The Guardian from London, Greater London, England • 15

FINANCIAL GUARDIAN Friday July 3 1981 ft Bob Mellish thinks the Isle of Dogs could become the Chelsea of the East End seem to be taking place in New York after London is closed and in the Far East before Europe opens the next day. If the authorities were really determined they would be parrying out concerted support around the world through the various central banks, rather than simply lobbing in a few millions in London. They would also need to push up London money market rates. Yesterday these edged up a little, but the one-month interbank rate is still just on 12 per cent, while the three-month is around 12 per cent. Nudging these towards 14 per cent would take some pressure off the pound, without forcing banks to shift up their base rates immediately.

Short of that, there is little else that can be done. There is no obvious immediate relief likely from a fall in US interest rates. though expectations that that will happen still persist in the US. playing its' part in regenerating the national economy. This will be gratifying for the Tories, not just because some of the credit for this will go to private industry.

Even better, there will be the addition of new owner occupiers in a council-house dominated area. In Tower Hamlets, 97.6 per cent of the dwellings are now owned by the council. But there are problems. One is how the LDDC is going to value the housing land. This applies both to the wasteland of Becton in Newham where Mr Bob Mellish, deputy chairman, dreams of happy village communities of small houses with gardens costing perhaps 25.000 and the potentially ritzy shorelines of the Isle of Dogs, which Mr Nigel Broackes, LDDC's chairman, sees as London's best remaining residential sites.

Until the LDDC has a proper estates department values remain unknown. But the prohibitively high price towards construction or at least private, housebuilding if only on the grounds that it was a private housing boom that led Britain out of the recession of 1931-3. But there is some modest evidence in yesterday's figures that housebuilding is indeed bumping up, though the rise in private housebuilding starts has been, offset by the fall in public sector building. This two-way tug provides an interesting backcloth to the grand; London Docklands Development Corporation's launch yesterday. For one immediate challenge facing the corporation is whether it can replace the severe local authority cutbacks on new housebuilding by putting up enough low cost housing to fill the local gap.

At a planned rate of 1,000 homes a year it would equal one seventh of London's 7,000 built last year. If it can, it will be doing more than just meeting a local London need. It will be NOTEBOOK Edited by HamishMcRae ANYONE hunting for sectors that might lead the economic revival tends to gravitate 'Very messy and nasty divorce' says Denman British Telecom i predicts rise in phone rentals Jobless could top 6 by leaving the EEC And if you believe the chartists in Chicago, it now looks as though sterling having dipped below $1.88, will continue on down to $1.80. Shining through GEC (see page 16) is sailing through the worst post-war recession with flying colours. It is, of course, helped by its pile of cash.

Interest income contributed a quarter of the latest year's profit and of the 15 per cent increase to a brisk 476 million. Without that, margins would have been about the same as those that the much bigger United States namesake enjoys. Further growth, both in tried and tested fields, and from new acquisitions will continue, helped by a 1,000 million export order book. Looking at the group's constituent parts, power engineering staged a recovery from the effect of strikes and the period of very low ordering. Housing starts pick up By Michael Smith, Industry Correspondent A FURTHER slight upturn in the pace of new housebuilding activity will help strengthen the belief that economic recovery is underway.

The number of new houses started in May was the highest so far this year at 14,000, with "starts "in the private sector up by 1,200 to 10,600. The full impact of local authority cut-backs is measured by news that public "starts" in the first five months of 1981 were halved to only 13,100. But the private sector, which suffered proportionately as badly in 1980 as local authority housebuilding, has begun to recover in 1981. The number of "starts" in the first five months of the year rose by 1,700 to 45,400 and in the three-month period between March and May were running 7 per cent ahead of a year ago. The signs arc clearly tentative but they also come at a time of slow recovery in the level of house prices.

