This battle will determine my relationship with the Government

'Dagenham is a lightning rod for whether manufacturing will continue in London'

The threat to the Ford car plant at Dagenham has become one of the first key problems to confront London's Mayor. It is economically crucial for the capital itself but, precisely because it is the first key challenge faced by the Mayor's office, it will also become a proving ground for a series of relationships - in particular, that between regional, in this case the Mayor, and central government.

The threat to the Ford car plant at Dagenham has become one of the first key problems to confront London's Mayor. It is economically crucial for the capital itself but, precisely because it is the first key challenge faced by the Mayor's office, it will also become a proving ground for a series of relationships - in particular, that between regional, in this case the Mayor, and central government.

The Mayor has two functions. One is dealing with the responsibilities and powers given to the Mayor by Act of Parliament in relation to transport, policing, emergency services, economic development, planning, culture and the environment, for example. The basic approach to those was set out in my election manifesto. Second, the Mayor has to deal with problems that arise outside the control of the Greater London Authority but that deeply affect the city and the lives of Londoners.

Dagenham is not only a major part of London's economy but a lightning rod for whether manufacturing will continue in London. But the causes of the threat to the plant obviously arise from factors outside the Mayor of London's control. They include excess capacity in the European car industry, the high exchange rate of the pound and the lower exit costs in the UK, which make it easy and cheap to make employees redundant.

But whatever the causes, the closure of the Dagenham plant would have massive negative repercussions for London's economy. Five thousand Ford jobs would go within two years. In addition, at least five further jobs would be lost in the wider economy for each job lost at Ford.

That would involve not only direct suppliers to Dagenham, but also the entire economic infrastructure of that part of London: local shops, services and so on. Up to 15 per cent of London's manufacturing jobs would be lost overnight, and the prospects for economic regeneration in that area of east London would be deeply damaged. Not only the workers at Dagenham, and component suppliers, but whole sections of local business would be affected. Dagenham was seen as a key issue at every meeting I had with business during the election campaign. It is the type of situation for which the mayoralty was devised - for London to have a unified voice on an issue that deeply affects it.

The situation therefore illustrates a whole series of new questions. The Mayor cannot avoid speaking on things that affect London and the lives of Londoners. In practice, the ground rules governing this are rather obvious: the point is not to comment gratuitously but to deal seriously with issues that directly affect the city. Dagenham is such an issue - the position of royalty is not - and the Mayor will lay down clear guide lines on it.

The first big issue is the exchange rate of the pound. The rate directly affects the competitiveness of all firms producing goods or services traded internationally: in terms of their ability both to export and to withstand competition in the home market from imports. It is negatively affecting London tourism as well as manufacturing. But maintaining a strong manufacturing sector is vital to a balanced economy for London.

In the case of the car industry, we face a series of devastating blows; companies make it quite clear that the present high exchange rate of the pound is a major factor in decisions affecting tens of thousands of jobs. Given the present situation at Dagenham, it would show not responsibility but rather a dereliction of duty to London for the Mayor not to say something about it. Ford has received strong historical support from central and local government. For example, the old London Country Council built estates to help to house the original workers at the plant.

Notwithstanding the immediate difficulties, I believe that Ford should take a longer-term view of the situation. Dagenham has one of the highest productivities of Ford's plants in Europe. The UK is an important market for Ford cars, accounting for 28 per cent of European sales. It is not good corporate reasoning that the company should treat the UK as a major market without undertaking substantial production here.

That backs into issues that affect the Mayor's relations with national government. In seeking to assist the maintenance of vehicle production at Dagenham, it is vital that regional and national government work together. Ford's decision will have substantial effects on the British economy and balance of trade in particular. The company also accounts for a large chunk of London's economy and manufacturing capacity.

That is why one of my first decisions as Mayor was to hold the earliest possible meeting with the Secretary of State for Trade and Industry, Stephen Byers. It is obvious that the most effective response requires a co-ordinated approach by national government and the Mayor. The meeting was fruitful.

The whole matter is complicated by the fact that the Labour Party forms the Government. Some people have been suggesting that I should not rejoin the Labour Party. I find that idea absurd. My views are, and always have been, part of the broad church of the Labour Party. The only reason I found myself in the position of having to stand as an independent was because a narrow sectarian group fractured Labour's coalition by preventing its London members from choosing their preferred candidate. My view on that is, London having spoken on 4 May, Labour's coalition should be put back together as rapidly as possible. My re-admission would obviously contribute to that, and I shall pursue it.

But having said that, it is also clear that the Mayor of London, as with every publicly elected official in the country, must place the interests of those whom they represent before the interests of their party. There is no more of a contradiction here than there would be for elected officials in any other area of local, regional or national government.

Devolution will mean that voters on a regional level will expect their representatives to be more than simple transmission mechanisms for national decisions. Voters will expect them to be, first and foremost, representatives of those who elect them - in creating a policy consensus to wield those powers devolved to local and regional level; in representing regional concerns to central government; and finally in working with government in areas where regional and national concerns overlap.