Away from the hurly-burly of Westminster this week (and the bizarre actions of David Davis), the big news in Manchester and for people up here is the thumbs up from the government for the Transport Innovation Fund Bid.

A Metrolink tram moves through the centre of Manchester. Photograph: Christopher Thomond

Much of the focus in the media has been about the planned congestion charging into and out of the city centre at peak times (more on this later). The less noted other side to the story, but in my view the far more transforming and significant one, is the £3bn investment into the public transport system of Greater Manchester.

This massive investment will provide a once-in-a-lifetime overhaul of the network in the city region, creating a truly world-class transport system. More trams, better buses, increased train capacity, improved stations and cycle routes that will connect the city and give people real choices about how they travel.

In my local area, for example, the extension of the tram network into Withington and Didsbury is the big news. Taken together with a fast-transit bus service up Wilmslow Road, commuters from south Manchester will soon have a choice between efficient, reliable and cost-effective public transport or driving to and from work at a cost of £2 a day in congestion charge.

For me, that's a key point about these congestion charging proposals: the charge will not come into force until these major improvements to public transport are in place. What's more, unlike in London, the congestion charge will only operate at peak times and will not cover a "zone", but apply when a motorist passes one of two "cordons" or rings.

I realise that not every area will see as many benefits from the transport cash injection, although most will. And I'm sure there will be no shortage of examples highlighted by the anti-congestion-charge lobby of people for whom this scheme creates a disadvantage. But doing nothing to tackle congestion is not an option.

Connecting people to jobs and to each other is absolutely vital to a city's economy (and to the wider economy). I know from the work I do with Nesta in encouraging innovation and enterprise in Manchester that effective transportation and connectivity is major factor in business location. In today's highly competitive, global market we cannot afford to let the city grind to a halt. This ambitious and one-off scheme will help transform Manchester into a world-class city.

It's a shame the other political parties locally don't see it this way. On the one hand the Tories in Greater Manchester cannot see beyond the inevitable concerns of motorists opposed to congestion charging - even though only one in five motorists will be affected. So much for David Cameron's green agenda. And the Lib Dems seem unable to decide whether or not they support it, even though nationally they support further road-pricing schemes. It's about time the Lib Dems stopped second guessing which position would gain them more votes, and have the courage of conviction.

Clearly we have a job to do now through the public consultation of making the case for this twin-track policy: investment in transport coupled with congestion-charging. But it's a case I'm happy to make as it's the right one for our city.