The Guardian from London, Greater London, England • 1

CITY EDITION GUARDIAN The best umbrellas have a FOX Frame PARAGON q- LV Manchester Wednesday January 26 1966 37,184 Price Sd ma i mr.vM i Rhodesia told Labour likely to lose Hull N. FROM DENNIS JOHNSON IN HULL, TUESDAY New corporation to help industry in export field by IAN AITKEN The Government's plan to create a new Industrial Reorganisation Corporation, with power to initiate and finance industrial mergers and rationalisation and armed with the right to draw up to 150 millions from the Excheauer. was announced in the Commons yesterday by terms for ending revolt Prime Minister promises urgent economic aid Mr George Brown, the Minister for Economic Affairs. The task of the new agency, which is to be headed by Sir Frank Kearton, the chairman of Courtaulds, was defined day the Government may build a Humber bridge. Mr McNamara has relied almost completely on the Government's record, which js now under severe fire not only from the Conservatives but from his own left wing.

His strongest cards are the personal standing of the Prime Minister and the residual belief that Labour, which has acted strongly on international and economic problems, has still not been given long enough to prove the effectiveness of it policies. It is doubtful whether dissension withm the Conservative Party will be amy more significant electorally than dissension within the Government The other hand On the other hand, none of this suggests a defeat of major proportions. The seat is habitually marginal and the actual number of votes available on the old register probably no more than 55,000 may well mean a fairly even distribution between the two main parties. The fight is now almost out of Mr McNamara's hands. His organisation, which has suffered fierce and often unjustified criticism during the campaign, now has the responsibility of bringing every known Labour voter to the noil on Thursday.

f'Grieootis news' on rates, page 382,000 houses built, back page Inevitable after today's finance committee meeting. The estimates submitted would mean a 4s increase on the present figure of 14s, but they were referred back for pruning. The Conservatives are making rates a major issue and point out that Hull is already the highest rated county borough in England. 4. The likelihood that Mr Gott will now poll enough votes to make a large dent in Labour's majority is widely accepted.

5. Labour will have the greatest difficulty in attracting its maximum possible vote, partly because there are expected to be a number of abstentions by people who feel they can no longer support the Government, and partly because of the possibility that bad weather will prevent many of the list voters (those who have removed to other parts of the county borough) from travelling on Thursday. The majority of such voters, who may total 5,000, are thought to be Labour supporters. 6. The Conservatives are almost certain to have collected the majority of the 2,107 postal votes.

7. The evidence suggests that the Liberal, Mrs Millward. will lose more votes to the Conservatives in an attempt to get Labour out than to Mr McNamara. What can Mr McNamara set against these disadvantages For one reason or another his party has failed to get across one winning idea during the campaign, except the rather vague promise that one TF the Labour candidate, Mr McNamara, wins the Hull North byelection on Thursday he ought to be carried shoulder high through Palace Yard. There are so many factors piling up against him that his chances of success seem to diminish with every hour.

There can now be no doubt thai a Labour win, even 1 with a paper-thin majority, would have to be counted as a major triumph for the Government. Tonight the 1.3 per cent anti-Labour swing needed to put the Conservative in begins to look pathetically small. In terms of Labour's poll at the general election it represents a swing of only 600 votes. Scale of assault These are the storm clouds now gathering over Mr McNamara's head 1. The scale of the Conservative assault on the rising cost of living has been tremendous and is bound to influence many middle-class workers in what Mr McNamara himself describes as Hull's low-wage economy." 2.

The Government's prices and incomes policy has been seen to be in serious difficulties and has been widely interpreted as operating against the interests of lower-paid workers. 3. A substantial increase in Hull rates by the Labour-dominated council is now BY OUR POLITICAL STAFF The Prime Minister announced in the Commons yesterday the means by which the Government hoped to help the people of Rhodesia in making a fresh start towards establishing a just society based on equality of opportunity." First, there must be an unqualified return to constitutional rule. Rhodesia's future course cannot be negotiated with the regime which illegally claims to govern the country." The Governor may receive from the regime any proposals about the means by which the rebellion is to be brought to an end. But discussion of Rhodesia's constitutional future must be with responsible persons representing all the people.

