But the present Government is already gung-ho for using private finance and would try to commit as much as possible

But the present Government is already gung-ho for using private finance and would try to commit as much as possible before the election.The difficulty with private finance for public projects is that such projects need to jump through two sets of hoops. They have to satisfy the private sector’s need for profitability besides the public sector’s traditional tendering procedures.I suspect a new administration that was less in awe of the Treasury might be more prepared to relax procedures that constrain the use of private finance. But I doubt if this would generate more than pounds 2bn- pounds 3bn. And the Conservatives would hope to have committed at least as much as this from further privatisations, an option that would be ideologically difficult for Labour.So it would be difficult for Labour to finance extra spending. This will disappoint supporters who assume that the reason why the Tories restrict spending is ideological hard-heartedness rather than the laws of economic gravity.Whether a Labour government would try to spend more despite the difficulty in financing it is, of course, uncertain. It is a problem of the increasing professionalisation of politics that when a party has been, like Labour, out of office for as long as 18 years, its leading members suffer from a serious shortage of experience in running anything much more complex than a student union bar.

But ministers do learn in office and Tony Blair has the advantage of owing few debts to the spending wing of his party.Labour does remain committed to two measures that are generally thought to be bad for competitiveness, employment and inflation – the imposition of the European Social Chapter and of a minimum wage. In addition, there is the possibility of pro-union legislation.The effects of a minimum wage depend crucially on the level at which it is imposed. There is a minimum wage in the US, but it is so low that it has little impact. But a minimum wage at, say, half average male earnings would bite, creating some unemployment and adding to inflationary pressures. It was the raising of the French minimum wage in 1982 that created the inflationary pressures that plunged the first Mitterrand government into financial chaos.Meanwhile, changes in the distribution of employment opportunities mean that in future those who lack good fortune or skills will increasingly face the uncomfortable choice between low-paid jobs and none at all. If a minimum wage destroys the opportunities of low-paid jobs, even that choice may disappear.The European Social Chapter is as yet undeveloped, and I suspect that eventually competitive pressures will limit the rights which workers can expect to have guaranteed under it.

Padraig Flynn, European Commissioner for employment and social affairs, believes that has an unfair advantage in attracting international investment as a result of its opt-out. He may be exaggerating, but Labour’s commitment to cancel the opt-out looks a transparent own goal for jobs.So a Labour government might surprise everyone. International investors and British businessmen, who have traditionally feared Labour policies, could well find that they can live with them. But the less well-off and the unemployed, who have the greatest hopes of Labour, could equally find that misguided social policies create unemployment and make them worse off.The writer is chief executive, Centre for Economics and Business Research.(Graph omitted). Bill Clinton’s perceived lack of leadership is a common theme among Wall Street executives. If you are British they will often compare their leader unfavourably with Margaret Thatcher, whose popularity seems more enduring in the US than in her home country. Until now there has been little methodology in the Clinton-bashing, but a team of stock market analysts at Salomon Brothers has finally approached the subject with analytical rigour.