Scotland’s biggest investment trust has shifted its investment portfolio, reducing its exposure to Asia and upping holdings in makers of smart phones and gadgets.

Under the shift in investment strategy run by Ilario di Bon, the Alliance Trust’s new head of equities, the fund said it does not expect a European “meltdown” and has invested £35 million in the region as “valuations for many companies are now looking increasingly compelling”.

In a market update, the Dundee-based group said increased its exposure to tech giants Qualcomm and Samsung, which it funded by selling down telecoms firms such as Vodafone and industrials. It added it has also increased its exposure to North American companies, including iPhone maker Apple.

Total assets were at £2.6 billion, down from £2.9bn six months ago. The company’s discount to net asset value – an issue which has subjected the firm to challenge from activist investors – remained stubbornly high at 15.1 per cent.

During the three months to 30 September 2012, the trust’s total shareholder return was 5.7 per cent, which put the conservatively-managed fund in the second quartile against their global investment trust peers. This closely watched measure was guardedly welcomed by analyst.

Simon Elliott, head of research for investment trust specialist Winterflood, said the company’s investment performance in the quarter was “reasonable” but added that the “longer-term performance numbers are less exciting”.

He added: “Given the extent of the changes that have been made to the portfolio recently, it is clear that there is still work to be done. Ilario Di Bon has been given the responsibility for the equity portfolio and he will be under pressure to deliver.”

The UK’s construction sector managed to eke out modest growth last month, but firms said they remained cautious about the future as residential activity fell for the fifth month running.

According to the Markit/Cips survey, where a reading above 50 represents growth, overall activity in the sector rose to 50.5 in October, up from 49.5 the previous month and the highest figure since July.

However, the headline reading was weaker than the 56.3 average seen in the decade leading up to the global financial crisis in 2008, highlighting an ongoing subdued trend.

Tim Moore, senior economist at Markit, said: “The bigger picture remains bleak given ongoing falls in new orders alongside renewed job cuts across the sector over the month.”

Stagecoach is making a £3.2 million investment in a fleet of Britain’s biggest coaches as it continues to meet growing demand for its inter-city travel service Megabus.

The Perth-based transport group said a fleet of 11, 15 metre-long coaches will be delivered in December and introduced on Megabus.com routes covering Scotland and England.

Manufactured by Falkirk-based Alexander Dennis, the “Plaxton Elite i” coaches have 75 seats, offering more than 20 per cent extra capacity than a standard 15-metre vehicle and more luggage space.

Ian Laing, general manager for Megabus.com, said: “Demand for great value inter-city travel just keeps on growing, especially with the rising cost of owning and running a car and the 
further stretch on household budgets.”

ALEXANDER Dennis is set to announce its biggest-ever overseas order in a new contract win that will send the coach builder’s turnover surging through the £500 million barrier.

The £110m order will be officially unveiled on Tuesday at the Euro Bus Expo 2012 in Birmingham.

Alexander Dennis chief executive Colin Robertson said he was not at liberty to reveal the name of buyer, whose custom will be a major boon for the Scottish company.

“But it is the biggest single international order we have ever received,” he added.

Half the work will be carried out at the company’s Falkirk headquarters, where Alexander Dennis employs about 900 of its more than 2,200 global staff. The remainder will be undertaken abroad in facilities closer to the customer’s home market.

The new order follows the takeover in June of Sydney-based Custom Coaches, its first outright acquisition since it was rescued from administration eight years ago.

The company is thought to have paid about £20m for Custom Coaches, which has a 24 per cent share of the Australian bus market. Building upon existing joint ventures in New Zealand, Hong Kong and North America, the deal to acquire Custom was billed as the next “significant step” in the bus builder’s globalisation programme.

The addition of Custom’s £55m in annual sales will push turnover at Alexander Dennis to just shy of the £500m target that it didn’t originally expect to achieve until 2015. Robertson said the company had now upped its goals, and was aiming to be a £1bn turnover operation by 2020.

Alexander Dennis was rescued in 2004 by a Scottish consortium after its parent company, Mayflower Corporation, went into administration. At that time, the Scottish company’s turnover of roughly £150m was dominated by sales to a limited number of large UK customers.

Two of the UK’s largest car insurers have been hit by a fall in premiums, with market leader Direct Line also reporting a dip in policy numbers.

In its first results as a listed company, the owner of Churchill and Green Flag said gross written premiums dropped 5 per cent to £1 billion in the three months to 30 September, which it blamed on a 3 per cent fall in motor policies to 4.1 million.

Meanwhile, rival Admiral said its group turnover, including written premiums, slipped by 2 per cent to £570m in the same period, despite an 8 per cent rise in the number of vehicles on its books to 3.6 million.

Admiral, whose brands include Diamond and Elephant, said: “The UK car insurance market is cyclical and we are in the softer part of the cycle with premium rates coming down. We believe that the sensible strategy in this part of the cycle is to slow our rate of growth.”

Shares in the group tumbled 5.3 per cent to 1,081p on the news.

Direct Line, which floated last month after splitting away from former parent Royal Bank of Scotland, also revealed a 4 per cent decline in third-quarter operating profits to £123.7m but said it was halfway towards its £100m cost-cutting target. It has already announced the loss of 70 senior roles and the closure of its office in Teesside.

Chief executive Paul Geddes said: “We continue to focus on disciplined pricing and underwriting, delivering claims improvements and lowering our expenses through our cost savings initiatives.”

