THE vast majority of Scottish children know that their parents worry about money and many claim to have financial anxieties themselves, a report out today reveals.

Eight in ten children in Scotland aged between eight and 15 have picked up on money-related stress in their home, according to the annual Pocket Money Survey from Halifax, including a fifth who say their parents worry about money “all the time”.

It said one in three children has lent their parents money, while nearly two-thirds have helped their friends out financially.

Just 17 per cent of children said they borrowed money from others, with three-quarters going first to their parents when in need of cash.

Savers are turning their noses up at some of the most competitive deals on the market by steering clear of banking with overseas brands.

Two-thirds of Britons believe it is important to keep their money with a well-known UK name, despite the recent battering to the reputation of the UK’s high street banks.

Almost half say they are deterred from using with a non-UK bank by the ongoing eurozone crisis, according to a survey by uSwitch.

A quarter say they “wouldn’t even consider” banking with an overseas name, even though non-United Kingdom banks offer some of the best rates.

However, while most (96 per cent) of bank customers value knowing their money is covered by the Financial Services Compensation Scheme, almost half do not know how much of their money would be protected in the event of an institution going bust.

CORPORATE bonds are currently the go-to asset class for investors nervous about equities and looking for regular income.

Private investors and pension savers have piled billions of pounds into corporate bond funds, making it the best-selling sector in five of the first six months of this year, figures from the Investment Management Association show.

Some of the best-known vehicles have 
attracted inflows of more than £1 billion over the past year alone.

Yet their popularity comes with a possible sting in the tail as fears grow of a potential
liquidity crisis that could force some funds to slam the doors on investors.

The Financial Services Authority (FSA) last month wrote to fund firms asking how they would be able to cope with large-scale investor redemptions.

The City regulator is anxious about the size to which some funds have grown at a time when the supply of new corporate bonds is slowing down.

It asked firms to stress test their funds and provide details of how they would meet 
redemptions.

The lack of liquidity in the market has forced some firms to look at ways of stemming the amount of money going into their corporate bond funds to ensure they are still able to cover redemptions should a correction spark an exodus of investors.

One of those firms is M&G, which offers the £6.3 billion corporate bond and £5.1bn strategic corporate bond funds.

While both hugely popular funds remain open, M&G wants to reduce the rate at which money is flowing into them, although it insists they will remain open to business.

It’s an unusual step to take, and bond fund managers generally believe they have sufficient liquidity to accommodate any withdrawal requests.

But Brian Steeples, managing director at Glasgow IFA The Turris Partnership, said
investors can take nothing for granted.

“Investors should be aware that no fund can accommodate everyone wanting to leave all at the same time.

“Investment should therefore be for at least a five-year period. If you can’t commit to five-year investment , do not invest in corporate bond funds.”

However, there’s no reason for investors to panic, according to Ken Taylor, director of Mackenzie Taylor Wealth Management.

“The liquidity concerns are valid in one sense, but I would question why dramatic redemptions might suddenly occur. If there are significant withdrawals from corpor­ate bonds, where is the money going to be placed?

“Equities do not perform particularly well in a rising inflationary environment, so to suggest everyone is going to simultaneously exit bonds is nonsense.”

The appeal of corporate bonds is the current climate is understandable.

Returns are often comparable with those available from equities and they also
provide a regular income, all with less risk to capital.

Over one, three and five years the average fund in the corporate bond sector has returned 7.6, 29.5 and 27.8 per cent respectively, according to Trustnet.

Taylor said: “The informed view is that investors are being well rewarded for taking risk in this asset class, as the premium being offered over gilts is unusually generous at present.”

Corporate bonds also look increasingly attractive in the context of a sovereign debt crisis that means the focus is less on companies going bust than on countries defaulting.

“This begs the question as to whether it is riskier to lend to a government than to a company,” Taylor pointed out.

“Would you rather lend money to the Spanish government or Telefonica, for example? Yet you are paid more to lend to the company, whilst the country is effectively bankrupt.”

The threats remain, however. While inflation – the traditional enemy of the fixed interest investor – is likely to remain benign for some time, the shortage of new bond 
issues is becoming a problem.

It reflects increased caution among companies focused on reducing debt levels rather than issuing new debt. It also implies that a higher proportion of the bonds that are being issued are by companies with a higher risk level.

That’s why Taylor warns that investors in corporate bonds needs to tread carefully. “We should, however, anticipate an increase in defaults, so more than ever it is extremely important to be selective in terms of the bonds you hold.”

Homework is the key to getting the best out of corporate bonds in the current market. Knowing the level of risk that a particular fund will expose you to is essential. As Steeples pointed out, it’s worth investors getting a good idea as to the composition of any fund they invest in.

“Be clear on the types of assets that are held within the fund; be clear on the spread of assets between the different sectors of the investment market; and be clear on the
geographic spread of assets,” he advised.

“Also and be aware of the top five holdings in the fund. This will give you an indication of what the manager is doing and what he currently favours.”

Be wary if a bond fund appears to have a lot of exposure to certain higher risk sectors, for example. The financials sector, including banks, is currently considered among them.

Taylor believes the extent to which different funds are exposed to financial services debt will be central to the fortunes of corporate bond funds over the coming years.

“Being overly exposed to this sector is extremely risky, and will continue to be so for quite some time yet. This factor alone goes a long way towards explaining the significant divergence in performance of some of the leading (and biggest) corporate bond funds over the past two years,” he said.

“As with any investment, do your homework and make an informed decision as to what it is you are investing in.”

A WEEK into the Edinburgh Fringe Festival and one performance really stands out. This comedian really had them rolling in the aisles on Wednesday with his tales of farce on Threadneedle Street.

Any pretence that the governor of the Bank of England knows what he’s doing was destroyed in a series of comic vignettes that had the audience wondering if they were unwitting participants in a mock
documentary.

Without spoiling it for you, I have to share some of the highlights:

Quantitative easing may not be having the desired effect, he admits, months after the rest of the country told him as much.

The UK economy is slowly healing, he claims, despite also slashing the growth forecast to zero, down from May’s 0.8 per cent figure.

The eurozone is a “saga that goes on and on”, he reveals, to gasps of astonishment.

In a stunning coup de grace, he produces an inflation report containing the shock revelation that the banks may use the Funding for Lending scheme to boost their own profits. Who saw that one coming?

There’s plenty more where that came from folks, and he’s here all month. In fact, he’s been with us for far longer than anyone would have expected. Somehow Sir Mervyn King remains, for now, governor of the Bank of England, from where his laconic delivery and devastating timing can have the maximum impact.

PRIVATE investors will not have been unduly concerned by the plunge in the Standard Chartered share price this week after it was alleged to have laundered up to £160 billion for Iran. But perhaps they should have been.

The accusation came from the US – which has sanctions in place against Iran – and raised the prospect of Standard Chartered possibly losing its New York banking licence.

Analysts Shore Capital described the news as “a hammer blow” to the bank’s investment case. Asia-focused Standard Chartered has retained a relatively low profile amid the banking turmoil of the past three years. However, it hasn’t been off the radar of the fund managers running billions of pounds in private holdings and pension savings.

Financials and Asia funds in particular have significant holdings in the bank. Financial Express singled out the Aberdeen Asia Pacific fund as one of several funds with more than 3 per cent of its portfolio’s assets invested in Standard Chartered. In fact, Standard features among the biggest holdings in 12 Aberdeen funds and its prominent in Asia Pacific funds run by other fund houses, too.

A number of funds in the popular UK equity and equity income sectors have hefty holdings in Standard too, including the Schroders UK Equity and F&C UK Equity Income vehicles.

