Livingstone's strategy is turning London around

London Briefing: According to a recent survey, nearly one in five Londoners could not name Ken Livingstone as the capital's mayor. I can only imagine that a similar, or even higher, proportion of UK inhabitants don't know the name of the Prime Minister.

Such is Mr Livingstone's fame, it is hard to believe that any sentient Londoner hasn't heard of him. From his early career as part of Labour's "loony left" to his most recent reincarnation as champion of London's prosperity, he has always attracted plenty of media attention.

For someone with a reputation as an extreme left-winger, Mr Livingstone must be aware of the irony when he declares that at the heart of his economic policies is the need to "find effective ways to help businesses and communities prosper and compete; building on the creativity and imagination of London, its people and its entrepreneurs and fostering a supportive environment for innovation".

Last week he launched a new economic development strategy for London, the latest in a series of such plans. These sorts of exercises used to be greeted with derision, carrying echoes of old-fashioned and discredited central planning exercises. But it is a measure of Mr Livingstone's success - and his personal reinvention - that his economic plans are taken seriously and warmly welcomed.

Critics are notable by their absence. About the only negative note sounded by commentators is about delivery: the plans themselves are good ones, the only thing that matters now is whether or not they are successfully implemented.

The latest strategy document contains much that is worthy, if not fuzzy, with all sorts of stuff about social inclusion, the environment and affordable housing: goals that always create warm-sounding sound bites but ones that are also fiendishly tough to quantify, let alone implement successfully.

At the top of the list of objectives, however, is a hard-edged statement about the imperative to make huge investments in transport infrastructure "if London is to retain its status as a world city".

The mayor estimates that by 2016 London's population will have grown by around 800,000. All of these people have to be housed and carried on the roads, buses and trains. Growth in housing supply has failed to keep up with demand so prices have soared beyond the reach of all but the most affluent of first-time buyers.

The standard economist's response to this is to recommend a sharp increase in supply. The Bank of England's Kate Barker has recommended precisely this in a specially commissioned report to the government. Mr Livingstone seems to have reached the same conclusion and is planning an extra 30,000 homes a year. The language is all about affordable housing but the subtext is clear and hard-headed: increase supply to drive down prices.

London's Development Agency gets £350 million (€504 million) of funding, which may sound a lot but is nowhere near enough to ensure effective implementation of all its proposals. The identification of Crossrail - a rapid transit link from Heathrow to the City (and further east) - is not new but that doesn't make it any less imperative, or cheap.

If it ever gets built it will cost at least £11 billion and take a decade to build. And that's just one vitally important infrastructure project.

It's no wonder, therefore, that Mr Livingstone appeals to all interested parties, not least central government and local businesses, to get involved.

One of the more encouraging aspects of his approach is the obvious attempt to make his policies "evidence based". While many of the objectives are worthy and rather aspirational, they are rooted in hard facts and the policy proposals seem to be supported by a good deal of data and evidence.

Many will be surprised by the numbers that show how, as recently as the 1980s, London's economy looked as if it might be in relative decline: growth (particularly in per capita terms) lagged almost every other region of the UK. But since the last recession that ended in 1991, London has managed to grow faster than much of the rest of the country.

Mr Livingstone has done much good for London but much, much more needs to be done. The signs are encouraging. In recent years, London has become a vibrant, dynamic and expanding city. Not all of that is down to Mr Livingstone but he does deserve quite a lot of the credit.

• Chris Johns is an investment strategist with Collins Stewart. All opinions are personal.