Farmers heading into winter were yesterday advised to check out their cash flows, with warnings of some severe challenges to their planned expenditure.

Jimmy McLean, head of agricultural services at RBS, said that, while this time of year was traditionally a low point in the borrowing calendar, the bank had concerns for later in the winter.

This latest announcement from the bank follows an unexpected rise of 10 per cent in bank borrowing in September as farmers coped with the late harvest and consequential late cheques from sales of grain.

Looking forward to the spring of 2013, McLean warned: “We are starting to receive early warnings from our customers about possible cash-flow issues, which is not surprising since this year has been one of the toughest years for UK farming, with reduced yields, additional costs and delayed harvest income.

“This is likely to put more pressure on cash flow through the winter and into next year. This will be compounded in December when the majority of farmers will receive a single farm payment which, for most, will be down around 8 per cent on last year because of a shift in currency valuations.

“For those who require additional borrowing as a result of the difficult conditions, it is always better to approach your bank sooner rather than later. In the past few weeks and months we have been supporting agriculture businesses which are facing cash-flow issues due to the wet weather, and we will continue to do so.

“Agriculture remains an important sector to the bank and we will be keen to assist, where we can.”

McLean said that he had already spoken to dairy farmers who were concerned about the quality of the silage they had been able to make in the past summer. “The problem is not bulk, it is poor quality,” he said. “The only solution for that is buying in protein and that in today’s market will be very costly.”

He was also aware of cereal growers who had followed their usual custom and forward contracted sales of their grain.

He added that he had not heard of any farmer failing to meet his contract tonnage although some had failed to meet the required quality standards.

Commenting on where the financial problems might lie, he said that the summer rainfall which was the major influence in farming had not affected all parts of Scotland equally.

“It has been much worse in the south and east where all the summer months saw well above average rainfall figures,” he said. “Further north and west had not been so badly affected.”

CHIEF executive Stephen Hester today insisted Royal Bank of Scotland was continuing to recover despite quarterly headline losses and an imminent fine for the bank’s role in the Libor-manipulation scandal.

Unveiling a two-thirds rise in core third-quarter operating profits to £1.6 billion, Hester said: “Our funding and capital position has been transformed, we have repaid all emergency loans from the government and central banks, and we have recently exited the Asset Protection Scheme without ever making a claim.”

Amplifying on the growing resilience of the partly taxpayer-owned RBS, Hester said: “Economic pressures are restraining customer activity and as a result banks are running hard to stand still in this environment.

“Nevertheless, resilient core bank performance at RBS provides resources for customers and for our clean-up, whilst signposting shareholder value in future.”

The bank’s non-core assets fell £7bn to £65bn in the quarter and have been cut 75 per cent to date, while its bad-debt losses dropped £159 million from the previous three months to £1.2bn.

RBS’s core tier one ratio – capital reserves as a proportion of its loans – is now more than 11 per cent against 4 per cent at the time of the 2008 collapse. Its loan to deposit ratio is 102 per cent against 154 per cent at the crash.

It was a different picture at the headline level, with an extra £400m provision for mis-selling payment protection insurance (PPI) helping drive RBS to a £1.3bn quarterly pre-tax loss. That compared with a £2bn pre-tax profit in the same period of 2011, and brings the group’s total bill for PPI to £1.7bn.

The cost of dealing with the fallout of the computer glitch that locked many RBS, NatWest and Ulster Bank customers out of their accounts last summer also rose £50m to £175m.

Hester said the timing of any settlement with UK and foreign regulators on the Libor scandal was out of his hands. But he said he would be disappointed if potential financial penalties were not clearer by the time of the bank’s annual results late next February.

“We have to dance to the tune of the relevant regulators. We are up for settling with all and every one as soon as they are ready,” Hester added.

The RBS boss said he felt it unlikely he would appeal to Brussels to relax or rescind the European Commission order for the bank to divest more than 300 branches following the collapse of the talks with would-be buyer Santander recently.

“I don’t expect the EU to be of a mind to change their sanction. At the end, it [the branches] are 2 per cent of RBS,” he said.

However, Hester said that, following the flotation of RBS’s Direct Line insurance business last month, a stock market listing for an independent branch business also remained on the table as well as a possible future sale of the assets.

RBS got rid of another 9,900 jobs this year, reducing the payroll by 7 per cent. More than 35,000 jobs have gone since the turnaround programme began. Hester said of the recent staff cull: “That’s by far the bulk of what we need to do.”

RBS’s shares closed down 5.9p or 2 per cent at 281.3p.

THE invention of the internet completely changed the way we think about our personal details and how public they should be. Social networking sites see us giving our name, date of birth and photos to anyone who cares to look. Shopping sites like Amazon also have an extensive list of the types of things we like to buy and offer helpful suggestions for our next purchase.

But what worries me, and actually what worries a lot of people, is what happens to that data once it is “out there”.

A new report by Demos, “The Data Dialogue”, presents the findings of a massive survey on what the public thinks about its data. There are some interesting, though not always surprising, results. For example, people are particularly concerned about companies having control of their data, with around 80 per cent worried about companies using data without permission and around 75 per cent concerned about data being sold on to third parties.

We give our data because we have to, if we want to make use of the multiple things we can do on the internet. Without giving my credit card
details, I cannot buy things online. Without sharing my personal information online, I cannot connect with people through social networking or email. We may not like it, but without providing these details we cannot function in 21st century Britain.