The value of having at least an idea of where your money is invested is also underlined by the news that France is set to return to recession.

France was this week described by fundexpert.co.uk as a “lion in the grass, very dangerous yet unseen by many”. Its research highlights a number of European equity funds in which France figures strongly. More than half of the St James’ Place Continental European is invested in France, while two of the European funds at Scottish Widows have third of their assets invested in the country.

That’s not to say anyone with money in those funds should think about getting out. But it underlines how easy it is to sit on the sidelines watching events unfold without realising how much of a personal stake you may have in them.

INVESTORS face enough threats without creating risks of their own, yet the compulsion to repeat the same investment errors seems as strong as ever.

It suggests that too few are making the best value investment of the lot – quality financial advice.

Perhaps the perception that too many advisers still fall short of the standards required explains why more than half of consumers say they wouldn’t pay a fee for financial advice.

It doesn’t augur well for next year, when new advice rules come into force under the retail distribution review (RDR). The changes include a ban on commission payments from providers to advisers for selling their products.

Many IFAs have already moved to a fee-based model in anticipation of the new rules. In the process, however, many are taking their business upmarket, leaving banks to target an enlarged “mass market”.

Research by Deloitte underlines the challenge faced in boosting access to advice. It found that 54 per cent of consumers are unwilling to pay a fee for financial advice.

THE problem of too little supply relative to demand in the UK corporate bond market is being felt directly by investors. This is because investment banks have cut their exposure to corporate bond market-making, leading to illiquidity in the asset class.

The fundamental supply/demand problem reflects a lack of issuance by large companies that are, generally, currently cash-rich.

Meanwhile, on the demand side, investor enthusiasm for yield has led to large funds becoming still larger.

But this would not be a problem for investors if market makers could offer liquidity.

In their absence, a few very large funds have effectively become forced buyers of any direct underlying bond holdings they can find and of an increasingly varied array of assets.

Two main factors have led to banks decreasing their exposure to corporate bond market making: first, it is part of a current trend by banks to reduce exposure to risk activities.

Second, market making is capital-intensive, requiring banks to go long or short on the names they create a market for.

Banks don’t have the capital to do this any longer, and if they do they are inhibited by new regulations as to what they may do with it and how they calculate the risk involved.

The liquidity issue works in favour of smaller funds in the sector.

They are able to be more selective over what they buy, and are not forced into overcrowded or more exotic parts of the market.

So what are the consequences for investors?

As long as the major central banks keep interest rates at very low levels there is no reason to fear a rise in bond yields (which would lead to a fall in corporate bond prices).

Meanwhile, investors seeking an income that will beat inflation will continue to look to the corporate bond sector for solutions. However, the problem of liquidity is unlikely to go away in the near term. This in turn discriminates disproportionately against the large funds.

• Tom Elliott is global strategist at JP
Morgan Asset Management

Q: FIVE years ago I took out life insurance to protect my family’s finances in the event of my death. However, my circumstances have changed and I’m wondering if I should amend it – I now have three children and the level of cover is probably below what my family would need. What are my options?

LN, Glasgow

AThe first thing you should do is check whether there are any options within your existing contract which allow you to increase the amount of life cover you have, without having to provide evidence of your health. This is important if your health has deteriorated since the plan was initially taken out.

If you are in good health you should be accepted for a new policy with an insurance company to give you the correct level of cover. You have the option of either taking out a top-up plan for the additional cover or replacing the original contract.

It may even cost less. In recent years, life insurance rates have fallen due to increased competition and longevity, so even though you are five years older, you could find that replacing your existing cover is cheaper than keeping it in place.

There are two different premium structures to life insurance contracts.

Guaranteed premiums, as the name suggests, guarantee that the regular premiums will never increase once the plan is in force. Reviewable premiums may initially be set at a lower level but are not guaranteed. They can rise in the future but it depends on the insurer’s claims experience.

You will also need to decide how long you will need the policy for and what additional benefits you would like to include.

For an additional monthly premium you can choose to include waiver of contribution, so if you are unable to pay the premiums due to long term sickness, the premiums will be waived and the cover will remain in force.

You can also add critical illness cover so the benefits are paid out if you suffer a critical illness such as heart attack, a stroke, or you are diagnosed with cancer.

It is also important to consider what benefits, if any, your employer offers (if you have one). Generally, the larger the employer, the more attractive an employee benefits package is.

It is not uncommon for employers to offer up to four times your salary as a tax-free lump sum if you were to die while still employed.

Once you have decided what level of cover and what features you want to include, take time to shop around to find the one that is best value for money. Taking out a life insurance policy should be a fairly painless and simple process.

You can do this by contacting insurance companies direct, using price comparison websites, but you may find this to be time-consuming and frustrating.

Alternatively, you can ask an independent financial adviser (IFA) to complete this for you and they will shop around on your behalf to find the most competitive premium for your chosen level of cover.

The premiums should be no more expensive and in many cases cheaper than purchasing via price comparison websites.

Finally, if you are replacing existing cover, make sure that your new policy has been accepted and is in force before cancelling the old one.

• Jason Hemmings is a partner at Cornerstone Asset Management.

• 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, Cornerstone Asset Management LLP and HBJ Gateley accept no liability on the basis of this article.

THE global credit crunch began five years ago this week. Jeff Salway looks at how the crisis has

affected our borrowing, saving and investing

FEW households have been left untouched by the effects of the credit crunch that began five years ago this week

It was on 9 August, 2007 that fears of a
dramatic unravelling of the sub-prime market began to be realised. Markets froze and the contagion began as banks worldwide realised they had no idea of their own exposure to bad debt, let alone other that of other banks.

The crisis became very real in the UK in September 2007 when images of Northern Rock customers clamouring to withdraw their money sparked panic on the high street.

For all the hopes since then that the worst was over, things have never been quite the same.

Now, in August 2012 the crunch, the banking sector trauma and, ultimately, the sovereign debt crisis in Europe continue to cast a cloud over household finances.

Sylvia Waycot, spokeswoman for Moneyfacts.co.uk, said: “The credit crunch may have officially started five years ago, but its pain is still as raw today as it ever was.”

Here we look at how the crisis has impacted on our borrowing, saving and investing.

SAVINGS

Cash savers have been hit hard. Interest rates began falling in December 2007, but the damage was done in a short spell 12 months later.

Between October 2008 and March 2009, a series of rate cuts sent the Bank of England base rate plunging from 5 to 0.5 per cent, where it remains today.

Inflation has gone in the opposite direction, with dire consequences for savers.

For much of the past three years, inflation has wiped out any gains there may have been from most savings accounts. The loss of income has hit pensioners in particular, with millions on fixed incomes forced to eat into their savings capital. The average savings product now pays just 1.09 per cent, down from 4.12 per cent five years ago.

While that is above the base rate, unlike the August 2007 average, it compares with the most recent inflation reading of 2.4 per cent, the lowest since 2009. In August 2007 inflation stood at 1.9 per cent, giving savers plenty of margin above rising prices.

“Savers continue to be hurt by the enormous drop in savings rates and they have little hope of beating inflation let alone supplementing incomes or growing nest eggs,” said Waycot “Increased talk of the Bank of England further reducing its base rate will only add to the air of despair.”

MORTGAGES

If any group can be considered to have gained from the crunch, it’s homeowners. Even that has to be qualified, however. The plunge in the base rate to 0.5 per cent sent variable mortgage costs plunging, with those on trackers benefiting from record low repayments and many taking advantage by overpaying in an attempt to clear their mortgage early.

