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
Getty Images.
Show Hide image

Tony Blair might be a toxic figure - but his influence endures

Politicians at home and abroad are borrowing from the former prime minister's playbook. 

On 24 May at Methodist Central Hall, Westminster, a short distance from where he once governed, Tony Blair resurfaced for a public discussion. Having arrived on an overnight flight, he looked drawn and puffy-eyed but soon warmed to his theme: a robust defence of liberal globalisation. He admitted, however, to bafflement at recent events in the world. "I thought I was pretty good at politics. But I look at politics today and I’m not sure I understand it."

Blair lost power in the summer of 2007. In the ensuing nine years, he lost reputation. His business ventures and alliances with autocrats have made him a pariah among both the public and his party. A YouGov poll published last year found that 61 per cent of voters regarded Blair as an electoral liability, while just 14 per cent viewed him as an asset. In contrast, John Major, whom he defeated by a landslide in 1997, had a neutral net rating of zero. It is ever harder to recall that Blair won not one general election (he is the only living Labour leader to have done so) but three.

His standing is likely to diminish further when the Iraq inquiry report is published on 6 July. Advance leaks to the Sunday Times suggest that he will be censured for allegedly guaranteeing British military support to the US a year before the invasion. Few minds on either side will be changed by the 2.6 million-word document. Yet its publication will help enshrine Iraq as the defining feature of a legacy that also includes the minimum wage, tax credits, Sure Start, devolution and civil partnerships.

Former leaders can ordinarily rely on their parties to act as a last line of defence. In Blair’s case, however, much of the greatest opprobrium comes from his own side. Jeremy Corbyn inclines to the view that Iraq was not merely a blunder but a crime. In last year’s Labour leadership election, Liz Kendall, the most Blair-esque candidate, was rewarded with 4.5 per cent of the vote. The former prime minister’s imprimatur has become the political equivalent of the black spot.

Yet outside of the Labour leadership, Blairism endures in notable and often surprising forms. Sadiq Khan won the party’s London mayoral selection by running to the left of Tessa Jowell, one of Tony Blair’s closest allies. But his successful campaign against Zac Goldsmith drew lessons from Blair’s election triumphs. Khan relentlessly presented himself as “pro-business” and reached out beyond Labour’s core vote. After his victory, he was liberated to use the B-word, contrasting what “Tony Blair did [in opposition]” with Corbyn’s approach.

In their defence of the UK’s EU membership, David Cameron and George Osborne have deployed arguments once advanced by New Labour. The strategically minded Chancellor has forged an unlikely friendship with his former nemesis Peter Mandelson. In the domestic sphere, through equal marriage, the National Living Wage and the 0.7 per cent overseas aid target, the Conservatives have built on, rather than dismantled, significant Labour achievements."They just swallowed the entire manual," Mandelson declared at a recent King’s College seminar. "They didn’t just read the executive summary, they are following the whole thing to the letter."

Among SNP supporters, "Blairite" is the pejorative of choice. But the parallels between their party and New Labour are more suggestive than they would wish. Like Blair, Alex Salmond and Nicola Sturgeon have avoided income tax rises in order to retain the support of middle-class Scottish conservatives. In a speech last August on education, Sturgeon echoed the Blairite mantra that "what matters is what works".

Beyond British shores, political leaders are similarly inspired by Blair – and less reticent about acknowledging as much. Matteo Renzi, the 41-year-old centre-left Italian prime minister, is a long-standing admirer. "I adore one of his sayings,” he remarked in 2013. “I love all the traditions of my party, except one: that of losing elections."

In France, the reform-minded prime minister, Manuel Valls, and the minister of economy, Emmanuel Macron, are also self-described Blairites. Macron, who in April launched his own political movement, En Marche!, will shortly decide whether to challenge for the presidency next year. When he was compared to Blair by the TV presenter Andrew Marr, his response reflected the former prime minister’s diminished domestic reputation: “I don’t know if, in your mouth, that is a promise or a threat.”

The continuing attraction of Blair’s “third way” to European politicians reflects the failure of the project’s social-democratic critics to construct an alternative. Those who have sought to do so have struggled both in office (François Hollande) and out of it (Ed Miliband). The left is increasingly polarised between reformers and radicals (Corbyn, Syriza, Podemos), with those in between straining for relevance.

Despite his long absences from Britain, Blair’s friends say that he remains immersed in the intricacies of Labour politics. He has privately warned MPs that any attempt to keep Corbyn off the ballot in the event of a leadership challenge would be overruled by the National Executive Committee. At Methodist Central Hall, he said of Corbyn’s supporters: “It’s clear they can take over a political party. What’s not clear to me is whether they can take over a country.”

It was Blair’s insufficient devotion to the former task that enabled the revival of the left. As Alastair Campbell recently acknowledged: “We failed to develop talent, failed to cement organisational and cultural change in the party and failed to secure our legacy.” Rather than effecting a permanent realignment, as the right of the party hoped and the left feared, New Labour failed to outlive its creators.

It instead endures in a fragmented form as politicians at home and abroad co-opt its defining features: its pro-business pragmatism, its big-tent electoralism, its presentational nous. Some of Corbyn’s ­allies privately fear that Labour will one day re-embrace Blairism. But its new adherents would never dare to use that name.

George Eaton is political editor of the New Statesman.

This article first appeared in the 26 May 2016 issue of the New Statesman, The Brexit odd squad