Britain’s Labour government said it will abolish the water regulator Ofwat and fold its powers into a single watchdog overseeing economic, environmental and drinking-water standards, marking the biggest shake-up of the industry since privatisation in 1989. Environment Secretary Steve Reed called the current system “broken” and pledged legislation in the coming parliamentary session, with Ofwat continuing to operate until a successor body is in place. The decision follows a 465-page review by the Independent Water Commission led by former Bank of England deputy governor Sir Jon Cunliffe. The report makes 88 recommendations, including merging Ofwat with the Drinking Water Inspectorate and water-related functions of the Environment Agency and Natural England, setting up eight regional water authorities to plan investment, and creating a statutory ombudsman to handle consumer complaints. Reed said five of the measures will be fast-tracked and a full response will be set out in an autumn white paper. Sir Jon warned that years of under-investment require a £104 billion upgrade programme over 2025-30, a cost that could lift average household bills by about 30 %. He estimated that more than £85 billion has been taken out of the system by shareholders since privatisation, and urged tighter oversight of company ownership, minimum capital requirements and the power to block unsuitable investors. The overhaul comes amid public anger over record sewage discharges—serious incidents rose 60 % last year—and the financial turmoil at Thames Water, which faces up to £1.4 billion in pollution penalties. Reed said the new regulator will aim to restore investor confidence while enforcing tougher environmental standards and meeting the government’s goal of halving sewage pollution by 2030.