27/01/2016 The Wales Report

Tonight on the Wales Report: Is business the new battleground

between the UK and Welsh Governments ahead of the Assembly

We hear claims that the Welsh Government's tuition fees policy

should governments intervene to change behaviour?

This man is bringing "nudge" to Wales, and he thinks it

Some of the great challenges of our time and behavioural science looks

like it has something to say about that.

On tonight's programme, if the recent job losses

at Tata Steel in Port Talbot have taught us anything,

it's that business here and the welsh economy are often

There have been constant calls for the UK and Welsh governments

to work together to give Wales a voice in the international

So we ask to what extent, if at all, both administrations

are co-operating for the sake of the Welsh economy.

And you can join in the debate on social media - the hashtag

Tonight, we hear frustrations among business leaders in Wales that

delivering key infrastructure projects like the M4 relief road

and improvements to the A55 in North Wales are taking

Our Business correspondent, Brian Meechan, asks if political

squabbles and point scoring too often get in the way of what's good

In a global economy, business does not respect national boundaries. The

Welsh border with England is open when it comes to trade with goods

services and workers moving between the two countries daily. The

question is our our politicians drawing false battle lines between

the two sides? Here in Chepstow, Wales is separated from England by

this river. It might seem perfectly tranquil but skirmishes between the

UK and Welsh governments over education and health in recent years

have caused tensions and ministers on both sides of the border say that

they are the truly progress this governments. What is your plan for a

stronger Wales? If after 16 years in power you cannot provide one thing

quite simply it is time for a change. For the first time ever

Wales is bouncing back from recession faster than regions of

England. Employment is at a record high. Foreign direct investment is

at record levels. That is what we can do as Labour in government. The

Conservatives believe they can build on accusations that Labour under Ed

Miliband and Jeremy Corbyn became anti-business and since the General

Election that Carwyn Jones has been at pains to emphasise Welsh Labour's

pro business position. If business is the new battle ground, what

impact does that have on Wales? In terms of attracting companies and

business to settle here and selling the country to the rest of the UK

and the world. What do firms on the Welsh side of the border as they? A

recent survey found that three quarters of people running companies

thought devolution had failed to deliver. Mark Hooper agrees. He

founded his company five years ago and the company provides space for

start-up firms across Wales. I think they keeping from a business

perspective is recognition from all sides that what has happened to

Wales for too long is not working. The support that we have got is not

driving business growth or GDA, so stop doing the things that do not

work and perhaps listen to people who are making it happen and I would

rather see politicians turn up and walk into places and start talking

to entrepreneurs and that will make a difference. This man has become

chair of CBI Wales this month and he says it is time for more frank

talking from businesses. I know people are scared to speak out

because when they do they are criticised. I will get criticised

but we have to start doing things differently. CBI Wales is message in

the run-up to the election is clear. Mike whose exports products

worldwide says businesses are increasingly frustrated with both

governments arguing about the NHS or devolving powers rather than dealing

with issues like the M4 and Severn Bridge tolls. We have been obsessed

by Wales in the context of Wales and not Wales in the context of the

world. There seems to be fighting over what powers we have or have not

got, we have lots of powers, use the ones we have got and make a

difference. I think that politics is in a mess, it has got tangled up, it

has not got much to do with the reality any more of what we in Wales

need. Why are we not copying the best practice? Look that

infrastructure and services, yes it is making it difficult for big

companies to come here and I think that is really worrying but it will

not take much, a bit of political courage and leadership and we can

start reversing that and making it better. The former director of CBI

Wales who was in post during the devolution referendum in 1997 says

that governments need to provide stability. There are two things that

business generally and individual businesses want and that is

certainty, does not like lots of change and the second is it wants to

make sure that all of the infrastructure around, whether it is

transport or digital is in place so that it can continue to do its

business and do its commerce and the lot of believers around,

particularly true -- travel does not belong to the Welsh Government and

it is taking far too long to try and deliver what we need to help to grow

business in Wales. Yes, political issues and particularly the

regularity of elections is always going to have an impact on those

sorts of decisions but I think what is important is to have a strategic

approach that you know where you're trying to get to even if there are

delays in reaching that objective. As the election battle begins in

earnest it may be too much to ask politicians to avoid point-scoring

on major the clear message from businesses is that they need to be

aware of the damage that can do to the country in the long term.