I actually think this is OK – if we can control what happens to that information. And what concerns me is that we do not have control, we do not know who is tracking our online presence and we do not know what they are using that information for. The above report, for example, found that a third of people did not know Google mail scanned the content of their emails to offer them more targeted advertising. I’m not sure where the line should be drawn, but clearly people are unhappy with this invasion of privacy – only 10 per cent of people were content with Google mail using their information in this way.

And I do not actually think simply having more information on how our data is used will improve the situation. The EU recently introduced the “Cookie law”, whereby websites have to inform their visitors if they are using cookies to track their movements online. The Information Commissioner’s Office found that only 13 per cent of people fully understood how cookies worked and there is such a low understanding of what they are that people often click “yes” to the requests to use them without even thinking.

So what do they do? Cookies are saved on your computer by a website and can store information about you every time you visit. They can be used to remember your username and password for a website, store your search settings or save a custom text size. They can be very useful and enhance our visiting experience. But if you don’t want information about your browsing history to be saved, you must delete them.

But what I would like to see, and almost 70 per cent of people surveyed for “The Data Dialogue” agree with me, is some sort of way to see what data is held on me. We need more transparency in this because I think companies take advantage of the fact that a lot of people do not understand what’s going on. So education is needed, of course. But companies, and by this I mean all organisations that hold data on us, need to be much better at being open and honest with their customers.

More than 70 per cent of people would also like to be able to withdraw their data. I can see that this is a monumental task for online shops and websites. Once data is in the public domain, it is hard to track exactly where it is and who has it. But more work is needed in this area. The EU is looking at bringing in the “right to be forgotten” but even this cannot go far enough, as while one company may delete your data, it is difficult to know who else may have it.

• John Robertson is Member of Parliament for Glasgow North West and chair of the All-Party Parliamentary Group on Communications

PUBS in Scotland are closing at the rate of two a week due to a combination of competition from off-sales and lack of confidence in the economy, according to the Campaign for Real Ale.

CAMRA figures show 55 pubs in Scotland have closed over the last six months and that across the whole of the UK 450 pubs have been lost since March – an average of 18 closures every week.

Campaigners say the industry is in crisis and are calling for an urgent review of the beer duty escalator – introduced by Alistair Darling in 2008 – which imposes a tax hike 2 per cent above inflation every year.

Mike Benner, CAMRA chief executive, said: “For too long, Britain’s beer drinkers have been forced to endure inflation-busting rates of tax on their pint, while the Treasury’s own projections show that these hikes will fail to bring in any additional revenue over the next three years.

“As today’s pub closure figures show, the future of Britain’s valued community pubs remains in jeopardy. With pubs finding it ever harder to maintain consistent footfall at a time when prices are ever increasing, it is only hoped that Parliament will take the first steps by voting to review punitive taxation policies on Britain’s National Drink.”

An online petition against the escalation of beer duty has now been signed by 100,000 people while more than 3,000 beer drinkers have written to their local MPs urging them to speak out on the issue.

Economic Secretary Sajid Javid said if the escalator was axed the Treasury would need to find another £35 million in taxes annually or cut spending. He told the Commons: “We regularly monitor
alcohol duties to make sure we are on top of the impact on industry and consumers.”

Q I am due to retire in December, when I reach my 65th birthday. I have just received my personal pension statement and they have provided a whole range of annuity options. Can you please explain these options and give me an idea of what I should do? I’ve been putting money in my pension for years, so I need to make sure I get a good deal.

AA Edinburgh

A When you come to taking your pension, you firstly need to decide whether or not to take a tax-free cash payment. The maximum you can take is 25 per cent of the value of your pension fund, although some arrangements do have an element of tax-free cash greater than this level. Generally, most people will elect to take the maximum lump sum, as it is tax-free and provides capital to help for larger items of expenditure in retirement.
 The vast majority of people use the balance of their pension fund to purchase an annuity – a guaranteed income for the rest of your life. Annuities come in various forms and, like a car, you can select optional extras when you purchase it. In saying this, some older personal pension arrangements have guaranteed annuity rates that were built into the contract at the outset. As they were set many years ago, these guaranteed annuity rates are generally far more favourable than you could obtain on the open market today. Checking for any guaranteed annuity rates is a must for anyone retiring with a private pension.

Each pension provider has to provide a range of annuity options. The highest annuity will usually be one that remains level throughout your life, stops on your death with no continued pension for a spouse and has no guaranteed period. The amount of pension on offer will generally fall as you add on extra benefits such as any guaranteed periods, spouse’s pensions or any inflationary increase in the pension each year. It is not uncommon for the latter to provide a pension of up to 40 per cent less than the very basic annuity. It is claimed that almost 50 per cent of retirees purchase their annuity from their current pension provider.

Your pension provider must allow you to purchase an annuity from any other provider in the market. This is commonly referred to as an open market option (OMO) and by shopping around you may be able to significantly increase the amount of pension you could receive. .

You should also see if you qualify for enhanced annuity rates because of any lifestyle factors or because you suffer (or have suffered in the past) from certain medical conditions. High blood pressure, heart problems, cancer, heavy smoking/drinking to name but a few are all various factors that may have a negative impact on your lifespan and may enhance the amount of your pension income in retirement. It is estimated by one provider that around 70 per cent of retirees could qualify for enhanced annuity rates which could pay an annuity income that is up to 40 per cent higher than a standard rate annuity.

As a consequence of not shopping around and getting the very best annuity rates at retirement, many retirees are missing out on a higher annuity income (potentially adding up to thousands of pounds).

l Jason Hemmings is a partner at Cornerstone Asset Management LLP. If you have a question you need answered, write to Jeff Salway, c/o The Scotsman, 108 Holyrood Road, Edinburgh EH8 8AS or email: scotsmancash@yahoo.co.uk.

