'Red Adair' is no stranger to 'blue skies' thinking

Adair Turner was a natural choice to join Tony Blair's band of "blue skies" thinkers at the Forward Strategy Unit in Downing Street.

At first glance, his credentials as a director of McKinsey & Co, the international firm of management consultants, and as director general of the Confederation of British Industry, would suggest Tory rather than Labour leanings. Described by friends as a "typical McKinsey man", Mr Turner might have felt more at home with other McKinsey graduates such as William Hague and Archie Norman.

In fact, he has always been a middle-ground man, more social democrat than Tory, and therefore an obvious ally of Mr Blair. As head of the CBI, he was called "Red Adair", after the Texan oilfield troubleshooter, when he urged companies to boost wages as well as profits, a move that angered traditionalists among the boss class.

Yet his spell at the CBI's helm, from 1995 to 1999, was judged a success. He inherited an organisation losing members and money, but turned it round, even if he was hardly an inspirational leader.

He worked closely with the outgoing Tory government, where his main contact was Norman Blackwell, the head of John Major's Downing Street Policy Unit and another member of the McKinsey old boy network. But he quickly established good terms with a Blair regime desperate to keep business onside.

A pro-European, he shares the frustration of business supporters of the euro that Mr Blair has sat for too long on the single currency fence, allowing the sceptics to make the running. He signed a letter last year saying: "Once in each generation, the case for Britain in Europe needs to be remade, from first principles. The time for this generation is now."

Mr Turner, 46, is vice- chairman of the investment bank Merrill Lynch Europe and director of a number of media and internet companies. Moving easily between the worlds of business, public policy and academia, he is visiting professor at the London School of Economics and has just been appointed chairman of the Low Pay Commission, which monitors the minimum wage.

He is an advocate of "European capitalism", which guarantees some protection for workers rather than a free-for-all American version. After the accounting scandals at Enron and WorldCom, the European model may now start to look the best bet.

Mr Turner's book, Just Capital, published last year, was seen as a "soft capitalist" response to Will Hutton's critique of the system, The State We're In. One friend said: "It's classic Third Way stuff, capitalism with a human face, in line with Blair's thinking."

The book argues that the market economy is not an end in itself but a tool, that it is wrong to think that we need to choose between it and values such as social cohesion and environmental responsibility.

After last year's general election, Mr Turner was recruited by Mr Blair to produce a report on the long-term structure of the National Health Service for the Prime Minister's Forward Strategy Unit. The review was seen by some Whitehall insiders as a rival to the one on financing being made for Gordon Brown by Derek Wanless, the former NatWest chief executive.

His book reveals his thinking on the NHS, which also pervades the report he has just submitted to Mr Blair. While welcoming New Labour's moves to inject market disciplines to improve value-for-money and patient choice, Mr Turner believes there are limits. He writes: "It is wrong also to imagine that healthcare can be simply a market like any other, and that the complete marketisation of patient-provider relationships would be desirable. The market economy is a tremendously powerful tool to achieve ends, but it should not pretend to reflect the full range of human motivation and aspirations."

One Whitehall source said of his report to Mr Blair: "It's hardly rocket science; it's common sense, precisely what you would expect from a management consultant."