Consumers' interests to come first under new utilities rules

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Thr privatised utilities face a tough new regime that will allow watchdogs to hand down heavy fines, cut prices and give customers a greater role in the regulation process.

Thr privatised utilities face a tough new regime that will allow watchdogs to hand down heavy fines, cut prices and give customers a greater role in the regulation process.

The plan, which was announced in yesterday's Queen's Speech, is aimed at putting the interests of consumers first.

It was the centrepiece of a raft of new measures affecting business. Others include cutting red tape, an e-commerce Bill, reform of the rules on personal bankruptcy and greater commercial freedom for the Post Office.

The Utilities Regulations Bill will establish independent consumer councils for each sector to investigate complaints and provide advice. Utilities will also be forced to publish any links with executive pay and performance. The Queen told Parliament: "To put the customer first, cut prices and make utility regulation more transparent and accountable, a Bill will be introduced to modernise the utility regulation system."

The regulators of the water, gas, electricity and telecoms industries will be given powers to impose fines for breach of their licences.

The Government said it would step up the fight against red tape and reduce the burden of "inappropriate and over-complex regulation".

A Bill will also be introduced to encourage the growth of the budding e-commerce sector.The Electronic Communications Bill, which was published in draft form over the summer, envisages e-mail and other electronic documents carrying "signatures" that the courts would recognise as binding.

The Post Office will be given greater freedom to compete in the UK and overseas markets. It will be converted into a public limited company (plc) wholly owned by the Government.

But the Postal Services Bill will forbid any sale of shares without another Act of Parliament. In exchange, rival operators will be allowed to compete with the Post Office and a regulator, the Postal Services Commission, will be established.

Businesses will also benefit from moves to help rescue viable businesses in short-term difficulty. The Insolvency Bill will also make it easier to disqualify unfit company directors.

Other measures include a Bill to create a new business entity, Limited Liability Partnership, and a Trustee Bill to modernise the powers of investment trustees.

The Confederation of British Industry said: "There is nothing we would say is completely wrong but each Bill has areas which might cause problems." The British Chambers of Commerce gave the whole programme a mark of five out of 10. Chris Humphries, the director general, said: "Positive moves on e- commerce and insolvency will be overshadowed by disappointment at the limited scope of the deregulation Bill."

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