The above is for general purposes only and is not tailored for individual use. It does not constitute legal, financial or investment advice on any particular matter and must not be treated as a substitute for specific advice. No action should be taken in reliance of the information given. The Scotsman Publications Ltd and Cornerstone Asset Management accept no liability on the basis of this article.

IF YOU’VE received a letter about impending changes to your child benefit payments, you may well be feeling a 
little confused right now.

The chances are that you have just two options open to you, neither of which will seem very palatable – not claiming payments to which you’re entitled, or continuing to claim them but at the risk of falling foul of the Revenue.

Accountants may be happy about it, but they’re on their own because the changes are
becoming the cause of great confusion and stress.

It’s all the brainchild of a Chancellor who spent much of 2008-2010 telling anyone who would listen that he intended to sort out the mess that was the UK tax system.

That Labour bequeathed a horrendously complex tax 
regime is not in doubt. That the current lot are conspiring to make it even worse is remarkable. Nowhere is this more apparent than in the child benefit tax debacle.

More than a million families will be affected by the change, taking effect in January.

In a nutshell – if that’s possible – child benefit payments are being reduced for households with at least one person earning more than £50,000, before being withdrawn entirely above £60,000.

Families with three kids aged under six could lose out by up to £50,000 as a result of the measure, by the time their youngest turns 18, PwC has estimated, while those with two young children could lose nearly £40,000.

Aside from the potential cost, the original complaint was that while families with income of £50,000 a year through one earner will lose some or all of their benefit, those with income of £98,000 but with both parents earning £49,000 will get it.

In the long run, however, the anger will focus on the way in which the benefit is being taken away. That’s because it’s being done through the high income child benefit charge (HICBC) – 1 per cent of the benefit cut for every £100 above £50,000.

Those affected have two main options: either they no longer claim the benefit from January, or they continue claiming it and have some or all of it clawed back through self-assessment.

Since when was dragging thousands more people into the self-assessment system a good way of simplifying the tax system?

HMRC will be licking its lips at the chance to raise money by penalising those who fall foul of the new rules. There will be plenty of opportunities, particularly where income fluctuates or circumstances change. The anomalies are numerous and, as usual, will become evident to policymakers only once taxpayers have started paying the price.

For parents facing the HICBC, opting out will be the easiest thing to do. Even this comes with pitfalls, however. Tax experts advise those eligible for the benefit to claim it even if they don’t receive the actual cash, to ensure they qualify for National Insurance credits that help protect their state pension. So much for making the tax system less complex, as Osborne claimed he would.

ALL eyes will be on the US election this week, and not just out of political interest. At the forefront of investors’ minds will be how markets react to the result.

Markets usually respond more positively to Republican wins, though, historically, they’ve gone on to fare better after a Democrat incumbent has secured a second term.

The biggest concern is what happens if Obama wins but the Republicans retain control of the Senate.

That combination took the US to the brink of default in summer 2011 and the looming backdrop to this election is the fiscal cliff – the expiry in January of billions in tax cuts and the start of $1.2 trillion spending cuts.

The priority for the President, whoever it is, will be a solution to those tax hikes and spending cuts, which could send the US economy spiralling back into recession. And even now, when the US sneezes, the rest of the world catches a cold, as they say.

It’s easy to feel remote from this, but through our investments and pension savings many of us have a stake in what happens next across the pond.

What’s curious is that investors have been lukewarm towards the US for some time. The average UK investor has just 4 per cent exposure to the US, according to Chelsea Financial Services. In contrast, the typical global fund has 43 per cent of its assets in the US, Trustnet figures show.

So while nerves will be jangling over the coming few months, the argument could be in favour of UK investors and savers having more money in the US, particularly if they’re in it for the long term. There are some very good US-focused funds and investment trusts out there, but global funds may well be the best way forward if you want US exposure.

Savour the moment – the British economy did well in the latest quarter.

Adding to the joys, the numbingly awful early estimates for the previous quarter have been revised up – predictably enough as that’s what usually happens. Happy days are here again – or are they?

I’m afraid the answer, as ever, is far from clear cut. Any vaguely sensible or honest analysis will recognise that there are swings, roundabouts and a plethora of special factors that make simple conclusions almost certainly wrong. So when the Treasury gleefully crows about recovery being on track and claims total vindication for its whole policy stance it is being irritatingly tendentious. Equally, though, it is self-serving twaddle for politicians of a different mindset to rubbish the numbers as no more than smoke and mirrors.

First, a bit of background. Last winter the UK sank into recession, according to the official statistics. At the time, I argued that the numbers were probably too pessimistic, but whether the economy was really shrinking or not times were certainly tough. And into the summer it got worse; the official data was slow to pick it up but you could sniff it in the air: there was definitely trouble at t’mill.

The reasons weren’t hard to spot: the deficit reduction programme – aka austerity – was front-loaded and hit us hard in 2011/12, inflation was nibbling away at our spending power, households were still paying down debt and nominal incomes were going nowhere. And then we gave ourselves an extra day off, knocking 0.5 per cent of the second quarter’s growth.

We have been more dutiful in the third quarter and growth will have been boosted by the recovery of that 0.5 per cent. Immediately, then, we can see that half of what looked such an exciting figure was no more than a statistical quirk. Nonetheless, that still leaves us with genuine quarterly growth of another 0.5 per cent. That may not sound much, but it isn’t a million miles from what was once the UK’s trend rate and it is certainly not to be sniffed at.

