London plots capital gains’

The capital’s institutions need to promote London as having a future, as well as history, as it approaches the next millennium. Janet Izatt reports

The capital’s institutions need to promote London as having a future, as

well as history, as it approaches the next millennium.

Janet Izatt reports

After years of trading on its reputation for history, London’s image is

being dusted off as it tries to woo potential inward investment away

from its rivals and boost its flagging tourist trade.

London’s makeover includes an pounds 8 million advertising campaign, the

London Tourist Board’s much maligned new logo, its own government

minister, the prospect of a London-wide local authority and an elected

Mayor (should Labour come to power) and possibly the world’s largest

ferris wheel.

The renewed attention to London’s looks is not before time. Tourist

numbers dropped dramatically during the early 1990s and the Gulf War and

growth in visitor numbers since the recession has been sluggish, falling

well below worldwide growth rates. Within Europe, London is competing

with the growing popularity of Barcelona and Paris as holiday

destinations. Worldwide, Australia is proving more of an enticement to

young people.

Meanwhile, on the inward investment front, London is having to work hard

to ensure that it retains its position as the heart of the financial

world against a background of renewed IRA terrorist attacks and lower

government subsidies to entice inward investment than other European


And it is working hard. The old adage that people unite against the

common enemy - in this case international and domestic competition -

rings true for London. It has spurred the business community, tourist

authorities and borough councils into working closely together to

present a cohesive image of London. At stake is the country’s economic


The Square Mile alone contributes more than pounds 20 billion pounds to

the national economy, matching the economic contribution from the

manufacturing sector, and is home to 540 banks from 72 countries. There

are more US banks in the City of London than in New York, more Japanese

banks than in Tokyo and more than half of the world’s ship broking deals

are handled from here.

The figures paint a success story but the Corporation of London, the

Square Mile’s local authority, doesn’t take its health for granted.

IRA bomb attacks on the Baltic Exchange, Bishopsgate, Canary Wharf and

the Aldwych since 1992 have raised fears that international companies

could steer clear of London because of security issues and the cost of

soaring insurance premiums.

Also of concern for the Corporation has been Labour’s long-term policy

to abolish the body should it come to power - a policy framed in the

bitter aftermath of the Conservative Government’s decision to axe the

Greater London Council in 1985.

Furthermore, the collapse of Barings Bank sent fear through the City

that its standing, and that of the financial regulators, in the

international banking community would be damaged. Another threat is that

of the Docklands wooing City-based financial institutions eastwards

with attractive property packages.

On the whole, however, the Corporation has overcome these obstacles.

Despite the bombings, London has retained its position as the world’s

leading financial centre, largely due to its security measures.

The Corporation swung into action after the first bomb attack in 1993

with its pounds 5 million ‘ring of steel’ policy. The package of

security measures resulted in an increased police presence on the

streets, random vehicle searches and one-way only routes into the City,

which were screened by security cameras, to help detect suspect


It was made a permanent feature of the City in June 1994 after being in

place for a year, a move that was well publicised by the Corporation to

build confidence among financial institutions, both domestically and

abroad, that it was taking security issues seriously. When the IRA

attacks resumed earlier this year, the Corporation lost no time in

publicising the fact that its ring of steel had been maintained

throughout the ceasefire.

London did not lose any major financial institutions as a result of the

bombings but ‘won’ the Deutsche Bank, which announced in October 1994

that it was relocating to London.

The greatest sign of the Corporation’s success must undoubtedly be the

Labour Party’s decision earlier this month to drop its plans to abolish

it in recognition of its contribution to attracting inward investment

and its co-ordination of the City’s defence against IRA attacks.

For the Corporation of London’s director of communications Tony Halmos,

Labour’s change in policy was tacit recognition that his department was

getting the message across that the Corporation played a vital part in

improving the health of the nation.

