Fortnight Publications Ltd.

Digging up the ProvinceAuthor(s): James IrvineSource: Fortnight, No. 22 (Aug. 6 - 31, 1971), pp. 22-23Published by: Fortnight Publications Ltd.Stable URL: http://www.jstor.org/stable/25543650 .

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22 6?31 AUGUST, 1971

Finance Pages_

Bonnier than the Clyde

Shipbuilding companies are making the headlines again. Earlier this week indust rial action halted work at the Swan

Hunter yards on the Tyne and Upper Clyde Shipbuilders face more permanent disruption to their employment and the closure of major parts of the group. From a Belfast viewpoint,\?he reaction has been that Harland and Wolff have been fortunate when compared with the fate of

shipbuilding on the upper Clyde. Such a

comparison is not wholly adequate. Harland and Woff now have two major,

physical, advantages when compared with

Upper Clyde. First, they are not so

constrained by the width or depth of the

launching channels. Second, they are more

interested in building larger vessels because of the availability of the building dock. This gives Belfast an advantage of a fundamental type since the orders which are coming to Belfast are for the larger tankers, Probably these have a better

prospect of commanding a break-even

price (or even producing a profit) since the number of yards capable of handling this kind of vessel is much more limited than for the smaller cargo vessels for

which the U.C.S. has' a number of standard designs.

A third physical advantage in Belfast is that the shipbuilding is all on one site.

U.C.S. may have employed a similar

number, in total, but the cost of

spreading this effort oVer four different

yards would militate against them. On the

Queen's Island, the fabrication arrange ments for huge welded section^ have only just begun to be fully operational and offer a further advantage.

Financial comparisons are difficult but

again Belfast may seem a better bet.

Although both groups have been drawing heavily on Government funds, when allowance is made for the proportion of these which has gone into new assets,

Harland and Wolff is probably closer to

becoming financially independent.

STORMONT'S PART

Devolved economic responsibility, from Whitehall to Stormont, may. also have been in Harland's favour. In the last

resort, if Whitehall, or the Shipbuilding Industry Board, had wished to give

Harland's the lame duck' classification, then Stormont could have tried to use its own*resources ?

always provided that its combined social and economic .judgment confirmed the merits of the case as they saw it. The pressure of the regional authorities on Whitehall was sufficient to

make sure that this was not necessary. However, Stormont has one or two

loose ends which it still need$ to tie up.' First, although the Government is now

the major shareholder, and in this

position it is expected to make several

(SHIPYARDS A SPECIALITY)

COMING TO BELFAST.SOON

. _mMfo

appointments to the Board of the

company, so far the new appointments have only dealth with the three top jobs. Lord Rochdale is to be Chairman of the

company and Mr. Iver Hoppe is to be

Managing Director. Clearly, the sooner the whole management and company structure is complete, the sooner the new

talents^ can be put to work. Three or four further Directors, nominated by the Government and elected by the sharehol

ders, could be added. It would be an

interesting move if these appointments contained people from the trade unions.

At the least, the kind of people considered could usefully be much more diverse than the groups which have been

traditionally invited to serve the commu

nity in this way.

Secondly, there remains the question of how much more money is to be channelled to Harland's from the Govern

ment. The Government is committed to cover the 'actual and prospective losses on the Company's order book as it stood at 3rd March last/ These age to be assessed at 30th September 1971 Harland's have drawn attention to the fact that this does not include any losses on the Shell tankers which were ordered on April 13.

Even with this proviso, it is estimated that a further ?2-3m. may still be allocated to the company over and above

the ?4m. subscribed to the share capital.

Two items in #ie new proposals for

Harland and Wolff could be further

clarified. Why did the financial advisors to.

the Ministry of Commerce agree to buy the shares at their nominal value,

whenever some of the shareholders would have been only too pleased to see them

change hands at about half that price: The market price for the shares in the month prior to the announcement was

usually below 20 pence: now it has risen to nearer 38 pence. Also, why did the

Ministry plan to stop at 47.6 per cent of the capital? To go over 5p per cent

would have ensured ,that Government

policy on general issues would have been

guaranteed. To stop short of 50 per cent does pose a risk, however slight, that at some point the shareholders could go

against the Government's wishes.The argu ments seem to point to a belief that less

than 50 per cent of the capital ensures

that day-to-day running is left to the firm's commercial judgment. If the wiii to keep out of commercial affairs is

present, the 50 per cent argument is

largely irrelevant, as has been wen

evidenced by the much more intensive

public ownership of basic utilities in Britain.

Some Irish myths take a long time to

dispel!

