Can he bring back Tory smiles?

Ken Clarke loves everything about elections, not least the bird's- eye view of the land below that you get in brilliant spring sunshine from a small low-flying aircraft. "You know why helicopters have to fly down the river," he says. "In case they fall out of the sky." The Chancellor guffaws loudly in a perfect imitation of Rory Bremner imitating him while his young Tory minder, Justin Powell-Tuck, smiles a shade nervously. Nobody, including the Chancellor himself, seems to know who has provided our helicopter. But, during the flight, Clarke delights in pointing out the London landmarks: the round courtyard in the Treasury, the new development at the Royals, Canary Wharf, seemingly only a few feet below us, the muddy Greenwich millennium site, the creeks meandering through the flatlands of south Essex.

And what a way to see England for this quintessentially English politician. We begin in Basildon, the rough, tough ultra-marginal which was too hot for the sitting MP David Amess to stay in, and where there seem to be more studs per male ear than in any other town in Britain. We end the day, unexpectedly, at Cambridge, in the kitchen of the Master's lodgings at Gonville and Caius, where a butler in black jacket, grey pin-stripe trousers and white gloves pours china tea and hands round exquisitely cut, smoked salmon sandwiches and where the new Master, Neil McKendrick, tells us something Clarke's two biographers have missed. McKendrick was a 22-year-old history don when Clarke sat the scholarship. McKendrick recommended him for a scholarship and wanted him to do history. He got an exhibition and read law. But recently the Master looked up what he said of the future Chancellor in his report: "A clear robust mind. But lacks subtlety."

Six hours earlier Clarke had bounded into Basildon, uncharacteristically immaculate in light, double-breasted suit and suede brogues. He is full of glee at what he will describe repeatedly today as Labour's "overnight conversion to privatisation". He believes, not unreasonably, that he has got a dramatic result by exposing the "pounds 12bn hole" in Labour's spending plans. For several days he has been pressing Labour to explain how, if they are intending to stick to his own spending plans, they will manage to do so without the Government's planned privatisation receipts or using frozen local authority proceeds to reduce the borrowing total. And he has drawn some blood. In a shift which Gordon Brown might have been planning for months, but which has been allowed to look suspiciously like simple flank-covering, Labour now turns out to be contemplating privatisation of its own: Channel 4, the Met Office and Air Traffic Control, the planned sale of which was described only months earlier by senior Labour spokesmen as "crazy". So Clarke, confronted by the press pack outside the Argos warehouse, warms to his theme that Labour's economic policy is in the hands of "unprincipled scoundrels".

The warehouse itself, enormous (386,000 sq ft) and clean, neatly symbolises the economic debate, and its frustrations for Clarke's party, at the heart of this election. On the one hand it reflects precisely the brimming business confidence of a rapidly expanding service industry. It is the latest of four such centres and an identical one is being built just outside Manchester. What better evidence of a thriving consumer economy? On the other hand, the Argos warehouse has little to fear from a Labour government adopting the Social Chapter, a national minimum wage or a 48-hour week: its 300 employees work an average 37.5 hour week and earn pounds 6.45 per hour. There are share options and a Save as You Earn scheme. Turnover is low and the staff share generous benefits, including pensions. Even the part- time workers have pension rights.

The warehouse isn't unionised. Not because the company is anti-union - its other four plants are all unionised - but because there is little interest. A union recruitment meeting attracted only 30 people and John Hampson, Argos's distribution director, is confident that a recognition ballot would be decisively lost. The workers greet Clarke politely, but are somehow disengaged from the electoral purpose of the visit.

With the voters themselves, Clarke is, for all his cheery belligerence, a respectfully old fashioned, soft-sell politician. He knows from long experience how, on seeing a minister looming on the horizon, electors "will dive into the greengrocers to be safe"; or an employee "will suddenly start to look terribly industrious". He therefore tries to "create a generally favourable impression" by taking a friendly interest in the electors themselves, introduces them to the candidate (and despite meeting five for the first time and having a self-confessedly awful memory for names, he doesn't slip up once). And he doesn't proselytise much. He admits to being especially careful about what he says with reporters present. There is always the danger that you will accidentally "say something consequential which will make a great news story of an issue you had not exactly intended to feature that day". Hadn't that been how in 1987 Neil Kinnock was skewered, by a voter from Penge, into saying that he would "take to the hills and fight as a guerrilla" against a Soviet attack?