Joining me now is Denise Lovering and Dan Langford. Thank you for

coming in, Denise if I can start with you, as a businesswoman in

Wales are you frustrated with both administrations? Yes. Business in

Wales would like a level playing field, both sets of government to

talk and do the same thing. If I could pick up on what Elizabeth said

in the clip and Mike, transport is a prime example. There is no real

physical barrier between Wales and England but we have so much problem

with the Severn bridge and the M4 relief road, both governments could

work together and do something now. What is the problem? Is a devolution

or the system or the fact that there are different colours at both ends

of the M4? They should overcome that, sort it out, business need you

to be talking on the same sheet. Do you see it as black-and-white as

that? Not quite. There is potentially an issue with devolution

were we have to avoid the possibility of holding opportunities

and new initiatives up because we are Wales and we have to rethink it

again. Sometimes if there is closer negotiation and engagement between

the two governments we might be able to get some decisions made quicker

and that is where the frustration would be. It is not the projects, we

are spending three years discussing the same thing. There are two sets

of hands on the wheel. Does that mean that they cannot take their eye

off the road because there is competition and it is good or does

it lead to endless point-scoring? I think so. It causes total

frustration. In business you cannot take time to decide, if you decide

to do something by the very nature of the fact you're running a

business and going forward, you have to make a decision quickly. Would it

be easier to run your business in England? I have no knowledge of

running their business in England apart from the fact we have depots

in England and the only problem we have is paying the toll when they

come back. I do not think it is that black-and-white, there are

frustrations and we can take some of the major infrastructure projects

from a business perspective we generally feel things are taking too

long but there are lots of things that have been happening that had

Devenney shown there is an engagement between the governments

which have been good for Wales and we can talk about the work with the

Cardiff City deal, there are lots of complexity is behind-the-scenes and

there are bits of political posturing, but ultimately everyone

is pointing in the same direction and trying to get this through as

the Chancellor said before the March budget. The football European

Championships in 2017 coming to Cardiff would not have happened

without total engagement and dialogue between the two governments

because some of the restrictions and recommendations, the requirement

that Uefa needed, the Welsh Government is not in a position to

give those. That is another debate. The big levers remain in

Westminster, the smaller levers are here, would you like to see more

leaders in Wales? That is a difficult question. I am not happy

with the way they have use the leverage they have got. Devolving

more powers I am not sure is very good. If ministers were here now,

what do Welsh businesses need? What I would like to see is a commitment

from the government who may be in power in Wales act are made to say

that they will carry on with the M4 relief road. We have two sets of

elections, we might have a referendum as well, there is a novel

lot of electioneering on the calendar. And it is painful. The

urgency, commitment, that is what we need. From both governments. Whether

one government might be more in a position to get decision-making

quicker than the other depending on the project, I do not know, but we

need that urgency and conviction, the decision-making about the

economy and infrastructure and business support will never please

everyone, let us just get on with it, that is what we need. I think we

have got so far, there has been engagement between the two

governments, it has got better. There is still a way to go. There is

still point-scoring going on and that should stop. Thank you both

very much. We are looking at How Wales Works. Higher education has

caused a great deal of controversy. Particularly Jewish and fees. The

Welsh Education Minister has said he intends to keep tuition fee grants

for Welsh tunes were they decide to study. That is despite concerns that

the policy could be taking money away from universities here in

Wales. The Higher Education Funding Council for Wales says there is less

money in their budget to put towards Welsh institutions. During the

academic year 2011 to 2012, Welsh universities got ?367 million. This

year, that funding has dropped by more than half to 151 William

pounds. That figure could drop further to ?87 million next year and

this is all fuelling a fierce debate. In the last few days, the

Education Minister pledged his continued support for the policy of

subsidising tuition fees for Welsh students. It comes back to that

principle, what are they primarily investing in and my argument would

be that it is the life chances of the young person. That takes

primacy, even over the very real priorities that you need to address

around the institutions. The universities themselves. That did

not please the vice Chancellor of the largest Welsh university.

The policy I think is holding us back. There is a solution to that

which we propose which just as maintenance grants and means tested

goes to those who really need them the most, if you took the same

approach to tuition fee grants, you could free up considerable funding

to allow Welsh universities to compete in the same way as other

universities in the UK and that is really critical to our future as a

country. There is a concern this policy will have an increasing

impact on Welsh universities. Student number controls have been

removed. There is no limit to the Nebraska does that have -- that can

go to university. And what that means is there is just not enough

money to fund Welsh universities. The latest draft government budget

proposals were in visiting a cut of 40% to funding for Welsh

universities starting in August. We have had no one in this. We have to

make plans to try to achieve that in a short timescale. It will cost

jobs, affect students and staff within the university and it will

cost jobs outside the university as well. We are told there is going to

be a cut of 40%, it could be more, in the next year. We need to plan

for that but we also need to plan for what comes afterwards. It would

be very helpful if the government could be more specific about what is

going to happen in the future and whatever happens to wish on fee

grants, the critical part is the government needs to make sure that

enough money is still available to fund all the areas that tuition fees

cannot fund and that means they can sure that the funding is available

for Welsh universities to be the great success they have been over

the last few years. The future could at sea of the people of Wales relies

on an economy and it is the universities that are building that

economy. A Welsh Government spokesperson said there is no doubt

we have had to make some tough decisions between -- within this

budget and we recognise that a cut to HEFCW will present challenges.