Indeed, research conducted by MORI for the Corporation shows that the

number of MPs who are very familiar with the work of the Corporation

increased between 1992 and 1995 from 42 per cent to 54 per cent. The

same research shows that the number of City business leaders who

believes the Corporation promotes the City of London overseas well, or

very well, increased during the same period from 78 per cent to 86 per


Further proof of the raised awareness of the Corporation is in the

cuttings: in 1981 there were no references to the Corporation in the

national press, in 1985 it had risen to 23, then 107 in 1990 and 359 in


The Corporation still has three major issues to resolve if it is to keep

financial institutions in London and attract further investment. It

needs to establish the right physical infrastructure, telecommunications

and regulation of financial services both within the UK and from


On these matters the Corporation is working hand in hand with a number

of other bodies, notably London First Centre, the inward investment

agency which is supported by Invest in Britain Bureau, the Corporation

of London, London Docklands Development Corporation, Westminster City

Council and the business community through its parent body London First.

The telecommunications front is looking fairly healthy as the UK offers

the most competitive telecoms environment in Europe. However, the

Corporation and London First Centre have been less successful in driving

through improvements to public transport, which is crucial for the

City’s reputation as 92 per cent of the 250,000 people employed in the

City travel to work by public transport.

The Government’s decision to ditch the CrossRail scheme, which would

link the City to Paddington, was a major blow to the Corporation and

London First Centre. ‘It signified that we are not investing in our

infrastructure,’ said Robert Gordon Clark, director of communications

for London First Centre and London First. However, London First Centre,

whose remit covers all of London, has notched up 38 success stories

since it was set up in 1994. Among these, it attracted electronics giant

Samsung to set up its European headquarters at Brentford and Delta

Airways to Park Royal. It is currently handling ‘100 live projects with

the potential to create 1,000 jobs’.

One of London First Centre’s key strengths has been its role in

brokering partnerships between the business community, local and central

government and the London Tourist Board.

‘We need to maximise opportunities for London because we are competing

with other cities such as Sydney which has the Olympic games to help it

promote itself,’ says Gordon Clark. ‘We are also competing with other

parts of the UK, such as Wales, which is running ads to attract

companies to relocate from London to Wales.’

The three-way contest to host the millennium exhibition, which saw

London elbowing out rivals Manchester and Birmingham to emerge as the

preferred choice with its Greenwich site, is further evidence of the

collective muscle of the various bodies.

If the millennium exhibition and the BA ferris wheel get the green

light, London may well succeed in attaining the all important ‘stand-

out’ quality on a cluttered international catwalk. All that’s missing,

it could be argued, is a London-wide local authority to ensure London

gets the attention it deserves.


London Tourist Board isn’t the only organisation to court controversy in

its attempts to revitalise London’s flagging tourism and investment

markets. British Airways’ plans to back a pounds 9 million, 500-foot

branded ferris wheel on the SouthBank with pounds 600,000 of start-up

capital as part of the millennium celebrations has also been greeted

with howls of protest (as well as a rival bid for publicity from Virgin

who propose to float visitors over the millennium site in Greenwich in a

hot air balloon).

Fending off accusations that its plans will result in blot on the

landscape, British Airways insists the enormous ferris wheel - the

largest in the world - will give London a landmark in the same way that

Paris has the Eiffel Tower, itself a relic from a previous exhibition.

‘We wanted to do something to mark the millennium. We had a whole load

of unsolicited proposals, of which this was one, and it just grabbed our

attention as bold, different and fun,’ says a BA spokesman. Of course

there is also the business rationale: ‘It does link in with our

business. British Airways is the biggest in-bound tour operator and we

bring five million tourists to Britain every year. That provides us

with opportunities to cross-promote within the United Kingdom and


British Airways says the wheel also makes sound economic sense, as an

estimated two million visitors will pay pounds 5 a ticket for the 20-

minute ride which will offer them unrivalled views across the capital.

BA is currently look at a range of options including using the same

fabric covering seats on BA’s planes on the ferris wheel seats, and

dressing attendants in BA livery. London Tourist Board has given BA its

blessing, just as British Airways has promised to use LTB’s new logo -

no surprise there. BA’s chairman Sir Colin Marshall is chairman of

London First which, in turn, is a member of London Focus, the LTB-led

group which approved the logo.

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