According to the Abbey National Building Society, average prices rose by 2.8 per cent in the second quarter of the year, the first quarterly increase since the middle of last year. Abbey National is convinced that the recession in house prices is now over, but a spokesman admitted that the 2.8 per cent rise in the second quarter was "fairly modest." Although the increase in house prices is expected to continue during the rest of the year, Abbey believes that the annual rate of advance will remain in single figures. placed on inner area land, even in the most derelict condition, has long been identified as being a major barrier to rejuvenation. The Housebuilders Federation describes as "absolutely scandalous the way public bodies, especially councils have come to an acre for the grottiest site. Still, the builders are excited at: the first opportunity for years to build on a large scalp, in inner London.

On top of that five to six year building gramme is bound to come steady 100 million or so a -year of solid infrastructure work. Finally there are the office, newspaper printing, hotel and entertainment complexes being hatched for sites-closer to, the City. There are plenty of critics who rightly are worried about the essentially undemocratic nature of the LDDC. Clearly, the corporation must demonstrate that the ends justify the means. Europe and losing out to the Japanese in third markets, although the Japanese should show sensible moderation in their exports to Europe as there were social and political limits on how fast countries could adjust.

But European industries had to become more competitive, and the $23 billion to be spent by the EEC motor industry in the next three years on restructuring was a positive step in this direction. The Japanese Government is expected to make a declaration on moves to encourage import promotion in Japan next week, and the EEC has now drawn up its own export promotion programme which will involve the pooling of diplomatic and commercial resources in Tokyo. The EEC Commission would like to see the Japanese drop high tariff barriers on a number of products, including processed foodstuffs, leather goods and certain agricultural equipment. But Sir Roy added that mutual investment by the EEC arid which was another development discussed on Japanese Prime Minister Mr Zenko' Suzuki's visit to Europe "last'month, would take some of the venom out of the burgeoning trade war. If trade restrictions grew, they would "spread across the world like wildfire with terrible political consequences." Restrictions voluntary or otherwise on the importing of Japanese cars to Britain should stay in force for at least another five years to give Receivers rescue Employees at Norvic Securities, the Norwich shoe company put into receivership on Wednesday, will meet the receivers today.

The receivers will see officials from the Union of Footwear, Leather and Allied Trades before making an announcement to the staff. The receivers hope that, if the company is slimmed down, they will be able to keep the business going and find a buyer for it. The directors went ahead witti the annual meeting yes By Peter Large, Technology Correspondent British telecom said yesterday that home phone rentals would rise by half if the Government allowed a rapid free-for-all in telecommunications. In country areas, call charges would rise as well. It estimated that 450 million a year more would be needed from home customers 30 each on average and 135 million from public pay-phones, necessitating a 20p minimum call price.

The figures the first time that BT has solidly quantified its argument are contained in BT's riposte to. the Beesley Report, which recommended wide denationalisation of telecommunications. Whatever the Government decides about Beesley, BT is preparing a case for a rise in charges of nearly 10 per cent in November, with home users taking the brunt. Charges were raised 17 per cent last November and 12.5 per cent the previous January. The reason for forecasting a much bigger rise if the Government accepts: Beesley is that at present business use of telecommutiications-'fiub- sidises the home use.

We will not be able to afford this if competitors start creaming off our trunk traffic," Sir George Jefferson, the BT chairman, said yesterday. Sir George stressed that British Telecom would not stand in the way of natural change." But the right decisions had to be taken, then implemented in a controlled and phased way. But electronics and telecommunications equipment remained by far the largest contributor to profits. By contrast, the weak sections furniture, traction and industrial equipment, including wire, are small. Among the recent acquisitions, Avery registered a sharp decline and AB Dick, one of the key US acquisitions also came unstuck.

The move deeper into high-technology medical equipment through Picker seems to have been better timed and it still leaves the best part of half a billion pounds, after note payments, for. more purchases. The dividend increase of 2p a share, or just under a quarter, shines through the gloom that most top industrial groups have generated in this area. And GEC also stands somewhat apart from other strong performers lately that owe all or most to defence contracts and government largesse. Lincroft talks to buyer By Margaret Dibben Lincroft Kilgour, the loss-making textile group, is planning to sell a substantial part of the group.

