An Economist speaks

from the Telegraph:

But Ms Reeves dismissed those concerns, telling BBC Radio 4 Today that “good” businesses that “value” employees will support Labour’s plans.

“This is exactly what people used to say about maternity leave, that it was a big burden on businesses. But the reality is, what good businesses know, is that it is really important to keep women in the workplace once they have children and not let them drift off because they can’t manage work and family life. That’s increasingly the case for dads.”

“Good employers like Asda, National Grid and Citibank are already giving more than the statutory paternity leave. What good businesses know is that unless they give that flexibility to mums and dads, they are likely to lose their best employees as they will go to a business that does value them, or they will sadly drop out of the workforce altogether.”

So, why does it need more government legislation? If it's in the interest of businesses, they'll do it. Now, maybe Rachel Reeves knows better than those businesses, but as someone who's only worked at HBOS, one of the failed banks, I think that's unlikely.

And ASDA aren't like a software or manufacturing company that can be based anywhere in the world. Adding 2 weeks paternity leave makes people here more expensive. OK, maybe only slightly more expensive, but "only slightly" can tip the balance in favour of another supplier.

As for maternity leave, I know a company that closed down a software team in the UK for this reason. Hiring staff that come in and within a year go off on maternity leave for a year introduces huge costs, most notably, backfilling with expensive temporary staff. It increased their staff costs by 10% over a 2 year period, which was enough to shut down the team and expand the team in the USA.

Scottish Independence and Business

There's quite a lot of talk going around about how businesses that are nervous about independence are scaremongering, bullied into it etc. So, I thought I'd check out what businesses are supporting independence on the Yes campaign website:-

For Carole Inglis, owner of Isle of Skye Fudge Company, voting Yes is about Scotland taking control of its own affairs

Like many entrepreneurs, before running my own business I often felt like a square peg in a round hole because when I see a situation, I want to make it better. It’s easy to get bogged down in bureaucracy along the way, but if you can find the strength to adapt and sweep that away, you end up in a far better place. For me, like being your own boss, an independent Scotland is such a liberating idea.

I come from a very enterprising family, so running my own business took only a small leap of faith. My great-grandparents ran a confectionary shop in Glasgow, so when I moved to Skye 35 years ago I started to make and sell tablet using the old family recipe, which had been passed down through the generations.

I've nothing against small businesses. I run one myself. But in the context of Scottish business and post-independence it's important to distinguish where a business sits on the rentier/entrepreneur line. At the most extreme end of rentierism is a teashop outside Windsor Castle that gets a load of trade because people want to put their feet up after walking around it, and they're the first cafe. The most extreme is creating an internet service, which depends on little more than having heating, lighting and internet connectivity.

And 50 odd years ago, before most people had cars, shops were closer to being rentiers. You'd go to the butcher at the end of the road because the next one was a mile or more away. It's why the butchers that are around today are generally excellent - they sell to people coming to them for a product and service out of choice rather than necessity.

Throughout that time I’ve been active in the business community, and have always found that the Scottish Parliament is accessible to me in a way that Westminster could never be. It has a strong record in supporting small businesses, particularly through initiatives such as the Small Business Bonus Scheme.

That's a scheme where small businesses pay no rates. Although any business that has premises should. So, a subsidy to small businesses.

Looking forward, I hope that with independence giving control over tax and regulation, Holyrood can simplify the tax system and design it to meet the needs of businesses in Scotland. I’d also expect further support for employers – hiring staff in an area where there are very few jobs to go around can be scary, and you feel a great deal of responsibility.

Not sure what the author means, but that has a whiff of voting for more handouts.

Connectivity is another really important issue for communities like Skye. That means boosting broadband speeds and providing a universal service through the Royal Mail – both of which we can only see if the Scottish Parliament gets the necessary powers with independence. The same goes for improving access for tourism. It’s crucial to businesses like mine that people can get to Skye easily and see all it has to offer.

In other words, like most little fudge businesses it isn't a business that exists because it makes a great product, but because it's where people go on holiday and need to buy something local to take home to thank their neighbour for looking after the goldfish. Which are not the sort of businesses that leave if the government makes bad economic decisions. It's those that don't have to be there, like a fudge company that sells to supermarkets that operate from an industrial unit in Stirling that could move to an industrial unit in Sunderland.

The Business of Musicals (In Venn Diagrams)

From Time

Holler if Ya Hear Me, the Broadway musical inspired by the music and lyrics of the late rapper Tupac Shakur, will close July 20 following weeks of poor ticket sales and mixed reviews.

This can be explained with the following venn diagrams:-

There's also this one that applies to the Spider-man musical:-

And three that explain the success of the dreadful Mamma Mia

Pinewood Studios

From the BBC

The famous film company Pinewood is to set up a new studio in Cardiff.

