13/11/2013 Y Sgwrs

Welcome back.

Everybody's bills are going up

but why do we in Wales have to pay more for electricity?

We've been looking for the light on Y Sgwrs.

More on energy prices in a moment.

We'll find out whether the rest of Wales loves or hates Cardiff.

We're joined as always by Vaughan Roderick and tonight's guests -

Baroness Eluned Morgan, a Labour peer.

Carol Bell, who has worked in the oil and banking industry,

and the comedian, Gethin Thomas. Welcome to you all.

Firstly, a look at the headlines.

We heard on Newyddion 9 that it seems there is evidence

that the British economy is improving.

Unemployment figures are down and the Bank of England says

the forecasts are better than expected.

But can we say with confidence that we are turning the corner?

Vaughan, a positive outlook for Britain

but what's the picture like in Wales?

There are positive signs in Wales.

We've been saying for a few months that the majority

of this growth is taking place in south east England.

That's still true but it seems that the economy here in Wales

is starting to grow and it's doing a little bit better

than other regions outside the south east.

There are signs that the Welsh economy is starting to improve.

But there are still problems especially

with unemployment among women and the youth.

Eluned Morgan, Mark Carney of the Bank of England sounded

very positive today. George Osborne's plans must be working.

It's working for the Tories and the rich people, yes,

but the problem is nobody's sharing this wealth, only those at the top.

If you look at wages, they're stagnant.

Prices are increasing, people feel poorer.

People today earn £1,500 a year less than they did three years ago.

There is a problem here.

The economy is growing but the wealth isn't being shared.

That is a fair point, isn't it, Carol Bell?

You're there in central London, in the middle of this growth.

What Eluned has said is quite right.

People are under pressure.

Their wages haven't gone up to match price increases.

We'll be discussing prices later on.

That's a huge part of what is going on.

But while we're importing so much fuel and other things,

there are many things we can't control, unfortunately.

Gethin, do you feel this increase?

Speaking from experience, I organise comedy tours right across Wales.

We've organised two tours this year,

one about eight month and it was a hard tour.

We've just finished another tour now, eight months later,

and we saw a lot more people turning up,

a lot more ticket sales.

It's difficult to say whether people are more confident in the economy

or have they just got used to the recession and coped better?

-Or they go on Wonga in order to buy a ticket.

-There is that!

Vaughan, there's also some nervousness about today

because of what Mark Carney has said.

If unemployment comes down to 7%, interest rates could go up.

People are celebrating but are also nervous because of their mortgages.

But remember a lot more people depend on their savings

than pay mortgages.

There is a tendency to say, "Interest rates are going up,

that's bad news."

It's not bad news if you're a pensioner with some savings.

They're amongst the people who have suffered the worst

over the last few years.

Those who were on a stable income and they've seen,

to all purposes, their incomes disappear

if they depended on some interest on savings.

You're in the City, Carol Bell,

is the City going to think that George Osborne is the man?

We'll go with Plan A, there's no need to change,

Miliband is living in cloud cuckoo land. Is that the feeling?

I think a lot of people have been disappointed in Miliband's recent

comments, personally, about what he said about energy prices

and the government should interfere in those prices.

I don't think people are stupid enough to believe

-that the government can control energy prices.

-We'll come to that.

But with the economy, is Ed Miliband right, Eluned Morgan?

You're not going to say anything to the contrary.

It is interesting because part of the reason

why the economy is growing is because they've started Plan B.

They have started investing in a way they said they wouldn't do that.

The point is, Plan B has started.

You have to remember also that people of this country

are in debt to the sum of £1 trillion.

What we've been worried about up until now

has been the country's debt.

Before long we'll have to start worrying

about people's personal debt.

Part of that problem is that debt is still growing.

That is causing problems for people in Wales especially.

This Wonga, all sorts of people contact the poorest people

and lend them money at interest rates that are much higher

than we expect in this country.

I do think...the problem we're seeing with this growth,

-we have to make sure that it's divided fairly.

-OK. Thank you.

Energy prices has been a constant topic in the headlines

over the last few weeks and on average, we in Wales pay more for our

electricity than any other part of the UK, apart from Northern Ireland.

Why? A simple question.

But as Daniel Davies has found out,

getting an answer is more complicated.

Here in Techniquest children can find out how much it costs

to light a house.

But I'm going to learn the answer to a specific question.

