Renu Mehta, the new It girl...

On a tan leather sofa, in a dimly lit hotel in Westminster, Sir James Mirrlees and Renu Mehta are talking about tax. That’s not a joke, or a euphemism. A Nobel prize-winning economist, Mirrlees, and a former hair-and-beauty model young enough to be his daughter, Mehta, have just come out of a meeting at the Treasury, where they pitched an idea they dreamt up together that could raise billions towards good causes.

Now they’re trying to explain it to me.

“It’s a bit complicated…” Mirrlees starts.

“But when you see the contrast between the present system and ours…” Mehta interrupts.

“It’s actually…” Mirrlees tries again.

“Well, you describe it,” she says. And he does.

Explaining big, complex financial innovation is second nature to Mirrlees. As a Nobel-winning economist he does it all the time – not least in one of his other ongoing projects, the biggest review of our tax system for decades. I might just possibly have come to this hotel to hear him talk about tax on his own – but what grabbed me was his unlikely partnership with Mehta.

They really are an odd couple. He’s sober and cerebral, whereas Mehta talks passionately and is incapable of standing in front of a camera without striking a pose. In combination, they’re like a tribute to The Avengers: I wonder if, in their mission to put the world to rights, Mehta might leap up and dish out karate chops.

Unlike Mirrlees, Mehta is not a Nobel winner. She’s not an economist or a financier. She has never run a business. Her most significant professional qualification is several years of designing clothes for her family’s import-export firm – not outstandingly well, by her own account – in between frequent luxurious holidays and hanging out at nightclubs.

I confess that I took against her initially – specifically, against her references to “charidee”, but also her tendency to get my name wrong. And my misgivings were not entirely exceptional. A lot of people aren’t sure what to make of Mehta. A friend of mine who worked on an up-market women’s magazine was invited a few years ago to include Mehta in a supplement about women doing good works but declined. My friend explained the decision thus:

“It all felt a bit odd, a bit suspicious. We’d never heard of Renu Mehta before. She was too good to be true. What was she trying to prove?”

Another who has met Mehta called her “a pushy, gorgeous and ambitious Indian It girl.” But since she’s been in the public eye she has made a huge impact. For her combination of glamour and good works – and her Indian background – one puzzled observer described her as, in effect, “the love child of Gandhi and Princess Di”. And that can’t be all bad.

Over the past year or so I’ve spoken to Mehta often and met her. In the summer, she roped me into working for her (without a fee, as you’ll see), and I’ve come to respect what she has achieved. But was my friend right: is she too good to be true? And is there even the slightest chance that the tax idea she conceived with Mirrlees could really change the world for the better?

Mehta was born and brought up in London, the youngest of four and the only girl. She was, she confesses, “a little spoilt”. The family had a fashion business in Delhi, where her father studied literature and religion before taking it over. It’s from him that Mehta gets her spiritual values, she says: “Gandhi’s message of peace and non-violence was spoon-fed to me.” She traces her grasp of maths to her mother’s degree in economics from Liverpool University, though not absolutely seriously. Her brothers Sanjay and Ajay are both married with children and based respectively in Delhi and London, where they oversee the business. A third brother, Vimal, was born with Down’s syndrome and is in care. It’s from him, she says, that she learnt her sensitivity.

But the spirituality, maths know-how and sensitivity were not immediately apparent. As a girl she read Vogue avidly and wanted nothing more than to work in fashion. She studied at the London College of Fashion and in her early twenties did some modelling. “It was fun,” she says, “but there was no intellectual stimulation, so I got bored and packed it in after 18 months.”

She took over as head of design at the family fashion business, Sphere. There were trips to Milan and Paris, holidays once a month, and a lot of parties (“but nothing debauched – I’ve never done drugs”). Her social life blossomed more than her talent for design.

But, like many spoilt rich girls before her, she came to feel that something was missing. “And I felt guilty because my life was so easy,” she told me over a cup of peppermint tea at the groovy Hoxton hotel in east London, near her office.

So she decided to put on a party for charity – again, like many spoilt rich girls before her – and got her friend Robin Birley, who ran Annabel’s, to help. “I’d never done a ticketed event, and Robin knew that, but he gave me the whole club.” Through friends, she got hold of Jools Holland, who helped to line up Eric Clapton. “We had a full house and raised £100,000, and it took only a few weeks to put it together,” she says.