But you do wonder how genuine and how sustainable this kind of growth might be.

I had thought that the Olympics would be mildly negative for growth; low footfall in the shops, tourists staying away and so on. That was wrong, and apparently the Games added 0.2 per cent to growth – good news in a way but bad news from the sustainability viewpoint – we won’t have that again for decades. So now our true “underlying” growth was just 0.3 per cent, – hardly the triumph trumpeted by the Government.

Even so, I feel encouraged. Construction remained a weak spot, perhaps reflecting the appalling weather that afflicted much of the UK this year. But services and manufacturing both picked up, which is pretty good going given the speed with which the eurozone is going down the drain. Retail spending has improved; you and I are apparently rather more willing to open our wallets/purses than we have been for quite a while.

This should not be a surprise (though the headline growth number certainly was). Austerity is evolving from a big hit into a slow grind and most of the acute pain is behind us. Inflation has fallen, though higher energy bills loom ahead. Nominal pay has been picking up. Whatever they say, consumers are feeling better; September was a good month for new car registrations.

Experience of the past few years teaches us that if things can go wrong they will. Our ret­urn to positive growth can be blown off course by many pot­ential hazards both foreign and domestic. But our recent experience is not typical. Things that can go wrong can – and often do – turn out all right in the end. It’s all very tentative, but I sense the evidence is of a change of trend.

Those growth numbers were not a triumph, but nor were they a sham. They were an encouraging step in the right
direction and we should welcome them for that alone.

• Peter Bickley is a consultant economist

Damage caused by firework displays this weekend could leave UK homeowners with a total bill of up to £1.5 billion, it has been estimated.

More than four in ten people plan to celebrate Guy Fawkes night this year, according to research by Santander Insurance. Around a fifth will be hosting a bonfire night or firework display at their own home, while another 8 per cent – some 860,000 households – will illegally try to hold their own private event in a public place.

But previous bonfire night efforts have caused damage to homes and property that has cost the average affected homeowner more than £270, said Santander. It also revealed that almost a million people have been physically hurt by fireworks on previous bonfire nights.

The insurer advises households to light fireworks at arm’s length using a taper; to keep their distance once they have been lit; avoid giving sparkers to small children; and keep a first aid kit and some water handy.

Richard Al-Dabbagh, of Santander Insurance, said: “We’re urging families planning at-home displays to ensure they have plenty of outdoor space and plan well in advance to avoid accidents to themselves or their property.”

WITH BIG comp­anies like Cadbury and Tate and Lyle entering the market for Fairtrade groceries, the market is bigger than ever before.

One in five Fairtrade products worldwide is sold in the UK and the market for fairly traded products is now worth £576m a year.

However, an academic who has spent his whole career in the industry says the original principles of the movement are being diluted by the entry of big
corporate players.

Dr Iain Davies says consumers should be more aware of which products are 100 per cent Fairtrade and which only adhere to some of the principles involved.

He says that companies such as Equal Exchange Coffee, Cafe Direct and Oke bananas, as well as goods sold in Oxfam and One World shops, should be recognised for continuing to fulfil all the original promises of the movement.

He says: “Consumers are not aware of the different approaches to Fairtrade, and therefore improved communication from the 100 per cent Fairtrade organisations on why they are different would help consumers make informed decisions.”

Dr Davies says firms such as Cafédirect, Divine and Traidcraft are being edged out by the rise in the use of the Fairtrade marque in own-label products.

“This research is not about criticising corporations, but is about letting people know that buying Fairtrade-marked products from corporations is not always the same as buying from companies that are 100% committed such as Traidcraft, Divine or Cafédirect.

“There is a definite place for corporations being part of the Fairtrade system, but there should still be room for these independent Fairtrade organisations. There are very few national, branded Fairtrade organisations left in the US and it would be a very sad thing if that happened here. Fairtrade organisations in the UK have been heavily socially led and they’ve led to innovative impacts on producer organisations such as joint ownership in Fairtrade brands.”

A spokesman for the Fairtrade Foundation said: “The Fairtrade Foundation welcomes the deb­ate that the paper creates about the future of Fairtrade, and the role of different types of business in delivering the depth and scale of impact for producers that is consistent with Fairtrade’s vision of a world in which all producers are able to secure a sustainable livelihood.

“The paper usefully points to the value of the dedicated 100 per cent Fairtrade business model, highlighting some of the added value these companies
deliver in terms of commitments to producer support, producer voice and shareholding in their own governance. At the Fairtrade Foundation we are keen to continue working closely with the dedicated Fairtrade companies to ensure that their distinctive added-value business model is able to thrive into the future, and also continues to act as a catalyst for wider change, as it has done to date.

“However, as the paper also confirms, consumers can rest assured that, wherever the Fairtrade mark appears on a product, the producers’ group have received the Fairtrade price and premium which they use for social projects like the provision of healthcare and education, or business developments.”

Ruth Tanner, campaigns and policy director at the anti-poverty charity War on Want, said: “It is vital that the movement’s principles are not lost due to corporate interests.”

Q My husband lost his job recently and we are really struggling to make ends meet.

This is very difficult for us, as we have always been people who have coped, and paid our way in the world. My husband and I were both brought up to do that, and we are trying to bring our daughters up to do the same. But it’s very hard for us at the moment and we need help. We have more money going out than coming in.

