Olympics 'will lead to loss of 3,000 London jobs'

Thousands of jobs will be lost in a deprived area of East London due to the 2012 Olympic Games, it was claimed yesterday.

The accusation was made by at the start of the public inquiry into clearing land by compulsory purchase of 200 businesses to make way for a 500-acre Olympic Park in the Lower Lea Valley near Stratford.

Michael Finlay, the managing director of PA Finlay construction company on Marshgate Lane, challenged the Games' regenerative benefits as he cross-examined Lord Coe, the chairman of the organising committee (Locog).

He said at least 3,000 jobs would go, based on a claimed 14,000 jobs in the area before the Olympics against a forecasted 11,000 jobs that will be created. He even claimed that many businesses in the area, including his, had been recruiting and estimated that by 2012 there would have been 25,000 jobs in the area.

Lord Coe said that future employment trends were "not an exact science". But he added: "I am optimistic that this is a net gain situation. The regeneration of that part of London is not strictly limited to 2012 or 2013."

Mr Finlay also cited a report by Richard Sumray, one of the original architects of the Games plan, made to the Greater London Authority in 2000. It stated that the 2012 site was second choice to an area just to the south in Bromley-by-Bow. The report, Mr Finlay added, pointed out that the value of land after the Games would have been higher in Stratford, not Bromley-by-Bow.

Lord Coe replied: "I can assure you that any venue will have a mix of public, commercial and legacy use."

In his submission to the inquiry, Lord Coe outlined the reasons for choosing the Lower Lea Valley. He said such a compact site meant athletes would be "competitors, not commuters", talked up the regeneration of the area and claimed there would be benefits for locals after the Games in terms of health, jobs and housing.

Until recently, the inquiry had expected to hear about 400 objections from 100 objectors. But only 30 to 40 meaningful objections are likely to be aired at the inquiry after the London Development Agency concluded last-minute land deals. Nearly 90 per cent of the land is already in public ownership after a series of private agreements, and businesses supporting 70 per cent of the jobs in the Olympic Village area have confirmed relocation sites.

The LDA has spent about £750m on acquiring the land, paying disturbance costs and buying sites outside the Olympic zone to relocate businesses.

The government inspector David Rose headed the hearing of objections to the compulsory purchase order (CPO).

David Higgins, the chief executive of the Olympic Delivery Authority, will appear today. A final decision is expected to be made by Alistair Darling, the new Secretary of State for Trade and Industry, in November, with a deadline of July 2007 for all the present occupiers to have left the site.