Peter Hain: Fêted in Manhattan, hectored in Neath... it's all in a day's work for minister with many hats

Peter Hain has had a summer of sharp contrasts. During a week-long busman's holiday in Martha's Vineyard near Boston, he mixed sailing with serving as an unofficial, secretive emissary to the Democratic Party, which is feeling rather bruised by Labour's decision to keep its distance from its presidential candidate, John Kerry, in order not to upset George Bush.

Peter Hain has had a summer of sharp contrasts. During a week-long busman's holiday in Martha's Vineyard near Boston, he mixed sailing with serving as an unofficial, secretive emissary to the Democratic Party, which is feeling rather bruised by Labour's decision to keep its distance from its presidential candidate, John Kerry, in order not to upset George Bush.

A glittering party was thrown in Mr Hain's honour by Sir Harold Evans and Tina Brown in their Manhattan penthouse, attended by senior Democrats and Kerry strategists. The only other Labour figures to have received such treatment are Tony Blair and Gordon Brown.

After two weeks topping up his perma-tan near Malaga, the Leader of the Commons was brought down to earth at the weekend as he prepared for the return of Parliament tomorrow after its summer break. Within hours of returning from Spain, he held surgeries in two former pit villages in his Neath constituency in south Wales, Lower Brynamman and Rhiwfawr. The talk there was a million miles from Bush vs Kerry. Locals lobbied him about disabled people's access to pavements, soaring council tax bills and the problems caused by asylum-seekers - even though none live in the area. "Council tax and asylum are ticking away in quite a serious fashion for us as a government," Mr Hain admits in a break between surgeries.

Although he squeezes in Neath's rugby match against Swansea, most of the weekend is spent ploughing through two red ministerial boxes. One is marked Leader of the Commons, the other Secretary of State for Wales. Mr Hain does both jobs; he is a busy, ambitious man who wears lots of hats.

Perhaps his most intriguing role is as the go-between with the US Democrats. Mr Blair blessed his visit, but it was not official, so the White House could not take offence.

"It was a private visit, renewing old friendships and making some new ones," Mr Hain says cryptically. The mood in Labour circles seems pessimistic about a Kerry victory. Does he think the Democrat can win in November? "No comment. It's not for cabinet ministers to get involved."

On his trip, Mr Hain is believed to have maintained Mr Blair's strict neutrality about the presidential race while soothing the ruffled feathers of those Democrats worried that Labour had abandoned the close links between the parties.

Mr Hain returns from his summer break fired up for a new mission. For months, he has been worried that the revived Liberal Democrats are a threat to Labour. The conventional wisdom in the Labour hierarchy was that Charles Kennedy's party helps Labour because it mainly takes votes from the Tories. But after the Iraq war, that is changing. The Liberal Democrats are making inroads into Labour's northern heartlands. Mr Hain is worried that the Liberal Democrats could cost Labour scores of parliamentary seats, even where it has no hope of winning itself, by taking enough votes from Labour to hand victory to the Tories.

The Commons leader warns that this could result in a Tory victory at the general election expected in May. He is deeply concerned that left-of-centre voters might be tempted by the Liberal Democrats.

"The implosion of Michael Howard's leadership has confirmed that we are in a different party political scene, where Labour has to fight not just an election against the Tories but an election against the Lib Dems as well," he says.

He welcomes Labour's tougher stance against the third party in this summer's Birmingham Hodge Hill and Leicester South by-elections. "The Lib Dems are the most aggressive, effective, street politics campaigners and they have to be taken on," he says. "Progressive voters and Labour supporters have absolutely no idea that Lib Dems are no longer the really progressive alternative to Labour. They have positioned themselves to the left of Labour on some issues - like Iraq. But on other issues their right-wing lurch is putting them in a crypto-Thatcherite camp which would horrify any Labour supporter tempted to vote for them to send us a message."

Mr Hain cites Liberal Democrat policies to abolish the New Deal, which he says would cut programmes to get the disabled into work; the child trust fund of up to £500 for each baby and the Department of Trade and Industry, which he claims would leave British business high and dry. The party has accepted laissez-faire economics and most of the Tory agenda of privatisation on public services, he says.

