Who’ll pay for Scotland’s future, plus top toymakers

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With barely a week to go until The Referendum, everyone is finally taking it seriously.

Up until last weekend the debate seemed to me, part vanity project for the separatists and part last-ditch attempt to hold on to the last crumbs of Empire, as if Scotland is all that makes Britain great. Yet it isn’t about which flag to hoist. It is about money in your pocket – something that even now, neither side has sincerely addressed.


I remember a debate at Bristol University some twenty years ago on the Scottish devolution. One contributor, from the audience, has stuck in my mind ever since. He argued that Scotland should go it alone, because in fact the rest of Britain would be significantly better off. He had a report which estimated government spending at 20% more per Scottish head than anyone else in the United Kingdom. The redistribution of wealth never sounded more attractive. So I am intrigued that even now the business end of Scottish independence or otherwise, is still so vague.

It was a shock poll over the weekend showed the independence campaign inching into the lead for the first time that eventually nudged everyone, including David Cameron, into campaign overdrive. The figures by YouGov showed the Better Together campaign, backed by Labour, the Conservatives and the Liberal Democrats, squandering a 22-point lead in just one month.

The markets didn’t like it. Even now, with the latest poll putting the No campaign back in the lead, there is uncertainty over currency and north sea oil. This is the important  stuff, economics – after all a key part of the Better Together campaign’s case for union. Will an independent Scotland be borrowing like mad and issuing billions worth in bonds? Will foreign investors to the UK start seriously looking elsewhere? Will major institutions like RBS and Lloyds Bank shift their HQ’s across the border, taking with them jobs, networks, and various prospects for growth? On the flip-side, if the No campaign wins, will it mean a return to the status quo? Probably not. There will be pressure on George Osbourne to make good those big promises over finances and policy to be put in place by the next general election. This landmark referendum will have a huge impact on the political landscape either way.

Rebuilding the brand, brick by brick


From finished masterpieces from the licenced stuff like StarWars to constructions “in progress” on nearly every surface and mini-figure colonies on bedroom floors, Lego is big business in my house. So it comes as no surprise in my household that Lego has snatched the “world’s biggest toymaker” crown from Mattel. Operating profit rose 12 per cent in the six months to the end of June, while China became its most significant market, with sales up more than 50 per cent.  The Lego Movie helped propel revenues to £1.2bn.

It wasn’t always a spectacular growth story though. Lego lost its way in the late 90s and went deeply into debt. Even back in 2004, Lego’s revenues were a fifth of what they are today. Then they sold the theme parks, renewed its portfolio and moved back to basics: making plastic bricks.

I interviewed CEO Jorgen Vig Knudstorp in 2011 when Lego’s turnaround was in full swing. His mantra was to keep things simple. He told me ”You need to challenge your organization all the time, to stay coherent, not make things too complicated… a lot of productivity is lost inside the company when things get complicated.” He practiced what he preached.

Lego has now sold the equivalent of 86 bricks for every person on the planet – not bad given its margin.  It costs just $1 (61p) to manufacture each kilo of its plastic bricks, which it then sells for $75. I wish it had been my business idea!

For my full interview with Lego’s CEO click here http://edition.cnn.com/2011/12/22/business/lego-knudstorp/index.html