To attempt to confront the challenge of knitting together one of the world's greatest financial centres, some of the UK's most deprived areas, a transport system with the same daily number of rail passengers as the rest of Britain, the administrative centre of the country, a significantly younger work force than average, and half of Britain's black and Asian population, without a strategic authority was madness. Diversity, which should be one of the city's greatest strengths inevitably headed towards increasing chaos.In the "let it all hang out" market ethos of the Eighties, fringe ideologues believed that the invisible hand would automatically solve all resulting problems. Those who believed that the Ivan Boesky insider-trading scandals and Michael Milken's junk bonds were magnificent examples of unfettered markets, but lacked the substantial wherewithal or international contacts to participate in such schemes, were able to find minor ideological solace in the privatisation of London's bus system, or the under-investment in the Tube. Here market efficiency would demonstrate its superiority over planning and regulation.The results are evident.

The progressive degradation of London's transport system stands, together with the privatisation of the railways and water, as the most convincing demonstration ever given in the UK that unfettered markets will not solve all problems. Every day, as commuters swelter in the heat of our un-airconditioned and faulty Tube system, as they wait in queues suffering from the fragmented privatised bus system, they rediscover why in some areas strategic planning and subsidies are not a bureaucratic con-game but a prerequisite both of a civilised life and an efficient business system.The Labour Government's creation of a strategic authority for London offers an opportunity to start undoing the damage that has been done to London.Consider what a Hague victory would mean for London. One of the foundations of Steve Norris's campaign was putting clear water between himself and the national Conservative Party. Hague's promises to cut taxation would entail even greater slashing of public expenditure than there was under Thatcher. His little England ideology would rule London out of the euro until 2006 - by which time more manufacturing jobs would be lost and London would be hit by a decline in inward investment. Hague's policies on race and sexuality are so unacceptable to London that they were the number one issue Steve Norris's campaign sought to distance itself from.

With London already having suffered so much under Thatcher, and with so much more threatened by a second round, Hagueism should have the lowest levels of support in London of the whole of the UK.In London it is possible to build extremely broad alliances coupled with a radical agenda. It would be petty to try to get people to jump through the ideological hoops of admitting that the private sector is not always the best provider of services - although elementary economics show why the inherently monopolised state of the Tube or Railtrack leads to profit gouging ("monopoly rents" for those who prefer more statesmanlike language) and conflicts of interest, not the competitive efficiencies produced in other sectors of the economy. In reality, most of business is infinitely more interested in getting real investment into the transport system than in defending the proposition that everywhere, in all circumstances, at all times, the private sector will deliver best.This week I announce a "Cabinet" for London that in terms of inclusivity, both politically and socially, is wider than anything seen in large-scale regional or local government in Britain. I hope, and intend, that it will be one link in reflecting and reviving some of London's more deprived areas. Far from colliding with hard-headed business approaches, I believe that type of radicalism appeals to it.The only other type of administration that London could have would be one of real "one nation" Toryism That is the image that Steve Norris tried to present. But it holds no credibility while Hague controls the Conservative Party.London needs both a Labour Mayor, and a Labour Government. Sectarianism by some in Millbank temporarily deprived it of the first.