It was a turning point. “I thought, if I can do that in a few weeks, what can’t I achieve if I dedicate myself full time to good causes?” She decided to use her social network of fortunate individuals and turn them into a forum for doing good – a Fortune Forum, as she called it. But she didn’t know what good, exactly, it could do. So she turned to her father.

Vijay Mehta is no typical clothing magnate.

A longstanding activist for peace, development, human rights and the environment, he had by that time stopped working in the family business. “He told me to read up on the issues and showed me a library of books. He said, ‘Start to read up on it. Take a year.’” I asked her which books she read. Her reply took me aback. “I chose just one. Published by Unesco, a Spanish author, I can’t remember the name of it for the life of me.”

Mehta’s approach is: don’t bother reading about poverty, climate change and disease – just get out there and do something. “Speed was essential,” she says. “When you see all the problems, you realise time is not your friend.”

Not long after the party at Annabel’s she went to Sardinia, where one of her “uncles” – a family friend, Gopi Hinduja, one of the super-rich Hinduja brothers – told her he was going to attend the Clinton Global Initiative. This was all she needed: “I realised I was going to get Clinton to launch my initiative. I just knew. The only way to describe it is like I was on a train and I couldn’t get off. I’ve never had that kind of feeling before.”

You can well imagine that her brothers thought she’d gone potty. But then her father had set a precedent for striving to change the world. What did he think? “I don’t think he would have the heart to tell his little girl that she is reaching too high.”

Was she aiming high? Plainly. Two or three years ago Clinton might have crossed the Atlantic to open your fridge, if you waved enough money at him. But for Mehta to think he would come to the first-ever Fortune Forum was extremely optimistic. Certainly, that’s what they thought at the charities she invited to join her. “Everyone felt this great event was pie in the sky from a wealthy socialite with a conscience to salve,” confesses Paul Hetherington, of the Woodland Trust, who then worked at WaterAid.

“The reality is that nobody thought she would pull it off,” says Mark Astarita, of the British Red Cross. “One of the other charities involved telephoned me and asked about Renu and I said I thought she was bonkers.”

Hoping to get Clinton to speak at the first event, she called Sant Chatwal, a trustee of the Clinton Foundation and a friend of her father.

“He was with Clinton at the time. He said, fax over your idea at once.”

There followed a presentation to Clinton’s chief of staff in New York, then a meeting with Bill and Hillary in person. Not long after that, she was in a taxi with Astarita when Clinton’s people phoned to say he would do it.

But getting hold of Clinton brought further problems, because the only available date in his diary was just 100 days away. That’s not a lot of time to gain charitable status – the forum’s trustees, overseeing the accounts, are her father and Lord Northbrook, a Conservative peer and financier – and to organise the event. “Normally I would have wanted a whole year,” says Astarita.

To zip through what happened next, the charities were fairly stunned to watch Mehta get hold of Clinton, then build an event around him. Other big names included Michael Douglas and Yusuf Islam, formerly known as Cat Stevens, making his comeback after years away.

According to somebody who should know, Clinton was paid $400,000. Mehta won’t tell me if she paid him, or how much, because she had to sign a non-disclosure agreement. But the event raised £1.1m, she says.

More than 300m people around the world had the chance to see the print and TV coverage, giving the participating charities the equivalent of £4m of free advertising. They were also given the chance to showcase their work to prosperous would-be supporters present on the night.

It was this that persuaded Mehta to turn away from fundraising directly and focus on bringing philanthropists and worthy causes together.

A year later, Al Gore and Bob Geldof attended the second Fortune Forum, while Tony Blair and Gordon Brown addressed the crowd of super-rich ticket-holders by video link. Mehta called to ask me to take part in another Fortune Forum event – chairing a panel discussion in a grand salon at the Dorchester hotel. I wanted to say no, but I didn’t know how to. By now Mehta was getting my name right, but instead making the deliberate mistake of describing me to everyone as “chief writer on The Sunday Times”. She piled on the pressure by signing off e-mails like this: “You are making me feel v. special, thanks for taking an interest, it is much appreciated.”

