Julian Knight: Katherine 'the Great' needs more discipline

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The Independent Online

Tired and underperforming are two words that spring to mind when the UK's biggest investment trust, the Alliance trust, is mentioned.

It seems I am not the only one who thinks that way. The Alliance is trying to stop a major shareholder – Laxley Partners – from forcing it to introduce a so-called discount control mechanism, which would force the trust to buy back shares when they trade above a set discount to net asset value. The Alliance's chief, the highly rated Katherine Garrett-Cox (or "Katherine the Great", as she has been dubbed), has railed against Laxley in a non-too-subtle way saying: "We are focused on managing the trust in the best interests of long-term shareholders, not those who are motivated purely to make a short-term gain."

The machinations of boards and activist shareholders are not the normal stuff of this column, but I feel that Laxley is trying to achieve something worthwhile here – whatever the motivation – namely bringing some accountability to the investment trust sector. For far too long, investment trusts have meandered along, paying low dividends and generally allowing their shares to trade at persistent discounts to the actual values of the assets that the trust holds. Alliance, as the biggest of the lot, has been one of the worst offenders. Discipline is called for and perhaps Laxley's proposal will bring this. Next month's Alliance AGM will show whether or not Ms Garrett-Cox deserves her monicker.

Ryanair not guilty shock

There has been an accusation – pardon the pun – flying around the internet that budget airline Ryanair is placing cookies on customer computers to manipulate the price of flights. Here's how it's supposed to work: a customer logs on to the Ryanair website to check a flight's price; their presence is tracked by a cookie, so that when they go back online later to buy the price is miraculously more expensive. Being Ryanair, many of us are willing to believe the worst. But Invisblehand has mystery shopped the Ryanair site and found the claims are nonsense. There were no changes in flights between first and second times a customer logged on any of the 50 or so routes investigated.

Ryanair is exonerated, but what about other operators? I remember booking flights to Australia last year for me and a friend through a major travel website. I logged on, saw the price was £707 a seat, contacted my friend and confirmed we'd go for it, logged back on a few minutes later and, lo and behold, seats were now £860. I called my friend and he logged on and saw the lower price, but one mistaken log-off later the higher price was in situ. Several days later I went back to the site and there again was the original lower price, which again went back up when I logged in and out. This is just one anecdotal account but it seems that it is technically possible for agents and airlines to track your usage of a site and perform what is apparently called in marketing circles "dynamic pricing"' – that's ripping off in plain English. If you've got similar stories I'd like to hear from you.

Credibility bypass

The Treasury Select Committee's report into UK banking last week was the dampest of squibs. We need more openness from the banks and it should be easier to switch accounts they said. Whoopee-do: how long did it take the MPs to come up with the same stuff I've heard from the same committee in the last two parliaments? Now the TSC wants banks to revisit the phasing out of cheques. Why, precisely? Cheques are expensive and anachronistic. As for the argument that the elderly won't be able to cope with eight years' notice of the cheque's demise, it is frankly insulting. The TSC is proving a pale, populist shadow of its previ–ous incarnation. It's in danger of a credibility bypass.

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