After a return to constitutional rule the Governor would of Rhodesians, responsible to by Mr Brown in these words To search for opportunities to promote rationalisation schemes which can yield substantial benefits to the national economy, especially in terms of increased exports and more rapid technological advance." But Mr Brown went out of his way to deny that its elective will be to retain ownership of the new or reorganised enterprises which it creates. Its aim will be tj withdraw its capital as soon as possible, and to move on quickly to further schemes so that the 6ame funds can be used over and over again. This was Mr Brown's reply to the inevitable Conservative accu sation that the new corporation would be little more than an agency for backdoor nationalisation. But Mr Brown may also have anticipated a further criticism from his own backbenchers namely, that the new agency will simply risk public funds in order to create enterprises which will be handed over to private ownership as soon as they become profitable. Not fast enough When Mr Hugh Jenkins (Lab.

Putney) asked about this, Mr Brown said that the corporation would not necessarily withdraw from profitable enterprises and stay on only in the unprofitable ones. In fact, It will not be the corporation's policy to retain public holdings for long periods but the possibility that it may do so in certain it is understood, has not been entirely ruled out A White Paper published yesterday sets out the purposes of the new agency in greater detail. It recalls that the need for more concentration ana rationBlisatldnliTBrTffindustry for more concentration and Rail unions9 high price for peace By BERNARD INGHAM Leaders of the three railway unions are to see Mr George Brown on Friday to discuss the controversial report of the incomes board on railwaymen's pay and conditions. The Minister of Transport, Mrs Castle, will also attend. The unions will go into the meeting seeking a method of avoiding the national strike threatened by the National UI1IUU IM executive from February 14, but all the indications after a meeting of the executives of the three unions yesterday were that the price of peace contemplated by the railway-men's union would be too high for a Government striving to maintain the credibility of its incomes policy.

On the other hand, there may well be the germ of a peaceful "settlement In a mathematical exercise which the railwaymen's general secretary, Mr Sidney Gre- conducted at a press conference last night He said that, on the management's figures, the railwaymen and the clerical staff still he more than 3.5 per cent behind Sir Frank Kearton was emphasised in the National Plan published last year but, it says, the pace has not been fast enough. "There is no evidence that we can rely on market forces alone to produce the necessary structural changes at the pace required," it adds. The new corporation, the White Paper says, will fill this gap. Necessary legislation will be introduced "as soon as possible." It goes on "The corporation will seek the fullest cooperation from industry and existing financial institutions, and schemes which it initiates will, whenever possible, DB put into effect either through the normal machinery of the market or in close collaboration with the market. It will be able to acquire a stake in the owner-Turn to back page, col.

1 Aim nf Inrinatrv the free enterprise organisation, stated that it would refer the proposal for the new corporation to the Monopolies' Commission on the grounds that it would lead to mergers and monopolies not in the public interest. A statement from the Institute of Directors said This is not back door nationalisation it's trap door nationalisation. In other words, Whitehall wants seat on the board of every company which the Government decides should be, as they put it, rationalised. A particularly disturbing feature of the proposal is that Government-sponsored mergers are automatically exempt from the Monopolies Act this means one rule for the State and one for free 'Trap-door nationalisation? mm, comprising tne widest nossible SDectrum of Dublic opinion of all races in the country and constituting a representative Government for reconstruction." During this period the police and military forces would come under the direct responsibility of the Governor. This Government would maintain law and order, and would require guarantees to prevent a repetition of the rebellion and to protect human rights.

"The British Parliament will need to be assured about the adequacy and the effectiveness of these guarantees." I Urgent action will be needed to restore the Rhodesian economy, the Prime Minister Sir Hugh's visit 'profitable' From our Correspondent Salisbury, Rhodesia's Chief Justice, Sir Hugh Beadle, arrived back here today after his talks in London. His visit, he said, had been profitable, with a useful interchange of views. said. I The British Government would be ready to contribute to the economic needs of the country and in particular to assist. In cooperation with other Commonwealth Governments, with schemes for the advancement, education, and training of Africans Persons restricted or detained for purely political reasons will be released, provided that they give guarantees that their political activities will be conducted constitutionally.