Why are their parents paying more for electricity in Wales

than in another part of Britain?

Last year, people in South and North Wales paid

an average £503 to power their homes.

People in both regions have paid more than the British average

for the last five years.

Those are the British Government's figures

so I asked the Energy and Climate Change Department

why Welsh people paid so much.

The answer? You'd better talk to the industry.

So that's what I did.

The biggest companies are increasing their prices

and blame the price they have to pay for electricity

as well as environmental and social duties.

But why does the increase for the customer vary from area to area?

The answer was there's a difference in transporting the energy,

and they aren't responsible for that.

I didn't think it was fair that people are paying more.

We are calling for more transparency in the industry so people can

understand the costs they pay every month for their electricity.

Every area has its own unique challenges.

The landscape, the population, the age of the infrastructure.

Distribution companies like Western Power Distribution in the south

and SP Energy Networks in the north supply the electricity

to our homes.

Before charging prices, the companies agree a price with Ofgem

which regulates the industry.

I had a word with them as well.

Ofgem says costs are lower in areas which produce more

electricity than they use.

If so, why is Wales paying more

because it produces more than it uses?

Ofgem says it's because there are so many rural communities.

Everyone clear?

The Westminster Energy Select Committee

has heard from the large companies.

Has the committee received a satisfactory answer to my question?

We want to know why.

If we have a National Grid,

we want it to work for the whole of Wales and all over Britain.

It is unfair that places like Wales produce energy

and pay more for it in businesses and in every family home in Wales.

The industry hopes that costs will drop over the next decade.

The politicians are looking for ways to help customers.

But today there was a warning from the National Audit Office.

Prepare for 17 years of increases in your energy bills.

Daniel Davies, who is still searching for the answer.

Carol Bell, what is the answer? Why do we have to pay more in Wales?

I think a lot of things were explained there which do play a part.

The problem is, it's very difficult for any individual

to understand exactly where the price of electricity,

or gas for that matter, comes from.

Why is there all this confusion in the industry?

Because there are several parts to the industry and transferring

electricity from the power station to the home, that is one part.

Then you have the cost of the fuel

which goes into produce the electricity, which is something else.

It's different in different parts of the country.

Nobody can understand these figures very easily to decide

whether it's fair or not.

But of course, Ofgem has done this. It has agreed that things are fair.

Eluned Morgan, you used to work in the industry

so you understand the industry well.

But as a politician, you must be angry about this confusion.

One of the problems is the way it was privatised.

It's the same thing with the railways.

One group owns the tracks,

another group owns the train which travels on the track.

That's the problem. It's exactly the same with energy.

And nobody understands it.

It doesn't make sense the way it was done in the first place.

Did you understand it when you worked within the industry?

I did, of course. But it is complicated.

It takes years to understand the system.

When people receive a bill

and they see the profit the company is making,

when they phone the company and it takes 40 minutes

to answer the phone and when they don't receive a good

service from these companies, of course people get angry.

The companies also got a bad name at the beginning with the selling.

The way they went from door to door selling. They have stopped doing it now.

Most people tended to stick with the people they used traditionally.

If you were in North Wales, you stuck with Manweb.

If you were in South Wales, you were with Swalec and British Gas.

Very few people change companies. Only around two percent every year.

And fewer people change in Wales than in any other area.

So that is interesting as well. So why are we paying more here?

It's partly because of this issue of the grid.

It costs more because we have rural areas here.

But also our houses are old.

But Scotland has a rural areas and they pay less.

The North of Scotland pay about the same as us.

But they get a payment from the Westminster Government.

Did you know that? That we are contributing towards that?

-No, I had no idea.

-But we do, don't we?

We contribute towards reducing their costs in the north of Scotland.

Yes, but I think we have plenty to do as individuals as well

at the same time as looking for a payment from the Government.

I was in Japan quite recently

and as everybody knows the Fukushima disaster

has affected Japan's ability to produce electricity.

The government responded by going to the people publicly

and saying, right everybody has to try and use less.

Do you know how much less they used? And they continue to use less.

17%. Has their standard of living dropped significantly? No.

What I would say is that we could all be more careful

and keep our own bills down.

It doesn't change the fact that the houses, as we've just heard,

a lot of work needs to be done on the older houses

out in the country to make them energy-efficient.

