Profile: A bright spark under pressure: Clare Spottiswoode, head of Ofgas, gets a grilling

CLARE SPOTTISWOODE, the beleaguered director-general of the gas industry watchdog, Ofgas, has had an appalling week. Humiliatingly, the first and only woman to have been appointed by the Government to run a regulatory agency has been forced to deny publicly that she has had an affair with the civil servant who recommended her for the job. And she has been ridiculed mercilessly for sending flowers to the poor chap.

More seriously, her professional judgement and competence have been questioned by members of the Commons Select Committee on the Environment. And apologies for inaccuracies in evidence which she gave to environment and trade and industry committees three months ago have been rehashed endlessly.

In a sense, Clare Spottiswoode has only herself to blame. Since her appointment six months ago, she has courted publicity. 'Clare is very cerebral,' according to a friend. 'But she is also flamboyant and impulsive, astonishingly nave, very arrogant, and she does love attention.'

She seems to have deemed it tactically useful to be media-friendly. She was, after all, the consumers' champion. Why should they not know who she was?

After she took up her post there followed a spate of gushing interviews, with unprecendented access to her Victorian home in Islington, north London, her architect husband and four children, as well as to her office. The media blitz culminated in a reverential description by the Mail on Sunday industrial correspondent of her changing nappies before setting off for a day's work changing the culture of the gas industry.

What Ms Spottiswoode did not realise in those glory days was that the press may bite the hand that recently fed it. On Wednesday, as distasteful rumours swirled about her, she was reduced to answering journalists' brutally direct questions about whether she had ever had a sexual relationship with John Michell, the under-secretary responsible for oil and gas at the Department of Trade and Industry. They were both, some years ago, middle-level civil servants at the Treasury.

It is true that Ms Spottiswoode sent Mr Michell flowers (but not red roses, as reported) after her appointment. (She also sent flowers to the chairman of the firm of head-hunters who had handled the account, and a man who had given her a glowing reference.) But it was alleged that Mr Michell had added her name to the shortlist prepared by head-hunters for the Energy minister, Tim Eggar. The DTI says it has investigated the rumours 'and found no cause for further action'.

Ms Spottiswoode had just left Wednesday's grilling by the environment committee on her alleged lack of distance from the DTI and British Gas when she was challenged by reporters outside the Palace of Westminster. She told them that she was 'very angry' about the unsavoury gossip, and categorically rejected the allegation of sexual misconduct, adding that she would have been 'delighted' to have denied it under oath had the select committee asked her to do so. And there the matter rests.

But, professionally speaking, what are Clare Spottiswoode's credentials, and why was she appointed to her pounds 70,000 a year job? Last November Mr Eggar attempted to answer this question. He spoke of her 'first-hand experience of competition at the sharp end, and her economics background' when announcing the appointment. This did not reveal much.

Ms Spottiswoode is certainly a good economist with a far sounder grasp of mathematics than most. Because her father worked abroad, she attended 11 schools before arriving at Cheltenham Ladies' College, where she took an impressive clutch of A- levels, in Maths, Applied Maths, Further Maths and Physics. She was the first female undergraduate at Clare College Cambridge.

Awarded a scholarship in Maths, she switched to Economics, in which she gained an Upper Second. By all accounts - including her own - she could have gained a First had she not been quite so interested in rowing and other sports, in behind-the-scenes work in the theatre and in her husband-to-be, the architect Richard Oliver, who had rooms on her staircase.

After two years of postgraduate economics at Yale, where both she and Oliver had prestigious Mellon Fellowships, she spent three years as an economist at the Treasury. At the time there were still relatively few economists at the department and her job was a heady one, involving plenty of responsibility and direct contact with senior civil servants and politicians.

She briefed members of the Cabinet on budget options and prepared confidential forecasts concerning European and Third World economies. Ms Spottiswoode loved all that. But in 1980 she resigned to raise a family and to start her own business. The Civil Service registered that it had lost a high-flyer. Clare and Richard now have three daughters and a son: Imogen, 13, Camilla, 12, Olivia, four, and Dominic, two.

Clare's first company, Spottiswoode Trading, may sound rather grand, but actually it was Clare in a small back room importing silks and decorative objects from Thailand. Three years later she sold out for pounds 30,000 - not bad going. Her second venture, a computer software company, Spottiswoode & Spottiswoode, set up with her sister Alison, was also a success. They sold the business in 1988 and Clare subsequently taught at the London Business School.

So, according to Mr Eggar, the reason Ms Spottiswoode knows about competition 'at the sharp end' is because she has run, successfully enough, two very small businesses. Well, yes, Minister. But, however sharp, the competition Ms Spottiswoode was used to bore little or no relationship to the sort of competition she was expected to encourage as the mighty gas monopoly was broken up.

What was it then that really made Ms Spottiswoode so attractive? Part of the answer involves gender politics and Whitehall power. The politicians felt themselves under pressure to appoint a women watchdog, and the Civil Service was determined that - male or female - the job should go to somebody out of its own stable.

The head-hunters were instructed to find a 'senior industrialist' to fill the post being vacated by the controversial Sir James McKinnon, an accountant and businessman who had alienated more than his fair share of industrialists, civil servants and politicians while at Ofgas. But they were aware of the sub-text. A cool, calm businesswoman with reassuring Civil Service experience would be welcome.

While the head-hunters were still trawling - pounds 70,000 a year is no great shakes for a senior industrialist - Ms Spottiswoode contacted them. She simply wanted to go on their books in an attempt - at the age of 41, and now that her children were growing up - to resume a more high-profile career.

Instead she ended up on the Ofgas shortlist, and impressed Mr Eggar with her dynamism, the intellectual strength of her free-market convictions and her faith in competition. She was to impress many (though by no means all) of the staff of Ofgas, particularly those who were fed up with the abrasive style of her predecessor.

Things started to go wrong for Ms Spottiswoode three months ago when she was called to give evidence to the Commons select committees on the environment and on trade and industry. The issue was a levy on consumers' bills, approved by her predecessor at the behest of the Government, to finance schemes including pounds 200 grants to householders installing more efficient boilers.

It sounds a bit arcane. But for Ms Spottiswoode the levy was outrageous on two impeccably liberal grounds. It was not, she said, for Ofgas - an unelected body - to impose what amounted to a tax. That was for Parliament. And the form of this particular levy was regressive; it would take from everybody, but benefit only those who obtained grants for classy new equipment - almost certainly the better off.

Had she stopped there, Ms Spottiswoode would have won more plaudits than brickbats. But she did not. She told the select committee that she did not have the legal authority to impose any such levy, and added that Sir James McKinnon had exceeded his powers when approving the first phase of the 'green tax'.

She was wrong on both counts and subsequently apologised to the committee and to Sir James. Privately she has explained that she was overtired and underbriefed at the time of the hearings, partly because her youngest child was seriously ill in hospital. 'I made a mistake. I won't make the same mistake again,' she said crisply to one of those whose feathers she had ruffled.

No doubt she won't. Ms Spottiswoode is a quick learner, and her free market credentials and genuine sympathy with the consumer are to her credit. But she must learn to control her impetuousness. And, however unfair this may seem, if she is to survive in the Whitehall jungle she must understand just how visible she is as a woman, and how quickly any alleged failures of judgement will be seized upon and magnified. If she didn't know a week ago, she must surely know now.