No time limit Mr Wilson went on to state "How long this period of Interim government may last cannot immediately be foreseen neither can the date at which parliamentary institutions can be restored. "The views of the people of Rhodesia will have to be sought on the amendments and changes necessary in the 1961 Constitution to secure a resumption of full constitutional government on the basis of the five principles which have been proclaimed by successive British Governments. To these must now be added a sixth principle, namely, the need to ensure that, regardless of race, there is no oppression of majority by minority or of minority by majority." He emphasised that the course of constitutional development Rhodesia after this towards independence must be based on these principles. A Royal Commission may he asked to prepare for a constitutional conference before independence can be achieved. Comment from industrial quarters yesterday on the Industrial Reorganisation Corporation was mainly critical and suspicious the Confederation of British Industr said outright that the background of the White Paper is coloured with suspicions" of the Government's interventionist policies." The CB1 statement said that the performance of the corporation would need to reassure industry that there will be no commercial discrimination.

"The CBI is hostile to the use of compulsion in the field of industrial reorganisation and will be watchful to ensure that the Government's proposals do not envisage nationalisation by the back door." Mr Heath attacks on gas By our Political Correspondent Mr Edward Heath, the Leader of the Opposition, made an attack on Mr Wilson, in a statement issued last night for what the Prune Minister said at Southport, on Saturday, about the Conservative Government's responsibility for the gas failure in the West Midlands. The statement itself was, in effect, a snub to Mr John Peyton, the Conservative front-bench spokesman on power, who had questioned the Minister of Power about gas supplies earlier In the day. But Mr Heath still felt obliged to issue -his own-state, ment later, apparently feeling that his party had not squeezed the last drop of advantage during the exchanges in the House. The statement said This afternoon Mr Fred tee, Minister of Power, repudiated Mr Wilson's allegations in his speech on saturoay mat line uonserva- tive Government was to blame for the failure of gas supplies in cne west Midlands. "The Minister informed the House of Commons this afternoon that sufficient capacity existed in the gas industry prior to the breakdown of the plant, thus con tradicting Mr Wilson's charge that the Conservative Govern ment had left behind insufficient capacity to meet demand.

'Misled "Mr Wilson thus completely misled the nation about the present fuel crisis. What he was trying to do was to mask the total ineffectiveness of the Winter Emergency Committee which he set up with such a fanfare of publicity last November. This committee has so far failed to take any action to cope with this winter's emereencies. Many manufacturers have stated mat they could have made emergency arrangements to deal with the shortage of gas if they had been clearly told of the element of risk in the situation. Surely the Winter Emergency Committee might at least have ensured that this was done I 1 now call upon Mr Wilson to ensure the closest possible relationship between the West Midlands Gas Board and industry itself in order that some better arrangements can be made In the immediate future." Gas Board's two top men away, page 7 On other pages Arts reviews 8 Beaton'! column 18 Bridge 4 Crossword 17 Finance and Industry 12-14 Home news 2, J-7, 14, Si 18 Horner 2 Leaders and letters 10 Overseas news 11 Parliament 2 Property market 17 Reynolds's Miscellany 9 Sport report 4 TV and radio 2 Weather forecast 18 Women's topics 8 Classified advertising Appointments Senior and Executive li 16 Public 14 Full index 2 The disagreement between the Chinese party leadership and certain sections of the officers' corps has now come into the open.

The nature of the differences and their causes are discussed by VICTOR ZORZA on page 11. Rate rises ls 9d after economies By GEOFFREY WH1TELEY The Manchester Corporation rate is to rise by Is 9d to 14s 9d in the The City's finance committee completed its annual budgeting and arrived at the figure yesterday, only three weeks after it had given a warning that the increase could easily be 3s. At a meeting lasting more than four hours, spending proposals amounting to about 2.5 millions apparently disappeared into thin air. The chairman, Councillor Harry Lloyd, said committees had responded to an appeal for economies. At the start of this month, preliminary estimates from all corporation departments amounted to 22 millions.