“Specifically, I am worried about our gas bill. We’ve tightened our belts and have prioritised our money to make sure we pay the mortgage, and daily essentials like food. But one thing we’ve had to neglect is our gas bill, and we’ve fallen into arrears on that.

“We are now receiving final demands – something I’ve never experienced before – and I am worried we may be disconnected. With two young girls and with winter coming up, that’s unthinkable. Christmas is going to be hard enough without that.”

GL, Orkney

A Citizens Advice Scotland says: “The first thing we would want to do is sit down with you and go over your finances in detail, to see whether you are entitled to any help that you are not yet getting. It’s amazing how often that is the case.

“But you mention fuel bills specifically. It’s good that you have prioritised your outgoing payments and you are right to have prioritised the mortgage, but it’s important to give equal priority to fuel bills because they are an essential, not a luxury: you need to be able to stay warm, and cook your food. If you go and see your local CAB adviser they will give you specific advice that suits your personal situation.

“The main thing is that you need to contact your fuel supplier as early as possible and come to an agreement about how to pay off the arrears. They are usually more helpful than you might expect.”.

• If you have a consumer issue that you would like tackling, contact Claire Smith on 0131 620 8511 or e-mail csmith@scotsman.com.

Start putting some cash aside now to ensure a brighter future for your kids

1 Use their tax allowance

Children are entitled to a tax-free allowance in the same way as adults. If their total taxable income is less than the tax-free allowance they are due, a form R85 can be completed so they receive their interest without tax taken off. Children under 16 cannot sign the form R85 themselves.

So long as the child does not become a taxpayer, they can continue to receive interest without tax taken off until the 5 April following their 16th birthday. At 16 they must complete a new form R85 and sign it themselves if their income is still less than their tax-free allowance.

2 The £100 rule

There are special rules if a parent has given savings to their child. Where gifts from a parent produce more than £100 gross income a year, the whole of the income from the gifts is taxed as the parent’s income. A child cannot claim back any tax on that income, nor can interest be paid without tax taken off.

The £100 rule applies to young people until they reach 18 or marry (whichever comes first).

The £100 rule applies separately to each parent, but doesn’t apply to gifts given by grandparents, other relatives or friends.

3 Trust accounts

A trust is a legal entity which holds assets on behalf of specified beneficiaries. The most common type held for children is a bare trust. Bare trusts can be called by another name, for example “re-accounts” or “nominee accounts”. An example of a bare trust account is “Mrs Smith re Miss Smith”.

A bare trust account held for a child can be registered for interest to be paid without tax taken off by completing form R85 (signed by the child’s parents or legal guardian).

4 Junior Isas (cash)

Introduced in November 2011, tax-free junior Isas are available to children under 16 (born on or after 3 January, 2011 or born before 1 September, 2002) who have never been issued with a child trust fund (CTF) Voucher.

Your child can’t have a junior Isa if there’s already a CTF in their name.

Funds in a junior Isa will be locked-in until age 18 and roll over into an adult Isa on maturity, although the beneficiary has the freedom to access it from that point.

Available from most high street banks and building societies, up to £3,600 can be added to a junior Is each year.

5 Junior Isa (stocks and shares)

Given the reasonably long investment time horizon for most children, the stocks and shares version of the junior Isa should be considered.

Risk and return are closely related and investing in stocks and shares is likely to bring higher benefits than cash, albeit in exchange for price volatility.

Visit www.juniorisaproviders.org for a selection of some of the better products available.

6 Child Trust Funds

These tax-free savings accounts were made available to children born between 1 September, 2002 and 2 January, 2011 with the government contributing between £50 and £500 (most typically, £250).

New accounts are no longer available, but existing accounts will remain in force and can be topped up to the same annual limit as junior Isas.

Both cash and stocks and shares versions are available, but with the accounts closed to new business the cash rates are largely unattractive.

7 National savings premium bonds

Anyone age 16 or over can invest between £100 and £30,000 in premium bonds, issued by NS&I. Parents, guardians, grandparents and great grandparents can invest on behalf of under-16s. The interest on the aggregated investments (currently 1.5 per cent) forms a prize fund and winners are drawn monthly. Prizes range from £25 to £1 million with the odds of a win around 24,000 to 1. Prizes are tax-free.

8 NS&I children’s bonds

Essentially a five-year fixed rate bond, these accounts pay out their interest tax-free. The current issue (issue 35) offers 2.35 per cent, which is not particularly attractive. However, for the small deposit amounts eligible (£25 minimum - £3,000 maximum) these bonds have their place. Early encashment is possible subject to loss of 90 days’ interest.

9 Regular savings accounts

Several banks and building Societies offer apparently generous rates in return for a regular monthly deposit. Halifax, for example, currently pays 6 per cent on its “Kid’s Regular Saver” account. However, £600 paid in over 12 months would earn just £18.97 gross, equivalent to 3.16 per cent of the capital amount. Moreover, after a year the capital plus interest is paid out and the 12-month cycle re-starts.

10 Alternative investments

Given the relatively long investment time horizon, alternative investments might be considered to add an interesting dimension to saving for children. Coins and stamps are a couple of examples. Similarly, some fine wine could be put down until the child is old enough to either sell it or drink it!

Part exchange deals now account for one in four home sales in Scotland as frustrated homeowners look for new ways to secure a quick move.

Builders, brokers, solicitors and estate agents all report a marked increase of late in the number of homeowners deciding they can’t wait any longer for market conditions to
improve. Part exchange is one way of circumventing the problem by allowing sellers to trade in their home as part of the payment for their new one.

