Britain Tallies Damage and Sets Out Anti-Riot Steps

The Wall Street Journal

By Alister McDonald

As the U.K. counts the cost of four nights of rioting, Prime Minister David Cameron set out a raft of new measures it will impose or consider on crowd control, gang membership and social media designed to prevent another violent episode.

Speaking in an emergency session of Parliament after the U.K. experienced its first night of calm since the unrest broke out in London on Saturday, Mr. Cameron rejected opposition demands to reconsider government plans to cut police budgets by 20% as part of efforts to tackle the country's budget deficit

But while praising the bravery of the police, Mr. Cameron also criticized their response to the rioting, saying there were far too few officers deployed on the streets while the tactics they used didn't work.

"Initially the police treated the situation too much as a public order issue—rather than essentially one of crime," he said.

The Metropolitan Police said Thursday they have arrested a total of 1,009 people and charged 464 of them so far.

Meanwhile, with the smoke clearing, politicians and business leaders are beginning to tally up the bill for the riots, which left a trail of shattered windows, burned-out cars and looted shops and thousands of residents cowering in their homes.

Claims related to the violence are expected to top £200 million ($323 million), according to the British insurance industry. Many worry that the long-term damage to an economy already squeezed by recession and government austerity measures could be much higher.

There is concern about the harm the scenes of lawlessness will have done to Britain's image as a tourist destination and a safe place to do business a year ahead of the London Olympic Games. Already, police are debating whether to let the Notting Hill Carnival go ahead, an August street festival that brings in tourists from abroad, amid fears of more disturbances.

"This is not the kind of image we want to see going out internationally," Mary Rance, head of UK Inbound, a tourism trade association, said of the riots.

The unrest "could not have come at a worse time for London's business community," said Colin Stanbridge, head of the London Chamber of Commerce, with companies already suffering from the global economic turmoil of recent years.

In Parliament, Mr. Cameron said the government was working with police, intelligence services and the communications industry to see whether it was right to stop people communicating via social-network sites "when we know they are plotting violence, disorder and criminality."

Police have said that in many cases the disturbances spread through the use of Twitter and electronic devices such as BlackBerry and its messenger service.

Home Secretary Theresa May is due to meet with representatives of Facebook, Twitter and BlackBerry maker Research In Motion in the coming days to discuss the technical and legal issues of stopping people from organizing unrest via social-networking channels.

Jillian York, the director for international freedom of expression at the Electronic Frontier Foundation, said there was no practical way to limit a block only to those users involved in the riots. "It appears that for the U.K. to prevent these tools from being used in this way, they would have to block the sites entirely, which would have a chilling effect on free expression," she said.

Mr. Cameron said ministers would work to develop a strategy to combat gangs. Measures to be considered include handing powers to landlords to evict troublemakers from public housing, a crackdown on the use of face masks and wider use of special injunctions against gang members. The gang injunctions now apply only to adults but will be extended to children as well.

Mr. Cameron said he would seek further advice on gangs, including from Bill Bratton, former commissioner of police in New York and Los Angeles.

The government also announced measures to help victims of the violence, including allowing people whose property was damaged to claim compensation even if they were uninsured, and temporarily suspending business taxes on affected firms. The government also plans to set up a £20 million fund to help businesses recover.

But with Britain's city centers still scarred by burned-out buildings and boarded-up shops, many fear that such aid will not be enough to rescue firms struggling to survive the unrest.

Experts are already warning of the potential effect the riots will have on already weak consumer and business confidence, against the backdrop of an economy that grew by just 0.2% in the second quarter.

Economists say previous mass disturbances, such as the "poll tax riot" in 1990 protesting the Thatcher government's fiscal policies, hurt the economy.

Jerry Blackett, head of Birmingham's Chamber of Commerce, said the cost to the city's retail, leisure and financial-services sectors of the 50% fall-off in trading activity during the riots topped £10 million. That didn't include the value of stocks looted from shops and damage to business premises from vandalism.

Though the overall figure wasn't critical to a city whose economic output is £20 billion a year, "it could be the difference between profit and loss for many businesses."

—Cassell Bryan-Low and Geoffrey A. Fowler contributed to this article.

Write to Alistair MacDonald at alistair.macdonald@wsj.com