Full details will be published in three weeks' time and the share quotation has been suspended; The directors of the cloth merchanting and menswear manufacturer are holding discussions with an unnamed buyer. The talks are still in a preliminary stage and the details have not yet been finalised. At the suspension price of 34p, the whole company is worth 1.6 million. In January, when the directors revealed a loss of 425,000 for the year, they told shareholders of a ban year for the group in which many customers had either destocked or bought imported goods. There was no interim or final dividend.

During the year Lincroft Kilgour sold its loss-making Harrison-Gloucester factory and slocks for 224,000 to a subsidiary of Forminster. The directors said at the time that the reduced scope of manufacturing operation for mail order there no longer fitted into the Another company which had been knocked by the harsh climate in the textile industry, Tootal, yesterday disclosed that it is close to buying the Tru-beniscd textile interlinings business of Trubenised Group. This will be merged with the Tootal Bondmor business. The cost to Tootal is expected to be under 500,000 cash. AMERICA'S unemployment rate improved last month in spite of a number of signs that the US economy is slowing down.

The Labour Department reported yesterday that the rate dropped from 7.6 per cent to, 7.3 per cent, but June is a month in which there is usually a substantial rise in employment levels. 3 We also offer document facsimile (doc-fax) and. telephoto facilities to Telex-Sharing Service users. 4 Telex-Shoring users can use our telex number (but not our name) on alt stationery, vehicles, etc. 5 You receive a FREE copy of the UK Telex Directory and can also have an entry in the Directory (at cost).

COSTS YOU 3 Call charges invoiced monthly. Incoming calls 50p each, plus longdistance phone charges if any. (All charges subject to VAT.) Sterling aid YOU CANNOT quite conclude that the first bout of serious selling of sterling at the beginning of June cost the reserves 200 millions but that is probably not far out. The underlying fall, in the reserves of $388 million may weir have by forward transactions-, a couple of months and the fact that the Government is in external deficit' tends- to 'depress the reserves even when the Bank is not intervening to support sterling. But all in all, support of 200 million would square with market estimates at the time it was clear that the Bank had been supporting sterling heavily, but only for about three days.

That was during the first bout of severe selling. Yesterday it continued to support the pound in London, holding it close to its opening level. But the main falls our motor industry further time to catch-up, Mr George Turnbull, chairman and managing director of the Talbot Motor Company said yesterday, writes Roy Harry. He flies to Japan today as a member of the Society of Motor Manufacturers and Traders delegation to discuss further import controls. "We need a period of adjustment the Japanese are very advanced and we have things to learn from them," he said.

Japanese workers had a high sense of team spirit and national unity but there was no reason why we should not, gradually, catch up with them and become more productivity minded. As an industrialist he said that direct government to government control would make a clearer issue of the import "quotas" and the Japanese motor industry was well aware that this was the big stick the British negotiators would wield during next week's talks. But there was no point in decrying the agreements already reached on what was called prudent marketing to keep down the level of imports. "When the SMMT talked with the Japanese in 1975, they had an import penetration in the UK market of nine per cent which last year grew to 11.7 per cent," he said. Without our agreement that figure could easily have been 20 per cent in the same period in uermany, the Japanese have worked from 1.5 per cent to 15." hope to terday but the chairman, Mr Charles Metcalfe, told shareholders that because of the unusual and tragic circumstances he would not elaborate on the statement, in the annual report.

The receivers, Mr Michael Jordan and Mr- R. A. Stone of Cork Gully, spent yesterday comparing the management's proposals with their own for the future of the company. The 700 workers in the Norwich factory and 400 at Mansfield, Nottinghamshire, face a cut in numbers late competition and tariffs and to oversee the approval of the attachment of equipment tj the network. This proposal has been rejected, but the Government is still discussing another POUNC roposal that a new reporting system by instituted to allow customers to judge the rangemquality and price of British Telecom services.