John Simpson

Digging

up the

Province

Large scaie mineral prospecting is about to begin in Northern Ireland for the first time. Despite the efforts of the Govern

ment to publicise the more positive aspects of this development, there is

widespread apathy about it. All things considered, this is not surprising. Mineral

prospecting is unsensational, and scarcely likely to re-create the Klondyke in the

Clogher Valley. In fact, the test borings now to be made will be done by surveyors taking earth samples from

depths only a couple of feet below the surface. In most cases, the soil samples

will then be sent to England to be tested for mineral ores. It could be ten years before the finding of mineral rich soil

samples would lead to the actual opening of a lead, zinc or copper mine.

And yet there are sound reasons why due note should be taken now of the

Government's plans in issuing licenses.

Anyone who has visited Tynagh, in

County Galway (where Irish Base Metals has a mine) or Avoca in County Wicklow

(where there is another) will be well aware of one of them. A mine may well be desirable economically. It can produce

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FORTNIGHT 23

?.-j.

indigenous weaith and up to three hundred badiy needed jobs for men in areas where other employment is usuaiiy scarce. But it can make a mess of the

countryside where it is excavated. Here

vigilance is the key. To some extent at least, Northern

Ireland will profit by coming iate to the mineral prospecting fieid. The licences

being issued by the Ministry of Commerce are accompanies by restrictive covenants

binding the iicencees to make good any damage to amenities when prospecting or

mining is discontinued. The trouble is that it is naturally in the unpopulated rurai areas that the companies are most

interested. And it is here, in the areas of greatest

scenic value, that the greatest damage couid be done. One company, in fact,

proposed starting work right in Gienariff. The Ministry of Commerce made it clear a licence wouid not be refused. But conservation requirements which wouid have been imposed were seen by the

company to be so onerous that the

project has now been dropped. But the incident does illustrate the incipient

dangers. They are increased by certain inter

national trends in the metai and minerals market. One is the continuing rise in

prices. Copper, a litter over ?200 a ton

twenty years ago, was within a whicker of ?600 for most of 1970. Industrial demand is such that prices, despite temporary fluctuation, are likely to remain on an upward trend. At the

prospecting levei, this means that lower

grade ores, previously reckoned unprofi table, are now worth considering and, in some cases, abandoned workings are being re-opened. But iow-grade ores usuaiiy demand radical mining techniques . . .

hence the increasing popularity of open cast working, aided by new and vast

earth-moving machines which can trans form a familiar landscape within the space of a few days. It is this prospect that has caused concern among conversationists, who question already whether the

safeguards written into the official li cences given to the companies are

sufficient. Restoring land previously used for mining may prove very difficult if it

was compeieteiy unspoiied before. Planting grass and filling disused quarries with

water wouid be very much a second best.

Then, what of the disposal oT waste ?

the ligiy slurries produced by chemical treatment on the site for minerai-bearing rock? ?

In Ulster these are no longer academic

questions, because the list.of prospectors recently licensed here includes some of

the biggest international companies in the business: Rio Tinto Zinc, Amex Explora tion, Selection Trust, Consolidated Gold

Fieids and Anglo United Development. Mr. Pat Hughes' Tara Exploration (so active in

the Republic) has licences in process of

being granted. In all, licences will soon cover 1,500 square miles of the province, in areas which include most of South

Down west of Strangford, and all of the Mourne Mountains, as well as a substan tial part of South Armagh and tracts

abutting on opposite shores of. Upper Lough Erne.

Cieany, public policy on minerals demands a fine balance between the

exploiting of these scarce natruai re sources and the husbanding of natural scenic resources which mineral devel opment can endanger.

James Irvine

Local

Authority

Rents

In England and Wales, local authority house rents are to lose their Government

subsidy and as a result the rents charged to tenants are to rise to their economic

level. To offset this, families on relatively low incomes will be eligible for a rent

rebate which will be assessed relatively to

their incomes. As a result, better off local

authority tenants will pay more for their

housing and others, who take the

initiative in claiming a rebate, may pay

something the same as at present. In Northern Ireland the silence on this

subject is deafening. No voices have been raised to call for 'parity' or 'step by step'

with such a political 'hot potato.' Equally, silence reigns on the other aspects of

housing policy which have been discussed in Whitehall. Are we to have 'fair rents'

legislation? Are we to permit tenants to

buy their houses?

The Minister of Development can

legitimately argue that all these problems will have to be assessed by the officers of the Housing Executive whose Director has not yet been appointed. However, these

policies require political approval and

(probably) legislation so that the Minister

cannot, for long, avoid an expression of his own opinions. Equally, Whitehall will want to know how we can justify expenditure on housing subsidies if they become proportionately more expensive than in other areas.

Recently the Minister kicked for touch

by saying that he would wait for the views of the Housing Council and Executive. The surprising feature is that no-one ;wantstogive an answer to the basic question?should rents be subsidised

uniformly for similar houses or should

they be subsidised so that the subsidy varies according to the ability of the tenants to pay?

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