Peter Mandelson: He's refreshed, he's doing 'the job of his life' - but he won't rule out a return to British politics

The Monday Interview: European commissioner for external trade

On the ninth floor of the European Commission's main building, Peter Mandelson emerges from his office carrying an empty plate on a plastic tray. His enemies believe Europe's trade commissioner has a fatal weakness for the high life, but the former cabinet minister says that lunch these days often consists of a bit of bread and cheese.

On the ninth floor of the European Commission's main building, Peter Mandelson emerges from his office carrying an empty plate on a plastic tray. His enemies believe Europe's trade commissioner has a fatal weakness for the high life, but the former cabinet minister says that lunch these days often consists of a bit of bread and cheese.

He is travelling more and working harder than in any other public job, he says, adding it would be difficult to find a home more modest than his rented apartment in Brussels. Some will not be convinced by this hair-shirted Peter Mandelson but, whatever his lifestyle, the man who quit the Cabinet twice is back in a big job. In charge of EU trade policy, he holds one of the few powerful positions at the European Commission, and to prove the point he will be one of just three commissioners at a formal meeting with George Bush tomorrow.

Mr Mandelson believes that in making the visit the President is "reaching out to Europe and the rest of the world and we should reach back". This is the time "to put the past behind us" or, to use a New Labour phrase, "a chance for renewal". This Republican President is not a natural ally, as the souvenirs in Mr Mandelson's spacious but functional office demonstrate; one is a framed photograph autographed with the words: "To Peter, with thanks, Bill Clinton".

President George Bush, argues the commissioner, has been "demonised by the European media [and] doesn't seem to have made a huge effort to offset the demonisation that has taken place". He adds: "The lack of warmth for European unity shown during Mr Bush's first term was an aberration in American policy." By contrast, this presidential visit "indicates a recognition that European unity and integration is a good thing". Mr Mandelson continues: "For everything Europe wants to do in the world, we need America as our partner. But the same goes for America."

But does the world's only "hyper-power" (as the French call it) really need a collection of 25 European nations? Seated at a long wooden table, Mr Mandelson responds slowly and deliberately: "The experiences of both Afghanistan and Iraq show America's vulnerability when it tries to go it alone. Without allies working with the US in Iraq, the position would be even worse. When America is alone, it is too exposed. It needs to work with and through others to achieve its goals. With effort on both sides, the ability to agree is substantial against a backdrop of a less-unequal relationship, between a more united and cohesive Europe and a more internationalist US".

Mr Mandelson hopes for more transatlantic co-operation on boosting the Middle Eastern economies (to underpin the peace process), on cutting transatlantic barriers on trade and investment and on joint technology (though not targets) for combating climate change. Yet his own job underlines the difficulties of transatlantic economic co-operation, let alone agreeing on Iraq or Iran. One dispute - over aviation subsidies given by the US to Boeing and by Europe to Airbus - is a test of whether deeds, as well as words, are changing. Both sides sued for peace a month ago, giving themselves three months to get an outline deal. Yet little seems to have moved and Mr Mandelson hints this deadline may slip. The talking is intensive, says the trade commissioner. "And I am still committed to agree a way forward within our three-month deadline - or so."

This is technical stuff, many miles from the cut and thrust of political debate ahead of an election at home. Mr Mandelson backs the return of Alastair Campbell to the fray and describes claims of negative campaigning from Labour as "baseless" and "baloney". Despite his departure to Brussels, the trade commissioner remains one of Tony Blair's trusted friends. His advice to the Prime Minister on election tactics - "if he were to ask for it" - would be: "Be yourself. Fight on our record. Show you have ideas for the future and talk to and get among the people. The national media will never do you any favours." It is safe to assume that a message something like this has already been delivered.

But doesn't the creator of Labour's red rose feel any pangs of regret at his exile from the central position he enjoyed in previous elections? "I have absolutely no yearning at all for that role," says Mr Mandelson, who will be travelling for much of the campaign - "whenever it is". He adds: "That's not to distance myself or disparage the efforts of my former colleagues. I am happy to watch from afar. I have found the move to Brussels refreshing. This is the job of my life. I have never had to work harder as a public servant. I have never had to deal with such a range of issues and policies and people and places. I regard trade policy as a tool of prosperity but also as a tool of growth development and social justice in the developing world. I am pro-growth and jobs in Europe and pro the poor in the rest of the world."