Lenders have raised their standard variable rates (SVRs) where possible over the past three years, however, and are now embroiled in a rate war as they try to get more customers onto fixed rates.

While best buys are cheap, the cost of the average fixed rate mortgage isn’t as far below the rate in 2007 as you might expect, given the drop in the base rate. The average two-year fix is now 4.65 per cent, down from 6.54 per cent in August 2007, according to Moneyfacts.

And many borrowers have suffered from the crunch. First-time buyers without deposits of more than 10 per cent have found it increasingly difficult to get on the housing ladder. Similarly, homeowners without a decent chunk of equity have struggled to get affordable new loans once their fixed rate mortgages have expired.

LOANS AND CREDIT CARDS

The cost of the average credit card is higher than five years ago, despite the much lower base rate.

The same goes for personal loans and both products have followed the same pattern as mortgages. In other words, cheap deals are available but the best are offered only to borrowers with the cleanest credit records. In the credit card market, more lenders are offering cards with rewards, but the availability of these is also limited to a select group of customers.

Waycot said: “This is an extension of a lack of appetite for risk that kicked in at the start of the banking crisis when it became harder for anyone to get a credit card and personal loans became driven by credit rating rather than a generally offered rate.”

PENSION SAVERS

The consequences of the crunch and the ensuing financial crisis mean that people retiring now are getting far less income for their 
pension savings.

Annuity rates have plunged over the past five years, reaching an all-time low this summer. The recent decline is due partly to quantitative easing, which has driven down the gilt yields used as basis for annuity pricing. Rates are expected to continue falling, spelling 
misery for millions of workers approaching retirement.

The decline compounds the damage inflicted on pension savings by market volatility, leaving many people with smaller pension pots at retirement than they might have expected.

The crisis has also accelerated the decline in final salary pensions.

Desperate to rid themselves of growing pension liabilities, more companies have closed their final salary schemes and shifted workers into defined contribution arrangements, where the outcome is dependent 
largely on contributions and investment performance.

INVESTORS

The impact on private investors of the crunch has been as much about the lasting effect on sentiment as it’s been about the initial hit taken by markets.

Paul Lothian, director of Verus Chartered
Financial Planners in Dundee, said: “There is no question that the credit crunch (or more specifically, its alacritous negative impact on asset values) caused a similar crash in investor confidence, which most have yet to regain.”

Markets have proved relatively resilient of late and many experts believe investors who take advantage of current valuations will be handsomely rewarded. But the appetite for risk is diminished, with money piling into corporate bonds, absolute return funds and others that promise – without necessarily delivering – some protection from market turbulence.

“The nadir of March 2009 proved to be the buying opportunity of a lifetime but, unsurprisingly, few retail investors had the appetite.”

That hasn’t changed. Unfortunately, however, the flight to safety has presented high street banks in particular with the opportunity to lure cautious investors into expensive products with flimsy capital guarantees.

“This ignores the truth about investing; namely that risk and return are related, and that the best approach is to buy and hold an appropriate mix of asset classes, widely diversified, regularly rebalanced, held over the long term and at the lowest cost possible,” said 
Lothian.

Money problems have always made up a fair proportion of Citizens Advice Bureaux (CAB) cases.

Alongside employment, housing, legal and consumer disputes, our advisers have always had to deal with clients who were in debt or unable to pay their bills. However, since the credit crunch, the proportion of these money cases has risen steeply.

Every Scottish CAB now has its specialist money advice experts as well as the “generalist” advisers who dominated the movement in the past.

This has been a necessary response to the changing needs of Scots in the wake the credit crunch. It has given the CAB service a unique insight into the patterns that underlie those needs.

Every day in Citizens Advice Bureaux offices all over Scotland our advisers sit across the table from people who simply can’t afford to get by. They just don’t have enough money coming in to live on.

Such people routinely make choices about whether to skip lunch and keep the heating on that day, or vice versa.

Three things concern us in particular. One is that many of the people who have been hit hardest by the credit crunch are those who were already struggling financially, and so were least able to cope.

Secondly, there has been a concurrent growth in the number of companies which blatantly seek to profit from the desperation of such people – eg through high-interest loans or bogus services.

And thirdly, all of this is happening against the background of seismic changes to the welfare system, which means that the safety net which is supposed to protect such people often no longer exists, or is hanging by a thread.

• Margaret Lynch is chief executive of Citizens Advice Scotland

IF WE weren’t in trouble then, we are now. It is now clear that economic conditions in the United Kingdom economy did worsen during early summer. This neither makes nor breaks my theory that the winter months were not as bad as the official numbers looked, but it probably renders it irrelevant.

A downturn in construction was the key swing factor in the rotten second quarter gross domestic product (GDP) numbers.

I am often rude about early GDP estimates, but this downturn was probably real enough. After all, in case anyone has forgotten, it rained forever and the wet trades struggle (ahem!) when it’s wet. Construction, though, does usually bounce back; jobs get delayed but not cancelled.

The tragi-comedy of the Eurozone rumbles on, as if to prove the maxim that “it has to get worse before it gets better”.

It is high time Greece did the decent thing and floated off into the Aegean, while Spain might as well admit the game is up and hold out a (large) hat for charitable offerings.

The notion that Britain would suddenly transform itself into a powerhouse of manufactured exports remains a triumph of hope over rationality.

And yet – such manufacturing as remains in the UK is not only really rather good, it is growing and it is indeed gaining world market share. It’s a good story, but not a lot of immediate help in the grand scheme of things.

Forecasts for 2012 now signal an overall contraction and expectations for 2013 sidle south with each revision.

In short, you could argue, we’re doomed. But who cares? Down in London, exciting things are happening; even this tired old cynic was pretty impressed by that gloriously eccentric opening ceremony and Team GB is hoovering up gold medals with an alacrity that is refreshing and startling in equal measure.

True, the Games have scared off many tourists and so will dent GDP as a significant slice of the workforce bunks off work – oops, sorry, “works from home” – but for a change we really do seem to have got something right.

That should, will, does make us all feel better; and once the games are over there will be a lot of deferred shopping to be done – or so I’m told.

Next month I set off for the Highlands for a week’s R&R and the weather will be good; I know past performance is not meant to be a guide to the future, but we’re talking weather forecasts here, not picking unit trusts.

Predicting good weather may seem a contrarian bet after the year we’ve had to date, but we contrarians usually know a thing or two.

And what’s good for me should be good for construction too; lots of busy builders catching up once the footings have drained.

And amidst all the gloom some of those inconvenient truths remain.

The employment data are still not consistent with recession and the anecdotal evidence from industry is that things may not be good but they aren’t a disaster either.

Whether government is right to be so focused on deficit reduction is a moot point.

The strategy looked right when it was set out two years ago and the UK’s continued “safe haven” status is about as good as accolades get.

But we have been unlucky; meltdown next door and all those uncertainties I wrote about last time have created headwinds that have made the whole process tougher. .

But that might be precisely the wrong thing to do. Amidst all the racket about “cuts”, we tend to get things out of proportion; there is nothing unprecedented about current budget cuts – it’s been done before and we survived.

And our public finances are in a terrible state; a whiff of backsliding and the markets would be quick to react, painfully. Better, then, to grit it out; to keep calm, as they say, and carry on – which for the majority of us frankly isn’t that hard.

• Peter Bickley is a consul­tant econ­omist

WE’VE all received junk mail telling us we’ve won the lottery and containing fake cheques made out for thousands. Fringe performer Patrick Combs decided to try and cash one such cheque and, to his astonishment, it cleared.

