Martin Rühl never imagined this fight would define the rest of his life. Not for a moment did he reckon it would become so epic in length, in scale, in consequences. He just thought his speck of a town should run its own electricity supply.
A modest proposal, but in the Germany of 2003 it was highly unusual. Gerhard Schröder was still chancellor and, although a social democrat, was pushing through more privatisations of public assets than any other leader in German history. This was in a Europe that had learned from Margaret Thatcher and Ronald Reagan to stop worrying and start loving the private sector. Now here, swimming against history’s current, was one orderly, slightly anxious engineer.
German politicians don’t privatise because they believe it will lead to better services. They mainly want the euros
On Rühl’s side were evidence, arguments and expertise. What he lacked was his multinational opponent’s money and firepower. The mismatch produced a battle that lasted years, that set off ripples around Germany and whose lessons should be pondered by anyone who wonders whether Britain could improve how it runs its electricity and gas, its water, its train services. And it kicked off in Wolfhagen, a somnolent town whose biggest previous claim to fame was that one of the Brothers Grimm had stayed in one of its half-timbered buildings.
Fifteen years ago, Wolfhagen was like thousands of other German towns and cities in leasing its electrical grid for its 14,000 residents to one of the world’s largest energy companies, E.ON. But two things made this place different. First, it still had a Stadtwerke, or municipally owned electricity supplier. Second, it had Rühl, who’d only recently become the Stadtwerke’s boss.
The Alternatives: German town takes power back from energy giants – podcast
Rühl spotted that E.ON’s 20-year licence was approaching its expiry. Rather than just sign again on the dotted line, he thought Wolfhagen ought to reclaim the grid for itself – and pressed the case repeatedly upon the local council for months. For all the legal and financial advice he’d garnered, Rühl was not at all sure he’d persuade the politicians. “Lots of people were saying something totally different.” Yet, “I knew it was legal and correct, and morally right.”
Now this small-town hick had to tell one of the giants of the energy world that the council no longer needed their services. How did E.ON take it? “Well … ” He remembers a scrap of English understatement: “They were not amused.”
The Germans have a name for what Rühl was about to do: Rekommunalisierung. One of those satisfyingly ungainly bits of Deutsch, it denotes a town or city reclaiming ownership of its public utilities. The term was partly spread by Wolfhagen’s epic fight for control over its power supply.
The British have their own word: lunacy. No matter how bad our privatised utilities get, any politician who suggests taking them back into public ownership may as well count the hairs on their palms.
Rail franchises can collapse in a single afternoon. Energy giants (including E.ON) face accusations of overcharging the public. Water companies can deny the taxman his dues and the public their investment, while shovelling billions into the pockets of shareholders.
For decades, Britons have paid through the nose for someone else – often based thousands of miles offshore – to rip them off. Now a clear majority of voters, even true-blue Tories, want public ownership of basic utilities.
Yet to call for that very thing, as Labour’s Jeremy Corbyn does today, is to face the molten wrath of the rightwing press, the trade lobbyists and the Conservative party. To resist the ideological extreme that the private sector must always run our public services is to be denounced as an extremist ideologue.
Rühl faced his own denunciations from E.ON. “They said we couldn’t do it. That the lights would go out. They said we were uneconomical … either the town would have to subsidise energy or residents would have to pay more.” All “bullshit”, he says. Yet the fight brought sleepless nights and days besieged by worry that he wasn’t up to the job.
He realised he was attacking E.ON’s business model. “For them it was like, ‘If [Wolfhagen] want their grid back then maybe everyone does.’ I was part of the breaking of the dam. So they had to give it their all.” And the amount they wanted to be compensated for the grid was far higher than the town’s starting bid.
Approached for comment on these and other issues, E.ON said: “Wolfhagen was one of the first cases of remunicipalisation in Germany. Many commercial, technical and legal questions were not clarified. That’s why both sides negotiated for so long.”
The multinational went back and forth with Rühl for three years, before compromise was reached in 2006. E.ON’s payoff was cobbled together by loans for local banks. His town had won control of its own grid. One epic battle had ended, but many more were to follow, across Germany.
A two-hour train ride from Wolfhagen lies Frankfurt, where I met the closest thing Germany has to a professor of privatisation studies. Tim Engartner can list the family silver flogged by his country – the airline Lufthansa, Deutsche Post, Deutsche Telekom. But, crucially, unlike their Westminster counterparts, German politicians don’t privatise because they believe it will lead to better services. They mainly want the euros. “Selling public assets gives them a huge windfall to spend on roads or social projects.”
