Powered by People – who do you trust to keep the lights on?

Tired of bashing bankers? Have a go at the ‘Big Six’ energy companies instead – always a good formula for a popularist message. That’s the tack Ed Miliband has taken with his latest headline-grabbing speech.

Miliband’s promise to freeze energy prices may please consumer groups but right-wing commentators have jumped at the chance to again portray him as “Red Ed” while energy companies are unsurprisingly up in arms. Even more controversial than price controls, are suggestions of breaking up the energy companies and increasing the control central government has over their activities.

Levels of trust in energy companies, for both the public and MPs, is pretty much at an all-time low. So clearly something needs to be done to restore this trust. But does Miliband’s rhetoric fill one with confidence that he has a thought-through vision of a secure, low carbon energy market? Does he have a plan and a narrative and the willingness to deliver on it?

As James Langdale suggests, this attack on the energy companies feels like old-school, left-wing, ‘state knows best’ tactics. But, in reality, Miliband is stuck between a rock and a hard place. Whilst he sees the need for some sort of reform in markets and economics, he defaults to a middle-ground which is neither free-market, nor true to the ideals and origins of the labour movement.

This is because Miliband triangulates everything he does and thinks off his reaction to, and repudiation of, his father’s ‘nationalise the means of production’ and public-ownership version of socialism. In his rush to refute this form of socialism, he makes vague threats about shaking up energy markets with no vision of what alternative end he seeks and what real means he will use to get there. So whilst he dislikes the effects of liberalisation, he is not sure what to do instead. All he is sure about is that he can’t be seen to be too ‘red’ and too much like his father.

But this is to misunderstand a crucial aspect of the labour movement’s and the Labour Party’s heritage. Whilst in Ralph

Miliband’s days, Clause IV – and therefore the Labour Party – was firmly rooted in nationalisation as the means to socialisation of the economy, this was the 1944 re-write of Sidney Webb’s original 1918 Clause IV.

What Ralph may have forgotten – or deliberately ignored – and what Ed is missing, is the original wording of the 1918 version of Clause IV which wasn’t about nationalization and public ownership at all, but about the mutualisation of the economy and common ownership. The text ran:

To secure for the workers by hand or by brain the full fruits of their industry and the most equitable distribution thereof that may be possible upon the basis of the common ownership of the means of production, distribution and exchange.

Fast forward with that 1918 text to today and that wording could mean community and employee owned energy. It could mean collaborative consumption, land trusts, credit unions, mutual finance, peer-to-peer enterprise, crowd-funding and the flourishing of ‘the good society’ where the citizen not the civil servant is king.

So how about, instead of bashing the energy companies for the sake of headlines, Miliband listened to Ian Marchant, ex-CEO of SSE, and now President of the Energy Institute, who has called for a flourishing of community energy projects? Or to the new CEO of the same company, Alastair Phillips Davies, who wants his company to become the John Lewis of the energy sector.

Just as ex oil-man Justin Welby, Archbishop of Canterbury, has called for a the rise of credit unions and a mutualisation of finance in response to the ‘Wonga-isation’ of the finance sector, so mutualism and co-operatisation could play an important role in the future production and supply of decentralised, low carbon, energy.

Just look at the way the big energy companies in places like Germany are under pressure from the rise of community rooftop solar projects. That’s a sign of power relocating to us, the people.

Set the market framework correctly and Clause IV v1 could become a reality here in the UK. Workers and communities could become vested and invested in the future of a secure low carbon economy.

Yes, the role for ‘Big Six’ companies might change; the market might need breaking up or rearranging in some way. But don’t take a mallet to the system. Work with the energy companies to make this a reality. Set the right market framework and let innovation and enterprise deliver outcomes, not byzantine procedures and Kafkaesque regulatory minefields.

Labour badly needs a vision if it is to stand a hope in hell of influencing or gaining power. But what we need is not the clunking fist of centralised power and quangos – it’s people-power.

The sooner Miliband and everyone in Westminster realises this, the better for us all.

6 thoughts on “Powered by People – who do you trust to keep the lights on?

  1. This article somewhat misses the point. The freeze is a necessary short-term response to a market that has failed. Itis limited to 20 months to allow a new Labour government to implement a proper solution. That’s when we can talk about mutualisation and nationalisation.

  2. I am surprised that Compass has published this kind of carping, and frankly incoherent, critique of Miliband’s proposals around energy pricing.

    Jules Peck seems to be both lambasting Ed Miliband for not socialising the big energy companies, and then in the next breath criticising him for taking a mallet to the system and not working with the big energy companies.

    Jules finishes by saying what we really need is “people’s power”, but gives us no clue about what this means. Should Miliband be calling for energy workers and consumers to set up soviets to seize control of the big energy companies?

    I am sure there is a useful debate to be had about Miliband’s proposals, but this article is just hot air and posturing.

  3. I agree completely with the overall argument in the piece – we need decentralised low carbon energy but I think Jules is missing one aspect of the energy transformation that took part in Germany – the big energy companies don’t like it and you can’t just work with them, you have to take them on.

  4. All this misses the point. The reality is that this “developed” economy was designed to run on high energy profits, ERoEI, and now that energy is no longer cheap and a small proportion of the economy, energy seems relatively costly for a large proportion of us. Welcome to Peak Oil v2.0, Economic Peak Oil.
    Two choices: a shift in social values or more Basic World + Premium World.

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