IT came in a junk mail letter. It was a fake cheque for $95,093.35 made payable to my name. It was meant to entice me into buying some get-rich-quick scheme. It was a slick come-on that said, “Patrick Combs, take a close look at the cheque above. It’s just a sample of the money you could be receiving soon.” Junk mail slime.

The fake cheque above looked real enough but clearly carried the words, “NOT NEGOTIABLE” typed in the top right-hand 
corner.

The letter it came with was pages of get-rich-quick promises and hype all punctuated by 
exclamation points.

Getting phony, come-on cheques wasn’t new to me. They junked up my mail box often. But on this particular day I was in a humorous mood and I thought it would be fun and funny to deposit this fake cheque as a joke.

Certainly, it would be an unmistakably ridiculous act that could only result in a teller’s laughter. It would be like offering seashells instead of your credit card to pay your restaurant bill, totally safe and a touch funny. Or so I assumed. So I endorsed the faux $95,093.35 junk mail cheque with only a smiley face, deposited it at the ATM and waited for a light-hearted call from my bank.

But my bank didn’t call laughing as I expected. Nor did they call to tell me I was an idiot. They did something else entirely unexpected. They cashed it.

Five days later, I returned to an ATM to get a little cash and out spat two $20 notes and a mini-bank statement which I usually dreaded. But this time I was wildly surprised to see my bank balance was $101,217.34..

It was at the beginning of an extraordinary happening but also a fight with my bank. A fight with the tenth largest bank in the United States at the time.

The bank could have reclaimed the money from me easily if they understood customer service. One kind phone call saying: “Oh my, Mr Combs, we have made a mistake by cashing the fake cheque you deposited and endorsed with only a smiley face. Could we have the money back?” The answer would have been yes, of course.

But instead, I heard nothing from my bank and began wondering if the cheque was in fact not ever going to bounce. After three weeks of waiting I went into the bank and asked the branch manager himself no less when I’d be safe to start spending the money?

He informed me that I was legally safe to start spending the money because it had been so long. Then I confirmed that it was legally mine with a phone call to a legal banking expert. Only then did I withdraw all the cash.

A week later, my bank apparently decided they didn’t like that particular law and they had their senior security officer phone me yelling threats of
policemen at my doorstep. Whatever happened to customer relations?

Yelling, threatening me and apparently lying after their very own branch manager told me I was safe to spend it was not right. Add to that that in the same threatening phone call I simply requested an official letter from the bank making a formal request for the money’s return and was outraged to hear: “I don’t have to give you any letter. This phone call is all I have to give you and it is all I ever will give you.”

And with that the fight was on.

Admittedly, by asking for the letter I knew I was putting the bank in a position where they’d have to do one of two things to give me sufficient reason to return the money. Either show their hand, and tell me the laws that indeed required me to return the money, or stop placing all the blame on me and simply admit they made mistakes.

And therein lay the bank’s predicament. Several key laws said the money was legally now mine and they had made mistakes. But whereas most other businesses understand the value of an honest admittance of error, an apology and a commitment to make it right, banks only see exposure. .

So I suppose asking my bank to admit their financial mistake was like asking a thief to trust me with his wallet. My bank simply wanted to refuse me the honest letter. And so we were in a stand-off. No proper letter. No return of the money.

I stood up to the bank on principle. As I saw it, I was just asking the bank to be honest and to be willing to take responsibility for their mistakes. Just as they’ve always held us accountable for bounced cheques.

And then I decided to turn my experiences into a comedy show – because we all need to laugh.

I’m afraid I can’t reveal if I kept the money in the end, or what I did with it without giving away the ending of my show, but please come and see me at the Gilded Balloon if you want to hear to story in full.

• Patrick Combs’ show, Man 1, Bank O, is at the Gilded Balloon

With 48 rooms and comfy beds, the portable hotel is a welcome addition to the Edinburgh Festival, reports (a well-rested) Claire Smith

THERE is a lot of chat in the office when I announce I am going to sleep in a portakabin in a car park.

“You’ll be boiling hot,” “you’ll never sleep” and “you’ll be kept awake by screaming and people having sex” are some of the comments.

But everyone is intrigued to find out what it will really be like to stay in the portable hotel which has popped up in the Caltongate gap site in Edinburgh.

Shortage of city centre accommodation is always an issue during the Fringe and this is the first visit by Snoozebox – a new company which began as a way of providing portable accommodation for people visiting big sporting events.

Snoozebox founder Robert Breare set up the company after a bad night at Le Mans and is delighted to be bringing it to Edinburgh.

He said: “To be in the heart of the great city of Edinburgh and part of the extraordinary cultural festival and party that is the festival was always something we’d hoped to be able to do.”

Breare, who used to run the Malmaison hotel chain, brought in his friend, racing driver David Coulthard, as president. The driver, who had also had bad experiences with temporary accommodation, insisted sound- proofing of the hotel pods was as good as it could be.

The offer of the Caltongate site was a last-minute thing. But there are already plans to bring the portable hotel back to Scotland to cater for visitors to the Open Championships and Hogmanay.

There has been some controversy over pricing. Initial reports suggested the 48 rooms in the portable hotel, which can sleep three at a push, would be on the market for £229 a night. However, prices appeared to drop dramatically and are now £80 during the week and £120 at the weekend.

Richard Worrell, marketing manager, says: “There has been a little confusion on room rates. As I understand it, a rate of £229 was briefly on our website at the very beginning, though this was very much a result of the advice we were being given by our agent on expected rates in Edinburgh for the period. When it became clear that capacity was unusually high for August, we reduced our rates to reflect the situation. From our side this is our first foray into Scotland and we are determined to offer both fantastic value for money and to get the Snoozebox experience and presence established in the city.

“The most important thing is that the whole opportunity came very late and part of our unique ability is to scale a hotel to meet demand.

“To go from an empty brownfield site to what we have now is something we’re very proud of, and is very much what we’re about.”

So what do you get for £80? Well, I’m in the William MacTaggart suite on the second floor – all the rooms have been renamed after Scottish heroes.

When I say suite, this is compact accommodation. There’s a huge double bed with soft, white linen and over the top is a bunk with a single bed. There is about three square feet of floor­space but lots of storage, two drawers, a couple of shelves, a wardrobe and a hook.

Through a sliding glass wall is the wetroom bathroom, with a lavatory, a sink and a shower.

There’s not a window as such, but there is a porthole in the door which you can keep open or cover with a plaque bearing the company’s slogan Zzzzzz.

Touches of luxury include a wall-mounted flatscreen television, there are plug sockets, free WiFi, air conditioning, fluffy towels and a selection of mini toiletries.

Iain Thomson, a former captain in the Royal Tank Regiment who is now head of hotel operations on the site, tells me the Fringe Snoozebox came in on 15 lorries, took two-and-a-half days to build and has a staff of 17, including cleaners, caterers and 
receptionists.

The set-up at New Street is relatively small, with just 48 rooms, but Snoozebox can also go bigger, providing space for several hundred guests.

We sip prosecco in the hospitality area, which is in a marquee with white sofas and pot plants, similar to the kind of thing you might find on a film set.

Thomson tells me the portable hotels have previously served the Diamond Jubilee in Windsor as well as at Goodwood and Silverstone and the Isle of Man TT.

Tonight my fellow guests include Nancy and Keith Tomlinson, who are beekeepers visiting from New Zealand. They have found it a bit too compact: “The phrase sleeping in a shoe box at the side of the road comes to mind.”

Nadine Lavin and Sophie Scott were booked into the Snoozebox by the BBC. They are neuroscientists appearing on a programme about the science of laughter.

