In the year after losing the mayoralty, Livingstone claimed on Thursday, he earned just £21,645. In fact, the accounts of his now famous personal company, Silveta Ltd show he invoiced a total of £232,550 for his services that year. Channelling that money through Silveta – whose sole shareholders are Livingstone and his wife – allows him to take advantage of corporation tax (at 21 per cent), rather than have all his income subject to income tax (at up to 40 per cent) and National Insurance (up to 9 per cent) paid by Johnson, Paddick, Jones and most other mortals. It all sat rather badly with Livingstone’s denunciation of tax avoiders as “rich b——s” who “should not be allowed to vote”. And the continued wriggling last week suggested a candidate with secrets still to hide.

Ever since Livingstone’s tax arrangements were revealed – by The Sunday Telegraph – in February, they have dominated the election. In a leaked memo on March 25, Heneghan admitted the “relentless attacks on Ken, specifically around the tax issue” had made the Labour campaign “difficult” and “dented our ability to get up our own messages”. Around the same time, Anthony Wells, of the pollster YouGov, credited the tax story with changing the race from an effective tie to an eight-point Boris lead.

In his memo, Heneghan described George Osborne’s Budget – with its “granny tax” and cut in the 50p rate – as a “golden opportunity” to turn the tide. Tory strategists were certainly nervous about the effects that the Budget and the Government’s “fortnight from hell” over fuel strikes, pasties, and party funding, might have on the Boris vote. Internal polling at the height of the row is believed to have shown a drop in Johnson’s lead, though his personal ratings remain buoyant.

But now the tax issue is back, exploding into a campaign that, with less than a month to go, has come alive. Sharing a lift with Livingstone at the London radio station LBC on Tuesday, the mayor burst out with four-letter fury at his opponent for having said that he, too, avoided tax. Paddick, a former policeman and fellow passenger, said: “I didn’t know whether to prevent a breach of the peace or arrest Boris for threatening behaviour.” As the figures provided by Johnson on Thursday show, Livingstone’s claim is indeed a “——- lie”.

Team Ken has been trying hard to move the story back to policy, where they made headway in January with a populist – if fraudulent – promise to cut Tube fares. In a sublime comic moment, Livingstone called on his opponent to abjure “negative campaigning” – this from a man who has launched two poster campaigns depicting the mayor as a criminal, compared him to Hitler and had him followed by a campaign worker dressed as a chicken. Meanwhile, Len Duvall, Labour leader on the London Assembly, has attacked the tax “soap opera” as “peripheral,” “farcical,” and a “monumental insult to the electorate”.

One reason Livingstone’s tax has become central is that it dramatises his key weakness. “Trust is at the heart of this election, and what the tax issue shows is that Ken says one thing and does another,” says Lynton Crosby, Johnson’s campaign director. According to the polls, Livingstone has, and always has had, the more popular manifesto policies; but that appears to matter little if voters do not believe you will deliver them. On this reading, Johnson’s fairly bare policy cupboard may in fact be better than Livingstone’s suite of expensive promises to thrust free money at people, money whose source he cannot satisfactorily explain.

Among the most interesting features of the election is the fact that if it were decided on simple party lines, it would already essentially be over. Labour has had double-digit leads over the Tories in London in every “general election” poll for the past two years. But up to a third of those Labour voters are today refusing to back Livingstone.

Some simply prefer Johnson’s personality. Increasing numbers of liberal voters are also repelled by what a Jewish Guardian columnist, Jonathan Freedland, a former Livingstone voter, called his “statements, insults and gestures that [have] offended me, my fellow Jews and – one hopes – every Londoner who abhors prejudice”. A private meeting between Livingstone and lifelong Labour-supporting Jews left them feeling, in the words of their leaked letter to Miliband, that Labour’s candidate “does not accept Jews as an ethnicity and a people”.

Livingstone, a serial abuser of Third Reich analogies, even managed to crowbar Hitler into an attack on the performance of the Northern line – and his unrepentant support for the homophobic anti-Semite Islamic preacher Yusuf al-Qaradawi offended gays as well as Jews. Livingstone’s gay fundraising event had to be moved to cheaper premises after not enough tickets were sold.

But there is a smaller, though highly influential, Labour group who want Livingstone, as one London MP puts it, to be “thrashed and humiliated” in the belief that he sums up all their party must ditch if it is to regain power. “Sectarianism, embrace of Islamist extremists, wild and uncosted spending promises, support for the takers in society, not the givers – that’s what he represents,” says the MP. “Exactly what costs us our credibility.”

Some of them also see a Livingstone caning as a way to dump Ed Miliband, who has backed his candidate beyond the call of duty. “If we cannot win this in a Labour city in a mid-term, we will have to look again at our leadership,” says the MP. The special nature of the contest, and of Livingstone, may, however, give Miliband an alibi, and Labour is famously poor at sacking bad leaders.

