) in subsection (3), for the words “statutory maximum” there were substituted “amount specified as level 5 on the standard scale”.

• (5) Provisions of Part 3 of the Enterprise Act 2002 which , immediately before the relevant date, had effect for the purposes of sections 109 to 117 and 125 of that Act shall, for the purposes of the application of those sections by virtue of paragraph (1), have effect in relation to those sections as applied by virtue of that paragraph as those provisions had effect immediately before that date.

• (6) In this article “the relevant date” means the date on which section 143 of the Digital Markets, Competition and Consumers Act 2024 came into force.

Commission to consult on proposals

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• (1) Before making its report under article 7, the CMA –

• (a) shall, so far as practicable, consult–

• (i) as the case may be, the water services provider or sewerage services provider or Scottish Water, who made the request under article 3 to which the reference relates; and

• (ii) the WIC; and

• (b) may, so far as practicable, consult such other persons as it considers appropriate,

on the matters the CMA proposes to include in its report.

• (2) In considering what is practicable for the purposes of paragraph (1), the CMA shall, in particular, have regard to–

• (a) the time limit for making a report referred to in article 4; and

• (b) the following considerations before disclosing any information–

• (i) the need to exclude from disclosure (so far as practicable) any information whose disclosure the CMA thinks is contrary to the public interest;

• (ii) the need to exclude from disclosure (so far as practicable) any commercial information whose disclosure the CMA thinks might significantly harm the legitimate business interests of the person to which it relates;

• (iii) the need to exclude from disclosure (so far as practicable) any information relating to the private affairs of an individual whose disclosure the CMA thinks might significantly harm the individual’s interests; and

• (iv) the extent to which the disclosure of the information mentioned in paragraph (ii) or (iii) is necessary for the purposes of the consultation.

• (3) For the purposes of the law relating to defamation, absolute privilege attaches to any consultation undertaken by the CMA pursuant to this article.

Reports on References

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• (1) A report of the CMA on a reference shall be made to the WIC.

• (2) For the purpose of carrying out any investigation in relation to the making of a report on a reference, and subject to paragraph (3), the CMA may disclose any information held by it for the purpose of facilitating its consideration of the reference.

• (3) In making a report on a reference, including any investigation carried out in relation to such a report, the CMA must have regard to the following considerations before disclosing any information–

• (a) the need to exclude from disclosure (so far as practicable) any information whose disclosure the CMA thinks is contrary to the public interest;

• (b) the need to exclude from disclosure (so far as practicable) any commercial information whose disclosure the CMA thinks might significantly harm the legitimate business interests of the person to which it relates;

• (c) the need to exclude from disclosure (so far as practicable) any information relating to the private affairs of an individual whose disclosure the CMA thinks might significantly harm the individual’s interests; and

• (d) the extent to which the disclosure of the information mentioned in sub-paragraph (b) or (c) is necessary for the purposes of the report.

• (4) In making a report on a reference, the CMA–

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

• (b) in respect of an article 3(2) or (3) reference–