But under attack, Clarke will argue back. He is delighted at the support from street traders in Norwich market. But there is an almost Monty Python knockabout with Cathleen Lawrie, a Labour Party member, who stalks him through the market and attacks him on tax. "Are you trying to get me into an argument, Mr Clarke? I don't have to play the game, you know." "You haven't the first idea what Gordon Brown would do if he got in and nor has he," replies the Chancellor. And to a woman who shouts at him in Ipswich town centre that "you and your lot have wrecked the country", he exclaims back: "My recollection is that when we came into office half the country was on strike against the other half." Relaxing afterwards in the pub over a pint and a cheese sandwich, he plays shamelessly up to his image. Affecting dismay at the prospect of leaving the pub, he declares: "I like it here."

But he has the true pro's touch: as the day wears on, he knows he is starting gradually to lose out in the battle for the airwaves to "the white-suited war correspondent" (as he at one point describes the new Tatton candidate Martin Bell). But he will stick determinedly to his theme throughout the day. And rightly so: not for the first time you have the impression that Clarke is fighting the election campaign that would make a difference if only his party wasn't engulfed by Tatton. You suspect that he would like to see Mr Hamilton replaced without delay, but he is scrupulous in never saying so. Instead, to the microphones thrust in front of him at the end of the day by reporters in Cambridge, he says, without once losing his amiability: "Are people going to cast votes on the Government for the next five years on the basis on whether Neil Hamilton should continue to be the candidate for Tatton? They're not in my part of the world and I hope they're not in Cambridge."

Earlier, he has turned down flat a suggestion that he should debate with Gordon Brown on the World At One. He is delighted to do it, but not from an Ipswich studio in which Brown would have the huge advantage of being physically with the presenter. And, as we speed through Norwich in a Jaguar driven by the Peter Martin, the eastern area Tory chairman, he claims to be a little concerned that, in a BBC local radio interview, he may have been a little "laid back" in suggesting that Great Yarmouth didn't necessarily need European transport cash.

But confronted unexpectedly by another radio reporter, who asks what he feels about "the new Steven Spielberg film being lost by Norfolk to the Republic of Ireland" he plays the straightest of bats. He would need to know the details before commenting, he says. And anyway Britain's film industry has never been doing better. And when Arnold Reeve, a shop assistant in Matthews' electrical store appears a little hesitant about the pace at which business is picking up, he takes it as welcome evidence "that the recovery will be sustainable. Cheerio."

Which helps to sum up his attitude to the economy, the one issue on which he genuinely believes the Government deserves to win a fifth election. He doesn't use the word "boom" once; he uses "sustainable recovery" all the time. He won't talk about it, but it's an open secret in Westminster that "Britain is booming" wasn't his own choice of slogan, though in the brief period available after the admen had thought of it, no one came up with a better one. And he isn't a "loadsamoney" politician. He emphasises continually the importance of income tax cuts to the wider economy and the need to spread the benefits of recovery to those who haven't yet tasted them.

But tomorrow he meets Eddie George, the Governor of the Bank of England, for the monthly monetary meeting - in Nottingham for the first time. In anticipation of a post-election interest-rate rise, the pound has soared to its highest level since 1992. George is virtually certain to press for a modest rise before polling day.

Isn't it true, I ask, that whatever the economic case, such a rise would be politically impossible, perhaps even suicidal. No it wouldn't, insists Clarke, suddenly becoming the Chancellor rather than electioneer, on the road from Norwich to Cambridge: it's a "difficult economic dilemma". And all the factors will have to be weighed, but, says Clarke: "I've never had any difficulty explaining, when we've put rates up or taken them down, what we're doing it for. So I don't think it is the political no-no that everyone keeps assuring me it is."

For once we've scarcely talked about Europe at all. So what are the risks that, if the Tories enter the closing days of the campaign still trailing in the polls, the potential leadership candidates will start a premature leadership contest by trailing their Euro-sceptic colours?

"I don't think that will happen," says Clarke. "There are sections of the Conservative press who will encourage people to do that but it isn't at the moment producing any response. I think the Conservative Party has settled a policy and knows how to fight an election on the basis of a programme for government."

Is it, I ask, a safe assumption that if he loses he'll stay in politics. "Oh yeah, a very safe assumption." And stand as leader? This he won't discuss. "It is positively damaging," he warns, if people start turning their mind to anything other than victory.

Who knows what the Chancellor, for all his confident demeanour, thinks deep down about the outcome of the election. He hasn't yet started to campaign in earnest among his own people in Nottinghamshire, where it is easiest to compare opinion with previous elections. All you know is that, amid all the distractions and the noises, he is going to try like hell. And, if anyone could make a difference, he could.