UK: SHORT ROUTE TO SAVING THE WORLD - Business executives who expect to do battle with an Old Labourite ...

UK: SHORT ROUTE TO SAVING THE WORLD - Business executives who expect to do battle with an Old Labourite ... - SHORT ROUTE TO SAVING THE WORLD - Business executives who expect to do battle with an Old Labourite peddling bash-the-bosses rhetoric will be re

by RICHARD WOODS [PP] 94, 097 Photograph (omitted).
Last Updated: 31 Aug 2010

SHORT ROUTE TO SAVING THE WORLD - Business executives who expect to do battle with an Old Labourite peddling bash-the-bosses rhetoric will be relieved - or disappointed - to encounter the real Clare Short (right). The pro-Europe, socially-committed secretary of state at the Department for International Development cuts a business-friendly dash Richard Woods reports.

Clare Short has just banished one of her aides to hide behind a potted plant in the corner of the room. She is having her picture taken and the photographer, a Mancunian in jeans and T-shirt, is keen to clear his field of view. 'Chin up please, and don't look sinister,' he says.

Her Majesty's secretary of state dutifully complies with a smile.

'What shall I do with my legs?' she enquires.

'Squish them together.' She looks bemused. 'Well, psychologically squish them together.'

He helps the secretary of state adjust her hemline. 'That's good.' She laughs and poses compliantly like an expert.

The head of the Department for International Development and MP for Birmingham Ladywood is not what you would expect. For a start, Short is tall. And Short is long on style, in a bright red jacket over a long black dress.

No flat caps or donkey jackets here. She is a striking woman who looks younger than her 53 years.

Notorious for being outspoken, she still flashes mischief in her eyes, but these days can easily hold her own in management-speak. This month, the veteran of Old Labour - she became an MP in 1983 - is addressing both the CBI and the Royal Institute of International Affairs on the role of private business in promoting development and reducing poverty around the world.

Once it might have been a call for fat cats to pay more tax to alleviate the suffering of the workers. Now her watchwords will be 'self-interest' and 'efficiency', and she will talk about being 'output-driven' as she urges the private sector to join a moral crusade.

'It isn't just a matter of social spending,' she says. 'You have got to have responsible economic management to get sustained economic growth, and you have got to get sustained economic growth to reduce poverty.' To captains of business who remember how Short once described Margaret Thatcher as 'a monster, the devil', the new lady from Ladywood will come as a surprise.

'They keep meeting me,' she says, 'and they think: 'We heard she was a ferocious Lefty, but really she's quite sensible.' You know what Gorbachev said when he was challenged: he said market forces have been with us since people first came together to sell a few tomatoes. I was a never a communist or a Trotskyite. The Labour party to which I belong, the pragmatic Labour party that believes in social justice, in managing both the generation and distribution of wealth in a way that uplifts people's lives, has always believed in a mixed economy.'

She used to tease the Tories, before the fall of communism, by saying that if everyone lived in the Soviet Union, 'I'd be in the Gulag, and you'd be driving around in flash cars getting privileged access'.

With New Labour's election victory, senior executives from Britain's leading companies beat a path to her door. She is a politician of passion, and at the DFID has found herself able to marry principle with pragmatism: tackling poverty, she believes, is both a noble cause and vital to the interests of British business. 'There is an opportunity for a big advance,' she says. 'The cold war's over. We have learned that too many markets gives you inequality, no regulation, and corruption, while too much state gives you a collapsing Soviet Union or an Africa not developing. We have learned a lot about the sensible balance between state and markets.'

There are still old prejudices to be fought, of course. 'People come to meetings with me and they say we can't have these multinationals involved in development. I say, 'See those shoes you're wearing? They come from a multinational company. See that watch? Did you come in a car, do you have a washing machine, a fridge, a freezer?' These are good, kind people, but they have this kind of knee-jerk, we-don't-want-any-of-this-dirty-business reaction, because they think it is about exploiting people.'

But in the post-Berlin Wall, post-Thatcherite order, she sees the old antagonism between social reformers and big business rapidly falling away.

Their interests now coincide. The reformers need economic growth to help the poor; the latter-day robber barons are discovering that better conditions and rewards for workers pay off in a world where consumers increasingly demand ethical standards. 'The evidence that the ethical consumer movement is growing and strengthening is very great,' says Short. 'For lots of big companies, their brand is worth so much to them that they can't endanger their reputation for being a quality company without really endangering their business performance.'

It is a confluence of attitudes she wants to exploit for the benefit of the 1.5 billion people in the world who survive on less than 65p a day. The Government's objective is to halve extreme poverty by 2015. Short believes it can be done if global institutions and private business co-operate in improving regulation, rooting out corruption, extending training, building infrastructure and delivering decent employment conditions.

As head of the DFID and UK governor of the World Bank, she has contacts and influence in the IMF, the UN and regional development banks to offer her allies. She has set up an advisory unit to help firms develop codes of socially responsible business practice, has backed an ethical training initiative and opened the Commonwealth Development Corporation to private-finance initiatives.

She is doing battle, too, with the hydra of the EU. A third of her budget is funnelled through EU projects, which she finds an intolerable waste. 'The EU's development efforts are very, very, very ineffective,' says this member of a government committed to being at the heart of Europe. 'There is poor management and then they get fraud. Different bits of the Commission have responsibility for different parts of the world, so there is no coherent plan or organised system in checking effectiveness. Because they get fraud, they put in lots and lots of economic checks - reasonably - but then you get a paralysed system.'

In a recent broadside, she gave her EU counterparts 'Short' shrift, but she remains committed to improving the system, not quitting it. There are sticks as well as carrots. The World Bank and IMF are increasingly linking debt relief in developing countries to measures to reduce poverty.

Short also believes the 'hot money' flooding round world markets that exacerbated the Asian and Russian crises has to be curbed by tougher regulation.

'We are seen now as the most radical thinking organisation in the international system,' she says. 'I strongly believe that core business interests are advanced by socially responsible policies that help promote development in poorer countries.'

Such rhetoric is appealing, but will it be heeded amid the clamour of the workshop? Many big corporations have already adopted Short's views, but smaller enterprises may be too busy trying to survive among their many predators to spare a dime for Clare.

'Small business often says the words but can't get in on the act,' she admits. 'We have to work at their inclusion.' How? She is trying to get Rotary International, which operates in more than 100 countries, involved, but says: 'I don't have in my hands the answers. I haven't developed those relationships and I need to do so, and I am going to listen and talk. I haven't got a ready-made package.' Which is a politician's way of saying, I'm sorry, I haven't a clue.

Nor is she clear what would happen if the long Western boom of the 1990s turns to bust. True, technological advance is shrinking the world, but economic downturn could easily drive private enterprise to concentrate on its own back yard. As the population of the global village passes six billion, the task of alleviating poverty grows. But, as she points out, it is prosperity, not any punitive measures, that will best stabilise the numbers.

Much has changed for Short in recent years. Her second husband, Alex Lyon, died in 1993. Since then she has been reunited with the son she gave up for adoption when he was six weeks old. She has seen New Labour win power, and has found a purpose that is 'noble and intellectually interesting' in a job she clearly loves.

'I think that, since the Industrial Revolution, the fault line of politics, nationally and internationally, was between capital and labour trying to get their interests to control the state. I think that is over. There is now a major shared interest promoting decent standards and responsible economic development and, well, that's big stuff.'

She breaks off, as if embarrassed at her grandiloquence. 'Oh, no,' she says when the photographer takes another snap as the conversation nears its end. 'You caught me with my mouth open.'

Time will tell whether the talk delivers results, but you can't fault her motives.

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