Yvette Cooper: 'If Diplomats feel they can't talk, that is very difficult'

The Shadow Foreign Secretary tells Oliver Wright where America is going wrong in the Middle East – and why she thinks the repercussions from WikiLeaks are so damaging

Yvette Cooper, Her Majesty's Shadow Secretary of State for Foreign and Commonwealth Affairs, is in fits of giggles. She is recounting how, on one of the few foreign trips she made as a government minister, she was late arriving for a meeting in Poland. "I can only have done about two or three foreign trips the whole time I was in government, one of which was a health conference in Warsaw," she said. "I managed to arrive late because I forgot my passport and only realised when we got to the airport. It was hugely embarrassing. In this job I will have to become a more organised international traveller."

It is fair to say that the foreign affairs brief was not one which Ms Cooper expected or necessarily would have chosen when she was handed the portfolio by the new Labour leader, Ed Miliband, two months ago.

Many had tipped to her to become shadow Chancellor – having topped the poll of MPs in the shadow cabinet elections. But in the end she had too much political baggage for Mr Miliband – both as Mrs Ed Balls and because of her own popularity within the party.

She is seen by many MPs as Labour's natural next leader – if and when Miliband E slips up. By giving her the foreign affairs job, so the conspiracy theory goes, Ed is keeping her out of the domestic limelight – much as Gordon Brown did to David Miliband before the last election.

But this may be a forlorn hope. Cooper's first major foreign affairs speech today is a masterful example of how everything basically comes back to economics if you want it to.

"They (the Government) have got completely the wrong approach to the economy," she says. "We saw that at the G20 and we are seeing that now particularly in Europe. It's the very narrow focus on steep, sharp deficit reduction to the exclusion of all else. They did not have any strategy at all for the G20. There was no proper engagement about the issues on global imbalances and about some of the currency debates between the US and China.

"This week is the European Council meeting and it needs to focus on the serious economic and political challenges facing not just the eurozone but the whole of Europe. But the Tories' focus on co-ordinated fiscal austerity is preventing the scale of growth that we are going to need right across Europe in order to prevent the kind of financial crisis that we have already seen.

"To have every single country across Europe all going into steep fiscal contraction at the same time relies on every country in Europe growing through its exports. Well, who's everybody going to export to? The whole strategy for the British economy is about relying on a £100bn increase in exports over the next few years but that requires other countries in Europe to be growing enough for us to sell to."

Cooper, born in Inverness, has an impeccable Labour pedigree. Her father, Tony Cooper, was general secretary of the Engineers' and Managers' Association while her mother, a maths teacher, came from a mining family. Both were solid Labour supporters.

After a comprehensive school education in Hampshire and a First in PPE at Oxford, she spent a year at Harvard as a Kennedy scholar, like her future husband Ed Balls, and worked on the infamous shadow budget in 1992 before again going to America for a spell as a staffer in Bill Clinton's "war-room" in Arkansas in 1992.

Returning to Britain she became adviser to Harriet Harman and later to Gordon Brown in Labour's treasury team, followed by work at the Centre for Economic Performance. Oh, and she also managed two years working at The Independent as a leader writer.

So she was more than just a "Blair babe" when she entered Parliament as MP for Normanton, Pontefract and Castleford in 1997.

She first became a junior health minister in 1999, before a spell at the Department of Communities.

When Mr Brown (to whom she was always closer than Mr Blair) became Prime Minister he promoted her to Minister of Housing and in 2008 she became the first female Chief Secretary to the Treasury. In the same year she married Mr Balls with whom she has three children. She is 41.

We meet in her rather impersonal (but lived-in) Commons office. Papers are strewn over all of the desks ("I'd better turn those over before you start taking photos," she says in a throw-back to her days in government).

She is warm and engaging. But sometimes she unnecessarily slips back into new Labour apparatchik speak. You can almost hear her checking herself in case she says something that could be construed as mildly controversial.

But between the lines it is clear she is recalibrating Labour's foreign policy on a whole range of issues. Although she is close to the Democrats she is much more wary about Britain standing by America for the sake of the much overquoted "special relationship" and is critical of the present administration's lack of action on the Middle East (from where she has just returned).

It was her first visit and it obviously affected her. "I was struck most by some of the individuals I met. There was one man I talked to whose house was right next to the proposed path of Israel's 'peace wall'.

"His house was going to be on one side of 'the wall' with his olive groves, and on the other side the graves of his parents and his grandmother. The wall is going to separate them." She pauses.

"I also met the parents of Gilad Shalite – the Israeli soldier who has been kidnapped by Hamas. Their quiet and dignified vigil was very moving. When you see the personal implications of the conflict it brings it home."

She says America must not give up on attempts to push the peace process forward. "America clearly has a critical role to play in the Middle East peace process and I think it is quite worrying at the moment the lack of urgency," she says.

"It just feels that the status quo is not sustainable and if anybody thinks that just because there is currently little violence, no one should imagine that that can continue."

She has more sympathy for the Obama administration on the leaking of foreign cables to WikiLeaks which, she says, has damaged the business of diplomacy. "I think that it makes for good media stories but it is bad for diplomacy," she says.

"It is a concern if people end up not talking to each other, not talking to diplomats and not sending information back home. When we were in the meetings with senior politicians on both the Israeli and Palestinian side several of them said – admittedly with a slight twinkle in their eye – 'I hope you're not sending any emails back home about this meeting'.

"You know if you end up with a situation where people don't talk then that is difficult. International diplomacy needs people to talk. Diplomacy is the currency of peace and I don't think WikiLeaks helps that."

And what of life after power? Although she has met a number of the leading foreign policy players passing through London (General David Petraeus, Mahmoud Abbas, Louis Susman, Cathy Ashton among others) it must be very different from the life of red boxes, drivers and power she had before.

"It's different doing a new job," she says cautiously. "In many ways it's deeply frustrating. I was talking to some of the students in the constituency 10 days ago and there are young people who already are worried about going to study too far away from home.

"We had someone who rang the office who is a pensioner in Blackpool who just discovered she's going to be £30 a week worse off because the local authority is cutting her mortgage interest payment. She had no warning and no information from the Department of Work and Pensions – she's just suddenly been told this.

"When you were in government, when you had an individual case which was shocking you could go and talk to a minister – go and try and do something about it. That is the real frustration. You know I have meetings every Friday in the constituency and it's one thing after the other that we'd been working on which is now not going to happen."

And what next? She is, as she points out, only eight weeks into the new job. But you can't help but feel she will be unhappy playing the party's statesman for too long. She ruled herself out of running for leader this time round ("I did think about standing") because of the age of her children. But she certainly hasn't ruled it out in the future.

Should Ed Miliband fail at the next election (or before), her children will be older and her husband will have already tried for the big prize, leaving the way clear for Cooper.

Labour's first female leader? Very possibly. But she will have to show more giggles and a little less caution if she is to win the ultimate prize.