Ken Clarke says government has become far too presidential. He blames Tony Blair for destroying Cabinet government, and regrets the Cameroons’ admiration for Blair.

Clarke is a strong supporter of Michael Gove, and thinks it “a pity” that he was moved from the post of Education Secretary. In Clarke’s view, you are not doing your job as either Education or Health Secretary (both of which posts he has held) if you are popular.

He describes the Greek crisis as “a three-pipe problem”, and adds: “The Greeks have made it impossible, unless they come up with some brilliant solution, to stay in the euro.” He warns that if Greece is forced out of the euro, it will be important not to take revenge on the Greek people.

Clarke also warns that referendums don’t settle anything. He agrees that the referendum on EU membership promised by David Cameron is a manoeuvre to keep the Tory Party together while also keeping Britain inside the European Union.

It is therefore, Clarke says, comparable to the referendum held by Harold Wilson in 1975, which kept Britain in Europe but failed to heal the divisions on Europe within the Labour Party. Six years later, the party split, with the pro-Europeans marching off to form the SDP, and it took Labour over 20 years to win another election.

But Clarke began by pointing out another very big change since he entered politics. Born in 1940, he first stood for Parliament in 1964, has been an MP since 1970, is standing again this year, and has served in eight different Cabinet posts, including Chancellor of the Exchequer and Home Secretary. In 2014 he returned to the backbenches, having served since 2010 as Lord Chancellor and then as Minister without Portfolio.

ConHome: “Has Government got better or worse while you’ve been around?”

Clarke: “I’ve reached the stage that once the thought enters my mind that things are not what they were, I count to ten, because that’s an inevitable reaction that hits everybody at my age.

“Politics and the process of government are very considerably transformed, of course, from the day when I first took an interest and then entered Parliament some decades ago. The biggest single change being it’s moved into the mass media age, and the process of government is dominated by daily, round-the-clock, campaigning [heavy emphasis, almost a groan, on the word “campaigning”], laid on top of every decision.”

ConHome: “Oh dear.”

Clarke: “As government tries to do more and more, and some of the problems get more complex, it is important that you maintain the quality of decision-making, despite all the rather short-term pressures upon everybody.

“The Government itself has become more presidential by far than it used to be. I thought David was going to have more collective government when he got in, wanted to go back to having more substantial figures in his Cabinet, and more authority to departmental ministers, and he probably still does, but in the run up to an election, all the pressures are on him to join in the media game.”

ConHome: “Isn’t the Cabinet far too big anyhow?”

Clarke: “Far too many people attend, yes. I do blame Tony Blair for making changes which certainly have changed government from what I previously knew, some of which I think are unfortunate.”

ConHome: “What, for example?”

Clarke: “Firstly Tony took on a huge number of staff in Number Ten and created a Number Ten department, and gave a prominent role to a tabloid journalist in helping him on strategy and policy. And he by all accounts abandoned quite a lot of the principle of collective responsibility and discussion which had gone on before.

“I remember a very senior civil servant, who obviously I knew well at the time, chatting to me, it was then off the record but it’s a long time ago now. New Labour had been in about a fortnight, and one of the dramatic things that had been done had been to announce the independence of the Bank of England, and this very senior civil servant, upon getting wind this was coming, asked Tony Blair, ‘Shouldn’t we put this on the agenda for Cabinet?’ To which Tony replied: ‘What for? What’s it got to do with them?’

“And I was also told on very good authority that the very first Cabinet meeting that Tony ran, the only item on the agenda was Alastair Campbell briefing members of the Cabinet on the line to take on current topics for next week. Because of course Tony had never been in a government before.

“And he was obsessed with all these American models, and he and Gordon even more so were totally obsessed with the media, so it hadn’t occurred to them that Cabinet had any particular role in decision making.

“The next generation will receive the Chilcot Report to discover how far the Cabinet were actually remotely involved, most of them, in the decision to go to war. I strongly suspect that they weren’t. David has pulled back from that a bit, but he hasn’t pulled back to the more collective system of government which predated Blair.

“And they do regard, the Cameroons, my colleagues at the top of the government, do always express their great admiration for Tony Blair and the way he managed his government and presented things. What do they call him? ‘The Master.’

“I point out that Tony is now one of the most unpopular and reviled figures in the United Kingdom. I don’t think any of these campaigning methods he introduced actually worked particularly. He got a good long run because the Conservative Party was carrying on an internal civil war and making itself unelectable as an Opposition.

“The system of government works remarkably well, all things considered. But it is too buffeted by short-term events and the atmosphere of public debate. We no longer have problems, we only have crises. The topic of the week, as far as the media are concerned, involves hysteria of the week, about some subject which will be totally forgotten in two weeks’ time.”

ConHome: “There is one respect, though, in which the whole thing has become less frenetic: refreshing my memory about your early ministerial career, I was reminded that ministers in the 1980s changed job much more often.”