"I can foresee a situation where even a hob-nailed Tory party led by Michael Howard could do much, much better than anyone imagines. In a whole string of marginal seats, where the Tories have been dismissed as not a serious threat to us, you could wake up the next morning with a Tory MP with even a small swing from Labour to the LibDems."

There is more than a touch of irony in Mr Hain leading the charge against the Liberal Democrats. He first came to prominence as an anti-apartheid campaigner and chairman of the Young Liberals in the 1970s.

Is he now displaying the zeal of the convert? "It was 30 years ago," he sighs. "Many young radicals, including several current Labour MPs, were involved in the Liberals." Asked why he left the party, he neatly turns the clock forward to today's message: he could see the drift to the right starting.

Mr Hain acknowledges that Mr Kennedy's opposition to the Iraq war appeals to some natural Labour supporters. "Iraq is incredibly difficult and will continue to be. But I think people see more clearly what we are trying to do. The choice is become clearer - between the strategy for a democratic Iraq the Labour Government is driving and the cannibalisation of Iraq that al-Qa'ida is desperate to achieve."

At Labour's annual conference at the end of this month, it seems, the leadership hopes to sweep the doubts about Iraq under a carpet of pre-election unity. "It will be a platform to lay out our policies in the run-up to the general election," he says. "Everyone will focus, laser-like, on that priority - whether cabinet ministers or grassroots party members. They know what is at stake."

On public services, Mr Hain believes people are starting to notice improvements. "They have got to feel it on the ground. Rather than have us tell them with a shower of statistics," he says. "I don't think they are necessarily in the frame of mind to accept our statistics.

"I don't think there is any conscious desire to get rid of a Labour Government. People are disgruntled with us but not angry with us, except a section of the population on Iraq. There is no sign on the doorstep of the anger we faced in the late 70s and early 1980s. The doorstep feeling is quite warm but people are not motivated to come out and vote for us."

Mr Hain will juggle lots of balls when the Commons returns. As well as announcing the return of the bill to ban fox-hunting, he will be involved in tightening security at Westminster. Recommendations will be made by the security services later this month.

"I have been working closely with the Speaker to bring House of Commons security into the post-9/11 age. We are in the era of the suicide bomber not the joker who slips past someone looking the other way

"What we mustn't do is create a fortress-like barrier between MPs and voters, between Parliament and people. Even the most active citizen would not want the mother of parliaments to be blown up and would understand that we have to be at least as professional and serious about security as you willingly are when you get on an aeroplane."

Mr Hain will chair a review of the new "family friendly" Commons hours before MPs vote early next year on whether to keep them. Demands are growing for a return to traditional, late-night sittings but Mr Hain says: "I hope we won't turn the clock back. I think we will be able to modify the existing [new] hours to get rid of some of the faults." He admits the new regime has resulted in virtually a "three day [a week] House" which is "not healthy" and that the "collegiate atmosphere" has broken down. He plans more big debates on Thursdays, when business often peters out.

Mr Hain is pressing for reform of the House of Lords, supporting the "secondary mandate" system under which peers would be elected in proportion to the votes cast at a general election. He also wants a sweeping review of the powers of the second chamber. "We need to put business through the Lords on a proper modern basis where you can't talk for ever, where the Opposition front bench can't delay legislation because it is on holiday, gone grouse-shooting or has an appointment in the City."

Despite his reputation as someone who speaks his mind, Mr Hain is trusted as a "safe pair of hands" by Downing Street and often fielded for tricky media interviews. His candour has landed him in hot water, notably when he hinted at the need for higher tax rates on the rich. Now that the Fabian Society think-tank has backed his ideas, does he favour a public debate on the issue? Mr Hain is on message. "I'm observing strict radio silence on that," he says.

THE CV

Born: 1950

Education: Raised in South Africa; Queen Mary College, London; Sussex University

1969: Chaired campaign to stop South Africa cricket tour

1971: Chairman of Young Liberals

1976: Union of Communication Workers

1991: Elected MP for Neath

1997: Junior minister in Welsh Office

1999: Minister of State, Foreign Office

2001: Energy minister; minister for Europe

2002: Secretary of State for Wales

2003: Leader of the House of Commons