The Guardian from London, Greater London, England • 1

KAN Bi? IHUItAHL SI NO RIVER SPRINGS mmSTJ 'W' ULtr LTD. ROCHDALE Tel AZZ Printed in London and Manchester Wednesday July 18 1979 15p 1 3 President clears the decks ready for major Government reshuffle Carter Industry aid to be cut by 233 Cabinet stands down shuffle among Mr Carter's close advisers would apparently be to meet the point he made during his television speech that he had become so bogged down with legislative proposals that he had not had time to consider broader issues, facing the By Jane McLoughlin, Industrial Correspondent Action to curb Government spending on industry will cut 233 millions, over a third, from regional development aid over the next three years. Sir Keith Joseph, Industry Secretary, who announced the revised regional aid programme in the Commons yesterday, also said he would not waive or defer 1.2 millions loan interest payable to the Government by the i motorcycle co-operative at Mer-iden, Warwickshire. In the regional policy changes, the Government has downgraded many areas which now had aid-qualifying status. Mr John Silkin, Labour's spokesman on industry, told a press conference after Sir Keith's announcement We are to fight this and fight it hard." Sir Keith, explaining the cuts at a conference after his Commons announcement said many areas now receiving help from the taxpayer were in better economic and shape than others not receiving any help.

In some of the areas getting aid, the help was not necessary," he said. Twelve areas have been upgraded to the highest qualification category for aid the special aevelopmcnt areas. Many others in lower priority sections development areas and intermediate areas have been downgraded. He explained the policy changes as a way of keeping a regional policy but making it more cost-effective while guard- Capital punishment assistance neither needed nur wanted by mcuslry. This mu-t be our long-term aim.

But the danger is that in the present economic recession aid is going to be uut before a reasonable level te-turns. and trade and industrv prospects in the regions will be damaged. We accept that the phasing which the Government proposes should limit the disruption lo cash flow and company planning and we shall watch very carefully what happens to company profitability and cash flow over the next two or three years Unions representing civil ser-anls who administer region.il aid said the cuts were disas-Turn lo back page, col. Nicaraguans jubilant after Somoza resignation country. However, it appears likely that Mr Hamilton Jordan.

his controversial assistant in the White House, will officially be appointed Chief of Staff and mat Mr Powell, will join him in tnat Mr Blumenthal's period at the Treasury has been among the most controversial in Ufc his tory. He is widely blamed in the international financial commu nily for iasl year's uncontrolled collapse of the dollar, which Mr darter drew attention to in nis energy broadcast. There will inevitably be much speculation about the future of Air Young. His well-known pen chant for voicing controversial remarks about the United Slates has infuriated many people llie past, However, Mr Carter has weathered each storm and remained loyal to Mr Young. The domestic consideration, that Mr Young is the most visible black member of me Presidents team, may well mean that he will survive a reshuffle.

The resignation of the entire Cabinet, however formal, is unprecedented in recent American history. The only comparable occasion was in 1972. after President Nixon's re-election, when he asked far the resignation of every non-career employee serving the White House. Sources in the Administration said that Mr Carter was expected to complete his reshuffle by the weekend. One element in his Cabinet which looked as if it was quite secure was the National Securitv team, consisting of Mr Zbigniew Brzez-mski.

Mr Cyrus Vance, the Secretary of Slate, and Mr Harold Brown, the Secretary of Defence. The dramatic way in which (he reshuffle has been staged appears to be an attempt by Mr Carter to demonstrate that he is now firmly in control and that America can expect a new style from him after his dismal ratings in recent opinion polls. the employed population. Over a transitional period of three years, that will be reduced to 25 per cent. The cuts will have little immediate effect, saving under 50 millions apart from cuts already announced in the Budget.

Next year, as the level of grants falls as intermediate areas drop oul of assisted status, the savings will begin building up to a final figure of 23.1 millions by 19S2-3. Sii John Methven, dirccior-gcneral of the CBI, gave a warning of the danger of cutting aid before companies had reached reasonable levels of profitability. We all want to see a return to levels of profitability which will make government Sandinista militants gave impromptu victory speeches in half a dozen parts of the town and people gathered around the Sandinista headquarters clammenng for Connnandante Willy, the local commander. In Managua, people wailed nervously to see whether the remnants of the National Guard, still stationed at the southern edges of the city, would abide by the agreement reached by Washington and the provisional junta and return to barracks. The man whom Somoza had appointed as the new head of he National Guard, Colonel Fredericn Mejia, is.

an unknown quantity. Sporadic outbursts of firing can still be heard in the shanty towns on the city's periphery. After 43 years of rule by the Somoa family and the Natioal Guard, the citizens of this bomb-scarred capital are waiting to From Alex Brummer and Harold Jackson in Washington President Carter's entire Cabinet last night offered its resignation in a move unprecedented in recent American history and designed to free Mr Carter's hand for a major reshuffle of his Administration. In addition, lower-level officials, including the United Nations Ambassador. Mr Andrew Young, and eight White House assistants said they were ready to step down.