The other possibility is that Livingstone could still win. Johnson’s campaign has been “underwhelming,” says Number 10. Ministers, meanwhile, have left few stones unturned in their effort to lose Londoners’ votes – as well as the Budget, the fuel debacle, and embarrassment over party donations, they have reopened the toxic subject of a third Heathrow runway. A little below the radar, Livingstone is working hard in suburbia, which he all but ignored in 2008, with hundreds of thousands of telephone and doorstep contacts, and has been rewarded with improved poll numbers there. London’s demography, too, increasingly favours Livingstone. More and more Londoners are not white, and not being white is, according to the Downing Street pollster Andrew Cooper, “the number one driver of not voting Conservative”.

Livingstone has made a particular effort to court the Muslim vote. The main Muslim borough, Tower Hamlets, is one of several, mostly but not exclusively Labour, where there have been dramatic increases in the electoral roll since 2008. There are about 400,000 more voters in London now than four years ago. Most of this is probably innocent enough: the capital’s population has been rising. But in Tower Hamlets, Livingstone has enjoyed the active support of the extremist Islamic Forum of Europe, which helped achieve staggering swings towards him there at the 2008 election. If Tory supporters stay at home, thinking it’s in the bag, differential turnout could still clip it for Labour.

Whatever happens in the election, something important already seems to have happened in the campaign. Yesterday, George Osborne, said he would be “very happy” to follow Johnson in publishing his tax returns, and those of other ministers. It may no longer be possible for anyone in public life to “do a Livingstone” and avoid tax. Quite unintentionally, the man once dubbed Red Ken may have changed politics for good.

Before Mr Johnson’s history lesson the schoolchildren had enacted a demonstration of the torch relay handovers in their playground.

Around 7,000 people, many of whom are members of the public who have shown community spirit, courage and sporting determination, have been named as torchbearers.

The youngest unsung hero is 12 and each torchbearer will wear a white-and-gold uniform which been designed by adidas.

An average of 115 torchbearers a day will carry the flame during the nationwide relay, from May 19 to July 27, to the opening ceremony in Stratford, east London.

We got rid of Labour’s deranged and wasteful Public Private Partnership for London Underground, enabling us finally to get the new Jubilee line signalling in and to reduce delays on the entire system by 40 per cent. And that new bus incarnates our cost-cutting approach, because the entire project has been delivered for about £10 million – not much more than the annual fare evasion on the bendy buses.

You will hear my critics say that each of the first eight new buses therefore costs more than a million. This is cretinous. You might as well say that each of the first 10 new Minis cost £50 million, because the cost of developing the new Mini was about £500 million. Hundreds of those beautiful buses will be appearing on our streets, and thousands of London buses will be based on their design and technology.

They are British-designed; they boast cutting-edge innovations; they are made in Britain and deliver jobs for the people of this country (unlike the bendies, which are made in Germany); they will do much to help us meet our air quality targets; and they will cost the taxpayer roughly the same as the current fleet of hybrid buses.

Indeed, they are so fuel-efficient – going twice as far as a diesel on the same tank – that over time they might even cost less. The officers of TfL are rightly proud of their achievement, which goes back to the great traditions of the Routemaster, the last bus specifically designed for the needs of Londoners. This new bus represents the boldness of the current administration in City Hall, since we had to overcome the elf-and-safety objections against bringing back the hop-on, hop-off platform.

Above all, the new bus shows that we stick to our promises. I said I would get rid of the bendies, which infuriated motorists and posed a risk to cyclists. I said I would have a competition to design a new bus; and after initial scepticism TfL is now so pleased with the result that officials will tell any mayoral candidate that it would be foolish not to progress with the scheme.

We have delivered on just about everything I said we were going to do in 2008 – and I draw the contrast with Ken Livingstone, who shamelessly and flagrantly broke his promises, not least to cut fares. We have brought in a 24-hour freedom pass for everyone over 60, put the Oyster on the overground, planted thousands of trees, introduced bike hire – and I now seek a mandate to go further. We have cut crime by 11 per cent (with the murder rate down by a quarter and bus crime by a third), and in spite of national budget cuts we will this May have 1,000 more officers on our streets than when I was elected.

We want to go on, cutting crime, investing in local high streets and small businesses, getting the best out of the Olympics and stimulating the growth that is essential for getting young people into work. With our housing and transport investments alone we can create another 200,000 jobs in London over four years. Above all, that bus shows the technological optimism that we must now apply to the Tube. In the next term we must take historic decisions to automate London Underground, obviating the need for old-fashioned cab-based drivers; and I don’t believe that decision can be taken by a man who is ideologically and financially in the pocket of the union barons. That is the mandate I seek. I am now off to the front, and I propose to return with my shield or on it.

As it happens, I met the good lady, by chance, on a crowded train in south-west London. I had a long conversation with my constituent, and I can confirm that she is neither a religious nutter nor driven by vindictiveness. She just wants the airline to accept that it was unfair and wrong, and the irony is that she has now been driven to take her case to the European Court of Human Rights in Strasbourg. And the further irony is that the British Government — a British Government whose individual members, if asked, would almost certainly agree that BA was loony in its decision — is now apparently backing that decision and opposing Mrs Eweida.

