But even if all those at the jobs summit decide they like the sound of his "third way", he will find they are facing in opposite directions.. The single currency will help focus European minds on the need for economic reforms that will genuinely improve the jobs market. President Clinton got into trouble for his triumphalism at last summer's G8 summit in Denver, boasting about the US economy's success even as security guards warned offended European delegates not to wander too many blocks in the wrong direction from the convention centre. But looking beyond the five-year horizon, it is hard to see how all of them can hope to remain stand alone companies. Halifax is large enough to lead in the consolidation of retail financial services everyone is predicting. But what of Woolwich and Alliance & Leicester? The betting must be that they will find themselves part of a larger organisation.

On what terms that happens depends crucially on how they perform in the meantime, including how they marshal all that surplus capital.. POLITICIANS always find it hard to resist the claim to have found peace where there was only discord, a "third way" between apparently divergent paths. That's precisely what Gordon Brown is about to do with his jobs summit this weekend, just as Jacques Chirac, the French President, did when it was his turn to host a similar summit two years ago. The Chancellor insisted yesterday that the forthcoming meeting was not going to be a mere talking shop.

He expected specific proposals for tax reform, a more active welfare system, better competition policies and more ideas for improving venture capital and entrepreneurship to emerge. Mr Brown is certainly sincere Let's hope he is right, too But the omens are not favourable. As a consequence, the markets are demanding the money is returned as quickly as the converted societies' tax positions allow. With building societies there is a further factor that pushes them down this route; if they buy anything, they lose their five year protection under the law from hostile takeover and as a consequence immediately become a bid target themselves.All the same, both John Stewart at the Woolwich and Mike Blackburn at the Halifax, talk merrily about finding other uses for the money, including acquisitions. With its special dividend and planned share buy-back, Woolwich is promising to deliver the maximum of its excess back to shareholders its tax position allows this year.

Even so, that still leaves more than pounds 500m of surplus lying around in the Woolwich coffers without a use. If he can find the right acquisition, Mr Stewart would happily give up his protection to pursue it The same is true of Mr Blackburn. The trouble is that with valuations at present levels, it's hard to see what either of them could buy that would deliver value to their shareholders.For the time being, most of the converted societies seem to have reasonably plausible independent strategies. Indeed, they'd hardly be worth backing if occasionally they didn't come up with a good alternative.

So what should the converted building societies be doing with their excess? Because until recently they've been locked into mutual ownership, unable either to spend or give away their accumulating capital, they've now got rivers of the stuff to dispose of.A recent circular from Salomon Smith Barney estimated this surplus at more than pounds 6bn for the big three alone (Halifax, Alliance & Leicester, and Woolwich), a figure which seems to be broadly confirmed by Woolwich's own estimate of its excess announced with figures yesterday.This is normally a highly dangerous position for managements to be in The risk of profligate expenditure is obvious. The corporate philosophy of our time is stick to your knitting, and if you cannot find an economic use for your money, let the capital markets do it for you.Ambitious managements are still prone to stray, however. Companies that don't will find shareholders want to know why. Unless there's a good growth story to tell, the stock market is prone to think the lack of it indicative of management failure.