The announcement was made by the White House Press Secretary, Mr Jody Powell, following a series of meetings during the day between Mr Carter and members of his Cabinet and staff The statement read: "The President had a serious, lengthy discussion with his Cabinet and senior White House staff today about the priorities of his Administration. He reviewed with them the progress of past years and problems that remain. All members of the senior staif and Cabinet have offered their resignations during this period of evaluation. The President will review these offers of resignation carefully and expeditiously in the next few days." Cabinet changes had been widely rumoured following Mr Carter's retreat to Camp David and his televised speech to the naliDn on Sunday nigh! in which he discussed his Administration's shortcomings and complaints about lack of leadership. A main target of recent criticism has been the Energy Secretary, Mr James Schlesinger.

but there has also been dissatisfaction with the Health and Welfare Secretary. Mr Joseph Cali-fano, and ith the Treasury Secretary, Mr Michael Blumen-thal. Mr Schlesinger had already acknowledged that the axe was poised over his head. In a television interview on Monday he said that he would not necessarily be an asset" during the coming election campaign. He said he had noi.

done a deal with the President to resign in the autumn. "I think that 'un- i demanding might come closer I to it." I The purpose behind any re NEWS IN BRIEF AN OPEN verdict was recorded yesterday on an aborted 26-week foetus which lived for 37 hours after the operation. The abortion had been accepted by the mother because, she had contracted German measles during pregnancy ami ieared that the baby would be handicapped. Back page. A WOMAN died and several civilians and soldiers were injured when a terrorist bomb exploded near a bus stop in Co.

Fermanagh yesterday. Back page. THE Attorney-General is considering the possibility of charges arising from the Lad-broke licences case. The company's shares fell to 175p amid rumour of a takeover bid. Back page.

FIVE men have an outslanding chance of the British Open golf championship, which starts at Lytham today. Peter Doberclner, page 21 INSIDE Arts, reviews 10 Business and finance 14-16 Classified Advertising 8, 17-1D Crosswords 22, 23 Grass roots 9 Guardian Women 11 Homo News 2-4 Overseas News 5-6 Parliament 4 Sports News 19-21 TV RADIO 22 ENTERTAINMENTS 22 PERSONAL 23 The weather SHOWERS and sunny intervals. Details, back page, Sebastian Coe flies the flag for Britain after breaking the old mile record Coe sets new mile record By John Rodda SEBASTIAN COE, a 22-year-old economics graduate from Loughborough University, hrokc the world mile record by half a second last night in the Bislctt Stadium, Oslo, Willi a rime of 3min. 48.09sec. Thirteen days ago on the same track he broke the world SOD metres record and became the iirst Briton to hold the two records since Sydney Wooderson before the last war.

Coe, who took the bronze medal in the European championships in Prague last year, has always been regarded as Athletics, page 20 an 800 metres runner, and he restricts his iuilc1500 metres racing to about one a year. Now he will consider running the longer distance in the Moscow Olympics. Steve Ovett, the British mile record holder until last night, was not in the field. He won the event, the Golden Mile, last year in Tokyo but declined the invitation at the weekend and said that for the winner of the event it would be a hollow victory. I don't feel, in any way that I have achieved a hollow victory was Coc's.

retort. Coe broke into the lead with still 450 metres of the race to go and won from Steve Scott, an American, hj more than 13 metres. Queen's visit on THE Prime Minister met the Queen last night and is understood to have told her that there is no reason why she should not open the Commonwealth Prime Ministers' conference in Zambia next month. Buckingham Palace has already made it clear that the Queen wanted to attend the Lusaka conference. TWO major series continue in the Guardian today with Robert Whymant on the exodus from Indo-China.

page 13 and Sir Keith Joseph, tn Industry Secretary, on how the concept of class damages Britain, page 7. THE Milk Marketing Board is to spend 90 millions on the purchase from Unigate of 16 creameries in England and Wales. Tin news added more than 20 millions to the stock market value of Unigate. Page 14. vAnd you come straight back home with your redundancy pay I'uc heard there's people from Ladbrokc's been hanging around thejactom gates." Paisley waves flag in Europe tinue because where investment is not placed in one part of the country, il will be concentrated in another, which will thus gain.