The Council's chairman, Mr John Morgan, said in the report that he considered the last year as something of a watershed for customers tant part of our overall film, television and video inte-ests." Mr Ward Thomas, chairman of Trident Television, which is also exploring developments in video and other new technologies, has said that Trident will not participate in any satellite initiatives in Britain. "I believe that anything here would be subject to restrictive practices and we will never get anywhere with it," he said. "I do not think I would want to invest in that, any more than I would want to invest in cable television here. are involved speci-fially with a contract in Europe but what it is I cannot say." As a result of hiving off its two former subsidiaries Trident will be worth 3,250,000 more as a company, it is revealed in a report which will be put to shareholders on Docklands scheme gets go-ahead NEWS IN BRIEF Gulliver move at ADP? SHARES in Amalgamated Distilled Products were suspended yesterday pending an announcement "very soon." Speculative interest has surrounded A DP since Mr James Gulliver bought a stake and took a seat on the board two years ago. The shares were suspended at 77p, a high point for the year, which values the company at nearly 6 million.

Last March Mr Gulliver denied as "absolutely untrue" rumours that he was planning to bid for ADP. He has some 20 per cent of the shares. FMC, Europe's biggest meat flroup, is reducing costs in a move that could mean the loss of 290 jobs. A statement from the group yesterday' said it had started talks with the unions relating to "redundancy and changes of working pattern" The main reductions and changes will fall in Ipswich and on the night shift operations. RUPERT Murdoch's News International yesterday raised its offer for the non-voting shares in publishers William Collins to 163p a share, from 150p, and extended its formal offer for the entire share capital until July 17.

The offer for the ordinary voting shares remains at 225p. RICHARD Tarling, a former director of the Far East conglomerate Haw Par Brothers International, yesterday lost his last chance to clear his name of violating Singapore law. He was refused leave by the Privy Council in London to appeal against his conviction and six-month sentence in Singapore. RECESSION in the brewing trade shows no signs of abating, with output in May down almost per cent to 8.3 million bulk barrels, the lowest May figure since 1972. The Brewers Society said trade has been hit by the impact of prices and the weather.

Output in the first five months of 1981 was down 7i per cent to 15.1 million bulk barrels. ROLLS-ROYCE has won a 5 million order to supply seagoing versions of its Spey aircraft engines to the Japanese Navy. Rolls has already sold 35 million worth of marine engines to Japan in recent years and there are high hopes of further success after yesterday's new deal. HERON Corporation, with interests ranging from property and garages to oil and gas exploration, yesterday reported a 24 per cent rise to 13.4 million in pre-tax profit for 1980-81. Net assets have risen 66 per cent to 133 million in the past year, mainly as a result of a revaluation of properties.

July 23. It is an ironic twist to Trident's long resentment of the IBA's decision to end its role as a commercial television company except as a minority shareholder in the two new and independent companies. The terms of rearrangement which Trident shareholders will be asked to approve have already been approved by the IBA. The sale of the two companies and disposal of one of the Newcastle studios of Tyne Tees will bring Trident 12.2 million, the rental of technical equipment to both Yorkshire and Tyne Tees, starting at some 2.4 million a year, will total more than 8 million over a five year-period and the rental of other studios, starting at 1,130,000 a year, will total more than. 11 million over eight years.

Alternatively, further studios could be bought for a minimum of 13.5 million. 1 By Rod Chapman, Business Correspondent Britain's unemployment figures would rise to at least 5 to 6 million if the country Were' to withdraw from the Common Market, according to EEC Director General for External Affairs Sir Roy Denman. Speaking at a in London yesterday, he said that withdrawal from the EEC would involve a very messy and nasty divorce the idea that Britain could leave on amicable terms was "codswallop as seen from Brussels. It would have to be accompanied by massive import restrictions in the UK, which would lead in turn to immediate and massive retaliation with the resultant unemployment being measured in the millions. Sir Roy pointed out that the EEC took 43 per cent of Britain's exports last year compared with 30 per cent a decade previously which constituted one of the biggest shifts in trade in British economic history.

