The real headline on energy this week

The phrase ‘Small is Beautiful’ was not coined by Fritz Schumacher, but by his publisher. The phrase was evocative and in a period of modernism in which architecture, development and media focused on the big, it helped to conjure up a different path of human-scale living. There are writers such as David Boyle today, who understand that, even more so in a networked society and economy, that scale – and scope – matters.

But Fritz Schumacher’s own view was better captured in his statement that “we need freedom and order: the freedom of lots and lots of small units and the order of large-scale, possibly global, organisation.” It just wasn’t a better book title.

Nowhere is this more true than for energy policy.

As I and colleagues in our new ‘social economy alliance’ wrote to the national press yesterday, “this debate cannot be about big state versus big business, but about big problems versus big opportunities.” It has been good to see Labour on the front foot on this as a consumer issue. Good to see, too, Co-operative Energy provide independent backing from within the industry.

Last year, I delivered a Consumer Policy Investigation at Labour’s request, arguing that issues of consumer power and living standards ought to be top of the agenda for any government.

But actually, it is a less headline grabbing announcement on energy – from Ed Davey and the Coalition Government – that I think is more important.

Over the last two years, led by my colleague Becky Willis, Co-operatives UK has been working with our members and partners to promote the potential for community and co-operative energy – small-scale initiatives that can start to think big. In particular, after a series of reports and research with our members, we led on the development of a manifesto for the sector – now signed up up to by a wide and welcome range of organisations across national life.

We challenged the burden of big regulation on small providers. For example, to get electricity from their powerhouse to the grid, a distance of 100 yards, we learned that River Bain Hydro had to negotiate with five different bodies, including the network operator, its subcontractor, the metering contractor, the energy supplier and Ofgem. The inspiring co-operative, OVESCo in Sussex started generating electricity in 2011 and, eight months later, had not received a penny in tariff payments due, despite completing three stages of registration and enquiry from Ofgem.

We called for a standard model of documentation to be produced, along the lines of the standardised conveyancing documentation and system for property transactions. It was one of the key campaign calls in a Community Energy Fortnight, now closed with a coalition which garnered mass public support – with over 60,000 people signing petitions in favour of clean, green and co-operative energy.

This will now happen. On 17th Oct, DECC is hosting a summit of government agencies to start the ball rolling.

Small steps, big thinking… Fritz Schumacher would be pleased. ImageImage

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Top ten ideas

I have been tweeting ten ideas from the great Geoff Mulgan, drawn from his new book, The Locust and the Bee. Here they are in a single blog:

1. Crises of efficiency become crises of interpretation – radical change happens not when things change but categories change

2. A predatory trade is one that is not reciprocal…economics has struggled to distinguish between profit and rent.

3. The economy needs care, which is why so many firms devote such efforts to create their own cultures, myths & meanings

4. The share of GDP due to the 1,000 largest firms across the OECD has risen from 31% to 72% since 1980

5. Human rights? Universal health care? These are examples of utopianism, the restless imagination of possible worlds.

6. Co-operatives and social enterprises bind their users and consumers into governance structures and prioritise values more easily

7. Human history is a drunkard’s walk where people learn from successes and failure, bumping into walls & then lurching forward

8. Education, as Roberto Unger puts it, is about providing children with “the means to resist the present”

9. Education today promotes competition between children. Tomorrow, it will place as much emphasis on co-operation.

10. We can judge any economy not just by its traditional resources but also by the complexity of its co-operative capacities.

You can purchase the Locust and the Bee (the simple conclusion of which is ‘be more like a bee’) from the tax-paying, democratic co-operative bookshop online, News from Nowhere.

Mutual, co-operative, friendly – what’s in a name?

The Mutual Life Assurance Society of the Cape of Good Hope was established in 1845 in South Africa as an insurance mutual. It became known over the years as ‘the old mutual’ and this in turn became its trading name. That was smart marketing – after all, it always helps to see yourself in ways that are in line with how your customers want to see you.

But in 1999, The Old Mutual demutualised. It was listed on on the London, Johannesburg, Zimbabwe, Malawi and Namibian Stock Exchanges and established its Head Office in London. It is now one of the FTSE100, one of the largest listed companies in the UK.

So what happened with the name? There is no protection of the term ‘mutual’, no regulator to question it or campaign group then to challenge the continued use of the name. Anyway, the term ‘old mutual’ had a multi-million pound brand value and seemed to be neatly consonant with the fact that it was a former mutual and now shareholder owned. So, the name stayed.

The paradox is that the ‘Old Mutual’ would never be renamed as the ‘New PLC’ because, despite the desire to demutualise, there was more financial value to be had for shareholders in suggesting that it had no shareholders – and there were no restraints on them doing so.

The newly re-launched TSB is perhaps a similar example. Lloyds holds the trademark for the name, and good luck to the new venture, but in no way does TSB now add up to a savings bank overseen by a trustee model. It is banking open to customers but run for shareholders.

Closer to the co-operative home, critics might argue that the joint venture of recent years with Thomas Cook and the Co-operative Group, which allowed Co-operative Travel shops to trade in the high street without an underlying co-operative identity fell into the same paradox. Although seen most likely as a temporary strategy, bridging a likely shift into Thomas Cook branding, the interesting thing here was that there was a wider restraint available, as the brand treatment of the name was subject to license and brand guidelines. Even so, the paradox was that while the shift out of co-operative hands may have made sense in commercial terms, the shift away from the name, at least in the short term, did not.

But ownership can change both ways. Nationwide Insurance in the USA opened up to investor-owners in 1997. Ten years later, it bought them out, using member funds, becoming fully mutual again.

So, what’s in a name?

Our names as a sector – mutual, co-operative, friendly, societies – have always been an uplifting and hopeful component of the language of business. The terms have now become brands and, like any brand, while no-one can control how they are always used, guarding their identity, a key part of our work, still matters.

Now and in future, our names need to remain authentic if they are to retain their value.