Government initial response to Independent Water Commission's final report
Source: gov.uk (2025-07-20)

Environment Secretary Steve Reed sets out the government's initial response to the Independent Water Commission final report, led by Sir Jon Cunliffe.

Good morning everyone. Welcome to this beautiful venue.

I’ve just watched Sir Jon Cunliffe’s statement presenting his report.

I’d like to start by thanking Sir Jon Cunliffe and his team for the huge amount of work they have put into reviewing the regulation of our water industry.

He’s produced an outstanding report that I will respond to in more detail in the House of Commons this afternoon. But I’d like to make some initial comments now.

It is clear the water industry is broken.

Our rivers, lakes and seas are polluted with record levels of sewage.

Water pipes have been left to crumble into disrepair.

Soaring water bills are straining family finances.

There are hosepipe bans across the country right now because not a single new reservoir has been built in over 30 years,

The lack of water infrastructure is holding back economic growth.

Water companies have been allowed to profit at the expense of the British people when they should have been investing to fix our broken water pipes.

A broken regulatory system let them get away with this.

Failing customers, investors and the environment.

The public expressed their fury in last year’s General Election, and they voted for change. That change will now come.

In just one year, this government has put in place the building blocks to clean up our rivers, lakes and seas.

First, we restored accountability by giving the regulators more teeth with a ban on unfair bonuses, severe and automatic penalties for breaking the law, and jail sentences for serious offences.

Second, we have launched one of the biggest infrastructure projects in British history to clean up our rivers, lakes and seas.

£104 billion pounds of private sector investment will rebuild the entire water network.

Upgrading crumbling pipes, repairing leaks and building new sewage treatment works around the country.

This is the biggest-ever investment in the water sector’s history and it allows me to make a new commitment to the country:

This government will cut water companies’ sewage pollution in half within five years.

This is the most ambitious sewage target the government has ever set.

Over a decade of national renewal, we will restore our rivers, lakes and seas to good health.

The third building block for change is today’s final report from Sir Jon Cunliffe’s Independent Water Commission.

It offers a blueprint for fixing our broken regulatory system so the failures of the past can never happen again.

I agree that water regulation has been too weak and too ineffective.

Having four separate regulators with overlapping and conflicting remits has created a merry-go-round that has failed customers and the environment.

Ofwat has failed to protect customers from water companies’ mismanagement of their hard-earned money.

Today I can announce that the Government will abolish Ofwat.

In the biggest overhaul of water regulation in a generation we will bring water functions from four different regulators into one: A single powerful regulator responsible for the entire water sector.

There are four further recommendations that the government can accept immediately and I will outline these in Parliament this afternoon.

The new regulator will stand firmly on the side of customers, investors and the environment and prevent the abuses of the past.

For customers, it will oversee investment and maintenance so hardworking British families are never again hit by the shocking bill hikes we saw last year as customers paid the price of past failures.

For investors, it will end the tangle of ineffective regulation and provide the clarity and direction required for a strong partnership between Government, the sector and investors to attract billions of pounds of new funding.

For the environment, it will cut all forms of pollution to clean up our rivers, lakes and seas for good.

We will legislate to set up the new regulator, and I will provide more details of this in Parliament later today.

Ofwat will remain in place during the transition to the new regulator and I will ensure they provide the right leadership to oversee the current price review and investment plan during that time.

This Government was elected to clean up water pollution.

We now have all the building blocks in place to make that happen.

This is our chance to make sure our children – and their children – can create the same wonderful memories we remember from our childhoods.

Splashing about in the waves on a beach, rowing along a river, without having to worry about toxic sewage pollution.

Today marks the start of a water revolution.

We are establishing a new partnership where water companies, investors, communities and the government will work together to clean up our rivers, lakes and seas for good.