The trend is a reflection of the slow housing market; five years after the housing market boom turned to bust there are few signs of life getting any easier for homeowners trying to sell up. While Scotland has proved relatively resilient in terms of house prices, industry insiders admit it will be some time before homes are selling in significantly greater numbers.

Virtually all of Scotland’s major housebuilders offer part exchange schemes, using them to shift new builds and potentially enjoying profits at any ensuing sale. Earlier this year, Barratt Homes reported a 40 per cent rise in Scottish part exchange sales in just 12 months.

Part exchange now accounts for around a quarter of all sales north of the Border,
according to industry body Homes for Scotland (whose membership provides 95 per cent of new homes built for sale).

The appeal for homeowners wanting to move is that there’s no chain, removing the uncertainty that goes with relying on several transactions to go through and allowing for greater confidence over timing the move.

Michael Maloco, senior partner at Maloco + Associates in Dunfermline, has seen a distinct upturn recently in the popularity of part exchange.

“It’s not for everyone, but it certainly has its place in the market. Typically we see it with people who have their eye on a particular house type or plot but who have yet to sell their own home,” he said.

“Part exchange allows them to secure the property they want freed from the anxiety of having to wait until they sell their own home.”

For the seller it also means not having to pay for estate agents or solicitors, home
reports and, where relevant, advertising.

Philip Hogg, chief executive of Homes for Scotland, said: “As well as providing confidence and reassurance through a guaranteed sale at a guaranteed price, part exchange also removes the stress and hassle which can be associated with putting your home on the open market.”

But while the appeal in the current market is obvious, it’s not without pitfalls and potential complications – especially when it comes to finances and the mortgage.

An obvious downside is that while part exchange means a guaranteed sale, you’ll be lucky to get the price you want. Housebuilders tend to offer a price around 5 to 10 per cent below the market value of your home and anecdotal evidence is that as demand for part exchange rises, the value discount is widening.

You’ll also have to ensure your lender is
satisfied with the deal.

Alison Mitchell, mortgage expert at Edinburgh IFA Robson Macintosh, said: “Lenders are happy to lend on a part exchange property, although over recent times they have restricted the amount of discounts and offers they will allow per transaction.

“Part exchange with new builds is the most common and which lenders are most comfortable with. Part exchange on non-new build starts to frighten lenders, with some not offering this option.”

Maloco reports few problems with lenders over part exchange deals.

“Provided the lender is seeing the disclosure of incentive forms and is instructing its own survey on the new plot – as is now the case in 100 per cent of all new builds – then it’s making lending decisions based upon full disclosure and there ought not to be an issue,” he said.

Those disclosure of incentive forms were devised by the Council of Mortgage Lenders and have been adopted by lenders across the board, according to a spokeswoman for Clydesdale Bank.

She added: “We lend on new and non-new build part exchange homes and, in line with the market, an independent valuer would consider all the incentives on offer as part of the exchange. Lending is based on either the purchase price or the valuation, whichever is lower.”

But some borrowers may find their lender objects to them porting their mortgage to a new property secured through part exchange.

Jonathan Harris, director of mortgage broker Anderson Harris, said: ‘It may be particularly tricky if you have a cheap mortgage rate that you would like to hang onto as lenders generally are trying to move borrowers off such deals.

“Likewise, if you are in a fixed or discounted period there may be early repayment charges to pay if you can’t take the deal with you.”

If that happens you may find your only option is to cut your losses and take out another mortgage. That may be difficult if you no longer meet the lender’s affordability criteria (perhaps because your income has fallen).

“Lenders are also more reluctant to lend on new builds than older properties, so you may get a much lower loan-to-value than you
require, said Harris.

“This will mean putting more of your own money in or trying to remortgage to a different lender, but bear in mind that all lenders are stricter on lending on new builds than in the past.”

Builders also have requirements that may rule out part exchange as an option for some would-be sellers.

They generally offer part exchange deals only on properties worth a certain proportion of the value of the new home, often around 70 to 80 per cent at a maximum.

This may come with a ceiling on the value of the old home being sold, which means you’ll have to be buying a home considerably more expensive than the one you’re selling.

There may also be an issue if your property isn’t deemed sufficiently saleable by the developer, perhaps because of its condition or type.

• Quick sales are rare in the current housing market, and virtually impossible in rural areas. But when David Beggs landed a new job in Stirling, there was precious little time in which to sell his home outside Kinross and seal the move he needed to make.

The market in Kinross was especially slow last year and several homes in his rural location been on the market for some time, so he knew his chances of selling quickly were slim at best.

With his mind open to alternatives, therefore, David asked a few developers what they might be able to offer.

“While I had heard of part exchange I always thought of it as the last resort. But when I looked into it, it seemed exactly what I needed, and Stewart Milne made it seem very straightforward.”

The housebuilder explained what it entailed and after its own and independent valuations, surprised David by offering him more for the house than he’d expected to get on the open market, in the current climate at least.

“It was very little hassle. The house was in good condition and had a new kitchen, and part exchange meant we didn’t even have to put it on the market and pay the usual house moving fees.”

The only sticking-point was with lenders, David being on a probationary period between leaving his former employer and starting with Handelsbanken, the Swedish bank whose branch he is setting up in Stirling this month.

“Being between jobs I had somewhat taken myself out of the market, but I managed to get a mortgage with my new employer.”

The whole part exchange process took three months and was easier than David had envisaged. “It was all about peace of mind for me, needing to move and not having a chain to worry about.”