Joining me now is Nick Ramsay and Beth button. Why do you think that

the current system is fair? The first question we have to ask

ourselves is is it fair that students should be leaving with this

amount of debt. Does the current system recognise that the benefits

that a society and individuals get from higher education, the cost

should be shared by the society and individual. It is good for Welsh

students. Wherever they study, they get the money but what about the

universities which suffer because lots of the money is going across

the border? We need to be clear that this money is lost from

universities. It is misleading. It makes sure that a student is making

a choice that is right for them and not the cost. This idea, we have to

be clear that issues of competitivity and quality existing

before this was introduced. This idea of graduates going across the

border, it is one we need to address but we should be supporting students

and incentivising them to come back. Bringing them back and then we will

see a return on that investment. Nick Ramsay, this division, if the

money does go with the students across the border, it is not going

to Welsh universities. It is misleading question mark no one

wants students to be leaving university with debt. We want to

keep that down but the policy is unsustainable. The review has

revealed it will not be able to be continued beyond the next election

for any length of time. We need to look now at ways of properly funding

students in a way that will benefit them. The Welsh Conservatives would

target the resources for those students that needed most. Whether

they are studying in England or in Wales, we would make sure the

students that need our support at it. Which is the system across the

border, isn't it? We have seen the figures from a steady at Edinburgh

University, retention and accesses broader in England than it is in

Wales and Scotland. Actually some recent 's research shows that for

the first time in many years the access has actually dropped in

England as a result of the policy. Edinburgh University has found that

access in England is better. We have to look at the access... It is

targeted by a support system that enables choice for all students

regardless of their background. Of course we think that targeting

support where it is necessary is important but we have to look at it

as a wider thing. It is not just about a tuition fee policy. We think

the Welsh Government should go further. We want to see this

principle extended through increased investment across the board. Maybe

the Welsh Government have got it right. In an ideal world, I would

agree with that but the funding simply is not there. We know that

budgets are tight at the moment and over ?1 billion has gone into this

policy. The many are simply not there. The other big to pick up on

access in England, last week, the Westminster government scrapped the

maintenance grants for the poorest students. They are now graduating

with even more debt than their wealthier counterparts. That is

actually a very important point. It is not just about tuition fees. A

lot of students are suffering because of cuts to maintenance

grants. We would be better off looking at tuition fees and looking

at maintenance grants. If you were to win in May, your party, what sort

of difference would students see question mark it would not be across

the board coverage. We would target those students that need the

support. Whether they are studying England and sometimes they have to

because of the courses, or study on this side of the border, they would

get the support. But we have to recognise we cannot fund everything.

Is there not a danger you are being idealistic Castle Market if

universities are going to see further cuts, where is the research

going to happen? We are concerned about that. I think we have to

recognise that there is a choice about where the money is invested in

the budget. It would relieve this competition. I do not like the fact

we are deciding whether higher education deserves a better cut --

bigger cut this year or further education. It is a bit ago choice.

It would enable us to direct investment into all forms of

education. The student lobby is a powerful lobby. It is a very bold

party that will mess with this lot. Yes, I think it probably is that at

the end of the day, we are just being written -- realistic. The

universities are saying this as well. They feel that they are not

getting the sort of support they need. Hopefully we can come forward

with a policy that will do the necessary.

The Behavioural Insights Team, more widely known as the Nudge Unit,

was set up by David Cameron back in 2010 to advise the Government

on how to improve public services and save money.

Applying insights from behavioural psychology, the team aims to give us

all messages to help us make the best choices in many

aspects of our lives, from getting a job to what we eat.

And now the Welsh Government has asked the unit to start work here.

In a moment, the Welsh Government minister responsible will be joining

us, but first let's hear from the director of the unit,

David Halpern, about the art of nudging.

A lot of policy issues concern human behaviour.

It is about people eating more healthily or committing less crime

or being effective in schools, in terms of how hard kids study

By introducing a more realistic of human behaviour,

it often leads to different kinds of solutions which don't necessarily

involve regulation or spending lots of money and it turns out

The big issue, getting people into work faster.

We went into job centres to understand what is that process,

we made some relatively simple changes on the face of it,

we were able to get people back to work much faster.

