NS Interview - Peter Hain

Northern Ireland's lord of the manor still has his eye on the main event in Downing Street

"Peter loves his castle." A member of staff is showing me around Stormont, the official residence of the Northern Ireland first minister, and the symbol of British direct rule since the Troubles. Apart from a recent interlude, when the assembly and executive functioned, the British have been lords of the manor here. Peter Hain is comfortable with it. Since becoming Secretary of State for Northern Ireland after the general election, he has taken advantage of the suspension of devolution to cultivate the place as his fiefdom.

Such is the political tension at Westminster, however, that Hain has been spending quite some time back home in recent weeks. He has assumed the role of non-aligned, honest broker between the Labour Party's grass roots and the government, visiting regional conferences and other meetings to rally the demoralised troops. These appearances have allowed him to pick up on the atmosphere of deep gloom that has descended over Labour in the wake of the Tessa Jowell mortgage row and the ongoing loan scandal. The latter "has been damaging and demoralising for party members. Everybody's talking about it," Hain admits. The rules have to be tightened, he insists, but Blairites should not use this as a pretext for severing links with the trade unions: "David Cameron and a minority within the Labour Party [have a common agenda] to exploit this and to cut off the ability of working people to be involved." He would be in favour of extending state funding for political parties, but says: "Taxpayers will not stand for - nor should they - the funding of poster sites, leaflets or advertising. What people will support is funding for political education, for training, for party organisation."

Iraq and sleaze, he says, remain the dominant issues. On the third anniversary of the war, which he publicly supported, he acknowledges the extent of the torment. "It was undoubtedly damaging during the election. Everybody on the doorstep, like me, knew that. And what it resulted in was a lot of Labour supporters voting Lib Dem and getting Tory MPs."

Hain's personal position on the war was made more pain- ful because his parents, seasoned anti-apartheid campaigners from South Africa, had bitterly opposed his decision. "I took the view that it was the right thing to do and stood up and was counted for that in the cabinet and outside. In the end, history will make a judgement on it. But at the moment it is difficult. We've just got to make sure that we can translate the [Iraqi] election verdict . . . into strong and durable government so that we are in a position to withdraw our troops and leave behind a very stable democracy."

Even with the Prime Minister's position looking imperilled, Hain resists the temptation to speculate about the timing of the Blair-Brown handover. So I ask him about the manner of the handover instead. Surely Tony Blair's closest allies will be the ones to tell him his time is up - just as they begged him to stay in the summer of 2004? I suggest the back-bench Blairites Alan Milburn and Stephen Byers as likely candidates for the job. Hain offers a different scenario, saying he thinks Charles Clarke is probably the only senior party figure with the necessary chutzpah to tell Blair to his face that he has to go.

Hain makes no secret of his desire to play a prominent role in a post-Blair world. His overtures to Gordon Brown's camp have sometimes been rebuffed, but he is keen to point out that Ed Miliband, one of the Chancellor's closest aides and now an MP, recently visited Belfast to see the Hain experiment at close hand. In the first sign that the Chancellor may be warming to Hain's advances, Brown agreed to speak beside him at an anti-poverty rally on the eve of the Welsh Labour conference.

Looking at the scale of the reforms Hain has already pushed through in Northern Ireland, one might be forgiven for think- ing that the battle for the deputy leadership in a Brown gov- ernment had already begun. Before our interview, I am taken on a tour of a series of Hain-inspired projects - a childcare centre on the Shankill Road, a government-funded carpentry training workshop for the unemployed, new-build social housing with solar panels. It all feels like the campaign trail.

"In the absence of a devol ved government - which I am working night and day to achieve - my view has been that Northern Ireland can't stand still while the world marches on," he tells me later, from across a grand, mahog any table in his Stormont office. "I was really struck by how the politics focused on an old constitutional argument and not on the social-economic agenda at all."

In nine months in the job, Hain has abolished the eleven-plus, introduced Brownite schemes such as the Sure Start programme and dawn-to-dusk schooling, and brought in private health companies to reduce waiting lists for routine operations. He has also slashed the number of quangos from more than 70 to 42 and replaced Northern Ireland's 19 health trusts and five education authorities with one body looking after health and social services and another with responsibility for education. At the same time, Northern Ireland's traditionally toothless local councils will be given new powers over planning decisions and regeneration.

In his zeal for change, Hain has made himself unpopular by raising local rates by nearly 20 per cent to bring them in line with the rest of the UK, and by introducing water charges. Exemptions for the poorest house-holds are designed to soften the blow, and Hain insists that the millions raised will go straight into health, education and new sustainable-energy projects. "When you look at what I've done here, you see a consistent theme of reforms which is not driven by any dogma from across the water, but a radical agenda to make sure Northern Ireland's people enjoy equal opportunities, driven by the values of social justice."

Hain is too cautious to use the phrase "post-Blair" himself, and insists that, despite initial nervousness, Downing Street is now fully behind his reforms. But it is difficult not to inter- pret the phrase "dogma from across the water" as Blairism. There is no doubt that his real focus is on the next occupant of No 10, whose name he casually drops into the conversation at every opportunity. "On the one hand, it is a public service efficiency reform agenda straight out of Gordon Brown's manual. On the other, it is also decentralising power," he says of his strategy in Northern Ireland.

There are also signs that Hain has broken from the Downing Street line on nuclear power, having already written a submission to the Energy Review urging a non-nuclear solution for Northern Ireland.

"There will be no support in the island of Ireland for building a nuclear power station," he says. "The Irish government set its face implacably against that and I don't think there would be any support in the north."

Hain recognises that Labour now faces an uphill struggle to convince the British electorate that it should be given a fourth term: "To win [the next election] we are going to have to renew ourselves as a government, renew the relationship between our leadership and the party, renew the relationship between the party and the trade-union movement. This is a big challenge and we have to do it by injecting more passion about our values, and our whole approach to politics as well."

At the same time, he warns against what he calls the "Al Gore" effect, recalling that the former US vice-president lost the presidential election in 2000 partly because he had rejected too much of the positive side of the Clinton legacy.

There remains for Hain the small matter of the peace process, and in this he knows he needs Blair's authority and experience. Looming over Stormont is the imposing Northern Ireland Assembly building, whose chambers have stood empty since power-sharing was suspended more than three years ago.

The Irish prime minister, Bertie Ahern, indicated recently that there is a compromise in the offing which could break the stalemate. Hain confirmed that Blair will visit Northern Ireland in a fortnight's time to issue a joint statement with the Irish premier. Sinn Fein and the nationalist SDLP have so far rejected unionist proposals for a "shadow assembly" to operate indefinitely until they believe that the conditions are right for power-sharing to resume.

British and Irish officials are preparing a plan to allow the assembly to meet over the summer, but only if a timetable can be agreed for the appointment of the top jobs in the executive, including first minister. A classic new Labour "third way", some might say, but one which Hain hopes will eventually lead him to vacate the office in his beloved castle.