To fix our broken energy market, we need Help to Supply

The government should do more to help communities, local authorities and businesses not only produce but supply their own power.

The Help to Buy scheme has so far attracted 6,000 applicants in just two months, and has already enabled nearly 750 people to climb onto the property ladder: another step towards encouraging a "property-owning democracy" and securing assets for individuals and families. Great. But there is a much more radical shift waiting to happen in the energy retail market, and a far greater opportunity to facilitate widespread ownership, not only among individuals, but communities and businesses too. We have heard so much about the need to encourage diversity and competition beyond the "big six", yet seen little by way of policies to put this into action.

In fact, we’ve seen the reverse taking place. The reduction in the Energy Company Obligation (ECO) levy will aid to bring down costs, but only for the larger energy companies, giving them an even greater advantage in winning over customers. And according to a recent report, the 20 month price freeze advocated by Ed Miliband will see smaller utilities lose out. We desperately need policies that will not seek to disadvantage start-ups and smaller players within this sector. The party manifestos - if they are serious about tackling high energy bills – must include measures that encourage innovation, competition and widespread ownership, not stifle it.

Markets overseas show that an entirely different picture can be painted. Germany has 1,100 electricity suppliers, and the average household has a choice of around 72 of these. The four major energy companies operating in Germany (E.ON, RWE, EnBW and Vattenfall) take up 43.8 per cent of the retail market. Most other suppliers are owned by the municipality or the community, and the rate of "bottom-up" ownership of such services and assets is growing. At the end of 2012, 190 communities had been successful in bidding to run – yes, own and run – their local distribution grid (at least nine of these are co-operatives) and 70 municipal utilities had been founded.

This is not renationalisation or even remunicipalisation, but a move toward a much more constructive, locally-governed infrastructure in which communities ensure transparency, efficiency and good competition. Many of these emerging community-owned suppliers, such as Feldheim Energie and EWS Schönau, are not only offering cheaper tariffs than their competitors, but are seeking and fuelling the prosperity of their locality. In contrast, the UK has 30 licensed suppliers and the largest six take up 98 per cent of this market. No community has yet set themselves up as a competitor.

True, we cannot lift the infamous successes of Germany’s market and immediately apply them to the UK, and neither for this reason can we directly duplicate policies from overseas. But what we can do is not do nothing: we need a strong policy infrastructure, backed by government, that will catalyse new start-ups and new competition.

The Community Energy Strategy, published today, recognises that many of the UK’s communities, local authorities and businesses have an ambition to not only produce, but supply their own power. Ofgem’s "Licence Lite", which was introduced five years ago to make this possible, has so far seen only one application progress. The GLA, the largest governing authority in the UK, has the facility, scope and financial backing to take advantage of this scheme, but many institutions and civic groups don’t. The London Authority’s application is still pending final approval, so we are unsure as to whether even this will be successful.

What we need is a "Help to Supply" scheme. Government, working with the Department for Energy and Climate Change and Ofgem, should set up a series of pilots to work with a range of partners – communities, generators, local authorities, supermarkets, business hubs, Local Enterprise Partnerships – to help them establish a licensed supply company. Along the way, risks, costs and barriers should be noted and policies – perhaps even an alternative to Licence Lite – should be implemented as a result of this learning. This way, we may move from the paltry 30 suppliers we currently have to doubling or trebling this number in the next couple of years, and perhaps even more as the momentum builds.

Our ambitions are right, but our policies are wrong. If we are to take rising bills, competition and transparency seriously, we simply cannot let this opportunity pass us by.

Caroline Julian (@carolinejulian) is Head of Research at ResPublica and undertook a Winston Churchill Memorial Trust travel fellowship to Germany last year to explore the ownership structures of local distribution grids and utilities. The report based on this trip will be published through ResPublica this year.

Lightbulbs on display in an electrical retailer in Soho in London. Photograph: Getty Images.

Caroline Julian is Deputy Director, Head of Policy and Strategy at the thinktank ResPublica.

Photo: Getty
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Brexit Big Brother is watching: how media moguls control the news

I know the Daily Mail and the Daily Telegraph well, and I don’t care to see them like this.

It would take a heart of stone now not to laugh at an illustration of Theresa May staring defiantly out at Europe from the British coast, next to the headline “Steel of the new Iron Lady”.

Those are, however, the words that adorned the front page of the Daily Mail just five months ago, without even a hint of sarcasm. There has been so much written about the Prime Minister and the strength of her character – not least during the election campaign – and yet that front page now seems toe-curlingly embarrassing.

Reality has a nasty habit of making its presence felt when news is remorselessly selected, day in and day out, to fit preconceived points of view. May and her whole “hard Brexit” agenda – which the public has now demonstrated it feels, at best, only half-heartedly enthusiastic about – has been an obsession of several British newspapers, not least the Daily Mail and the Daily Telegraph.

I know these papers well, having spent the best part of a quarter-century working for them, and I don’t care to see them like this. When I worked there, a degree of independent thought was permitted on both titles. I joined the Telegraph in 2002; at the time, my colleagues spoke with pride of the paper’s tolerance to opposing views. And when I was at the Mail, it happily employed the former Labour MP Roy Hattersley.

Would I be able to run positive stories about, say, my mate Gina Miller – who successfully campaigned for parliamentary scrutiny of the Brexit process – in the Telegraph if I were there today? Or at the Daily Mail? Dream on: it’s two minutes of hate for that “enemy of the people”.

Morale in these newsrooms must be low. I am finding that I have to allow an extra half-hour (and sometimes an extra bottle) for lunches with former colleagues these days, because they always feel the need to explain that they’re not Brexiteers themselves.

Among the Telegraph characters I kept in touch with was Sir David Barclay, who co-owns the paper with his brother, Sir Frederick. Alas, the invitations to tea at the Ritz (and the WhatsApp messages) came to an abrupt halt because of you-know-what.

I don’t think Sir David was a bad man, but he got a Brexit bee in his bonnet. I was conscious that he was close to Paul Dacre, the editor of the Daily Mail, and both had cordial relations with Rupert Murdoch. It became clear that they had all persuaded themselves (and perhaps each other) that Brexit suited their best interests – and they are all stubborn.

It seems to me unutterably sad that they didn’t sound out more of their factory-floor staff on this issue. We journalists have never been the most popular people but, by and large, we all started out wanting to make the world a better place. We certainly didn’t plan to make it worse.

People used to tell me that papers such as the Daily Mail and the Telegraph changed because the country had but, even in the darkest days, I didn’t agree with that premise. We are in the mess we’re in now because of personalities – in newspapers every bit as much as in politics. The wrong people in the wrong jobs, at the wrong time.

Would the Daily Mail have backed Brexit under Dacre’s predecessor David English? It is hard to imagine. He was a committed and outward-looking Europhile who, in the 1970s, campaigned for the country to join the EU.

I can think of many Telegraph editors who would have baulked at urging their readers to vote Leave, not least Bill Deedes. Although he had his Eurosceptic moments, a man as well travelled, compassionate and loyal to successive Conservative prime ministers would never have come out in favour of Brexit.

It says a great deal about the times in which we live that the Daily Mirror is just about the only paper that will print my stuff these days. I had a lot of fun writing an election diary for it called “The Heckler”. Morale is high there precisely because the paper’s journalists are allowed to do what is right by their readers and, just as importantly, to be themselves.

Funnily enough, it reminded me of the Telegraph, back in the good old days. 

This article first appeared in the 22 June 2017 issue of the New Statesman, The zombie PM

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