Britain's broken markets are failing consumers - Business Works
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Britain's broken markets are failing consumers

by Ed Mayo, SG, Co-operatives UK and spokesperson, Social Economy Alliance More than half of consumers feel they have 'little or no control' over what they buy in five of the seven markets that are most fundamental to the UK’s cost of living, according to Ed Mayo, Secretary General of Co-operatives UK and a spokesperson for the Social Economy Alliance, commenting on the findings of a poll released today.

The poll by the Social Economy Alliance shows that the British public has preference for community-owned businesses that reinvest profits - two thirds of consumers would switch to one in energy and utilities (64%), care for the elderly (60%) – and half of consumers would switch to one in transport (55%) and banking (50%).

The findings reveal a preference for community ownership by people intending to vote across the political spectrum - 64% of likely Conservative voters, 69% of likely Labour voters and 77% of likely Liberal Democrat voters would all switch to a community owned energy provider.

The key findings reveal:

  • More than half of consumers say they have 'little or no control' over what they buy in energy and utilities, transport, care for the elderly, banking and housing;

  • Lack of choice in markets that dictate cost of living must be tackled;

  • Despite political focus on energy markets, outlook for 2014 is 'even bleaker' in transport and care for the elderly;

  • Cost of living will continue to rise unless market failure is addressed;

  • Britain has a distorted economy with power in too few hands;

  • Campaigners call on the next Government to open up markets to alternative providers that reinvest their profits;

  • The British public has a preference for community-owned businesses that reinvest profits.

The Alliance 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.

The next Government must strengthen competition policy and allow social economy providers - such as consumer-owned energy co-operatives - to enter and succeed in these markets. The cost of living will continue to rise unless market failure is addressed and alternatives that reinvest their profits are supported. What is required is 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.

"This is not how markets are supposed to work," says Ed. "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 has 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."

Here are some examples of social economy organisations and businesses:

  • The Co-operative Energy is owned by its customers nationally. Its fixed price tariff guarantees to fix prices for customers until March 2017.

  • 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.

  • 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.

  • 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.

For further information about the Social Economy Alliance, please visit:

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