But it's not just in the country. If you look at the valleys,

they have the oldest housing stock in Britain in the South Wales valleys.

Most of them have been built in a way that there is no easy way...

There is no cavity you can fill in. They only have one layer of stone.

In Cambridge the engineering department there is looking at how

they can make streets in Cambridge,

and they are not big houses, the ones owned by some of the colleges,

where you can go into a whole street and make them much more efficient in one go.

It's interesting because with regard to image, it was the bankers

who were having a hard time but now it is the energy company bosses.

They are the new bankers. They are public enemy number one.

-Do you use that as material, as a comedian?

-Yes.

It sounds as if I'll have enough material for the next 17 years!

-And she's sitting next to you!

-And I've got a full house!

Who has the worst image, the bankers or the energy companies?

I've spent the last five years on Pawb a'i Farn and other programmes

trying to explain that there are different types of bankers.

Some are irresponsible and some don't understand risk.

I think the story here with the energy industry,

is that we need more transparency.

That is what we need.

The people in government need to make policies which force

the companies to be more transparent.

Eluned Morgan, what about the policy?

Ed Miliband says prices should be frozen.

But the Westminster Government says that is completely irresponsible

because it creates so much uncertainty before and after the freeze.

What's important is that he has been clear.

He's going to freeze it

while they are looking again at how to restructure the market.

-But the prices will go up before they are frozen.

-No.

It's obvious that these companies can freeze prices because they do.

They already offer a service to people

to keep the same price until 2017 now.

So I don't think...

People are making a big deal out of this but I do think

people need to understand that it's possible for them to do it.

The problem is,

because they take advantage of the fact that people don't switch

or look at what else is available...

This happened to my mother last week.

She was on the most expensive price because she didn't know.

Nobody had told her.

If you have somebody telling you you can't go higher than this,

then you are helping the poorest people.

But in 2011 Plaid Cymru and the SNP put forward a Parliamentary

motion because they wanted to freeze petrol prices.

Labour turned around and said it was completely irresponsible. You can't do that.

It is exactly the same policy but with petrol.

So how is it possible to do it with the gas and electricity industry but not with petrol?

Oil is different because we don't produce a lot of oil.

-We can produce energy in this country.

-Not enough.

-No, not enough.

We produce as much oil as we do gas.

But the point is, the decision about the price of oil is made

a long way away from this country.

And that feeds through into the price of gas.

In the end it feeds through to the price of coal as well.

It did but the price of gas and the price of oil have been separated recently.

In some countries. Not in this country.

There has been a lot of debate recently about the green element in bills.

Do you as a customer worry about whether the environment is protected?

Or during this difficult time, is it just too costly to be green?

No, I don't think so.

What struck me with this story was that these companies said today

they would reduce the increase if the green levy was reduced.

But that sounds to me like an attack by large companies on smaller

companies who are bringing in new ways of producing energy.

-So you are happy to pay these green taxes?

-Yes.

On that note, thank you for now.

Last week we asked whether rural areas

suffer the most in a time of saving.

We had several suggestions during the conversation that too much attention was paid to Cardiff.

It is a familiar theme

and one of our panellists tonight is eager to hit back

and defend the capital.

A few days ago a ceremony was held in the European Parliament

to celebrate the fact that Cardiff is the European Capital For Sport in 2014.

Not the capital city of Europe's Celtic nations but the whole of Europe.

Excellent! So a reason to celebrate.

At first sight.

But the reaction of many people in Wales online has seemed

anti-urban or even anti-Cardiff.

Let me give you an example from Golwg 360.

"Once again, the money will flow into Cardiff and stay there."

So why this reaction? Jealousy?

Or maybe there's a longing for a lost Welsh folk tradition,

which sounds a bit to me like preparing the Welsh culture for the museum.

Unfortunately, the folk museum is in Cardiff.

Certainly, there is a suspicion that too much goes to Cardiff and the surrounding area.

I'll give you another quote.

This is from Golwg 360.

"These days Britain means London and the south-east of England.

"It's a shame that many of our politicians in Wales

"are trying to create the same kind of Utopia on a smaller scale

"by giving Cardiff as many resources as possible

"and saying it is good for the whole of the country."

Is there any truth in this criticism?

Nonsense!

Having said that, Cardiff and the surrounding area

is where most of the population lives.

So it is inevitable that money will be spent on resources for them.

But remember, this is not a unique situation.

