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.

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Who will win in Copeland? The Labour heartland hangs in the balance

The knife-edge by-election could end 82 years of Labour rule on the West Cumbrian coast.

Fine, relentless drizzle shrouds Whitehaven, a harbour town exposed on the outer edge of Copeland, West Cumbria. It is the most populous part of the coastal north-western constituency, which takes in everything from this old fishing port to Sellafield nuclear power station to England’s tallest mountain Scafell Pike. Sprawling and remote, it protrudes from the heart of the Lake District out into the Irish Sea.

Billy, a 72-year-old Whitehaven resident, is out for a morning walk along the marina with two friends, his woolly-hatted head held high against the whipping rain. He worked down the pit at the Haig Colliery for 27 years until it closed, and now works at Sellafield on contract, where he’s been since the age of 42.

“Whatever happens, a change has got to happen,” he says, hands stuffed into the pockets of his thick fleece. “If I do vote, the Bootle lass talks well for the Tories. They’re the favourites. If me mam heard me saying this now, she’d have battered us!” he laughs. “We were a big Labour family. But their vote has gone. Jeremy Corbyn – what is he?”

The Conservatives have their sights on traditional Labour voters like Billy, who have been returning Labour MPs for 82 years, to make the first government gain in a by-election since 1982.

Copeland has become increasingly marginal, held with just 2,564 votes by former frontbencher Jamie Reed, who resigned from Parliament last December to take a job at the nuclear plant. He triggered a by-election now regarded by all sides as too close to call. “I wouldn’t put a penny on it,” is how one local activist sums up the mood.

There are 10,000 people employed at the Sellafield site, and 21,000 jobs are promised for nearby Moorside – a project to build Europe’s largest nuclear power station now thrown into doubt, with Japanese company Toshiba likely to pull out.

Tories believe Jeremy Corbyn’s stance on nuclear power (he limply conceded it could be part of the “energy mix” recently, but his long prevarication betrayed his scepticism) and opposition to Trident, which is hosted in the neighbouring constituency of Barrow-in-Furness, could put off local employees who usually stick to Labour.

But it’s not that simple. The constituency may rely on nuclear for jobs, but I found a notable lack of affection for the industry. While most see the employment benefits, there is less enthusiasm for Sellafield being part of their home’s identity – particularly in Whitehaven, which houses the majority of employees in the constituency. Also, unions representing Sellafield workers have been in a dispute for months with ministers over pension cut plans.

“I worked at Sellafield for 30 years, and I’m against it,” growls Fred, Billy’s friend, a retiree of the same age who also used to work at the colliery. “Can you see nuclear power as safer than coal?” he asks, wild wiry eyebrows raised. “I’m a pit man; there was just nowhere else to work [when the colliery closed]. The pension scheme used to be second-to-none, now they’re trying to cut it, changing the terms.”

Derek Bone, a 51-year-old who has been a storeman at the plant for 15 years, is equally unconvinced. I meet him walking his dog along the seafront. “This county, Cumbria, Copeland, has always been a nuclear area – whether we like it or don’t,” he says, over the impatient barks of his Yorkshire terrier Milo. “But people say it’s only to do with Copeland. It ain’t. It employs a lot of people in the UK, outside the county – then they’re spending the money back where they’re from, not here.”

Such views might be just enough of a buffer against the damage caused by Corbyn’s nuclear reluctance. But the problem for Labour is that neither Fred nor Derek are particularly bothered about the result. While awareness of the by-election is high, many tell me that they won’t be voting this time. “Jeremy Corbyn says he’s against it [nuclear], now he’s not, and he could change his mind – I don’t believe any of them,” says Malcolm Campbell, a 55-year-old lorry driver who is part of the nuclear supply chain.

Also worrying for Labour is the deprivation in Copeland. Everyone I speak to complains about poor infrastructure, shoddy roads, derelict buildings, and lack of investment. This could punish the party that has been in power locally for so long.

The Tory candidate Trudy Harrison, who grew up in the coastal village of Seascale and now lives in Bootle, at the southern end of the constituency, claims local Labour rule has been ineffective. “We’re isolated, we’re remote, we’ve been forgotten and ignored by Labour for far too long,” she says.

I meet her in the town of Millom, at the southern tip of the constituency – the opposite end to Whitehaven. It centres on a small market square dominated by a smart 19th-century town hall with a mint-green domed clock tower. This is good Tory door-knocking territory; Millom has a Conservative-led town council.

While Harrison’s Labour opponents are relying on their legacy vote to turn out, Harrison is hoping that the same people think it’s time for a change, and can be combined with the existing Tory vote in places like Millom. “After 82 years of Labour rule, this is a huge ask,” she admits.

Another challenge for Harrison is the threat to services at Whitehaven’s West Cumberland Hospital. It has been proposed for a downgrade, which would mean those seeking urgent care – including children, stroke sufferers, and those in need of major trauma treatment and maternity care beyond midwifery – would have to travel the 40-mile journey to Carlisle on the notoriously bad A595 road.

Labour is blaming this on Conservative cuts to health spending, and indeed, Theresa May dodged calls to rescue the hospital in her campaign visit last week. “The Lady’s Not For Talking,” was one local paper front page. It also helps that Labour’s candidate, Gillian Troughton, is a St John Ambulance driver, who has driven the dangerous journey on a blue light.

“Seeing the health service having services taken away in the name of centralisation and saving money is just heart-breaking,” she tells me. “People are genuinely frightened . . . If we have a Tory MP, that essentially gives them the green light to say ‘this is OK’.”

But Harrison believes she would be best-placed to reverse the hospital downgrade. “[I] will have the ear of government,” she insists. “I stand the very best chance of making sure we save those essential services.”

Voters are concerned about the hospital, but divided on the idea that a Tory MP would have more power to save it.

“What the Conservatives are doing with the hospitals is disgusting,” a 44-year-old carer from Copeland’s second most-populated town of Egremont tells me. Her partner, Shaun Grant, who works as a labourer, agrees. “You have to travel to Carlisle – it could take one hour 40 minutes; the road is unpredictable.” They will both vote Labour.

Ken, a Conservative voter, counters: “People will lose their lives over it – we need someone in the circle, who can influence the government, to change it. I think the government would reward us for voting Tory.”

Fog engulfs the jagged coastline and rolling hills of Copeland as the sun begins to set on Sunday evening. But for most voters and campaigners here, the dense grey horizon is far clearer than what the result will be after going to the polls on Thursday.

Anoosh Chakelian is senior writer at the New Statesman.