Plea for rates cut in wake of bombings

Westminster city council has written to the Chancellor demanding a rebate on business rates for firms badly hit by the London bombings.

The council said it had been inundated with requests for help from smaller and medium-sized businesses in the borough struggling to cope with a fall in the number of shoppers in central London following last month's attacks.

Figures released by the British Retail Consortium this week showed a drop of 8.9% in retail sales in central London last month as shoppers, put off by Tube disruption, security alerts and safety fears, stayed away in droves. Sales in Britain as a whole declined 1.9% during the same period.

The council is also seeking an urgent meeting with Ken Livingstone, the mayor of London, to discuss how the congestion charge might be reviewed. Proposals include shortening the restricted hours or suspending the charge during September to encourage visitors and shoppers back into the area.

A spokeswoman for the council said: "We are aware that businesses are struggling, particularly the smaller companies who don't have the surplus to cover a downturn in retail sales. It is clear that since the bombings people are spending less time in the city. We want the government to help ... kickstart central London's recovery."

The London Chinatown Chinese Association and the bar chain Interpub are understood to be among those who have written to the council to express concerns.

In a letter sent to the Chancellor yesterday, Simon Milton, the leader of the council, said a temporary reduction in business rates would send a message of support to the area. "The business rates collected ... here in central London are re-invested to support areas all over the UK. But at the current time it is central London that needs additional support to enable our capital to get back up and running in the wake of these terrorist atrocities," he said.

In a separate letter to the mayor, councillor Danny Chalkley, cabinet member for transport and economic development, said: "Central London is the dynamo of the national economy and a showcase for the UK. We are calling for the mayor of London to review the congestion charge, measures that would help to stimulate recovery in the West End."

Mr Livingstone rejected the calls for help and said the real issue was the 10-15% drop in Tube travellers after the attacks rather than the 0.003% drop in the number of cars on the road since the increase in the congestion charge. "The vast majority - 90% - of those coming in to central London come by public transport," he said, calling Westminster's accusations "a politically motivated red herring".

Westminster will collect £946m in business rates during this financial year. The council will receive £74m back to fund services and the rest is used to fund local authority services in the rest of the country.

Rebates on business rates have been carried out in the wake of previous crises. After the bombings in Manchester in 1996, the government petitioned the Valuation Office to reduce the rateable value of retail properties in the damaged Arndale Centre, which then paid lower business rates. The government also offered a mass rebate through a hardship agreement following the Oldham riots in 2001.