Withdrawal would lead to the loss of a great deal of the investment which had flowed into Britain since accession to the EEC. The speech' also contained a-stark warning of the possible consequences of a trade war with Sir- Roy commented that, "once we start a bush fire (on import controls), we're on our way back to the 1930s and unemployment on a far greater level than seen in Europe now." There was no point in retreating into a "fortress Northern papers merge. AT LEAST 100 people are expected to lose their jobs following the decision announced jointly yesterday by Thomson Regional Newspapers' and' the Guardian and Manchester Evening News to merge seven weekly newspapers; in Stockport, Macclesfield and Wimslow. Three new papers, owned jointly by the two groups, are to be opened the Stockport Express Advertiser, Macclesfield Express Advertiser and the Wimslow Express The' decison to close the seven old titles, which has received the formal consent of the Secretary of. State for Trade, was taken because each was suffering "insupportable and continuing losses," a joint statement said.

The 203 employees of the "Express" titles owned by Thomson have been told their jobs are secure and the brunt of the job losses will come among the 134 employees of the "Advertiser" titles owned by the Guardian and Manchester Evening News. Pearson By lieifhis Barker by the relatively small sum it had to. 'pay for its major shareholding, in the reconstituted Yorkshire Television reompariy, the. Pearson Longman publishing group has set up a new company to manage its expanding interest in films, television, video and other new communications technology. Goldcrest Films and Television will be the master company managing all such developments under its chief executive, Mr John Eberts.

the founder of Goldcrest Films International. This is the feature film enterprise owned by a number of leading financial institutions, including the National Coal Board Pension Fund. The new Goldcrest Films and Television will own around 40 per cent of Goldcrest Films International. One of its subsidiaries will produce programmes for in Sir George Jefferson Repeating his arguments about BT being allowed to raise finance freely, Sir George said that anything which checked modernisation plans could lead into a downward vortex in which the national network would deteriorate. The BT report welcomed the competition of true value added services," though with safeguards.

It said limited resale of BT's lines also possibly be. allowed!" although "we "are at see' how that would increase national wealth." But to allow separate private networks competing with BT's national network could be ex tremely damaging." 'It should not, in any case, be contem plated before the later 80s when modernisation of the network should be substantially completed. BT said. BT's case, page 17 In a conciliatory move the leaders of three London bor ough councils affected by the LDDC are being asked to join the board. Mr Broackes said that Councillor John O'Grady of Southwark had agreed to join, and Newham and Tower Hamlets are also to be asked.

Mr Broackes said that after 18 months of study and' discussions as shadow chairman since the scheme was. floated- by Mi-Michael Heseltine he now felt much more optimistic about the 'LDDC's Chances of making a success of the challenge. He. said The boroughs had an appalling reputation with developers and financial institutions. As a property man I never went there.

Why face aggravation from councils opposed to the profit motive and home ownership He believed the LDDC had the confidence of business. Trafalgar House will not undertake any work within the designated area. The LDDC has already been vested with 300 acres, mainly in the Isle of Dogs and will be slowly increasing its holdings. The initial government funds for the first year amount to nearly 90 million, including about 20 million for land purchase. 6.5 million is to be handed back to the boroughs Other board members include two senior partners from valuation firms, Sir John Gar- I licit, lurnier permanent secretary at the Environment Department and Mr Denis Stephenson, of Peterlee New Town.

The first large builders to start housebuilding this year at Becton are expected to be Wimpey, Barratts and Broseley. ability to handle full project management for building of nuclear plant worth 1,000 million. Options to increase the financial strength of the NNC are thought to include seeking additional funds from its present shareholders, widening the shareholding or asking shareholders to underwrite its debts. The Government' present shareholding partners are GEC (30 per cent) and British Nuclear Associates (35 per cent), a consortium' of contractors' led by Babcock and Wilcox. POUNC monopoly worry Manchester Evening News TELEX-SHARING SERVICE Is your answer and It costs lust 25 a year, plus calls! Our long-established telecommunications depart- ment is fast and reliable.