Investment and expansion do not flow from regional policy, which can only guide such investment there is where Where Hie cuts hit hardest, page 2. Reaction round-up, hack page. Leader comment, page 12. Parliament, page 4. most labour is available.

To some extent, it has succeeded in doing Ihis. but the better an area's reputation for productivity the more chance there is for expansion," Sir Keith said. At present, assisted areas cover more than 40 per cent of National Reconstruction announced it would arrive with the Foreign Ministers of the six Andean Pact nations who had flown from Caracas, Venezuela, for talks with the provisional junta. In the town of 25 miles south of the capital, the first news of Somoza's resigna- Sowing the seeds of downfall, page 5. Leader comment, page 12 tion came across the rebel radio Sandino in the form of a communique from the provisional government.

Minutes afterwards, the bells of he town's church began chiming out the hour of liberation bonfires were lit on every corner, and Sandinista songs and the now famous cry of "Patria Jjbre morir (A free country or death) echoed around the streets. Sterling continues to rise By Victor Keegan Business Editor The unrelenting rise of the juunu un i ui iii excnane mai kcls gathered pace yesterday with a fresli jump of over two i cents against a weakening dollar. It closed at $2.2710. an increase of 2.2 cents or almost 1 per cent on the day. The pound has risen 8.6 per cent against the dollar since last month's Budget.

This will reduce the country's prospective inflation rate by about two percentage points if it is maintained, but at the cost of making industry's task of selling abroad even more difficult than it is already. People going abroad can now buy over 20 per cent more dollars for their pounds than they could a year ago, 14 per ceni more irancs ana aiuiosi per cent more German marks. The main influence yesterday was the continuing weakness of Ihe dollar which needed heavy sunnort from the authorities in Kew York, aided by the Bundesbank in Germany. The reason for this was a feeling that Presi-1 dent Carter's energy measures would do little to alter the short-term economic problems of the US. Heavy buying of sterling was reported from New York.

One worry is the fact that the dollar has now depreciated against the pound by almost 5 per cent since the last price fixing on June 28 by the Organisation of Petroleum Exnorting Countries when Sheikh Yamani. the Saudi Oil Minister warned that a 5 per cent depreciation of the dollar might prompt militant members to push for a move away from the dollar lo a basket of currencies as the basis for the Dricine of oil. ing against any sudden changes. The purpose was to concentrate taxpayers' money on those areas where economic and job prospects were least good, he said. He said that there would be more discrimination against new projects, although the selective investment policy scheme would remain to attract international capital m-vestmen.

He would not put a figure on the number of jobs which might be last through the cuts, although estimates have suggested 100,000. Sir Keith's estimates suggest that regional aid policy has created 10,000 new jobs a year so far. He expects that level to con and urged the. Sandinistas to lay down their arms. Leaders of the victorious Sandinista movement were expected to enter Managua later to start rebuilding a country which has been ravaged by civil war.

Somoza agreed lo resign only after the guerrillas had promised to integrate all but the top ranks of the National Guard, which fought to save him, into a new army. The key concession was transmitted lo General Somoza by the US mediator who was dealing with the provisional Sandinista junta in Costa Rica. In Miami, General Somoza gave a press conference and said he resigned "because I am a realist I hope the best thing for my people would be my resignation." In San Jose, the capilal of neighbouring Costa Rica, the Provisional Government of human being can experience in the evening of life." That regrettably, is not an experience generally available to most of Europe's old-age pensioners, as the reference was to the honour of making a speech at such an occasion, so they will just have to take her word for it. It was, in any case, a duly of dubious delight with which she t-( Jfllcu. 1VUL uiu.v na.s Jit speaking to the serried ranks of i the new 410-member parliament, but she was also, she in formed the world, addressing the people of Europe and the two Americas.

Asia, Africa and Oceania. The European MPs listened, anyway or most of them did. The French Socialist leader, Francois Mitterrand has re- signed, in what the French Miss Shelagh Roberts seat was Turn to back page, col. 3 cent but is 7 nnr nnnf Tr, Ulnef fn re: 15 complete exemption 4 cent per cent to the theatre Equity's own figures and re- search show that the money sPent on live and theatr in most European countries is greater than in Britain. I From Julia Langdon in Strasbourg WHERE IN THE WORLD WILL YOU FIND STANDARD CHARTERED? assurances that such a thing THE FIRST words to follow wouIa nGVer occur again the declaration of the opening It seems unlikely.