He is worried about a lack of momentum in world trade talks which, by increasing trade with developing countries, could boost prosperity in the Third World. "My current concern is about the apparent lack of ambition, the lack of political will to make a real success of this [global trade] round. Anyone can reach a low-level agreement on the lowest common denominator. But what good would that be either for us in Europe - and the business opportunities and employment opportunities we want to see - but also for the millions of poor and needy in developing countries who desperately need the market access and the trade assistance and support?"

Already one of the most committed New Labour supporters of the EU, Mr Mandelson says his conviction about Britain's European destiny has been reinforced by his new job. The balance between the member states and the commission has improved, he says. "The commission does not purport to be the government of Europe but we have to be a strong and independent political executive for the EU. Left simply to intergovernmentalism, the EU would quickly lose steam."

Ironically, the UK's soul-searching over its place in Europe comes as British values are on the ascendancy in Brussels after the accession of ex-Communist states. "They have independent minds, their own interests and their own view of Europe's direction. They tend to share Britain's outlook."

As to whether the Government has done enough to sell Europe, Mr Mandelson's response is barbed but unspecific: "The Prime Minister has given strong leadership. I wish all members of the Government had done the same."

Lord Patten, a former European commissioner, said last year that the referendum on the EU constitution is winnable only if the Chancellor, Gordon Brown, plays an enthusiastic role. Asked about this, Mr Mandelson replies without mentioning the Chancellor. "It is a statement of the obvious to say that a divided government will get a negative response from the people. That's not just the case over Europe policy it is a general statement about politics. The Government has to up its game after the election whenever it is held and I am sure it has every intention of doing so." Challenged on the Chancellor's role, he replies: "Gordon Brown made clear his commitment to winning the referendum when he spoke the other weekend and I welcome that."

Mr Mandelson insists that a vote on the constitution can be won and hints that the campaign will include a pledge not to seek membership of the euro in the near future. He is confident partly because the "yes" case has yet to be made, "partly because people would rather see Britain kept at the centre of events, rather than pushed to the side which would be the consequence of our voting 'no'. And lastly, those who had misgivings about the single currency will realise one referendum will no doubt be enough for this Government and this Parliament, and a 'yes' to the constitution is unlikely to be followed by an early referendum on the single currency." By contrast, a "no" would mean Britain "relegated the margins of the EU. We would be clinging on and heading towards Norwegian status, where we have to abide by European rules but would have little or no influence in shaping them."

In the meantime, the economic reform and deregulation agenda of the Commission, led by Jose Manuel Barroso, ought to help improve the EU's standing in Britain. On one current controversy - a proposed liberalisation law to allow firms to provide services across borders - Mr Mandelson is pragmatic in the face of complaints from France and Germany. He wants the measure revised or "re-presented" but "without throwing the baby out with the bathwater".

Nearly four months into the job, the new commissioner believes he has "adjusted well" to life in Brussels. He has even been praised by the French newspaper Le Figaro. But he has neither pledged the rest of his career to Europe, nor ruled out a return to domestic politics. "Britain is my home. I have British instincts and a British outlook which I bring to my job in the EU," he says. "I haven't turned my back on Britain, nor have I stopped being a political animal. I have always worked on the basis that the future will look after itself and I look forward to that still being the case."

THE CV

Born 21 October 1953, London

Education Hendon County Grammar School; politics, philosophy and economics at St Catherine's College, Oxford

Career 1979 Lambeth councillor; 1985 Labour's campaigns and communication director; 1992 MP for Hartlepool; 1995 shadow Civil Service spokesman; 1996 election campaign manager; 1997 cabinet minister without portfolio; 1998 Trade and Industry Secretary; 1999 Northern Ireland Secretary; 2004 EU trade commissioner