Ministers will argue, in Strasbourg, that BA was perfectly within its rights to kick her out of the workplace, because there is nothing in the “rules” of Christian observance that says you have to wear a cross. They will argue that wearing a cross is “optional”, and therefore unlike wearing other items of apparel (headgear, bracelets, etc) that other religions demand of their adherents and which are therefore permissible for BA staff.

I don’t know the process by which government lawyers have decided this is the right way to go, but someone needs to march into their room, grab them by the lapels, and tell them not to be such confounded idiots. They appear to be following the 2010 Court of Appeal ruling of Lord Justice Stephen Sedley, who threw out Mrs Eweida’s case for discrimination and accused her of having a “sectarian agenda”.

Sedley is a very clever man, and a distinguished jurist, but I don’t think he would object if I called him the most Left-wing judge of the past 50 years. You should read his judgment, as a perfect example of how a brilliant mind, in the grip of strong ideological prejudice, can depart completely from common sense.

His first point, as I say, is that Christianity does not demand that its followers wear crosses — in the way that, say, Sikhism demands turbans — and that Mrs Eweida was therefore not discriminated against, and suffered no disadvantage, simply for being a Christian. Sedley makes much of this distinction between “optional” and “compulsory” bits of religious clothing or apparel, and you can see why it might be convenient for employers like BA.

Mrs Eweida might argue that her deep personal convictions drive her to wear a cross; and another female employee might argue that her deep personal convictions drive her to wear a burka. How could BA forbid one but not the other? What if a member of cabin crew turned up insisting (as many Britons do) that she believed in the Jedi order, and that her personal convictions demanded that she dress as Princess Leia? This objection may sound logical enough; and yet it flies in the face of common sense. There is surely a world of difference between discarding a uniform, in favour of a burka or a Princess Leia outfit, and wearing a small cross on a virtually invisible chain.

The airline was neither reasonable nor proportionate in its first response — as was shown by its subsequent capitulation — and the Appeal Court could have recognised that.

Sedley’s second point is that no other Christians, in BA’s entire 30,000 staff, protested in the same way, or insisted on wearing a cross, and that there was therefore no evidence that Christians were disadvantaged as a group. That may or may not be true. But if it is true that Mrs Eweida was on her own in wanting to wear a crucifix, then that surely shows she was not the thin end of the wedge, and that allowing her to wear a cross would have been a reasonable and harmless indulgence, rather than a general invitation to others to break the rules on uniform.

Mrs Eweida is a member of a group — Christians — and she wanted to express her membership of that group in a small and inoffensive way. She was suspended and sent home. She was told she could not have contact with the public. She was discriminated against. She did suffer disadvantage. It is plain as a pikestaff. Government lawyers should run up the white flag now. Never mind Strasbourg: it is time for some common sense.

I know the money is there, because I can see what is happening to London property values, and I can see the money still washing in from overseas. The other day I met a distinguished gentleman who told me he had lived in his house for about 35 years. It is a large, terrace family home – creaking staircase, cracks in the wall, a faint suggestion of cats as you enter the front hall. It is the kind of Georgian or Victorian home that you find in large numbers in London, and of course, after years of property price inflation, it is worth a fortune.

Some people – mainly but not exclusively “non-doms” – get around stamp duty by treating the house as a company. They buy shares in the company, and therefore pay tax at 0.5 per cent rather than at 5 per cent for expensive homes. But there is an even larger group of people who are exploiting a loophole, and going for a (legal) dodge called subsale relief. The result is the same: through the agency of some clever lawyers, they avoid a tax that is paid by virtually everyone else. According to a leading tax accountant, this loophole is being ever more ruthlessly exploited, and the loss to the Treasury could easily now be a billion pounds.

It is time that it was closed. Yes, of course London’s destiny is to be a great global metropolis, and of course it is right that people should come here to enjoy the many pleasures of London life. I have nothing against such people – and I do not blame them for trying to minimise their tax exposure. At least they are frank about what they are doing. They are not hypocrites, like some people, ahem, I could mention – no names, no pack drill – who foamingly denounce tax avoidance, and call for bankers to be hung, and who then turn out to have elaborate schemes to avoid paying the full whack of income tax on their earnings.

What all these people need to remember, humbugs or otherwise, is that hundreds of thousands of Londoners cannot afford the accountants to help with this kind of avoidance, and that there are hundreds of thousands who cannot afford any kind of property at all, let alone the fleshpots of Cricklewood or Mayfair. Here in London we will have built 50,000 new homes over the past four years, homes for social rent or part-buy, part-rent. It is a record number, and will help huge numbers of people who cannot afford to live in the city. We believe we can do even more over the next four years, in a programme of construction that will help to get large numbers of people into employment. Of course, it would be easier if we had an extra billion to spend on support for the housing construction programme.

Think of that Russian oligarch and the house he wants to buy for his cleaner. There are all sorts of reasons for him to love London. We have the right time-zone, the right language, we have excellent schools, more museums than Paris, more theatres than New York and a murder rate now at its lowest since the 1960s and considerably lower than Moscow’s. Is he really going to hop it to another jurisdiction, just because he has to pay the same for his property as any other UK taxpayer? I don’t think so. Sauce for the goose, sauce for the gander.