Confidence in food

I am glad to see more public debate about the decision to cut back the Food Standards Agency, kicked off by Tim Lang’s column in the Guardian.

The facts are simple.

  1. Ten years ago, trust in food in the UK was the lowest in Europe (post foot and mouth and BSE).
  2. Many of us campaigned for a regulator that could take on vested interests and we got it in the new FSA – with John Krebs, the scientist, and Deirdre Hutton, the consumer champion.
  3. Today, trust in food in the UK is among the highest across Europe.

Where now? What the FSA could not do is to match the corporate behemoths of Tesco and food companies. On consumer signposting (‘traffic lights’ and Guideline Daily Amounts), for example, the Co-operative and Sainsburys were on the side of the angels and the regulator, but labelling is essentially an EU competence not UK, and the food industry saw it off.

No-one likes too much red tape, least of all ordinary citizens. I have argued before that regulators sometimes operate like great monopolies and sometimes like handmaidens for big business. But some rules help to make markets work. Confidence in food is good for consumers and it is good for the market.

Let’s see where the facts go now…

10 out of 11 of the World Cup team play for a co-operative

Of the 11 players who started out on the field for Spain’s winning World Cup team, 10 of them play for a co-operative.

Barcelona is the poster child of co-operative football and I am delighted today that, with Supporters Direct, we have launched a report and first UK version in English of the Barcelona statutes – with the support and encouragement of Barca’s outgoing President Joan LaPorta.

Barcelona has 170,000 members and is a remarkable case of democratic innovation – drawing members jury-style by lot for its Delegate Assemblies. If you want to change the Board in Barcelona, you vote for it, as 53,000 did in the elections last month. If you want to change the Board for Manchester United, as our report by Dave Boyle, points out, you have to start with £1.2 billion in your pocket.

The health warnings apply. Not all Spanish clubs are organised on anything like this model and there is if anything more of a common tradition of ownership by fans in Germany. No doubt, all clubs are feeling the pinch. And you can only grow community ownership not import it (there are fifteen clubs now in the UK organised like this with supporters trusts – the most recent is Lewes – but not in the top flight).

But perhaps there is a Spanish recipe here that we too can enjoy.

Pier review

I have blogged before about Jess and the campaign to turn Hastings Pier into a co-operative enterprise.

Well, last night Hastings Borough Council formally started the compulsory purchase order process that should lead to the transfer of ownership of Hastings Pier to local people.

It will take £8m for the first phase of development but the local development trust is positive it can be done. One route is to make a community share issue – it is one of ten pilots that are meeting up at our event on this with DTA on Thursday at Coin Street Community Builders in London.

When I was young, Brighton pier was sold for a pound and as a lad, I’d walk past it on the sea front, jangling the silver and coppers in my pocket hopefully. It was sold to private companies and no good came of it.

£1 or £8 million, it is time to give community ownership a go.

Crowding in

Having gone through the publishing process, with Agnes Nairn, for our 2009 book Consumer Kids (now out in Italian and South Korean, with Chinese in the pipeline!), I know what it feels like to be a sausage in the pipeline.

So it is lovely to be connected up with two inspiring authors who want to do it all in a more co-operative way.

Henry Tam has published his remarkable historical narrative ‘against power inequalities’ as an electronic book, up on our website over Co-operatives Fortnight and downloadable and useable for free for the coop minded.

Martin Simon, who has been a wonderful time bank pioneer and the kind of person who could run the country, if we ever outgrow the profession class of politicians, has written to me about his book – Your Money or Your Life: time for both – due out this Autumn.

Martin is crowd sourcing the book funding. You can join in on buzzbank

It is great fun to do. Liz Laine who was one of the happy Investors in The Age of Stupid walked around with a big smile on her face for a month when that film came out. Sign up just for the smile.

Edgar Cahn, himself the author of my Desert Island choice “No more throw-away people”, says, a propos Martin’s book project, that time banking reduces the isolation that one old timer conveyed to him when he observed “we used to have community and then we got air conditioning!”

£11 billion of consumer detriment in financial services

‘They offer you an umbrella when the sun shines but take it down when it’s raining’. That could be a blues song. In fact, it is what one woman, over sixty, from Wales, told a colleague in my last role when doing consumer research about financial service companies.

There has been a drip, drip, drip of financial scandals over recent decades, tracked by journalists, consumer campaigners and, in most cases, eventually the regulators. I have long wanted, rather than repeat the litany from personal pensions to split capital investments, to develop an estimate, however loose, from this sorry catalogue of the total levels of detriment that UK consumers suffer as a result.

Inevitably, the sources, methodologies and timescales vary,  but my view has echoed the words of Professor Herman Daly, the pioneering ecological economist, who said that it is better to imprecisely right than, if you offer no estimate, being precisely wrong. With input from the Centre for Financial Inclusion, the loose estimate I have done of the big bill for consumer detriment comes to £11.2 billion – and around £32 billion for the five years before.

High levels of consumer detriment don’t necessarily translate into excess profits, although with widening margins in the current market conditions, it may do. What such high levels of consumer detriment shows is that markets are not working fairly or efficiently and that everyone, providers and consumers may lose out as a result. The point is that large-scale, mainstream financial disservices predate the credit crunch by many years.

So far, the response post credit crunch has been blind to the issue of the incentives that drive the performance of financial institutions and it has therefore been blind to the position of mutuals and co-operatives, based on members rather than external investors. It is as if the new regulatory regime ignores the contributions of mutual models, because it assumes that all financial service institutions are basically the same. The otherwise admirable Which? Banking Commission itself made this same oversight just recently.

I hope the Coalition plans do more. The Coalition Agreement, thanks to the Lib Dem manifesto, makes a commitment to diversity in financial markets. But this term disappears when it comes to the detailed terms of reference for John Vickers’ commission on the structure of banking. Here the issue of diversity is sidelined, looking instead through a competition lens rather than an institutional perspective as well.

There is a welcome surge in credit unions. Glasgow is the credit union capital of the UK, where one in five people are members – I have blogged before on their panache and success.

But when you consider the scale of what has gone wrong through the credit crunch and then add in the risks that have not gone away, including economic uncertainty and a property market with residential prices still many multiples of average real incomes, it feels as if we are crossing our fingers and hoping that it works out differently next time.