Paris gets it from most of the South of France.

Even Edinburgh gets it from everybody in the Highlands.

And London gets it from the North of England.

As much as I enjoy unreasonable extremism on this issue,

there are implications.

Without support, Cardiff and Wales cannot compete with

international cities like London, Paris, Rome, Dublin, Athens...

Well, maybe not Athens now.

But Cardiff, our capital city, is the shop window.

And there's a danger that the whole of Wales could lose out

economically, culturally and socially.

For once, can we just not fight amongst ourselves?

Let's do just that right now.

You are the only one from North Wales here tonight.

Cardiff, Cardiff, Swansea, Bridgend. Everything goes to Cardiff.

Well, not everything but a lot does.

We see the same kind of story in other places.

We complain in Cardiff about everything going to London.

But if you remember when we were talking about establishing the Assembly,

that was one of the reasons why we wanted to bring it to Cardiff to ensure that it happened,

because we wanted to take something out of Wales

and create a new centre point for Wales. That is what has happened.

Would that have happened without all these things?

Would the place be as dynamic? I'm not sure.

It's better that it's happening here than not happening anywhere in Wales.

Is anybody going to stand up for the countryside? You are from Swansea.

I do have an answer. I was looking there the Millennium Centre.

Amazing things take place in the Millennium Centre.

Why don't we broadcast live what goes on in the centre

into cinemas and halls around Wales?

They do the same kind of thing in New York with the Metropolitan Opera.

We could do it with the Wales National Opera.

I've been saying this to anybody who will listen.

-We have some amazing things.

-Like Gethin's shows.

Broadcasting them around the country live so that everybody

is part of the excitement and the great shows we have there.

The problem is this.

You talk about this city but it's not only rural areas that would complain.

Newport would complain. Newport is only 10 miles away from Cardiff.

It's easy enough for them to go to the opera.

The main headline in the South Wales Argus a few weeks ago was,

'Newport to get Britain's biggest 99p shop.'

There are areas of Cardiff which are poor

and which complain that other areas of Cardiff get things.

You said at the end, why don't we stop arguing amongst ourselves?

-But we do like to argue in Wales, don't we?

-It's our speciality.

We are very good at doing it. We're playing to our strengths.

What I would say is...

In simple terms, Cardiff is a shop window

but the whole of Wales is the shop.

You need a city.

But if you live in North Wales, Liverpool might be the capital for many people.

They go to Liverpool.

I used to go more often to Liverpool, to see football for example,

than I came to Cardiff when I was living in Bangor.

Without a big city like Cardiff,

we might be more dependent on cities like Liverpool and Bristol.

I'm not sure how much Wales would benefit

if big events like the sporting events went to those places.

I'm not sure how that would benefit Wales.

It is very positive that we have the facilities to bring in these large events,

just to give cultural, social, economic opportunities.

It brings international attention to Wales as well

and that benefits everyone.

And with regard to a capital city, London dominates Britain.

Is there a danger that Cardiff could do the same in Wales?

I think it does already.

But what we do have here in Cardiff

and I've brought many visitors here recently,

is that we have a gem.

People don't know how good Cardiff is until you bring them here.

They want to go to the Millennium Centre or to a big rugby game

and I don't know what they have in their minds

but we have something amazing to offer them.

Do politicians manage to solve this age-old problem?

A lot depends....

I was talking about Newport.

When David Cameron came to Cardiff a few weeks ago

to announce that the NATO summit would be held at the Celtic Manor

in Newport he said, "It's great to be bringing the summit to Cardiff."

Now, how do you brand Newport?

Would Newport benefit from being counted

and portrayed as a part of a Cardiff region.

From the point of view of south-east Wales, West Wales is different

and North Wales is different,

but Cardiff is really the brand of south-east Wales.

People outside of Wales don't know where Torfaen and Blaenau Gwent or the Rhondda are.

Cardiff is the brand.

But how do you persuade people in Anglesey for example,

that Cardiff is the shop window?

I think it is a bit of a problem.

One of the things that happens is that it sucks talent from other areas.

You can see on the schoolyard that parents

have come from all over Wales.

I think that is a problem because of what they leave behind.

But I do think if they didn't come here they would go to London.

So it's better that we stay here.

Thank you to the panel tonight. That's it for another week.

We are taking a break next week

but we will be back in a fortnight, so join us then.

For now, good night.