So for example, for 30 odd years, we have been asking people

in the job centre, you have to show that you are looking for work,

so what three jobs did you look for last week?

Psychologically, we think that is not as good as doing

something different, which is asking people,

And to ask them in quite concrete terms where are you going to look,

what kind of thing you looking for, what time of day, after I have

If you ask people about the future instead of the past,

it turns out they are much more likely to get into work faster.

They just become more effective in their searches.

We notice in job centres that quite often people,

even when they were booked in by the job centre,

to have an interview the next weekend, only one in ten people

would turn up, so we ran a trial, we were giving texts to tell them

you have been booked into this thing.

If you add the person's name, it goes from 10% to 15%.

If you add my name, the job centre adviser,

If you have one line in there to say, I have

booked your place, good luck, it goes up to nearly

Introducing psychology and humanity to the exchange can have a huge

One of the key points to understand information is not

People sort of know things but there are lots of other things

that are driving our behaviour when we eat so we are often not

Plate size, enormously, how big your plates are at home

influences how much you eat, how big the portion sizes,

the bigger the boxes, the more food you will eat,

The way in which food is presented in a school,

what comes first, the salad or the chips?

These things turn out to be incredibly powerful influences

There is a lot of reason to think that this will be driven

by local innovation, rather than just national

prescribing, partly because people do not want national government

saying this is how big your plate size can be.

But you can well imagine communities can shape for example how many

fast-food outlets are around the school, what is the food

You can imagine a community being able to mobilise on some

of the things and actually making a very big difference,

probably more effectively sometimes than a national government saying

Some of the great challenges of our time, behavioural science

looks like it has got something to say on that so obesity

and lifestyle issues, it actually includes

People sometimes forget but a lot of what happens in the economy

is essentially psychological, confidence.

What do you think everybody else is doing?

That affects whether you decide to employ another person or not,

so yes, we think that it is up to some of the big challenges on us,

a lot of the focus of our work these days.

I'm joined now by the Minister for Public Services,

To what extent are you nudging us at the moment in Wales? I think we are

starting to nudge a bit more but I think there are ways in which

government always nudge in any case. David rightly referred to health

issues for example and clearly we seek to encourage people to smoke

less, to eat more healthily, to drink more wisely. So there are

those traditional areas of government but what has been

interesting from the work of the behavioural insights team as they

have also targeted quite concrete economic and social policy issues as

well. You mentioned smoking. That is not nudging. That is a ban. A ban on

smoking in public places. A ban on smoking in cars with children. That

is not nudging. Many would say that is more nannying. It is a fine line.

I think there are different courses for different courses. I think we

know that the work that was done in respect of a ban on smoking in

public places has led to impact on behaviour. We have laws in place for

example on discrimination which have changed public behaviour but what is

quite clever here I think is that the work of the behavioural analysis

goes to areas where government has not traditionally been able to

reach, with things like regulation or spending. And instinctively as a

minister, are you more of a nanny or a nudge? I think there is a

correlation that you need. It is right that we have regulations

against his commission. It is right that people can breathe clean air.

Those things are important. I think you have got to stop this binary

divide. It is not a binary divide. There is a room for nudging and

there is a route for regulation. Give us an example of where you

would like to nudge Western Mark it has to be settled? I would like to

see improvements in voter registration rates amongst those

under 25 for example. I would like to see an improvement in council tax

payment levels. Those are areas where we will six ball work with the

team in the future. That is work... I am not the expert on this. There

are people with the experience who can tell us. We have brought the

team into the Welsh Government, we are starting work with them at the

present time. They have got insights, they have done good work

for the UK Government and they have done good work for the Inland

Revenue and others and we want to see what we can learn from that. The

whole ethos of nudging is that we as citizens are meant to know we are

being nudged. Once we know, does it feel question mark it appears to be

working in the areas that the team has targeted in the recent past. I

think we are all subject to nudging. We know that the big supermarkets

are seeking to nudge our behaviour all the time. What we are trained to

do here is work with the grain of human nature and identify ways in

which policies can be better explained to people, put in terms

they understand and respond positively to. The beauty of nudging

is it is cheap. Sometimes it generates a real return. If you

speak to the team and the Inland Revenue about the way in which they

have improved tax collection rates, for example, we are talking about

tens of millions of pounds being collected. And if you do for me next

didn't -- administration, you would go big on nudging, would you tell us

we are by Ian nudged? I am telling you now. There is nothing secret

here. We brought the team into talk to us. They spoke at our summit.

David spoke in November. And I know that people in local government, the

health service and others have been impressed by what they have heard

and are talking with them. Thank you very much.

If you'd like to get in touch with us:

We'll be back next week, but until then, thanks for watching.

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