The staffed the elected parliament of 0 the parliament is suffi-Europc came in the unmistak- ciet to ensure that if one able ringing tones of Ulster. prerequisite of an orderly con- Madam president," the Rev duct of business is to be a Ian Paisley said, "on a point pacified Mr Paisley then some of order. Poor minion can well be given The years which have fol- the task of a daily checking the see the hated Guardsmen off the streets before they aWiit celebrating. In Washington, official; that with Somoza's departure the bloody civil war will t-i ri that there will be a peaciful transition lo a new Covin. and thai Centrists phiv an increasing lole i Nicaragua's future.

Details of the agreed proci for the handuvcr of pov.n were given a- Somoza arrival the United States. L'nd, agreement, there would hi a ceasefire and standstill hv both the National Guard and the Sandinista insurgents. General Somoza would haitd over power to his Assembly and leave Nicaragua The Assembly would tln-n an interim President win would lontacl the inn: appointed by the guernllj-The Provisional Turn to page 3, cul. Chartered WW KingWiiiiamSt. i cr ti From Andrew Pollalc, Managua and Reuter in Washington Church bells rang and rifles were joyfully fired into the air throughout Nicaragua yesterday as the crumbling dictatorship of the Somoza family finally ended in Latin America's first, successful popular uprising for 20 years.

Anastasio Somoza. the 53-year-old President whose father had been, put into power by the United States Marine Corps in the 1930s, resigned yestsr-day before flying with his family and a retinue of five aircraft to Homestead Air Force Base, south of Miami. But problems arose when the man General Somoza nominated as the new leader of Nicaragua, Congress President. Mr Francisco Urcuyo, indicated that he would not hand over power lo (he junta. Mr Urcuyo instead pledged support for the National Guard pared to disrupt the inaugu- ration by demanding union nag.

JJJC MUlieni JJ1 DIJUBU DJie Ul the more exciting events of an m. i John Palmer, page 5 uv-tdaiuii V. IIll.ll weia iiciaiuiu being heavy on history but proved light on almost everything else. Mr Paisley got short shrift from the parliament's acting president, its oldest member Manama I.aiiico Wm pc aa sue was linnerstnnrlnhlv aniious to proceed what she described as the great joy a submitted a claim of 10 to 12 per cent, involving cnanges in the working patterns and an agreed annual minimum wage. All the indications suggest ihe 41? Minister Mr Nor- st John-Stevas, is losing f.he ovr candle-end cuts for the arts and will have to accept further imvori iho In inflmharchin nf lha Film netr TommVinitv hkvn pcan Community have been marked by a distinguishing ability of the British to prove rnemseives awkward customers.

Then Mr Paisley arrived on the scene and found, of all things, that the Union Flag, hanging limply in the Strasbourg heat, was upside down. How he could tell in the circumstances, no one was quite sure, but there was little quos- tion that, if nnvnnr was likelv lu uc iiKiii on inai buujeub would be Mr Paisley. What was more, he was pre- Axe over main arts group By Nicholas de Jongh. veal that the Arts Council will economies to the Arts Coun- Arts Correspondent require an increase of about 22 cil's budgets. The reductions in arts subsi- Per ln next financial If the two leading opera dies, which are expected to year taking it from just over houses with long-standing corn-intensify in the next finan- 60 millions to 73 millions, mitments have to accept the cial year will force the Arts mercIv t0 kecP Pace with its wage claims, and the Arts Council to consider Withdraw- Present commitments and to Council has a budget helow the ing its grant-in-aid to one of contend with inflation and 20 per cent increase, neither the major national arts organi- waSe settlements.

company will be able to plan sations, such as the London With the end of any form of full-scale seasons. Festival Ballet, the EngUsh incomes policy, the Royal ls organising National Opera or the Royal Onera House and the English what describes as the larg-Ballet's touring company. National Opera have been demonstration in its his- Such an action, defended on faced with wage claims from the tory is leading the ground that it would save Musicians Union of more than protests against the effects of the closure of more than half a 20 per cent; Equity, negotiat- thS, increase in VAT dozen regional reoertorv ine for the ooera chomciwc h. Frances VAT rate is 17 per Surrounded by the business as well as the pagcantrv of the City, King William Street is an important part of our network of branches in London. Each one can serve your business by dealing direct widi anyone of our 1500 branches throughout the world, and this system will save you time and money.

If you bank doesn't work like this, it time you rang Keith Skmner'on 01-623 7500. I Standard Bank Limited theatres, would amount to the signing oi a aeatti warrant tor the company concerned. But the arts world, which is "fil? he in 1048 nl r. danger ingwhfch exfst! danger in which it exists. Independent calculations re- helps you throughout the -world City Notebook, page 14.