NO FRILLS bank accounts are under threat, but the service they offer is essential to millions and should be protected, say consumer groups.

Consumer Focus says banks have begun to withdraw services from people with basic accounts, with RBS and Lloyds denying
access to the LINK ATM network.

However, one in five UK adults – around 8.4 million – 
depend on a basic bank account.

Mike O’Connor, chief executive at Consumer Focus, said: “A bank account is an essential product in the modern world. The last thing these consumers need is a race to the bottom 
between banks which keep chipping away at the features these accounts offer. Without 
intervention these accounts could become less useful or more expensive for low income consumers.

“We are calling on banks to work with government and regulators to produce minimum standards for basic bank accounts.”

Michael Ossei, personal finance expert at uSwitch.com, said: “ Banks have spent the last few years talking about rebuilding consumer trust, but without action talk is cheap. The whole point of basic bank accounts is to protect vulnerable customers and to help eradicate financial exclusion – giving everyone access to a bank account and their money for free. As it is, only four in ten (43 per cent) people think that banking will still be free in a year’s time. ”

THAT which was lost has now been found.

I always think of this expression whenever a missing item is restored to me. Until I looked it up I was convinced it was said in The Winter’s Tale – when Princess Perdita returns to court after being brought up by shepherds. Ironically, I can’t find it.

Anyway, the expression came to mind when a little girl was returned to me after an absence of more than 20 years. She is about half an inch tall, cost me the most part of a tenner and came through the post.

The little girl was Jemima, the missing passenger in my corgi Chitty Chitty Bang Bang car. And the little hole in the back seat where she should have been was a constant reminder of her loss.

But in our modern online world you can find anything. and when a friend started buying and selling toys on eBay I asked him to search for the missing girl. And there she was.

“Do you want me to bid for you?” he asked. “Yes” I said.

It was an exciting few days. The price went up and up. There were nerve-wracking moments. My friend bid on another, cheaper Jemima – a modern day replica. “But I want the REAL one,” I said.

My friend then spotted another – restored by someone with a shaky hand. “But her face is EVIL.” I said. “She is not MINE.”

Luckily the price stayed under a tenner, so I never got to find out how high I would have bid to get “my” Jemima.

She arrived in the post, she fitted perfectly into the back seat. And I remembered how I’d lost her in the first place – because she sits back to front waving to people behind. I remembered my little fingers fiddling and trying to get her to face forward.

It was good to get her back. And with all four characters in place my Chitty Chitty Bang Bang is now worth about fifty quid. But there’s a problem. While I was tracking Jemima online I realised the car is also missing its front and rear wings. I might bid on some if they come up for auction.

I wonder how far I’ll go this time. Never thought of myself as a collector, but now I understand how it can 
become an obsession.

Soaring rental costs are pricing Scottish families out of private accommodation – and the situation is set to worsen as rents climb higher and benefit cuts kick in.

The cost of renting a private home in Scotland has hit a record high, new figures show, and landlords warn that they’ll continue to rise next year as cost of new legislation is borne by tenants.

The average rent in Scotland reached an all-time high of £672 in the three months to the end of September, according to the quarterly report from Citylets.

While the average property is taking longer to let out than a year ago, demand continues to increase in Scotland’s biggest cities. Aberdeen remains the most expensive place to rent, with the average monthly cost of a two-bed flat – the most popular rented property type – rising 2.4 per cent to £899 over the past year. It took just 20 days on average in the last quarter to let out a two-bed flat in the Granite City, down from 25 days in the same
period a year ago.

The average rent for a two-bed flat in the Capital has increased by 1.3 per cent to an average of £729, while in Glasgow the typical two-bed flat now cost £622 a month to rent out.

Dan Cookson, analyst at Citylets, said: “Aberdeen and Edinburgh both continue to be the most expensive places to rent as well as both having the lowest time to let in the country, which is a great sign that the only way is up for these cities.”

The latest figures come in a newly expanded rental report that will be
unveiled on National Landlord Day on Tuesday.

The occasion will be marked by an Edinburgh conference, where housing and welfare minister Margaret Burgess will highlight the role of the private rented sector in meeting Scotland’s housing needs. Those needs are increasingly acute, however. Between benefit cuts and rising rents, a growing number of people who don’t qualify for social housing are being squeezed out of the private market.

And the cost of private rented accommodation will climb even higher over the coming months, said John Blackwood, director of the Scottish Association of Landlords: “Ahead of our national conference and reports of rents reaching a new high for Scotland, landlords will be pleased to note that demand for private rented accommodation is on the increase. We expect rents to rise even further in 2013 as we see the full effect of greater 
legislative pressure put on the sector.”

That pressure comes in the form of the the Scottish Government’s new tenant deposit scheme, which came into force in July and with which all landlords must comply by 13 November.

The financial cost to landlords of meeting the requirements of the new scheme seem certain to be passed onto tenants in the shape of higher rents. Newly 
clarified restrictions on the upfront fees that letting agents and landlords can charge tenants are set to add to the 
upward pressure on rental prices.

Cookson said: “This year has seen the rental sector face some significant challenges, with both the introduction of the tenancy deposit scheme as well as the dec­ision to ban all agency fees. It’s too early to see whether these changes will have an impact on our figures, but we will be monitoring it closely going forward.”

But Blackwood is more certain of the repercussions. “This, combined with benefit cuts, will undoubtedly affect those families on low incomes as they struggle to find suitable accommodation in the private rented sector,” he said.