Ms Scott has been impressed: “Their use of space is very good. They fit quite a lot into a small pod.”

I catch Manchester teachers Jo Hurford and Rosie Talbot as they are running out of the door. “We are late for our train,” they tell me. “The beds are almost too comfy.”

Blair Hanlon, a psychologist from Glasgow, has stayed here with his wife Gill and their 20- month-son Cal. “It is a bit like staying on a ship,” he says.

Finally, I meet Apolstolos Trantsidis from Greece and Miho Hirano from Japan, who are eating breakfast in the marquee with their four-year-old son Appollon. “He was enjoying it very much,” says Ms Hirano.

So how was my night? I have to say it was excellent. Big, comfy, clean bed, soft, soft sheets and lots of space to strew the contents of my handbag. A bit of rattling as some late-night guests climbed the gantry but really very peaceful.

After a ton of coffee, some yoghurt and fruit I saunter back to the office with a song in my heart.

“You look incredibly… well…rested,” said one of my colleagues

And I am.

Q: IN MID-MARCH, I purchased nine Brussels sprout plants for growing on by me, an experienced amateur gardener, in a cold frame and then planting into my competently managed vegetable patch.

On 12 June I inquired, by e-mail, about the abnormal development of one of the plants – it was growing much taller than the others and beginning to flower.

At Dobbies’ request I e-mailed (on 21 June) a photo of the plant and surrounding plants. Awaiting a response, I e-mailed, without photos, on 2 July that a second plant was developing the same way and a third
was growing with a longer
stem than the remaining six plants.

On 9 July, still without a response to my 21 June e-mail, I e-mailed photos showing the current development state
of the three plants and remaining six.

Still without a response, I wrote on 23 July asking for a speedy reply.

As of 6 August, I still haven’t heard from them. I can only assume that Dobbies is purposely ignoring my complaint, perhaps illegally, with the objective of dissuading me from pursuing any contract rights I may have.

Dr AS, Edinburgh

A: GENERAL manager at Dobbies Garden World, Lasswade Simon Martin said: “We are extremely sorry to hear about Dr AS’s experience at our centre here at Lasswade. We always strive to put our customers first and we endeavour to respond to all customer enquiries within 24 hours.

“I’m currently investigating the delay in our correspondence with Dr AS.”

He added: “We were working with our grower to try and determine the reason for the abnormal development; and it appears there is a trail of e-mails which were not received on either side.

“I am taking every step possible to ensure this does not happen again and I have asked our managers to ensure that e-mail correspondence is followed up with a phone call in future.

“We have now garnered an explanation from our Brussels sprout grower as to a possible reason for the development of the three plants and have passed this onto Dr AS.

“We have also offered a full refund as well as a replacement of the plants for next year’s crop.”

Since contacting The Scotsman, Dr AS has been contacted directly by Dobbies.
He is still unhappy about the company’s lack of response to his initial question.

He also feels because of the lack of response he has missed the growing season for brussels sprouts and lost his potential crop.

Dobbies has promised to investigate further.

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

Saving money is becoming a national obsession – and here LetsSaveSomeMoney.com website founder Sarah Willingham reveals the top ten searches since the site launched.

1 Broadband
It is confusing, and we are finding that people want to read more about how to get a better deal and what to look for. By combining your broadband, phone and even digital TV, you could save up to £413 a year.


2 Credit cards
People continue to get themselves into debt, and two out of three waste money on high interest rate credit cards when there are much cheaper options available. 


3 Mortgage
This is the big one where the most money can be saved. People feel overwhelmed by jargon and want help to negotiate through the minefield.


4 The Olympics
Our section on ways to save money if you are visiting the Olympics has become a big hit as families wanted to enjoy the fun without spending a fortune. One top tip was to take an empty water bottle.


5 Car insurance
Everyone needs car insurance, but people are realising that they should never auto-renew as insurers rarely reward loyalty. Ninety-eight per cent of people could save money on their car insurance. Average saving is £400.


6 Home insurance
Another one where people tended to auto-renew but are now fighting back and searching for a cheaper deal. .


7 Switching utilities
Three-quarters of UK households are still on old-fashioned expensive tariffs. However, you could save up to £420 on your utilities and all you need is your bill.

8 Energy saving
You can cut out bills by just being more savvy with our energy. Turning the thermostat down one degree saves on average £70 a year. 


9 Entertaining children in the summer holidays
Parents are scouring the web for ideas and looking at sites like ours for inspiration.


10 Credit ratings
Sadly, it is still very hard to borrow money and for many this is because of a poor credit rating. Lots of people are trying to find out what their credit score is and how they can improve it.

• For more information see LetsSaveSomeMoney.com

SOLAR energy is becoming a more attractive solution for consumers trying to save money on energy bills – and Scotland is
already ahead of the game, according to energy experts.

New research from uSwitch.com shows the average consumer can save more than £1,000 a year on household bills by having solar panels installed.

And soaring energy bills make solar a more attractive proposition than ever – even north of the Border. People who have already fitted solar panels are saving an average of £82.50 a month or £1,000 a year on their household energy bills.

The research from uSwitch shows nine out of ten people who have had solar panels fitted on their property would recommend them to a friend, eight out of ten say they have switched to solar in order to save money while four out of ten say they represent a good return on investment. Six out of ten say they had solar panels fitted on their property in order to
become more green.

Simon Nicholas White, a photographer from central Edinburgh, said the difference in his household bills had been “massive” since solar panels were fitted to the roof of his old town tenement: “Ours were fitted two years ago and we have really noticed the difference. This year we turned the hot water off in March and it won’t go back on until October November.

“Even with the weather we have been having the solar panels are still generating enough to fill the hot water tank for baths, showers and washing up.”

Kevin Sears, energy efficiency expert at uSwitch.com, says: “With soaring energy prices and the rising cost of living, households are looking for new ways to cut costs. Solar energy provides a real opportunity to save around £80 a month on energy – something that consumers can’t afford to ignore. With over half of households under the impression that solar power is too expensive, consumers should be aware of all the options available, including
Engensa’s new SolarLoan.”

Niall Stuart, chief executive of Scottish Renewables, said: “Our figures show that between 2009 and April 2012 more than £206 million has been invested in the Scottish solar panel industry, creating new jobs and opportunities across the country.

“Solar has become increasingly popular way for householders and businesses to power their properties, keeping their energy bills down and for some, even making a profit by selling excess electricity to the grid.

“Renewable energy is quickly becoming a part of our everyday lives and currently meets around 35 per cent of Scotland’s electricity needs.”

Jerry Hamilton, renewable energy director at Rexel, a company which fits energy-saving technology, said: “It’s very exciting to see how ahead of the game Scotland has been in terms of the energy crisis. The country realised very early on that there is an impending energy resource problem that will soon hit the UK and has invested heavily in a renewable alternative.

“Through our business we have seen huge growth in solar installations in Scotland. Despite the lower light conditions experienced in the country, if high- quality products are fitted, solar panels can still provide a good return on investment, as well as protect from the expected energy increases. As the UK becomes more reliant on energy resources from other countries, Scotland will be reaping the cost benefits of investment in solar and other renewable energies.”

MORE than one in ten people in Scotland are living in fuel poverty, according to government 
figures obtained by shadow energy minister Tom Greatrex.

The Westminster MP challenged the SNP and the Scottish Government, saying more should be done to reach people struggling to pay their bills.

Figures show 658,000 people in Scotland are living in fuel 
poverty – defined by spending more than 10 per cent of household income paying for gas and electricity. Around 12.5 per cent of the population are struggling - which is higher than anywhere else in the UK.

