Archive for the ‘Business’ Category

Aye o Nay for Scotland?

The basic argument of the Yes campaign is that it’s better that the people of Scotland are ruled by the people of Scotland i.e. that independence is a good thing by definition and they’re right. The basic argument of the No campaign is that there’s strength in numbers and they’re right too.

But which is actually best?

It’s certainly very easy to knock down the Yes arguments:

  • the support from oil will be a lot less then the sums they are expecting not least because Alex seems to count every penny coming in as tax revenue rather than the 20% or so that would actually come in but even that’s from a much bigger base than he’ll have courtesy of various international agreements which divvy up the amounts based on population rather than land area.
  • it certainly would be best for Scotland to continue to use the pound and the Bank of England but that just isn’t a runner so at best Alex will be stuck with his first plan B i.e. use sterling but outside a sterling-zone arrangement. Presumably the banks in Scotland wouldn’t be permitted to continue to print their own money as they do now so the Scottish notes would be replaced by Bank of England ones in this scenario.
  • since an independent Scotland simply wouldn’t have the wherewithall to support the banking system, it seems certain that most, if not all, of their banks would have to relocate to England even aside from European laws requiring that. There’s going to be quite a hit to the economy and jobs should that happen. On a related note, the various investment companies based in Scotland are already preparing to move and, of course, you could hardly have National Savings (a branch of the UK Treasury) based in Glasgow anymore.
  • the freebies (education, prescriptions, etc.) are mainly dependent on the oil revenue which is somewhat less than Alex seems to think it is or would be and, of course, that knocks the “oil premium” fund on the head too.
  • defence industries ranging from Trident to loads of small and medium companies would almost certainly have to relocate because the MOD insists on having various key components made and assembled in the UK.
  • the much lauded research facilities in the universities are going to have to find their funding elsewhere as the vast majority of the research institutes which fund them are UK institutions.
  • Europe is something of a wildcard as nobody can really say what the outcome of negotiations might be at this stage but it seems unlikely to be plain sailing.

For the No camp, well the argument is that none of the above will happen if they win.

However, it’s not really so simple as that. As the Yes people say, it’s not so much the nitty gritty details but that Scotland should be run by the Scots. Which is grand for those at the top of the pile but not so good when you find (as happened just prior to them joining with England in 1600) that it takes twelve Scottish pounds to buy one English pound, that your job went south and your pension is pretty much worthless.

Copyright © 2004-2014 by Foreign Perspectives. All rights reserved.

Weird marketing terms

The way that some marketing terms arise is quite peculiar, isn’t it.

For instance, Cyber Monday, the Monday following the Thanksgiving holiday, came from a marketing campaign that ran five years ago which was picked up by many of the other online retailers. Nowadays, it’s become a day (or, in some countries, a week) of major discounting for online retailers. Crazy as it may seem to do a week of major discounting, I’m sure that consumers don’t complain about it as an early Christmas shopping day.

Copyright © 2004-2014 by Foreign Perspectives. All rights reserved.

Would you really take your pension cash and run the fund yourself?

As from April 2015, those in the UK will have the option of taking full control of their own pension fund which is a fantastic freedom from the shackles of the insurance companies that up to now have controlled almost all pensions investments.

Although there are many people who invest their own private pensions just as they do with their ISAs, there is also the option of transferring one’s company scheme and investing that too. That’s a much bigger deal as one’s company pension is often much more substantial than one’s ISA although, up to now, that was not terribly relevant as you couldn’t take full control of it.

How much more substantial? Well, I recently calculated roughly how much it might be for a colleague and the numbers were quite staggering. Taking a simple example of someone who’d worked 40 years for this employer, earning £40,000 per year, the total value was aroud £450,000. More interesting, the pension that the employer was paying on that equated to around 4.75% (say £22,000).

So, in principle, if he were to take the £450,000 and could get 4.75% or more from the investments, he would do better than his company scheme. However, that’s not the full story. When he died the £22,000 would be reduced to £11,000 for his widow and when she died, the payments would stop. If he took the £450,000 and invested it himself, the pension income wouldn’t reduce when he died and in due course his kids would get to keep the £450,000 (or whatever it was then worth).

It looks like a better deal, and the only question is: would many people actually do that? Although it may seem crazy not to, the amounts of money involved are quite scary, after all you’re getting to manage an investment fund more than 10 times your salary and that’s probably a good deal more than most people are used to dealing with.

One way to get the confidence that you’d need to take the money is to run a dummy portfolio over the 5 or 10 years preceeding your retirement which should give you an idea of how well (or badly) you would be running the investments. That way, when the day comes, you’ll know whether or not you could do it. Whether you’d have the confidence to take the money and run it is, of course, quite another matter.

Copyright © 2004-2014 by Foreign Perspectives. All rights reserved.

Is there any constraint on the growth of mandatory courses?

A long time ago, there used to be a single induction course for new entrants here but now that the induction seems to have been passed on, rightly, to the appropriate line manager, the subjects that would formerly have been covered as part of that are now taken up by courses in their own right.

The reason for that seems fairly clear: the personnel people want to be sure that the subjects are properly covered so that the company doesn’t get sued. However, that reasoning leads to the “flight safety” problem i.e. that the courses are just being done for the sake of saying that they’re being done.

So, we have the, clearly important, fire safety course which is generally seen as a chore to do when, of course, it could be rather important one day. We have a data protection / freedom of information course which skims over the information. We have a diversity course which is one that really seems, unfortunately, to fall into the “we have to do this, so we’re doing it” camp. Then there’s fraud awareness which seems mainly to have the message “we’ll catch you on”. Finally, for now, there’s the display screen awareness course which does have some useful points but which needs to come with a little manual as most of those points will be quickly forgotten.

As all of those except for the main fire safety course are online, personnel don’t seem to worry about targeting them in any way and, as they find their feet with the technology, it would seem that we can all look forward to a diet increasingly made up of mandatory courses, many of which may well be on the mandatory list because they can be put on it.

Copyright © 2004-2014 by Foreign Perspectives. All rights reserved.

Putting a negative spin on your marketing

You usually expect companies to put a positive spin on their products, even when they’re not so good so I try to downplay such messages in my mind to see what the true picture is.

So, I was a bit thrown by the recent car insurance renewal from Axa. They had their main marketing message in big letters (“10% discount for renewing online” and the usual promotion of the insurances that you don’t yet have with them). However, the insurance renewal at £78/month seemed a bit expensive and when I checked it certainly was as it was only £25/month last year. Net effect of that being that I was getting together the information I needed to get a quote elsewhere. After all, tripling the insurance was a bit much.

They are just lucky that I read a bit further though. It seems that the £25/month was actually over 9 months with an initial deposit bringing the total to around £275 whereas the £78/month is over three months with an initial deposit bringing the total to almost exactly the same total.

Talk about bad marketing! I wonder how many customers they’re going to lose by presenting an insurance quote that appears to triple the cost but actually leaves the total almost exactly the same?


Copyright © 2004-2014 by Foreign Perspectives. All rights reserved.