Blair launches £120m rural economy aid

Tony Blair is set to announce £120m of loans to bolster the British tourist industry and the rural economy after the foot-and-mouth outbreak.

On a trip to Yorkshire, Mr Blair will announce that the Government is to provide the money to help small tourist and retail businesses suffering from a loss of trade.

He will also announce a £6m, Government-funded promotional campaign, organised in conjunction with the British Tourist Authority and the English Tourist Council, to make the case for the British tourism.

Mr Blair is to use a series of interviews with American, French and Japanese broadcasters to drive home the message that Britain is open for business.

Mr Blair was due to say: "It's time for people to come back to the countryside. Businesses need them. As long as people stay away from livestock there is no reason not to come, and every reason why they should."

The underwriting of loans for tourist and retail business hit by the outbreak, including garages, restaurants, souvenir shops, and others hit by cash flow problems, will be done via an extension of the Small Firms Loan Guarantee Scheme.

Further details of the extended scheme, which will allow businesses to apply for loans between £5,000 and £250,000, will be provided by the Department of Trade and Industry.

During his trip, Mr Blair will meet regional MAFF officials, and key figures from the Army dealing with the outbreak in Yorkshire and Humberside.

With income from tourism down by as much as 80% in parts of the country worst hit by the outbreak, the Government is desperate to demonstrate that Britain is not in quarantine.

Mr Blair's efforts were being backed up by those of Deputy Prime Minister John Prescott, who was due to visit both Norfolk and Shropshire.