Clarke: “Yeah, well, Tony even speeded that up. John Reid had five jobs in three years. Tony had never been a minister, so he had no idea what a minister was supposed to do. So every time he was a bit stuck for a press release, and wanted to send a message, he had a reshuffle.

“Cameron I think has drawn the lesson from Blair and Brown that constant reshuffles are a waste of time, so he was very good, it was about two years before his first reshuffle. Blair at times reduced it to comedy. Musical chairs. The only one he stuck with was Gordon Brown: he was quite powerless to move him, the only one he should have moved.”

ConHome: “A lot of Tories were rather cross when Michael Gove was moved lately. What did you think about that?”

Clarke: “I think George Osborne and Michael Gove are the two most successful departmental ministers in this government. So I thought it was a pity that Michael was moved away. I’ve no doubt that he’ll be given another senior job if we win the next election. I’ve no idea why he was moved, but of course I’ve read the newspaper reports that it was all to do with Lynton Crosby’s opinion polls, which I find it difficult to believe.

“Michael was very controversial. It’s always the case, if you are Secretary of State for Education, or you’re Secretary of State for Health, and are not unpopular in the opinion polls, then they’re neither of them doing the job properly.

“Health and education do require a process of almost constant change and reform, in response to constantly changing demands. The employees of the great services are very resistant to change of any kind. And the public are even more resistant to evident change.

“I don’t agree with everything Michael did. But on balance he was an extremely good reforming Secretary of State. I trust it wasn’t just that he’d made himself unpopular with the teachers’ unions that he was given this sabbatical at the whips’ office.”

ConHome: “There’s a new finance minister in Greece…”

Clarke: “Yes, it makes me feel nostalgic. One of those marvellous 1960s Trotskyites. I don’t think the Greek public have voted for the Left. The number of Greeks who believe that Mr Trotsky had the answer after all, or who take seriously this escapism from the problem of debt and recession, is very small.

“They voted because they utterly despaired of their established parties, and probably rightly, although it was a bit hard on the outgoing prime minister. But at last they decided that the old Greek political establishment, corrupt and oligarchic as it had always been, had got them into this mess, and was probably not going to get them out of it quickly, and so they decided to take a risk – what else was on offer? – and see if these extraordinary alternative Left politicians can somehow pull off a miracle, which I don’t think they can.

“Every western democracy has that problem. The angry impatience, the escapism, the easy answer – to say it’s all the fault of our established politicians, all the fault of these bloody foreigners – every western democracy has that.

“In no western democracy can the traditional parties of government get a majority on their own. The first one was the Tea Party. Then you had Le Pen. Most of the protests are right-wing nationalist in Europe, but some are left-wing nationalist, like Spain and Greece. The Greeks are the only ones so far who’ve put theirs in office. I am fearful of the consequences.”

ConHome: “This finance minister, Yanis Varoufakis, he went on Italian television and said the euro is ‘a house of cards’ and ‘Italy’s debt situation is unsustainable’, which of course annoyed the Italian finance minister.”

Clarke: “He’s been elected on a preposterous platform, which is not getting him anywhere, so I’m sure he is trying to destabilise all the others now, yes.”

ConHome: “But what is to happen? Because the debts are unsustainable in some of these countries. So what is to be done?”

Clarke: “Well they are. Maybe, in due course, further restructuring and rescheduling of some countries’ debts will be required. Can’t rule that out for Greece, can’t rule that out for Italy or Spain, perhaps. Well Spain perhaps you can. Portugal perhaps will need it one day. But you can’t just do this overnight in order to allow the Government to go on a spending spree and refuse to carry out the reforms necessary to make their economy competitive.

“If there was the faintest prospect of Syriza continuing with structural reform, and if they would extend it to include the attacks on corruption, and tax evasion, then if I was a finance minister still I probably would go along with some slightly smoke and mirror sort of rescheduling or debt swaps.

“But to have this lot turn up and say they demand forgiveness of their debts because they’ve got to hire a lot of new civil servants…”

ConHome: “They’re also saying it’s because of the Second World War.”

Clarke: “Well as I say they’re all nationalists, left-wing, right-wing. Ours is anti-foreigner, theirs is anti-foreigner, and Syriza have turned the whole thing into an anti-German thing. The first thing the new Prime Minister did if you recall was go to a memorial to the partisans killed by the Germans. Not a very subtle political message, I think.

“It’s not the Germans. The Left across Europe keep playing on this anti-German remember the war stuff. Angela Merkel is head and shoulders the best political leader in western Europe. But along with others she has a responsibility to get the European economies back into a competitive state.”

ConHome: “But can Greece ever become competitive within the euro?”

Clarke: “Well it does require a lot of change. Well I wouldn’t have let it in. It wasn’t convergent. The one thing to get across in Greece and elsewhere is that the present problems are not caused by the euro.

“There’s a whole section of British pundits and journalists who constantly tell the public ‘All this is something to do with the European Union and the euro’, which it’s not. The crisis started in Wall Street and the City of London, where banks went in for folly, and regulators were useless, and we had a truly enormous credit boom, followed by a credit crunch.