Greatrex said: “This is a damning indictment of the SNP’s five years of failure in tackling fuel poverty, and a clear example of skewed priorities. When the SNP cut the fuel poverty budget in 2011, that was their decision for which they should be held to account.

“With the threat of more price increases from energy firms, there may well be more pain on the way for already hard-pressed families across Scotland.”

A spokesperson said: “The Scottish Government has a raft of measures in place to support families most in need, and has allocated a £65 million budget to tackle fuel poverty and improve energy efficiency in 2012/13 – up from £53 million in 2011/12. Between 2009/10 and 2011/12, 62,000 homes benefited from loft insulation, 25,000 had cavity wall insulation installed and over 54,000 were referred for new central heating systems and insulation under Scottish Government schemes.Scotland is an energy-rich 
nat­ion and people should live in warm, comfortable homes.

“That is why we are continuing to lobby the UK Government to take a firmer stance with our energy companies.”

EIGHT per cent travellers have never bothered to take out travel insurance before going abroad – even though people typically take items worth more than £1,000 with them, according to new research.

More than two million people in the UK have either lost their suitcase while on holiday or had items stolen from it.

And the value of items stored in luggage is soaring – with more people than ever travelling with Kindles, iPads, laptop computers and expensive smartphones.

Insurers say people should check their cover to make sure expensive items are fully covered before they travel.

Bob Atkinson, a travel specialist at MoneySupermarket.com, said: “Whether you leave it right until the last minute, or spend weeks preparing, packing your suitcase marks the beginning of a getaway – and we Brits are stuffing our cases to bursting- point. It seems there is no such thing as travelling light; as a
nation we are wheeling around a staggering £32 billion of possessions for just one week away, including £8bn of cash.

“Unsurprisingly in this age of handheld gadgets, more than eight million of us can’t leave home without ‘essentials’ like a laptop and iPad. All of which have increased the value of our holiday luggage. Worryingly, we don’t seem to have considered this when it comes to taking out adequate travel insurance.”

I’VE BEEN accused this week of censoring a columnist after dropping an article on the economics of the Fringe by ex-jockey, promoter and flagrant self-publicist Bob Slayer.

Actually, I did like the column, which was about how much performers are shelling out to be in Edinburgh, and I was astounded by his ability to concentrate – which I never expected.

But newspapers are rapacious beasts and news is like the mail: “It never stops” in the words of US postal worker Newman from the TV series Seinfeld.

So in between Bob writing the article and the day it was due to go to print, a veritable storm erupted, thanks to the confusing outpourings of Official Fringe Miserabilist Stewart Lee. Suddenly everyone was talking about performers losing money for the sake of being here.

As Festivals Edinburgh director Faith Liddell said to me wearily: “It’s a story that comes around every year.”

And yet this year has been different – largely because of some particularly bad-tempered broadsides flying between rival venue managers. There have also been some unbelievable tales floating around on blogs about the lavish velvet- lined rooms where “official” journalists are plied with alcohol while PR dollies do the dance of the seven veils. “If only,” said one exhausted reviewer, crying into his cheese sandwich.

We all know the Fringe is a great big money pit. There is no doubt some performers are getting locked into crazy contracts and running up crazy debts. Having said that, it is also a great big summer camp, where for three weeks performers can hone their craft, people can meet their heroes and we can all drink beer until five in the morning. This is hard to reinterpret as a viable economic model. In fact, it is a miracle it happens at all.

It’s time to get real – and Edinburgh needs to do its bit to keep this magical life-affirming show on the road. Let’s all make a pact not to rip people off, to help people out, to pay our way. And for once, in the words of Neil Innes: “Let’s make up and be friendly.”

AFTER a 15-year break, The Lumberjacks are back with their infectious three-for-the-price-of-one formula. They take a trip down memory lane with Kate Copstick

It has been 15 years since The Lumberjacks first came to Edinburgh. Now, in case any younger 
people are getting excited because they have a Lumberjack alert on their smartphone, no, these are not the American hip hop Lumberjacks, T Mo and Khujo, but the Canadian ho ho Lumberjacks – Stewart Francis, Craig Campbell and Glenn Wool. Not necessarily in that order.

1997 was not a great year for comedy, to be fair. 
Princess Diana and Mother Theresa died, there was a massacre at Luxor in Egypt and, perhaps in hindsight most chilling of all, Tony Blair was elected. But down in the Grassmarket, at least, something funny was stirring. The original Stand Comedy Club was born in the basement of the Grassmarket Bar. The Lumberjacks and I grab a table there for old time’s sake.

They claim to have been fresh-faced, bright-eyed and bushy-tailed back then. Strangely, Glenn Wool still is – a Dorian Grey of the comedy world and pretty much the poster boy for a life of drink, drugs and homelessness. Stewart Francis, star of stage and screen on this side of the Atlantic and the other, still doesn’t actually want to be a stand-up. “I’d give this up in a heartbeat,” he says. “It is just not really my personality.” What he really wanted – and wants, if anyone is interested – was to be a cartoonist. “I kept sending them off and no-one wanted them,” he says. And so he turned to stand-up.

“How great is it that you can have this as your fallback situation?” says Campbell, sipping Coke (Campbell is opening for Frankie Boyle tonight and wants to stay sharp. “I love Frankie’s audience,” he says. “It’s a real bearpit”). I frown. “Every sip of that a baby dies.” (I paraphrase Stewart Lee). “Can I try?” says Wool, reaching for the glass…

We troop downstairs to the actual basement room where The Stand first stood. There are around eight of us crammed into the space, now used for storage, and there is more beer here than people. “That’s just how I remember it,” says Campbell.

“Eight was fine,” they agree, “eight people meant you could eat.” However, 25, they remember, would sell the room out.

They still would play happily to an audience of eight, they say. “You have to think that those eight people have actually turned up … that they are there because they want to see you,” says Wool.

“You can’t take your disappointment out on your audience,” says Francis, who turns out to be as hardline about his comedy as he is one-line. Francis is a Value For Money comic to his core. Audience banter, endless riffing and navel-gazing by comics are “just pissing on your audience” he says. But he has his sensitive side. “I remember my first gig here,” he says. “I had called and called Tommy [Sheppard, Stand boss] and finally got a spot. And when I arrived, the board outside had all the comics’ names on it. And at the top was Stu Who. I thought they were having a go.”

Talking about VFM, the Lumberjacks offer you not just three comics for the price of one but a special guest each show, garnered from the top names in Edinburgh by the boys themselves. To be fair, Francis has garnered most names. Harry Hill was the opener, impressively. Wool, it would seem, has been collecting mainly female names, Francis points out. “And how many guests have you got us?” he enquires of Campbell. “Er, none so far,” says Campbell. The Francis eyebrows raise in mock despair.

We take one last lungful of beer fumes and comedy hopefulness and head to the Tron, which is where, it transpires, the first Lumberjacks gig actually played. They were originally a duo – Francis and Campbell – but Wool “just turned up and joined in”. The Stand gigs were late-night add-ons. As we leave the Grassmarket it would appear Wool has pulled. A chunky bloke from the end of the table is getting big hugs and invites to the show. It turns out he is the brother of the bloke who managed the Tron when the ’Jacks first lumbered into the Fringe. As we drive up to Hunter Square, Wool regales us with the tale of how this guy, the Tron’s comedy parts being compact to say the least, got his testicles trapped in a filing cabinet. I won’t go into detail. Wool, obviously, did.