I felt manipulated, but it was in a good cause, so I did what she asked. For the record, I didn’t ask for a fee. I would have felt like a snake if I had, and can only hope the others weren’t paid either. (If they were, they’d have certainly pushed up the forum’s costs, which this year approached £100,000, though the staff includes only Mehta herself, on no wage, and a single assistant.) After all, none of the panellists that night was short of wedge: Stelios Haji-Ioannou, the founder of EasyJet, and the businessman Johan Eliasch, best known for buying up hundreds of acres of Amazon rainforest to stop it being cut down.

The debate seemed to energise the audience, among whom I saw other zillionaires, including the Australian Alan Bond. One highlight was when Stelios was labelled “the devil” for his part in encouraging cheap, and unnecessary, air travel. He took the epithet in good humour and replied, unanswerably, that if people
don’t like the emissions they should stop flying.

It’s hard to generalise, then, about what makes people give time to Mehta’s projects. Stelios does it as an old friend. Clinton may have been showered with money. I did it because I broadly approved of the cause, was flattered to be asked and didn’t know how to refuse. But even after taking part, I couldn’t help wondering what Mehta was doing it for. Was she just trying to raise her profile, as my friend on the women’s magazine suspected?

I asked her father, who gave me a startlingly honest assessment. “Once she found her vocation,” he said, “she found focus, discipline and drive. I always wondered whether spoiling her would ruin her, but to the contrary her values transcend many of the material things that were always available to her. Luckily, she tired of the jet-set lifestyle and was looking for something deeper. I am profoundly happy that she chose this path.”

I wasn’t expecting him to say anything more revealing about how she’s changed, but he did: “Renu has that special something about her that attracts powerful people. She has mingled with some of the most eligible men in the world – but for now she’s put her mission before marriage.”

After fundraising, Mehta went with WaterAid to Ethiopia to see what’s being done with the money. “She dressed in standout Ralph Lauren outfits,” recalls Hetherington, “and was followed by the locals like the Pied Piper of Hamlyn.” She only made one such visit. “You don’t need to see many of those villages… You see the pain and realise there are a million villages just like it. What is clear is that they all need money. I wish I had the world’s chequebook,” she says.

Mehta started looking into how much money people give, and discovered that, proportionately, the poor give much more than the rich to good causes. In Britain, people with lower incomes give 3% of what they have, while the rich give just 0.8%. This is particularly shocking when you consider that Gift Aid and other tax structures provide a greater “subsidy” to rich people to make charitable donations than to the poor.

Though she gives more than 3% herself (“much more,” she says), she concluded that a new mechanism was needed for releasing wealth from the rich. “We have got to close the gap,” she says. “We have to achieve philanthropic parity.”

Soon after reaching that conclusion, she met a woman called Patricia Wilson at a party. Wilson recalls that they fell to discussing poverty, the environment and global warming. “Renu asked if I was on my own, and I explained my husband was in Cambridge. She asked what he did, and I replied he was an economist. I said that he too was concerned about welfare and poverty issues, and was currently working on a tax review. And Renu asked if she could meet him.”

The meeting was arranged and Mehta travelled to Cambridge.

“Can you find a fiscal incentive to dramatically stimulate philanthropic giving?” she asked Mirrlees before lunch. “He said yes, and we practically shaped the formula on the way to the restaurant.” In a nutshell, the proposal offers to match donations with government money.

In July, she returned to help work on the idea. “He showed me how much money this could raise – as much as £10 billion, perhaps more. I had a glimpse of the number of lives that could be saved and improved. And I was crying all the way home to London.”

Since then the plan has received endorsements from Sir Nicholas Stern, the secretary-general of the UN, Ban Ki-moon, and another Nobel-winning economist, the Princeton professor Eric Maskin, who describes it as “admirably simple and potentially highly effective”. As Mehta and Mirrlees describe it, everyone’s a winner. Rich and poor alike are given an increased incentive for giving money to “charidee” – specifically, towards meeting the UN’s Millennium Development Goals. The needy get more of what they need, and the taxpayer, miraculously, isn’t out of pocket.

Of course, this isn’t absolutely true. You can’t get something for nothing: the proposal only works if the rich actually do make greater contributions than hitherto. “In a very narrow, selfish sense,” Mirrlees concedes, “people are giving, so they will be worse off. But people usually recognise that as a good thing.”

In other words, the scheme will be a great success all round – but only if everybody decides, as Mehta did, to her father’s satisfaction, that working for the good of others, even by writing a cheque, can be its own reward.