IRA attacks in London shake City's confidence

April 27, 1993|By Richard O'Mara | Richard O'Mara,London Bureau

LONDON -- As structural engineers sifted through the rubble of a bomb explosion that devastated the heart of London's financial district Saturday, concern was growing over the effect such attacks might have on London as a world financial center.

Nobody here wants to give in to the Irish Republican Army (IRA), but it is becoming increasingly obvious that the price of a bomb is far less than the cost of replacing the glass and steel of buildings eviscerated by strategically placed explosives.

Nor is there much confidence being expressed in the ability of the security forces to prevent future attacks. The head of the House of Commons home affairs select committee, Sir Ivan Lawrence, demanded "much more effective efforts to protect the City."

London's financial district is called the City, after the City of London Corporation, the local council for the square mile that constitutes the financial district.

David Mellor, a former Cabinet minister, appeared on television to say, "For the second time . . . terrorists have ripped the heart out of the City of London, putting at risk lives, livelihoods and the position of the City of London as the world's premier financial center."

"Why are more of these people not caught?"

Michael Cassidy, of the City of London Corporation, said, "We cannot take a third [bombing in the City]."

Sensing a possible decline in confidence in the City's viability, Norman Lamont, the treasury minister, issued a statement in which he said, "I have every confidence that businesses will continue to locate here and work successfully here."

He promised that the government would do its part "by acting as reinsurer of the last resort."

Meanwhile, police reported a number of arrests during raids in London in the early morning hours, and by midmorning it was estimated 20,000 people were unable to reach their offices on the first workday following the explosion. This amounts to a little under 10 percent of the total work force in the City.

Despite the depression evident in many quarters of London's financial world, many other people directly affected by the disaster were defiant, if not optimistic. Small businesses in the City -- sandwich shops and opticians and the like -- were open yesterday, some of them with plywood covering their shattered windows.

Prime Minister John Major, in a speech at the European Bank for Reconstruction and Development, said of the IRA, which claimed responsibility for the bomb, "They fail to attract wide support, they fail the rules of civilized life, they fail to undermine democracy."

"On Saturday they tried to maim the commerce of the City of London. They failed again."

Saturday's bomb took one life and injured scores.

Assessments of the overall damage were scaled down from the original $1.6 billion estimate. The Association of British Insurers issued a statement saying the cost "seems likely to be of the same order of magnitude as last year's bomb," or about $500 million.

The April 1992 blast gutted the Baltic Exchange building, much in the same way as Saturday's destroyed the NatWest Bank tower, one of the tallest buildings in London. Several other buildings near the blast were also heavily damaged and might have to be pulled down, including a church.

One expert, Nicholas Balcombe, chief executive of Balcombe's Insurance, stuck to the original estimate of about $1.6 billion.

"There's no question that it's worse than the Baltic Exchange explosion," he said. "I am not a structural engineer, but clearly there is a lot of structural damage. It isn't just the windows that have gone."

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