‘Big fix’ needed in Britain’s broken markets, says Social Economy Alliance
More than half of consumers feel they have ‘little or no control’ over what they buy in 5 of the 7 markets that are most fundamental to the UK’s cost of living, according to research released today by the Social Economy Alliance.
Despite the political focus on Energy Bills; Rail & Bus Travel and Care of Elderly People came off even worse than Energy and Water in the polling, with almost two thirds (64.7% of transport users, 63.3% of people planning or buying care-for-elderly people) saying they have little or no control over what they buy in these essential markets. The figure is 59% when it comes to energy and water.
According to the Alliance, the next Government must strengthen competition policy and allow social economy challengers – such as consumer-owned energy co-ops - to enter and succeed in these markets, as well as support the development of consumer-owned co-operatives.
The cost of living will continue to rise unless market failure is addressed and alternatives that work better for people and communities are supported, says the Alliance.
The Social Economy Alliance is a new voice on the economy. Twenty three respected social enterprises, co-operatives, universities, housing associations, crowd-funders, social investors, think tanks and charities have come together to form the group. They have released today’s polling to launch a call to UK consumer and community groups to get involved in developing a manifesto for a more social economy – one where alternatives such as cooperative energy, social investment and social enterprise housing groups are allowed to fix social and economic problems in the UK.
According to the Alliance, the sort of market failure the UK is experiencing requires radical thinking and action, and is ‘The political opportunity at stake in the 2015 General Election’.
Ed Mayo, Secretary General of Co-operatives UK and a spokesperson for the Social Economy Alliance, said:
“This is not how markets are supposed to work. In genuine markets, the customer is King and their freedom to choose keeps companies on their toes. Consumers don't feel powerful and they have little confidence that companies can earn their trust. What we need is an economy that is more open to competition from a wider range of companies on the basis of the things that matter - good value, fair dealing, markets that work for the people in them. This is what we call a social economy."
“Our research also uncovered a remarkable interest among voters in community-owned businesses that reinvest their profits. That is good news, as these are the sort of businesses that are likely to succeed in the 21st Century. And they are businesses that thrive where there is market-breakdown.”
The Allliance argues that Britain has a distorted economy and a worrying concentration of power in a few hands, in comparison to neighbouring economies like Germany’s that feature a range of medium-sized providers.
Throughout the financial crisis, social enterprises and co-operatives have out-performed traditional businesses, and alternative banks have seen better returns on assets. Something exciting is happening in the UK, and the Social Economy Alliance will be working throughout 2014 and 2015 to ensure that the next General Election delivers a Government that supports a social economy.
The Social Economy Alliance approach is designed to put power in the hands of people, foster bottom-up economic growth and take advantage of the many innovations the UK’s social sector has created. From community energy to housing, from business to public services, the Alliance believes that economic and social policy can and must reinforce one another.
Example 1. The Co-operative energy is owned by its customers nationally. Its fixed price tariff guarantees to fix prices for customers until March 2017
Example 2. Welsh Water is run for the benefit of its customers and has no shareholders to satisfy. It works to keep quality high and costs low for its customers.
Example 3: Crystal Fountain is a retirement village in Nailsworth, Gloucestershire. Its profit-driven owners went into administration and the village declined. Residents chipped in their money and created a social enterprise to run the village. Its residents are co-owners and will control how it’s run and see that the majority of any profits are reinvested into the village and its community.
Example 4: Brixton Energy is a co-operative based in Brixton, London. It generates solar energy and its financial revenues stay within the local community. Germany produces more than 20% of its electricity from renewable sources, with communities generating about a quarter of this. In the UK, less than 1% of renewable electricity is generated by communities.
To request a copy of the research, please email email@example.com