London's skyline will never look the same again, thank goodness

'Unless the capital is to become an impossible sprawl, it will have to build upwards'

Th Mayor's office is now beginning to give precise flesh to policies, outlined in my election manifesto, that will make London, in 10 years' time, both a physically different and a better city to live and work in. Two of these - support for tall buildings in central London, subject to certain conditions, and the congestion charge - have a high profile in discussions on urban policy. It is therefore important to understand their relation to the city's overall economic policy.

Th Mayor's office is now beginning to give precise flesh to policies, outlined in my election manifesto, that will make London, in 10 years' time, both a physically different and a better city to live and work in. Two of these - support for tall buildings in central London, subject to certain conditions, and the congestion charge - have a high profile in discussions on urban policy. It is therefore important to understand their relation to the city's overall economic policy.

The planning support being given to the construction of Norman Foster's Swiss Re "gherkin" building, on the site of the former Baltic Exchange, has aroused a storm of criticism in certain quarters. Simon Jenkins, in the Evening Standard, attacked all those responsible with unrestrained ferocity, even invoking warnings about corruption. In reality the building well illustrates principles that should be applied in London.

Economic globalisation means that London will become, to an even greater extent, a crucial locus for business. In a world in which countries compete, a larger part of this will necessarily be felt by their capitals. Many international companies, particularly in the expanding service sector, will either come to London or they will not come to the UK at all. Other countries recognise this trend in the resources they are pumping into, for example, Paris and Berlin.

Office and commercial space in London will be under increasing pressure. Unless London is to become an impossible sprawl, with still-greater pressure on the green belt, it has to build upwards. (The other half of the strategy is development of brownfield sites.) Construction of high buildings will improve their commercial potential, and the city must receive some of the benefits for its development.

This is not reducible merely to direct revenue from planning gain. The first requirement is architectural quality. If the commercial operation of buildings is to be improved they must employ the best architects. Indeed I will not support major planning applications that do not embody this approach. Norman Foster's Swiss Re building is an outstanding example.

One of the most widespread complaints received during the mayoral campaign was that local inhabitants are left looking through wire mesh fences at large construction developments without the benefits flowing into the community. Any developer promising glibly that their programme has been thoroughly examined to make sure that the maximum benefits flow into the local community, but is unable to remember what these are - as occurred with one planning discussion - will get short shrift.

Additionally, projects must aid, not worsen, London's transport bottlenecks. One of the strong points of the Swiss Re development is that the only proposed car parking is for disabled access. The entire complex would be served by public transport. Integration of major projects with the transport system will be a major criterion, and proposals involving large numbers of underground car parks are likely to be examined with a very critical eye.

Over a decade, this policy of building high buildings will change London's appearance. But, provided the criteria are adhered to, it will be better both economically and for the quality of life in the city.

Transport is the heart of the second key economic policy announced last week - the proposal to introduce traffic congestion charges in a part of the central city. The issue is simple. London's transport problem, as with every major city, cannot be solved on the basis of individual cars. The road-building programmes required for such a solution are financially impossible, not only because of construction costs but because of the properties that would have to be purchased, and the widespread devastation of the city's fabric that would be required. The only solution is a steady increase in the proportion of passengers carried by public and social transport, including taxis. Without this, congestion will continue both to erode London's business efficiency and to blight its inhabitants' quality of life.

Solving this requires, first and foremost, an improvement in public transport. But in order for the above-ground transport system in central London to function properly, congestion has to be reduced. The congestion charge is part of the overall transport strategy for London. The reality is that all candidates in the mayoral election in London knew that the congestion charge is necessary - including those who opposed it publicly, such as Steve Norris, or advocated that it be delayed, such as Frank Dobson.

A clash of timing did arise during the Comprehensive Spending Review. When the Government put all the bids for spending on health, education, transport and other fields through the Treasury computer, it found out that it would push too much money through the system in a short period - a fall-out from the excessively restrictive spending policies of the first two years of the Government. Transport spending, which has longer lead times and is less politically sensitive, was therefore put back in time compared to health and education. This is not a foolish judgement from a macro-economic point of view - given the starting point.

The problem is that, for London, timing is crucial. In order to make the congestion charge politically acceptable, improvements in public transport have to be delivered before it is introduced. The Government could have dealt with this in its spending plans by introducing an item for congestion charging, or giving a different time profile to spending. London would have been the only city to take this up in the short term, and therefore the macro-economic implications would have been negligible, but the impact on transport policy in the city would have been great and positive.

That detailed question almost inevitably got lost in the overall brushstrokes of the spending review. But it is a key issue for London.