New York’s new mayor pledges to rebuild the city

New York’s new mayor tonight pledged to rebuild his shattered city - but warned of tough economic times ahead.

Mike Bloomberg took over the reins of office at the stroke of midnight on January 1 in Times Square and tonight was formally inaugurated as mayor.

The billionaire leader succeeds Rudolph Giuliani, the man dubbed the world’s mayor for his leadership in the wake of the September 11 terror strikes, but tonight warned he also inherits a difficult legacy.

Braving freezing temperatures for the outdoor ceremony, he was watched by the great and good of New York, including Mr Giuliani and Hillary Clinton, and by his first lady - 22-year-old daughter Emma Bloomberg, who postponed studying at the University of York to campaign for his election.

Mr Bloomberg said: ‘‘We will rebuild, renew and remain the capital of the free world.

‘‘To meet the challenge facing our city we must work together to draw upon the energy, entrepreneurship and talents of all New Yorkers.

‘‘As we must rebuild lower Manhattan so we must invest time and effort throughout our entire city.

‘‘New York is safe, strong, open for business and ready to lead the world in the 21st century.’’

Mr Bloomberg was speaking just half a mile from the remains of the World Trade Centre, where work to recover bodies and clean up to the site of the destruction continued round the clock throughout the holiday season.

He paid tribute to the 2,937 people who died in the terror strikes and added: ‘‘Here in New York we understand all too well the price of liberty.’’

But he warned the price of the attacks on the city economy was high - and immediately told council staff to tighten their belts.

‘‘I pledge to reduce staffing in the office of mayor by 20%,’’ he said.

‘‘We cannot ask of others what we are not willing to do ourselves. I will be asking all parts of my city government to do more with less.

‘‘We will not be able to afford all that we want. We will not even be able to afford everything we currently have.’’

The city’s financial situation is perilous, with a massive deficit already existing before September 11, which has exacerbated the situation with tax revenues falling.

Mr Bloomberg urged the city not to repeat the mistakes of the 1970s, when taxes were hiked to meet a massive deficit, and the middle classes fled, leaving a demoralised and crime-racked city which it took until Mr Giuliani’s administration to clean up.

‘‘We cannot repeat the mistakes of history,’’ he said.

‘‘We cannot drive people and business out of New York. We cannot raise taxes - we will find another way.’’

He also made a pitch to businesses to stay in the city, at a time when fears have mounted that some will leave for cheap accommodation in New Jersey.

‘‘Based on my experience building a business here in New York, I can guarantee that New York is the best city in the world in which to do business,’’ he said.

‘‘To our corporate leaders, I urge you to strengthen your commitment to New York. This is no time to leave the Big Apple. New York is your future.’’

The new mayor faces a series of challenges, including crumbling schools, and the need to keep crime at the all-time low of the previous year.

He also has to get £14 billion of aid pledged by President George Bush when he visited the city in the wake of the attacks but which has not been allocated for spending.

The cash is vital to meeting the rebuilding bill and improving transport links to lower Manhattan to avoid an exodus of the big-name financial firms which occupy the financial district.

He must also overcome doubts about his lack of political experience and although not a natural orator, hit the right notes tonight with an audience which included all of New York’s main ethnic communities.

Mr Bloomberg also pledged a shift from his predecessor’s confrontational style, saying he would work with all sections of the city to guarantee its future.

And he sealed his pledge to economise with a minimalist reception for the hundreds of invited guests, with only sandwiches on offer - a break from the past when banquets were the norm for the start of a new mayor’s term.