£4m for business hit by terrorism

An urgent £4 million funding package to rescue London businesses devastated by the 11 September atrocities is being announced by Ken Livingstone today.

Following crisis talks with ministers, the Mayor and the Government have compiled a package to aid small businesses and to finance a massive rebranding campaign to attract trade and tourists into the capital.

The Mayor fears the coming downturn will mean the loss of one in 30 jobs in London. This morning he warned council chiefs that it could lead to economic disaster.

The crisis is especially acute in the heart of London, where some businesses have seen takings halved and theatres complain of audiences being reduced by a third.

The loss of American tourists has hit London hard but so has the tendency of too many people to stay in the suburbs. Shopping centre outside London report business has increased.

Announcing the rescue package at the switching on of this year's Regent Street lights, Mr Livingstone said: "This is an unprecedented situation for London. It's clear that Central London retailers, visitor attractions, hotels and theatres have been hit particularly hard by the terrorist attacks, and people's reluctance to travel in central London."

"I have already pledged a half a million free and discounted tickets promotion to encourage audiences back into the West End, and this extra £4 million will help businesses that were already hurting from the effects of foot-and-mouth and a strong pound."

Of the £4 million, £500,000 comes from the Small Business Service for London, £3 million stems from Mr Livingstone's economic development agency, and the remaining £500,000 comes from the Culture Department. These funds have been switched from international marketing in the US because it is thought unlikely that many Americans will want to travel.

It is hoped that the redirection of the money into local and regional marketing schemes will persuade more people from Britain and Europe to visit London.

Tourism employs 275,000 people in London directly and is worth £8 billion for the London economy.

The British Tourist Authority estimates that the UK's industry could lose about £2.5 billion this year. Research by the London Tourist Board and the London Tourism Recovery Group has shown that 88 per cent of companies involved in tourism have seen business reduced since 11 September.

Trade and Industry Secretary Patricia Hewitt said the rescue package offered real help and support for the tourist industry, adding: "It's important that everyone plays their part in helping businesses through this difficult time."

City & Business