“Had the euro been properly applied, they wouldn’t have had much trouble. I helped draw up the euro, and we had very strict rules.”

ConHome: “Wasn’t that rather naïve of you, to think these rules would be kept? The Germans are very keen on rules.”

Clarke: “Well they were very keen on fiscal discipline. The Maastricht criteria, do you remember? The population of Europe can only dream of having a government capable of hitting the Maastricht criteria now. 60 per cent of GDP stock of debt. No more than three per cent deficits. And they didn’t keep to it. There were penalities, but they weren’t applied.”

ConHome: “Even the Germans fudged it.”

Clarke: “Well the Germans were the first to break it. Others needed no encouragement. We didn’t even need German encouragement. We were outdoing the Greeks and we weren’t in it. And there were meant to be rules of qualifying before you joined the euro. And they let Italy in, which never satisfied them.

“It was always only suitable for convergent and competitive economies. But they let Greece in, and they let Portugal in, who plainly were not ready. But what made the weakest ones weakest was they had extremely uncompetitive structures.

“What they actually need are Thatcherite reforms, most of southern Europe. But the obvious example of reform of the labour laws is currently being reversed by Greece.”

ConHome: “I take your point that the crisis wasn’t caused by the euro. But doesn’t it sometimes help to have an exchange rate which can take some of the strain?”

Clarke: “No, that’s the British folly. The British for the last 30 years, large numbers, including quite sensible economic commentators, seem to assume that when you trash your economy, which we have frequently done since the war, everything’s solved by just trashing your currency. You devalue.”

ConHome: “It takes some of the strain, doesn’t it?”

Clarke: “We devalued by 25 per cent in 2007-08, and we still have a deficit in our balance of trade.”

ConHome: “We do have employment.”

Clarke: “But it’s not export-led yet. We have employment because of our labour laws. Thanks to Margaret, we have the most flexible labour laws in the western world.”

ConHome: “So do you think Greece will in fact be forced out of the euro?”

Clarke: “I’ve no idea. But if I were there, as someone who was doing this kind of thing 20 years ago, when we had Mexican crashes, one of the contingency plans I’d be working on desperately quickly is how to minimise the impact of Grexit.

“And what you’ve got to minimise is the disruption to financial markets. And you’ve also got to minimise the blow that will hit the Greek population. There’s no point sitting there watching the Greeks falling into total misery and saying it serves them right. They are members of the EU and you’ve got to minimise the shock, the consequences.”

A few minutes later, Clarke added: “The Greeks have made it impossible, unless they come up with some brilliant solution, to stay in. Because they will destabilise monetary policy, and the currency, for everybody else. I mean the euro is already weakening. I trust some brilliant minds from some European countries will come up with the solution. But it is looking worrying, mainly because the Greek politicians are still stomping about giving us samples of their election campaign. I can only say they’ve got a three-pipe problem with the Greeks.”

ConHome: “It is quite a three-pipe problem, and it’s not quite clear who is Sherlock Holmes.”

Clarke: “The British are obsessed with the euro. You can’t get the British political class or journalists to look at Europe without going on about the euro. They’re forever forecasting its imminent demise. They have for the last 20 years, because of the very peculiar tinted glasses that the British wear on these things. I mean we’re still admitting members. Latvia joined only a few months ago.”

ConHome: “And can you see Britain joining eventually in fact?”

Clarke: “Not in my lifetime, no. It’s now a political given…In 50 years’ time, the idea that every sovereign state has its own separate little currency will be regarded as rather comic.”

ConHome: “Lastly, the politics of the British referendum. I know you’re not keen on referendums…”

Clarke: “They never settle anything. They always destabilise the subject. As we’re seeing in Scotland.”

ConHome: “Yes. I can nevertheless see that in order to manage the Conservative Party, while probably keeping us inside the European Union, this was quite clever. Because the great demand of the eurosceptics was for a referendum, so you say, ‘Yes, you can have your referendum, but as a matter of fact I will win it, because I will get some Harold Wilsonish concessions.’”

Clarke: “Yes, I think that was the intention. It had better work. Nothing has quietened our eurosceptics down for the last 20 years.”

ConHome: “They’re finally quiet at the moment, aren’t they?”

Clarke: “Well to be fair, I am a very keen Conservative, so what we’ve got to do is to make sure is that it does settle it and put it to bed. And we should be aware of the risks. Because I think referendums usually stir things up, they don’t settle things.

“I mean just as a warning anecdote from an old sweat. Harold Wilson amazed everybody by calling a referendum for party management purposes. The only reason for a referendum was to unite his party, and to settle it.

“He was astonished to see his Cabinet divide into fiercely warring factions in the campaign, from which he took personally rather a detached role. Roy Jenkins and Shirley Williams on one side, Michael Foot and Barbara Castle on the other certainly were not detached.

“He got a Yes result, but his left-wing eurosceptics took no notice of the result, his party remained split, and within six years it split finally, when the Gang of Four left. And from the day that Harold Wilson called the referendum, it was more than 20 years before his party could win an election again.”