It has to be a major dally newspaper like the Manchester Evening News couldn't manage with anything less than the best. Now we offer you an efficient, economical telex-sharing service that meets the needs of local businesses. WHAT YOU GET FROM OUR SERVICE By Maggie Brown The go-ahead has been finally given to the London Docklands Development Corporation headed by Trafalgar House chairman Mr Nigel Broackes. It now faces a 15-year challenge to revitalise and repopulate the capital's most desolate heartland. The LDDC's deputy chairman Mr Bob Mellish, Labour MP for Bermondsey and former Labour chief whip, said in recognition of the mammoth task ahead that he will "probably" resign from Parliament within the coming few weeks now that the Government has given the LDDC statutory backing.

He hit back at his critics, who have vigorously opposed the corporation's creation by saying "they are stark raving mad to think I am going to let property men rip off London by putting up Centre Points and 180,000 penthouses all over the docks." The LDDC will basically act as a New Town development corporation, without elected representatives, and will take control of planning and development in a area that has a rapidly falling population currently standing at 56.000. It stretches from just East of Tower Bridge, through the Isle of Dogs, where the 60-70 LDDC staff will be. based, to Becton, in Newham, where it plans to build about 6,000 low cost family houses of between 25,000 to 35,000. Everyone believes that there will be a huge rush for these houses, half of which will be for direct sale, a quarter for rent and a quarter for shared ownership. The Post Office Users' National Council called on the Government yesterday to ensure that the private customer was not discriminated against in future tariff revisions by British Telecom once its monopoly ends.

In its annual report, POUNC commented that it was vital that the Government acknowledge its responsibilities to customers. POUNC has already urged the Government to establish an independent authority to regu builds on Trident deal 1 Incoming telex calls phoned to you during' normal business hours; confirmation copy mailed to you first class overnight. 2 Outgoing copy transmitted oy us and a copy mailed to you first class overnight. (We are open 20 hours a day Monday to Friday; eight hours a day Saturday and Sunday. Our telex is switched on 24 hours a day, every aay.j WHAT OUR SERVICE 1 Membership of the Telex-Sharing Service is 25 per annum.

2 Entry in the UK Telex Directory, if required 5 per quarter. State reviews NNC cash ternational television and video markets. Pearson Longman bought its 25 per cent stake in the new Yorkshire Television holdings company, one of the two commercial television companies hived off from Trident Television on the instructions of the IBA, for a low sum. Mr James Lee. chief executive of Pearson Longman and chairman of Goldcrest Films and Television, said yesterday The price we have to pay for Yorkshire Television fully reflects the difficult period immediately facing the commercial television industry.

"We know that more funds will be required to carry us through the rought patch that lies ahead but we are fully satisfied that the investment will give an excellent return over the life of the franchise. Yorkshire Television will also form an impor SHARE-TELEX SAVE MONEY ENJOY TOP-CLASS SERVICE The number of members we can accept for this service is-limited Ring ERIC BAYLEY now on 061-832 3566 for details, or for leaflet and membership application form, without commitment, attach this ad to your letterhead and send to: Eric Bayley, Manchester Evening News Telecommunications, 164 Deansgate, Manchester M60 2RD. The Government pressed ahead with its controversial plan to build a pressurised water nuclear reactor when it announced an urgent review yesterday of the financial structure of the National Nuclear Corporation. The National Nuclear Corporation, in which the Government has a 35 per cent stake, was set up to contract work on the first PWR for the Central Electricity Generating Board. But the small capitalisation of the NNC a mere 10 mil-lion has long hampered its 11 111 TTVT T2T1S1 1 f- YttLftNULr-.