How energy co-operatives could help keep bills down

Isn't it time we got more for our money?

Centrica, owners of British Gas, one of Britain’s biggest energy companies, has once again posted very good profits - made out of our individual energy needs. Isn't it time we got more for our money? That we had a stronger stake in how our energy gets generated, who benefits and where the profit goes? In the US a very different and far more diverse energy market exists. At its heart are energy co-operatives. 

Indeed, there are 42 million American citizens - the equivalent of two-thirds of the British population - who are members of energy co-operatives getting their energy needs met not from one of the Big Six energy firms that dominate the UK energy market but rather from ordinary people pooling their buying power to get a better deal. Even given the size of the US the co-operative energy movement serves 12 per cent of US energy consumers, far exceeding the reach of the UK’s small energy co-operative sector. 

Could things change in the UK? With concern growing about how our future energy needs will be met and increasing recognition that co-operating consumers could get a better deal for themselves and their communities, there is growing interest in how the government could map out a different, more decentralised and inevitably more sustainable energy market. 

The last Labour government saw and encouraged the growth of the social enterprise movement and the beginnings of a new community energy model providing mainly wind energy but some solar energy too. Baywind Energy Co-operative in the Lake District was the first to raise the required finance for turbines through community shares but a number of others have followed and more are planned. 

But if energy co-operatives and social enterprises are to be able to offer a real challenge to the traditional energy firms embraced by the Coalition, a far stronger set of signals from the Government will be required. 

One of the key lessons from the US is the need for a strong "champion" of consumer-led energy co-operatives and social enterprises to provide dedicated support, expertise and advice. In the US it is the National Rural Energy Co-operative Association, in the UK a new similar body would be needed to help local people prepare, finance and run community energy schemes. Such a body would help to galvanise interest in new forms of community ownership of energy generation. 

In the 1980s, a TV advertising blitz featuring a "Tell Sid" message drove home the opportunity to buy shares in newly privatised energy companies. We need a new share ownership drive in the energy industry – community shares giving people a real stake in the generation and distribution of the energy they use. Because the lesson we’ve learnt since the 1980s has been that individual shareholders on their own don’t have enough power to really make the Boards of the big energy companies sit up and take notice of local needs. 

Where the community owns a stake or 100% of the energy that is being generated power and influence is spread more widely across the membership.  Crucially too, the benefits of the energy generated are spread across the membership, helping to keep more of the money the energy generates in the local community rather than ‘lost’ in large profits or high executive pay, often to companies based far away from where the original energy was generated. 

In the UK, community-scale energy schemes are slowly expanding. Although they tend to be based in rural areas Brixton Energy with its solar panels initiative is an encouraging exception. To help drive a more rapid expansion of community-owned energy the government needs to be bolder in the incentives it creates within the energy market. 

Every time a new source of energy – a new power station, a new wind farm or hydro scheme is established the big energy companies have to secure a licence and/or establish a company to raise the finance to drive the scheme. The government could insist through incentives built into legislation that a right is created for local people to invest in the new energy "companies" (subsidiaries in the main of the Big Six). After all why shouldn’t local people, whose ever rising energy bills will have to pay for this investment not have the opportunity of a more direct financial benefit too from the energy being generated in their neighbourhood. 

I understand the power of markets and the benefits of strong competition, but we need to ensure those benefits and power are used for the general good rather than the self interest of a few. Co-operatives offer the possibility of a new "shared capitalism"; ensuring more benefit from the efficiencies and opportunities markets, properly regulated; can create. Energy co-operatives have a far larger reach outside the UK. Isn’t it time there were more opportunities for a new generation of innovative energy co-operatives to emerge here too?

Gareth Thomas is the Labour and Co-op MP for Harrow West and the chair of The Co-op Party

The sun sets behind the chimneys at Didcot Power Station. Photograph: Getty Images
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Why are boundary changes bad for Labour?

New boundaries, a smaller House of Commons and the shift to individual electoral registration all tilt the electoral battlefield further towards the Conservatives. Why?

The government has confirmed it will push ahead with plans to reduce the House of Commons to 600 seats from 650.  Why is that such bad news for the Labour Party? 

The damage is twofold. The switch to individual electoral registration will hurt Labour more than its rivals. . Constituency boundaries in Britain are drawn on registered electors, not by population - the average seat has around 70,000 voters but a population of 90,000, although there are significant variations within that. On the whole, at present, Labour MPs tend to have seats with fewer voters than their Conservative counterparts. These changes were halted by the Liberal Democrats in the coalition years but are now back on course.

The new, 600-member constituencies will all but eliminate those variations on mainland Britain, although the Isle of Wight, and the Scottish island constituencies will remain special cases. The net effect will be to reduce the number of Labour seats - and to make the remaining seats more marginal. (Of the 50 seats that would have been eradicated had the 2013 review taken place, 35 were held by Labour, including deputy leader Tom Watson's seat of West Bromwich East.)

Why will Labour seats become more marginal? For the most part, as seats expand, they will take on increasing numbers of suburban and rural voters, who tend to vote Conservative. The city of Leicester is a good example: currently the city sends three Labour MPs to Westminster, each with large majorities. Under boundary changes, all three could become more marginal as they take on more wards from the surrounding county. Liz Kendall's Leicester West seat is likely to have a particularly large influx of Tory voters, turning the seat - a Labour stronghold since 1945 - into a marginal. 

The pattern is fairly consistent throughout the United Kingdom - Labour safe seats either vanishing or becoming marginal or even Tory seats. On Merseyside, three seats - Frank Field's Birkenhead, a Labour seat since 1950, and two marginal Labour held seats, Wirral South and Wirral West - will become two: a safe Labour seat, and a safe Conservative seat on the Wirral. Lillian Greenwood, the Shadow Transport Secretary, would see her Nottingham seat take more of the Nottinghamshire countryside, becoming a Conservative-held marginal. 

The traffic - at least in the 2013 review - was not entirely one-way. Jane Ellison, the Tory MP for Battersea, would find herself fighting a seat with a notional Labour majority of just under 3,000, as opposed to her current majority of close to 8,000. 

But the net effect of the boundary review and the shrinking of the size of the House of Commons would be to the advantage of the Conservatives. If the 2015 election had been held using the 2013 boundaries, the Tories would have a majority of 22 – and Labour would have just 216 seats against 232 now.

It may be, however, that Labour dodges a bullet – because while the boundary changes would have given the Conservatives a bigger majority, they would have significantly fewer MPs – down to 311 from 330, a loss of 19 members of Parliament. Although the whips are attempting to steady the nerves of backbenchers about the potential loss of their seats, that the number of Conservative MPs who face involuntary retirement due to boundary changes is bigger than the party’s parliamentary majority may force a U-Turn.

That said, Labour’s relatively weak electoral showing may calm jittery Tory MPs. Two months into Ed Miliband’s leadership, Labour averaged 39 per cent in the polls. They got 31 per cent of the vote in 2015. Two months into Tony Blair’s leadership, Labour were on 53 per cent of the vote. They got 43 per cent of the vote. A month and a half into Jeremy Corbyn’s leadership, Labour is on 31 per cent of the vote.  A Blair-style drop of ten points would see the Tories net 388 seats under the new boundaries, with Labour on 131. A smaller Miliband-style drop would give the Conservatives 364, and leave Labour with 153 MPs.  

On Labour’s current trajectory, Tory MPs who lose out due to boundary changes may feel comfortable in their chances of picking up a seat elsewhere. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog. He usually writes about politics.