Clarke was born in Salford, Lancashire, in 1949. He lived in the Higher Broughton area of the city and became interested in poetry after being inspired by his English teacher, John Malone, whom he described as "a real outdoor guy, an Ernest Hemingway type, red blooded, literary bloke". Recollecting his childhood, Clarke said:
I used to think trees were dirty, because when I was a kid in Salford you'd climb them and come off filthy, it was like you'd been up a chimney... and even if you got a stretch of park you just had to scrape the grass and there were, like, cinders underneath... it was horrible...
His first job was a laboratory technician at Salford Tech. He began his performance career in Manchester folk clubs, where he began working with Rick Goldstraw and his band the Ferrets. His first releases were on Tosh Ryan and Martin Hannett's independent label Rabid, starting with the EP Innocents in October 1977. Rabid also released his debut LP Où est la maison de fromage'? (catalogue number NOZE 1), which was a collection of live recordings, demos and rehearsals. This was reissued by Revolver Records in 1989 (RRLP 10) also making it his last album to date. He toured with Bill Nelson's band Be-Bop Deluxe in 1978 and was signed by Epic Records, who issued the Martin Hannett produced studio album Disguise In Love in 1978.
Clarke has attributed his early success in part to the influence of the English poet Pam Ayres. Her run of success on the British TV show Opportunity Knocks led both Clarke and his mother to believe that he could make a living at poetry.