That may strengthen its hand in negotiations with the US over a new 'open skies' agreement which the Clinton administration has made a condition of clearing the BA/American deal.RetailingRetailers are concerned that the new government will raise interest rates, cutting into consumers' discretionary income, and will introduce a minimum wage that would push up costs. A rise in rates would have an impact on credit sales, with furniture and carpet retailers hit hard, according to Robert Clark, director of consultants Corporate Intelligence on Retailing.Retailers could be hit by the introduction of a minimum wage. Retail workers are among the lowest paid in industry, and increased wages would increase costs. The current average retail wage is about pounds 3.50 an hour.
Smaller retailers, who do not have the financial clout to absorb higher costs, could be among the worst hit.Financial servicesLabour's victory could portend the biggest shake-up in how the City of London is regulated since the "Big Bang" of 1986.Labour has pledged to combine the self-regulatory organisations of different industries into one super regulator with central control. The new regulator would be an enlarged version of the current Securities and Investments Board. It would include the Investment Management Regulatory Organisation, the Securities and Futures Authority and the Personal Investment Authority. Labour argues that one regulator will reduce bureaucracy and make it easier for investors to understand who is guarding the markets.Aside from changes in regulation, the City is fearful that Labour will scrap the tax credit on dividends for institutions like pension funds.MediaAlthough the Labour position on media ownership remains vague, the companies most restrained under the regulations hope for a level playing field. The Tories set audience share thresholds to limit cross-ownership of television, radio and newspapers on both the regional and the national level. In particular, newspaper companies with more than a 20 per cent national audience share can't buy terrestrial television franchises.Labour said acquisitions among media companies should be addressed more on a case-by-case basis and judged against tests of the public interest.
Yet change is unlikely to be top of the new government's agenda.ConstructionLabour is committed to honouring infrastructure contracts under the private finance initiative, while house builders should benefit from spending on social housing and from the release of capital receipts held by local authorities. Councils are not allowed to spend more than 25 per cent of capital receipts gained from property sales on investment in housing. Labour has said it will increase that to 100 per cent, although there is confusion about how much the existing receipts are worth and how quickly the funds can be disbursed.PropertyHouse prices are likely to continue to rise for the rest of this year, even though interest rates will probably go up. The Halifax estimates house prices will rise 7 per cent this year. Labour may introduce legislation that would make lenders prove they are giving borrowers the best advice. That could increase the paperwork involved in taking out a mortgage and slow down the process.IndustryLabour's industrial policy is focused on encouraging investment in manufacturing and creating an educated workforce.
