Transport projects are key to London's future

Huge investment in transport projects are needed for London's future prosperity and to retain its status as a world city, Ken Livingstone said today.

A major report from his regeneration agency lays bare the challenge the city faces if it is to continue growing and eradicate poverty.

Projects such as the ?11billion Crossrail scheme - which would link Heathrow with Canary Wharf and the Square Mile - the Thames Gateway Bridge, and the East London-Line extension are needed within the next decade, the Mayor said. Crossrail remains delayed because of a battle over funding, and a public inquiry has been ordered into the Gateway Bridge.

But work is expected to begin shortly on the ?1billion East London Line extension which would provide new links to south and east London. The report also says more must be done to encourage parents back into work by maximising the take-up of benefits and reducing the cost of childcare.

Mr Livingstone today set out his economic development strategy in conjunction with the London Development Agency which has a ?300 million annual budget to boost the capital's economy. It sets key targets to help maintain growth and ensure all communities across London benefit. It shows ways of intervening in areas where the market cannot - or will not - tackle poverty and other social problems.

Key aims include:

The strategy calls for big business and industry to work with City Hall and government. It says the state - and the taxpayer - cannot solve all the capital's problems.

Mr Livingstone said: "London is the gateway to the rest of the UK for foreign investment, tourism and trade, and it contributes billions to the wider economy. By pooling our resources we will ensure London maintains its competitive edge."

The report says more needs to be done to tackle pollution, and that the lack of affordable housing drives key workers away, depriving public services of staff. Under the plan, the LDA will work with firms to tackle a skills shortage and ensure employees are re-trained to cope with a changing workplace. It also wants to see new businesses and more tourists from home and abroad.

Mr Livingstone, who said London was matched only by New York and Tokyo on the international stage, said economic success was the key to improved quality of life.

The capital has the highest child poverty rate in Britain at 38 per cent, rising to 53 per cent in the inner city. The population is expected to grow by 800,000 by 2016, taking the population to 7.9 million and placing further strain on a creaking infrastructure.

The report says: "London's longterm success depends on maintaining its reputation as the best city in which to do business in Europe. This means attracting new companies, workers and overseas investment, and giving London the infrastructure... in which established businesses want to stay and expand."