The actual amount now required from ratepayers is 19.5 millions, and even this is an increase of 2.5 millions on the rate demand at this time last year. No cuts Councillor Lloyd stressed that there would be no cuts in corporation services the reductions would simply mean that they would not expand as rapidly as had been hoped, but they would not fall below the standard achieved in the current year. The highways committee, for example, had lost" 100,000 of its original estimate of 317,000, and this meant that some footpath maintenance work would have to wait But some "rabbits," it appeared, had been produced trom tne flat at tne last moment to save city ratepayers from a drubbing. The committee discovered an unexpected windfall in the shape of 700,000 from increased fees which the education authority charges neishbounne authorities tor children attending Manchester schools; an extra 250,000 had been chopped off the education estimates, and the airport committee, which had already promised to contribute 54,000 to the rate fund, had been persuaded to chip in with another 100,000 Biggest headache Education estimates had obviously given the committee the biggest headache of all. The Burnham award means that teachers' salaries account for one-quarter of the city's revenue, ana mere were, no means by wnicn me commiuee could economise on that The airport committee was called to the rescue in its new capacity as a corporation trading committee.

Even with the contribution to the rate fund, the committee will still have a reserve of 400.000. It was clearly not in the interests of South Africa to be drawn into the conflict. Restricting the conflict to Rhodesia and Britain was South Africa's interests. Sir de Villiers's proposal would force Britain Into a position which would be anything but friendly to South Africa. A situation of enmity would result between South Africa, the black States, and other members of the Commonwealth, as well as making the country's position more difficult with the United States which supported Britain's stand.

Dr Verwoerd said he sympathised with Mr Smith, and warned Britain and the West that black majority rule in Rhodesia would bring chaos and destruction. He continued I do hope that the British Government will realise that this is not only true of ihe immediate future but for some indefinite future time. The British Government''! attitude to Rhodesia so far had been beyond comprehension, he added. "Long before UDI Govern form an interim Government Premier's sixth a iple pnnci By NORMAN SHRAPNEL, oar Parliamentary Correspondent The Commons went" back to work yesterday with Mr' Harold Wilson commandingly on the job. For a man alleged to be facing his GBtterdammerung at'Hull tomorrow, the Prime Minister appeared to be in remarkably good heart Others had their troubles as well, and were less successful In concealing them.

Nobody even Mr Heath -himself when the cjmeback hit him can have thought it wise for the Leader of the Opposition to accuse Mr Wilson of "hedging" over Rhodesia. that State, Mr Heath, was rapidly informed, might well' be his own naw year resolution In terms a good deal less clear than those of the statement on Rhodesia which he was questioning, Mr. Heath insisted on the need to' talk' to anybody at all. including Mr Smith, since anything else- would' look like a demand for "unconditional surrender." Anxious as ever to help Mr Heith' to clarify his thinking on this unhappy subject, Mr Wilson Interpreted this as an encouragement to the rebels to "legalise the swag." The right Governor Such language 1 A murmur of outrage arose from the Tories, who instinctively shun four-letter words, and who- were beginning to wish this plain-speaking business had never been started. But Mr Wilson went ruthlessly on, calling spades spades and even saying what might be done with them.

Certainly, we gathered. Mr Smith or anybody else could shoulder his spade and go along to Government House to talk to the Governor provided he asked for the right Governor. But when it came to talks on the constitutional future, these must be with a group representing all sections of opinion including the Rhodesia Front, if it wanted to take part and if it had in the meantime forsworn its rebellion. AU this sounded unbearably clear to the right wing Tories, and Mr Wilson capped it all with a sixth principle to add to the famous five Hie need to ensure that, regardless of race, there is no oppression of majority by minority or of minority by majority." The Opposition was baffled, and although the implacable Mr Wall muttered something about moving the adjournment of the House he was not around when the moment to do it came. It began to look at last as though the more extreme reactions such as the personal vendetta allegation thrown at Mr Wilson at Question Time are exposing themselves as the dangerous nonsense they really are.

Parliamentary report, page 2 Club to sue FA and BBC over TV plan By our Correspondent Mr R. W. Lord, chairman of Burnley football club, said last night that the club intended to sue both the Football Association and the BBC for announcing through the press that highlights of last night's cup replay between Burnley and Bournemouth would be shown on Sportsview an hour after the finish. Earlier a BBC camera crew who arrived at the Burnley ground had been asked to leave. Mr Lord said the Club had for some years been against the televising of all matches except for short extracts on Saturday nights because of the effect on attendances.

