Preparing for the nitty-gritty of the gas market: Mary Fagan looks at the task facing Clare Spottiswoode, who takes over today as head of the gas industry regulator

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CLARE Spottiswoode faces a mountain of paperwork when she arrives at her desk this morning - the first she will spend as the regulator for the gas industry.

The new director-general of Ofgas cheerfully admits that she has yet to tackle the nitty-gritty of the Monopolies and Mergers Commission's report on gas - although she says she did read the summary when she was shortlisted for the Ofgas job.

Ms Spottiswoode takes up her post at an interesting time. The Government has yet to respond to the MMC's report, which said that, while British Gas should dispose of its trading arm, full competition in domestic gas supply could wait for almost 10 years.

Whatever the Government decides - there is a growing view that it will opt to bring in competition much earlier - it is Ms Spottiswoode who will have to make sure that the new-look gas market not only works, but does so in a way that is fair for everyone.

The new head of Ofgas breaks the mould among regulators of the former nationalised utilities. She is the first woman to be appointed and at 40 is relatively young for the job. With a penchant for bright blue suits and multi-coloured blouses, she scarcely fits the grey image of a regulator.

Not that she fitted the Government's original requirement for a senior industrialist either.

Nevertheless she is adamant that her credentials make her 'ideal' for the job. Lively, quick-spoken and with evident conviction, Ms Spottiswoode gives the impression that this is the role she has been waiting for throughout her varied career.

She is an economist by training, and joined the Treasury in 1977. Three years there gave her a knowledge of the way Whitehall and civil servants tick. She left to have children, supposedly on five years' extended leave.

But she combined motherhood with running a successful gifts business and caught the entrepreneurial bug. Having sold the gifts business she set up a computer software firm, which she sold in 1988, remaining as managing director and chairman until 1990.

For the past three years Ms Spottiswoode has worked part-time for a variety of businesses and has lectured at the London Business School. She has combined job-juggling with expanding her family - four children with ages ranging from one to 13.

All the aspects of her career to date bring different but equally important skills to the Ofgas role, she says.

'This job is a very lonely job - as in one's own business as an entrepreneur, the buck stops with you.'

Equally invaluable is the understanding of the Civil Service, she says, while her background as an economist has given her a 'much greater clarity of vision' as she views the industry she must now oversee.

She regards herself as on 'the drier side' as regulators go, and believes her approach will be akin to that taken by Professor Stephen Littlechild and Ian Byatt, her counterparts in the electricity and water sectors.

Looking at the long-term structure of the gas business is the best way to deliver the best prices and services and to serve the interests of the nation as a whole, she argues.

'My approach is an economic approach. What does it cost to provide services? People need to know that.' She also sees the industry as a chain stretching from the North Sea to the consumer, with interaction between the links.

Despite being new to the issues, she has already formed the view that over-fragmentation of the domestic gas market could damage long-term investment in North Sea developments.

The question on many lips will be how she differs from her predecessor, the outspoken and often controversial Sir James McKinnon. Relationships between Sir James and British Gas were often bitter and he was an unashamed champion of both the domestic gas consumer and those trying to break into the supply market in competition with the giant British Gas.

Ms Spottiswoode has overlapped with the previous encumbent over the past few weeks. 'Sir James has been ideal and he has shaken up the industry. He was given a short straw, a toothless watchdog, and he has transformed that into something very effective,' she said.

But she adds that the industry she is faced with, and the nature of British Gas, have changed since Sir James became the first to head Ofgas. 'British Gas has changed its culture at the top, although by no means throughout the organisation. They are keen to move into the new world.'

It has certainly tried to make her welcome. Within two days of her arrival she visited Cedric Brown, the British Gas chief executive. The meeting, apparently cordial, lasted two hours.

That said, the company is unlikely to have an easy time. In spite of the MMC's recommendation that competition can wait until the next decade, the new Ofgas chief would have no objection to seeing it introduced in 1998, the year in which the electricity companies' monopoly of supply to domestic consumers is due to end.

However, she remains unclear as to exactly how competition should be introduced into the domestic marketplace. 'The structure of that I do not believe is obvious,' she adds. The need to educate herself more fully on the task ahead has made her wary of talking to the City in her early days. She has avoided making statements that could be misinterpreted until she is much clearer on what she wants to do.

One thing that is certain is that Ms Spottiswoode would like to see a bigger and beefier Ofgas. Staff have already increased to 48 from 28 a year or two ago, but she believes more people are needed to implement the changes that the industry is likely to face.

Not least, she will be dealing with a multiplicity of suppliers ranging from North Sea producers to regional electricity companies, many of which are entering the gas business. In future, she notes, the roles of Ofgas and Offer, the electricity watchdog, will be inextricably linked.

When she is asked if she wants to be seen as the consumers' champion, the reply is swift: 'I am much more UK plc's champion. Lower gas prices to industry are also important as that helps Britain and creates jobs.'

Nor will she be a workaholic, sacrificing all on the altar of a more liberalised gas market. The job for Ms Spottiswoode is five days a week, then she and her family will head for their second home in Suffolk.

'Weekends are sacrosanct. You need some mind space to make good strategic decisions, otherwise you can get bogged down in detail.'

(Photograph omitted)

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