This lack of dogmatism has two major consequences. First, it gives half a chance to any Martin Rühl who can show that public control will yield even more euros for those essential works. Second, when a privatisation leads to worse services or higher prices, politicians can be pressured into reversing it.
In the east German city of Potsdam, the privatisation of water pushed charges up by a third within two years – so it was cancelled. City after city has taken back bin collection in-house. And then there’s energy. In 2005, Wolfhagen was into the final straight of taking its grid into public hands. Since then 284 municipalities, including the second-biggest city ofHamburg, have followed suit.
Such cases don’t get much of a showing in the British press. The pundits and policy wonks who equate public ownership with Red Robbo, Bakelite phones and stale British Rail sandwiches never mention that across Europe there have been 567 instances of public services being taken into public ownership since the year 2000. Everything from care homes for the elderly to bus companies is now run by continental towns and cities.
In the 1870s, Birmingham was the birthplace of municipal socialism: the city’s then-mayor, Joseph Chamberlain, bought the gas and waterworks and ran them for a public profit. Nearly 150 years later, Europe is pioneering a new form of municipal socialism, while Theresa May’s ministers try the most motley methods to keep the failed East Coast mainline out of the public sector.
Even so, Wolfhagen stands out. It’s where the Japanese and South Koreans fly in just to take lessons. Visit the Stadtwerke today and Rühl’s successor, Alexander Rohrssen, will list its achievements. A profit every year, which has not only paid off the bank loans but funds the town’s kindergartens. Generally cheaper electricity than most competitors, including E.ON. The number of staff has almost doubled and this still-small enterprise has won national prizes for its innovation on reducing energy use.
But to see the real difference made by public ownership you need to head into the middle of the town, to a small cinema that opened in 1948. Kai Mellinghoff is the third generation of his family to run it. He barely remembers the battle with E.ON: “It was in the paper, but people weren’t moved by it.” A few months afterwards, however, Rühl came to him with a proposal. He wanted to hire the cinema to screen environmental films. It was 2006, the year of Al Gore’s An Inconvenient Truth. Tickets were either free or cheap, all 90 of the red plush seats were filled. This was an event.
After the film, there might be a speaker on climate change or electric cars, and the audience would be invited on to Mellinghoff’s terrace. He shows me its postcard view of the timber rooftops of his town and the woods beyond. Out here, the townspeople would clutch glasses of wine and discuss the film, the environment and what part they could play in preserving it.
Rühl wanted the now-public Stadtwerke to go 100% renewable by 2015; these evenings were his way of spreading the idea. Renewables meant a forest of solar panels, and giant wind turbines on the mountain that overlooks Wolfhagen. The prospect split the town in two: opponents of the wind farm produced mock-up posters of turbines looming out of a napalmed forest and leering down at locals.
The Ancient Greeks would have known what to call Mellinghoff’s terrace. It was an agora, a place for citizens to discuss politics. For all its fury, the debate turned the Stadtwerke from a company under new management to an asset in which everyone had a stake. That bond got closer after Wolfhagen had adopted the renewables pledge. To raise the millions needed to build the wind farm, the town sold a quarter of the energy firm’s shares to locals in a citizens’ co-op. The co-op has seats on the board of the company, giving residents a direct say over how their utility is managed.
Even after all the years of fighting, I ask, would Rühl recommend Britons do the same with their utilities? He ponders all the failures of British privatisation – with a special, sad mention of “your rail system”. (Every German I meet uses the same regretful tone about British trains, as if discussing a child with behavioural problems.) Then he says something that sounds uncannily resonant to anyone in Brexit Britain. “Germans say we can’t make decisions because everything is decided in Brussels or by big companies. If you can improve your standard of living and make your own choices, that has to be good.”
One snowy afternoon, Iris Degenhardt-Meister walks me up the mountain to see the wind turbines up close. Over the couple of kilometres uphill, she laughs while rehearsing the charged town debates of a decade ago, as if remembering university pranks. A civil servant, she’s also a co-op director. The shares give her a decent dividend, albeit capped by a Gierbremse, or greed brake. As for the turbines: “We love them!” She can identify each one. That way lies eins, over there is vier.
I ask a question that would be absurd in privatised Britain: does she feel they belong to her? “Yes!” A pause to consider the size of the co-op’s stake. “After all, we own a quarter of them.”