Pinewood Studios Wales will be based at the former Energy Centre building in Wentloog and will form part of the company's global network.

The deal was announced on Monday by First Minister Carwyn Jones and Pinewood Shepperton chief executive Ivan Dunleavy.

From the BBC (May 2013)

The rejection of a £200m expansion of Buckinghamshire's Pinewood Studios is "hard to believe" in the current economic climate, company bosses say.

The 15-year project for new studios, stages and streetscapes at the site in Iver Heath, was turned down by South Bucks District Council on Wednesday.

It ruled it was an "inappropriate" expansion into green belt land.

If you read both articles, they wanted to build 100,000 sq/m of studio in Buckinghamshire and now have 180,000 sq/m in Newport.

So Pinewood tried to expand where they were, the Homeys opposed it, so Pinewood decided to move a bit of the studio to Newport (not Cardiff) which is not so Homey.

They'll soon find they can operate cheaper out there at which point most of the rest of the studio will probably move.

Germany to ban "flat-rate" brothels

From The Telegraph:

Germany's biggest political parties have agreed to ban so-called flat-rate sex offered by some brothels in the country.

The move is part of a clampdown on Germany's booming prostitution industry that critics say has got out of hand since a 2002 law legalised sex work. They view as exploitative the special offers in some brothels where men can have unlimited sex for 100 euros ($136).

There's an old quote by George Carlin about prostitution: "Selling is Legal, Fucking is Legal, so why is it illegal to sell fucking?" I think the German variation here is: "Selling unlimited services is OK. Selling sex is OK. So, why is selling unlimited sex not OK?"

The thing with unlimited services is that they generally they play on how much people value people think they can get. People have an idea that they're getting one over on the business, but in reality, it's generally the other way around.

There's a restaurant near me that sells unlimited deserts as part of their 4 course menu. You can just keep on asking for deserts. So, people think "bargain". Reality is that most people get through desert one quite easily, get desert two, and half way through, they hit the wall. So, the restaurant attracts customers thinking they'll get lots of deserts, but actually, they get one more. A few might scoff down half a dozen, and the restaurant probably loses money on them, but they're so rare that overall profitability is hardly dented.

What I'd imagine is that a lot of men turn up, pay for the unlimited option, then after they've had sex once, are well, done. A lot of guys probably get dressed and leave. Some will hang around, but most won't.

Massive Transfer Deal

From the BBC and the BBC

Vodafone has sold its 45% stake in Gareth Bale to Real Madrid in one of the biggest deals in football history.

The $130bn (£85m) deal was announced by Tottenham Hotspur after the close of trading on the London Stock Exchange.

The company will return £54bn to its fans, of which £22bn will go to the North Stand.

Vodafone will also invest money in new players, with funds earmarked for high speed strikers.

Dr No Development

From the BBC:

Plans for the £200m expansion of Pinewood Studios have been turned down. The 15-year project would have seen the building of studios, stages and streetscapes at the site in Iver Heath, Buckinghamshire.

Pinewood previously claimed if the plans were refused "significant harm" would be done to the UK economy. South Buckinghamshire Council rejected the plans as an "inappropriate" expansion into green belt land.

Yup. Can't have anyone doing things like putting up buildings where people work, can we?

Councillor Bill Lidgate, whose ward includes Iver Heath, said he was "delighted" the plans were rejected.

He said: "We're 87% green belt in South Bucks and those policies are jealously protected. The point people must understand is that Pinewood Studios do not make films, they rent out buildings."

(puts on film production buff hat)

Actually, they don't. Pinewood studios provide production facilities. You don't turn up and ask to rent the 007 stage and they just hand over the key. It's a managed service, like having a serviced office, only far more advanced. They've not only got the biggest stage in the world, but also things like an underwater filming tank, with all the specialists to run it. And it's set out as a centre, with makeup rooms, catering rooms and so forth. It's a value added service that provides a lot of highly skilled work to people.

When you watch a movie and see all the bad guys or bit players are Brits, you can almost guarantee it was shot in Britain. That's because you don't go flying bit players around the world - you use some British cast members. Count how many Britons have minor parts in Raiders of the Lost Ark and Star Wars. With the exception of Indy and Marion, the rest of the speaking parts are British. And same goes for crew and specialists. You don't go flying make up girls across the world. So, if you get productions here, you get all those jobs here. So while Pinewood don't make the movie, a lot of Britons do as a result.

And unlike the Homeys in South Bucks, desperate to keep their house prices high, Pinewood doesn't depend that heavily on location. They could decide that dealing with the sort of madness of British Homeys isn't worth it and start closing things down here and setting them up in Canada. You can shoot films almost anywhere.