Campbell, too, has fond memories of the Tron. He reminisces about how he used to call his mum from the phonebox in the square and how, after their first night, after he told her about the gig, she tremulously broke the news to him that his much-loved cat Squirty had died. “She said,” says Campbell, “‘I am so upset I don’t know whether I can go square dancing tonight.’” You can see where Campbell gets his legendary sensitivity.

As we swing down towards the chaos of roadworks that once was York Place, we all learn that Wool had actually been a professional stand-up for three years 
before joining the Lumberjacks – he had played almost every reservation and mining town in British Columbia (where having “entertainment” on allowed an establishment extended opening hours). That momentous year the combination of a winning scratchcard and a car accident insurance payout (“whiplash,” winks Wool) had left him with the financial wherewithal to go travelling. And the road led to Edinburgh.

Down at The Stand’s current home there is a frenzy of manly hugging and backslapping with Tommy Sheppard – “the only club owner who would make you toasted cheese sandwiches at two in the morning”, says Campbell.

When we meet, early in the Fringe, the boys have yet to see their new home at The Assembly Rooms on George Street, so we set off up the hill. “Do you have our stump?” is all they want to know. When they first came to Edinburgh they assumed that what Brits mainly associated with Canada was lumberjacks. Hence the name choice. Now, with their glorious return (by ­public demand, apparently, and not just 
because they are all far too old and tired now to retain an entire hour show each) they even have a lumberjack set.

As we enter what was the Music Hall, now a vision in corporate beige with barely the curve of a cornice in sight, the lads’ eyes light up. The room holds around 600 (“just a nice intimate number”, says Francis). In a back room there is an ­entire stage-tree in pieces. “Where’s our stump?” is all they want to know. The stump is there. There has been a slight technical misunderstanding as to the pre-show cinematic cavalcade of Great Canadians (including absolutely the cutest pictures of Craig Campbell, Stewart Francis and Glenn Wool ever seen in public) but nothing to worry about. They quickly work out their six minutes at the Assembly Rooms press launch.

“Five minutes,” says Sheppard. “Five? It was six,” says Campbell. “We’re being cut already,” gasps Francis.

I leave them dividing five minutes three ways and playing with their stump. Well, they are Lumberjacks and they are more than OK.

• Return of the Lumberjacks (Back by Poplar Demand), The Assembly Rooms, until 26 August. Today, 8:10pm.

A mysterious, captivating diva, a labyrinthine plot and Janacek’s signature dramatic score combine to create a magical, thought-provoking opera rich in romance and power, writes Claire Black

ON A set that is vaguely reminiscent of Mad Men – an office space dotted with mid-century furniture – a statuesque woman perches in an armchair, insouciantly flicking through a magazine. There’s something of Maria Callas about her. Or maybe Jackie Kennedy. There are others on the stage – they are all men, buttoned into their three-piece suits, shirt sleeves rolled up, hair slicked to their heads. They scuttle about, stealing glances in her direction, caught in a confusion of lust and fear.

In one of the final rehearsals for Opera North’s production of The Makropulos Case, which opens tonight, Ylva Kihlberg has the daunting task of incarnating the mysterious Emilia Marty, one of Leos Janacek’s most intriguing creations. An opera diva, a woman who can drive men to suicide such is their desire for her, Marty is both mesmerising and monstrous. Before she even appears on stage we know how she fascinates both men and women, young and old. There is something magnetic and indefinable about her, something at once alluring and perhaps just a ­little frightening.

“Is she in her thirties?” one character, Albert Gregor, asks, when he first hears of the great singer, before the audience has seen or heard her.

“At least. But beautiful,” replies the teenage Kristina, a novice singer who, in Marty, has just found the ultimate role model.

But in fact, Emilia Marty is much older than Kristina suggests.

Marty was born Elina Makropulos in Crete 337 years ago. Her father, a physician to the emperor, developed a potion to grant immortality but the emperor made him test it on his teenage daughter and so began Elina’s long life. By the time we meet her she is in need of another dose to live another 300 years. The question is: does she really want to?

Janacek only began writing operas at the age of 50. Perhaps best known for The Cunning 
Little Vixen, his penultimate composition was The Makropulos Case, inspired by fellow Czech Karel Capek’s philosophical and comedic stage play, which Janacek saw just weeks after it opened.

Janacek was one of the most successful opera composers at writing his own libretti, turning dense works (his final opera was Dostoyevsky’s The House of the Dead) into dramatic operas with scores of both spiky menace and stunning beauty. Even for Janacek, though, the plot of The Makropulos Case is labyrinthine.

“There are so many intricacies I’m actually not sure that Janacek follows them through precisely,” says Richard Farnes, music director of Opera North, who will conduct tonight’s opening Edinburgh performance. The case Farnes refers to is a century-old legal wrangle, a dispute between two families yet to be settled, which provides the backdrop for the appearance of the mysterious and beautiful Marty, who unexpectedly turns up and inexplicably offers the solution to the case. How can she know the intricacies of the personalities involved more than a hundred years ago, those caught up in the case wonder? Not least Gregor, the feckless man who is hoping the outcome of the case will provide him with an inheritance substantial enough to wipe out his debts.

“I always think of Gregor as being like one of the wards of Jarndyce [the character in Dickens’s Bleak House],” says tenor Paul Nilon. “He’s an orphan. He’s lacked love and can’t settle in ­anything. He’s lived his entire life on tick, it’s all borrowed, all artifice. And then this extraordinary woman walks into his life and she has this kind of magic that makes him feel alive for the first time.

“And yet, although it’s an incredibly joyful thing it’s also terrifying. The terror of loving someone for the first time is frightening. Emilia frightens him. There’s a moment in one scene when he asks, ‘What has happened in your life?’ and she turns away, she can’t tell him.”

When Janacek was writing The Makropulos Case he was approaching the age of 70 and was, at that time, infatuated with Kamila Stosslova, a woman half his age. It’s not difficult to find evidence in the opera of his keen understanding of the incredible power that women can have over men, but what is more interesting is that Janacek allows Marty to be a more nuanced character than the vampish, manipulative monster she might be. Both in the score, particularly in the glorious third act, and in the libretto, Janacek ­reveals that Marty is as she is because of what she has experienced in her long life: not just loss, but also the violence of men who have wanted her. Janacek explores the nature of desire and comes up with a portrayal that is both violent and haunting.

“Janacek is so good at that because he gives us different layers in the music of Emilia,” says Kihlberg. “We see and hear so many different dimensions of her story, especially in the third act when she tells the story of her life.

“It is a challenge but I’m really enjoying myself. I love it, I do. It is so chatty and complex in the 
beginning and then, in the third act, it just opens up and becomes this romantic super-opera in which I really need to sing.”

Farnes agrees that the challenges of Janacek’s score for both the singers and the orchestra are significant but the “odd grammar” of Janacek’s composition is what lends it its depth.

“When I think of this opera until the third act, I think of it as very conversational, based around words and not very mellifluous,” says Farnes, “but actually what I’ve realised this time, even in the scene in which Gregor is in love with Marty but she’s not interested in him, the music is very genuinely propelling that love forward even though it’s unrequited. You sense from that that Marty does know what love is, that she has been in love, she understands how it works. In a sense Janacek betrays that even when emotionally Marty is going against it.”

As to the central question of the piece: if you could, would you want to live forever? I wonder how Kihlberg would answer?

“If I’d been asked that question a year ago I might have a different answer, but after working on this I know I wouldn’t want to live forever. I think it must be so, so hard. Just think of all the people you have to say goodbye to. Every single person you meet, the children you give birth to, you would know that they would leave before you and that must be devastating.”

