Alexander: The Lib Dem who knows he can make a difference

Not yet 40, the Chief Secretary to the Treasury is doing what few have done before: hammering out a Budget as part of a coalition government. He speaks to Oliver Wright

It would be fair to say that Danny Alexander has had one of the most extraordinary ascents in recent British politics.

By a quirk of electoral arithmetic and an unexpected scandal he is – two months shy of his 40th birthday – arguably one of the four most important men in Government.

As one of the "Quad" along with David Cameron, Nick Clegg and George Osborne, every important decision made by the Coalition crosses his desk.

And for the next ten days in the run up to the Budget his role as Chief Secretary to the Treasury has never been more central.

The times when he was a press officer and journalists in Westminster used to disdainfully attempt to escape his briefings are a distant memory.

The last few days have been particularly busy. When we meet – on the 6.50pm train to Hull – he has already been in three meetings with the Chancellor that day and over the previous week has attended four or so meetings of the Quad, thrashing out details of the Budget in 12 days' time.

Unlike previous governments where budget decisions went to the wire and the Treasury reputedly bought fast-drying ink so that all the documents could be printed in time, this year key agreements have to be made earlier.

Partly this is the nature of coalition government, which means everything has to be formerly signed off by both parties, but also the new Office of Budget Responsibility needs all the Treasury's documents in advance so there is less room for manoeuvre.

"The days of chancellors sitting up till 2am the night before the Budget trying to work out what to do are long gone," he says.

Like all ministers before a Budget he is cagey about what it will contain (that doesn't usually stop "sources" from leaking most of it) but he does confirm that there is still a robust argument going on.

"Nick and I are fighting bloody hard," he says. "It is not easy."

At the heart of the discussions is the question of where to spend what very limited resources there are available.

Many on the Tory side would like to see the Government get rid of Labour's 50p tax rate and reverse the planned cuts in child benefit for those earning more than £40,000 a year.

On the Lib Dem side the priority is bringing workers earning less than £10,000 out of tax and pushing the idea of moving the tax system from one which favours taxing income to one which focuses on wealth.

While he will not be drawn on specifics you get the clear impression that while the Lib Dems will make gains on the first demand the idea of a mansion tax is off the cards – whatever Vince Cable may say.

"Our very top priority is lifting the income tax threshold to £10,000," Mr Alexander says.

"I genuinely think it is the best policy that any party in British politics has at the moment for trying to give some real help to people who are struggling, to encourage them to go out to work.

"Of course all these things have to be paid for – and different people have different priorities about how we might use money which is available to us. Those are things in a Coalition you have to debate and discuss. Different parties have different priorities. This is our priority. No doubt a range of those priorities will be reflected in the Budget."

Traditionally the Chief Secretary to the Treasury deals with government spending alone, but the nature of the Coalition means that Mr Alexander has to be aware of the whole gamut of economic policy. He has also had to take the lead on spending cuts, which he says has given him "a pretty thick skin as a result".

"I was incredibly conscious when making those decisions and still am as we deliver them that every number on every page represents a service or someone's job," he says.

Mr Alexander splits his time between his constituency home in Aviemore, in the Highlands, and London where he now has to spend a disproportionate amount of time. He is married to the journalist Rebecca Hoar and they have two daughters, Isabel and Isla.

So has the job changed him?

Unlike some politicians who can spin a yarn or tell an anecdote to help them speak "human", Mr Alexander still appears slightly self-conscious talking about himself. "In very practical terms it changes things," he says. "I've never worked as hard as I do now. I'm spending much more time in London. I probably don't spend as much time with my friends as a result. Probably every politician says this but from my point of view – no I don't think I've changed. I think I'm the same person I was. I have the same values; the same ideals."

In the longer term he faces significant political struggles with boundary changes which might carve up his electorate and the likelihood that – particularly in Scotland – the Liberal Democrats will be punished for going into government with the Olde Tory enemy.

Mr Alexander is unrepentant though, whatever electoral fortunes may bring.

"The Liberal Democrats really are making a difference," he says.

"We have an enormous amount to be proud of. We have a record to be proud of. We have got nothing to apologise for going into government. It is our opponents who should apologise."