While we are under the jurisdiction nf the FA, they still have no right to run our domestic affairs," he said. (FA Cup repines, page 4J New town's solution for transport By BADEN HICKMAN A figure-of-eight busway or monorail route, free of all other traffic and pedestrians, will allow special vehicles to serve uninterrupted the residential areas of Runcorn new town. Supplementary loops will link the public transport to industrial areas. Single-deck buses expected to be chosen in preference to the less economical monorail will give easier access and He lower to the ground than traditional vehicles, and will be operated by one man. This balancing of public and private transport is a primary objective in the master draft plan published today by Runcorn Development Corporation for increasing the -town from 27,000 to 70,000 by 1977, and eventually to 100.000 by the latest at the end of the century.

The new town will ccst between 100 millions and 150 millions. It will provide homes and jobs for people moving from North Merseyside. and is the second to get under way in the North-west. Work is expected to start on the first houses in April. There will be no through traffic in the residential areas.

Professor Arthur Ling, author of the plan, is considering covered ways between neighbour hoods and the bus routes To discourage suburban motoring, there may also be groups of garages instead of one to every house. Buildings will be 75 per cent houses to 25 per cent flats, and it is hoped to make the new town a regional sports and cultural centre. (Report bv our Planning Correspondent, page 6J Dame Edith Pitt A spokesman at Queen Elizabeth Hospital, Edgbaston, Birmingham, where Dame Edith Pitt. Conservative MP for Edgbaston. ts ill, said yesterday that her condition remains grave.

ment members had said that British policies followed in Rhodesia would ultimately lead to tragedy. But because this was another State's business, my Government has always said it will not interfere or do anything about it." A crumb of comfort for Rhodesia from the speech was that the "Petrol for Rhodesia Fund," which has been well supported Transvaal is to send its first 5,000 gallons. The organisers plan to make the fund-raising nationwide. Slide Villiers's no-confidence speech and Dr Verwoerd's reply can be regarded as an opening thrust and parry in the general elections which take place on March 30. Dr Verwoerd said that the Opposition leader's speech was plain electioneering.

It is obvious that the Rhodesia issue is one on which the hard-pressed United Party could attract some emotional support in a contest in which the Opposition seems doomed to lose even more heavily than in previous elections. (South African opposition Trnirned, page 111 figures produced by the uuiiie-baud method of comparing rail way pay with that in a number of other Industries, even with a 40-hour week from April. Bill of 5m. He argued, no doubt more in hope than expectation, that the solution to the problem was to bring forward tie 3 per cent pay increase due in October to April, to put the railwaymen on the ttuiuebaud stanaaia. This would cost the impover ished railways board another 5 millions.

In return, however, Mr Greece implied that the railway-men, the major railway union, would be prepared to take a much more positive rOle in promoting higher productivity. If the railwaymen's union is prepared to negotiate and Mr Greene pointed out immediately after the strike decision that it would have to get round the table sooner or later there could be a basis for compromise without Irreparable damage to the prices and incomes policy or serious detriment to Mr Aubrey Jones's authority An alternative method of closing the gap would be a larger stride towards meeting the two-year-old claim for a third week's holiday or an improvement in pensions. Mr Cecil King and the 'Guardian' The following statement was issued yesterday by Mr Cecil H. King, chairman of the council of the Newspaper Proprietors' Association My attention has been drawn to a report in the Guardian of January 24 on negotiations which took place under my chairmanship at the offices of the NPA on Sunday afternoon. In my opinion this report Is a clear breach of an undertaking arrived at at the meeting and is in parts misleading and offensive.

I deplore its publication." Our Labour Correspondent's report was in our view accurate. Editor, the "Guardian" Mr Johnson calls Congress leaders Washington, January 25 President Johnson called Congressional leaders to the White House tonight for a conference on national security affairs, presumably including the pause in bombing raids on North Vietnam The meeting came soon after it was disclosed that the US had sent a message to allied and neutral capitals saying that it could not indefinitely postpone a resumption in the bombing of North Vietnam. Reuter and British United Press. US warning pence message? page Dr Verwoerd stays neutral FROM OUR SOUTH AFRICA CORRESPONDENT Chatwood-Milner can advise you (it won't cost a penny and could save you thousands!) Fire can strike your business at any time, day or night. Fire that could destroy all vital documents, destroy your business.

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