• The Makropulos Case, Festival Theatre, tonight and 13 August. Today 7:15pm.

WITH a dry wit, sharp intelligence and a remarkable memory, Ruth Rendell – now on her 77th book – is still a woman at the height of her powers, finds David Robinson

THE week before I meet her, Ruth Rendell had been to the West End to watch a show called Gatz. It is an eight-hour production, and for it the leading actor had to memorise all 49,000 words of F Scott Fitzgerald’s classic novel – in the right order. She is impressed by that. And because she is impressed, I am too. Because when it comes to retentive grey cells, Baroness Rendell of Babergh CBE is in a league of her own.

You could be forgiven for not noticing that straight away. Your first impression would be of a spry, dry-witted woman in her late sixties (she is actually 82) who is far more open and friendly in person than the rather forbidding grande dame of crime ­fiction her media image would lead you to expect.

Since her husband’s death in 1999, she has lived alone in her elegant four-storey house overlooking the houseboats moored along the Regent’s Canal, a street where Lily Langtry and Michael Flatley used to live and where a generally less ostentatious affluence is de rigueur. It is the sort of house that used to come equipped with servants and would now come with a £6 million price tag in an upper-crust estate agent’s window. The sort whose inhabitants, above and below stairs, she writes about in her latest novel – astonishingly, her 77th – The Saint Zita Society.

Saint Zita was the patron saint of servants. These days, as Rendell’s keen eye for social observation has spotted, that is a job that dare not speak its name: instead, there are au pair friends of the family who drift into the role, chauffeurs forever waiting for a ­summons on their mobile phones from their banker bosses, impoverished companions of the super-wealthy, and Asian nannies, along with fixed-hourly rate gardeners and handymen who live out and – only occasionally – butlers and cooks who live in.

The whole point of a Ruth Rendell novel isn’t the murder itself, but what drove the murderer to the crime and how he or she copes with its repercussions. In The Saint Zita Society, she takes as her canvas an entire street of white-painted stucco Georgian houses of the super-rich in that part of London where Belgravia shades into Pimlico. There will be a murder, and when it happens, the lives of those above and below the stairs, in houses on both sides of the street, will find themselves horrendously interconnected. And no-one – not a single crime writer I can think of – could handle such a large cast as competently, zooming into so many disparate lives to reveal their inner fears, then out again to show their ­usually superficial, but sometimes desperate, intertwining, as the woman next to me.

But let’s get back to that memory masterclass. The publisher’s copy of the novel, I tell her, didn’t have a map of the houses in the street (the finished copy does, with lists of their inhabitants), so I my made my own. Did she start off with anything like that?

“No, I never do. I started with the idea of taking a little street – as I did with my [2009] novel Portobello – and then thought about writing about the servants who live on it. They had to have a place to form their ­informal society, so I thought of the Dugong [her fictional pub at the corner of the street] and I gathered them all there and just took the story on.”

What about a notebook in which to write all those precise details of the way we live now, like the way whole streets in prosperous parts of London will have Scandinavian-style candles in their windows at Christmas or how a strict Muslim woman might shrink from shaking a man’s hand? “I never carry a notebook while walking around London. I just pick those things up. I’m very good at quizzes.” She taps the side of her head. “There’s all kinds of useless knowledge in there. Great chunks of Antony and Cleopatra, long bits of poetry, quite a few quotations – and ­Wexford [her only series character, and protagonist of 23 of her novels] has used nearly all of them.” She grins – a sudden widening of her mouth and lightening of her expression before continuing. “But no, I never make notes; just a few small details when I’m writing, but nothing much. The plot is never written down. I will tell the story to myself, but I won’t plan it. I’ll speak the narrative in my head for a while.”

While you’re washing up, for example?

A faux-frosty frown. “I don’t wash up. Maybe if I’m on a long walk, or lying down before sleep.”

What kind of narrative – the details of how people act, or the main turning-points of plot?

“Oh no. Never that.”

She had told me earlier that it could be three months before she would get round to writing those lines she had tried out in her head. Surely she would have forgotten them by then?

“No, I can still remember what I thought. Right now, for example, I have an idea for a Barbara Vine for the future. It won’t be even for next year but for the year after. But the idea came and I’m pleased with it – it’s a very good idea. Well, if you imagine a page of a printed book. I will have said that page to myself. And when I write it, well, it won’t be exactly like that, but that is enough for me, and I know that it will be all right.”

I have interviewed a lot of crime writers, but I have never heard anything like that. Right now, inside the Rendell cranium, not written down anywhere, there are ready-formed nuggets for novels that could either be standalones, Inspector Wexfords, or those more psychologically dark novels (sometimes barely crime at all) she writes as ­Barbara Vine. How early does she know which they’ll be?

“The Saint Zita Society I knew from the start couldn’t be a Wexford or a Vine. There is a sort of dream quality about the Vines, a thoughtfulness, a brooding on things. I have a new Vine out – not the one I recently had the idea for – early next year, and again there was never any question of it being anything other than a Vine right from the start. And I’m writing a Wexford now.”

Wow. After more than a decade of interviewing authors, I think I have probably grown hard to impress, but at this stage, I am almost lost in wonderment. I think this is precisely because she is almost deliberately trying not to impress me, the way you can do when you’re 82, a Labour life peer and and have 77 critically acclaimed books and best-sellers to your name, some filmed by the likes of Chabrol and Almodovar, stretching all the way back to the then ground-­breaking (because it dealt with a lesbian love affair) From Doon With Death in 1964.

Let’s wheel back that statistic again. Let’s face it: you’ve skipped over it too easily. Seventy-seven books. Good ones too, with a quality that hasn’t fallen off. Bestsellers nearly all of them. Books that pick up on the misfits on the margins of society and take a long and close look at that society itself. Most writers have relatively short careers – even a decade is a long time in publishing – before the public tires of their way of looking at the world, or gets used to their tricks or starts to find their characters formulaic. With Ruth Rendell, that has never happened. But she has not finished making my eyes widen in astonishment.

“Another thing is that I can always remember exactly where a line or a name was on a page, and I can go back to it without any trouble. I don’t make any notes, but I do know where to find things. Suppose I need to know where Wexford first talked about his love of the countryside or where he quotes Larkin, or what was the beginning of his ­hatred of racism or where he first encountered domestic violence, I would be able to find it straight away.” Double-wow.

Somehow – don’t ask me how – she ­manages to lead a fuller life than most even with all the writing. She gets up early each day, works out on the cross-trainer in her basement, spends the morning writing in her office at the top of the house (58 steps she will go up and down four or five times a day). Then in the afternoon, three days a week, it’s off to the House of Lords, walking to Bond Street and catching a Jubilee line Tube to Westminster.

In the evening, she might go out to that theatre (which is where we came in, remember?) or stay in and read a book. She gets through about four a week – good, interesting choices too: the week I meet her, she is working her way through AM Homes’s forth coming novel May We Be Forgiven and AN Wilson’s The Elizabethans, plus re-reading Stella Gibbons’s Starlight and wondering whether to start Vassily Grossman’s mammoth Life and Fate. She’s some dame. Me, I’m tired just typing this paragraph.

She signs my copy of her latest novel. Filling the entire page opposite, in unshowy grey capitals, are the titles of books – non-­fiction, short stories, omnibuses, novellas – she has written. I mumble something about it being an impressive list.

“Well,” she says, eyes twinkling, “I do like writing, you know.”

• The Saint Zita Society by Ruth Rendell is published by Hutchinson, price £16.99. Ruth Rendell will be appearing at the Book Festival on Thursday, 16 August at 8pm.