Grilling the fat cats from multinationals such as Google and Amazon holds little fear for Margaret Hodge. After all, she was the Labour MP who faced down the challenge of British National Party leader Nick Griffin at the last election, inflicting a crushing defeat that sent the BNP into a possibly terminal decline.

That success secured Hodge the affectionate “battling granny” moniker that she has carried into her work as chairman of Parliament’s Public Accounts Committee. It is a role to which the 68-year-old is well-suited after 40 years of public service beginning with her election to Islington Council in 1973. She came to the Commons following a 1994 by-election in Barking and will be standing again in 2015.

During the Blair and Brown governments, Hodge served in a number of departments, with her ministerial roles encompassing culture and tourism, work and children. But taking on the BNP leader at the 2010 election was perhaps her biggest challenge — and greatest triumph.

Criticised even by fellow Labour MPs for raising awareness of the threat posed by Griffin and his party years before the election, Hodge returned to grassroots activism to convince her constituents not to turn to the far right. “I needed support,” she recalls at her Westminster office. “I worked really hard for four years and put a lot of effort in. We started in 2006 when Griffin announced he would stand. It was a terrible time for me. It was just after my husband died and I thought: ‘Oh my God, what am I doing?’

“I shall never forget the Jewish community on that. They really just rose to the occasion and supported me. It was right across the political spectrum — it wasn’t just Labour Jews. We won it because we had spent four years really working to reconnect with local people. We live in a Westminster bubble here. I’d been worried about the constituency since 2001.”

Hodge’s demolition of Griffin — she received 18,000 more votes than him, pushing him into third — precipitated a BNP collapse across the constituency. Two years later the party lost all 12 of its council seats in Barking and Dagenham. The English Defence League has partly filled the void, a new and different concern, says Hodge. “It hasn’t got a base in the community. The BNP had a base in Barking. The EDL are linking on social networks. They can produce a crowd in a particular area on a particular day. They are pretty horrible.

“The lesson [for politicians] is ‘keep connected to your community’. It’s about how you do your politics.

People’s politics really do start from the local. They care about national issues that impact on them locally.

I think if you look at the most successful MPs who win against the odds, it is done with politics starting from the local. I never read what [the party] tell me to campaign on each week. I ignore them.”

Hodge believes her election to the PAC chairmanship was “recognition” from her Westminster colleagues for her anti-extremist work. She has grasped the role with both hands and through the committee’s work on multinationals’ tax avoidance, has raised its profile to an unprecedented level. Far from seeing it as a step down after a decade in government, she believes the role represents the culmination of years rising through the political ranks.

“I’ve had 40 years’ experience of public services,” she explains. “I’ve touched almost every bit of the public sector you can think of. I’ve chaired a local housing authority, I’ve been on a health board, I’ve been on quangos, university governing bodies. There is something about all that knowledge and experience that helps me do this job more effectively. I’m not trying to climb a greasy pole. That gives me a new freedom which has been helpful in fulfilling the role to reflect ordinary people’s views rather than feel I’m constrained by party loyalty.

“People think: ‘She’s asking the questions I want my MP to ask.’ It’s a team effort. All our reports are unanimous. I have to build consensus. My years of experience help, I hope.”

Hodge speaks of the committee with a relish that suggests she feels more effective now than during her ministerial spells. Is that the case? “A little bit,” she agrees. “It’s the power of exposure. You come into politics to change the world according to your values. Obviously government is the best way of doing that. But I’m having a really stimulating time.

“I feel incredibly privileged to be doing it and really lucky to have it at this point in my life. I’m also absolutely determined, as I always have been, to make a difference.”

The window of Hodge’s office — which she inherited when elected to the PAC top job — affords a spectacular view of the Thames, with the 72-storey Shard standing out in the distance.

It would be a cliché to suggest Hodge has the world of big corporations permanently in her sights, but it is impossible to ignore the steely determination with which she leads one of the key select committees.

Lord Patten and leading BBC officials were interrogated last week, before the spotlight was turned on the Duchy of Cornwall and the heir-to-the-throne’s tax arrangements.

Hodge acknowledges that her committee’s approach is grabbing the public’s attention.

“Everyone is feeling the pinch. People are really struggling to pay their bills. Most of us don’t have any choice about paying our tax. Public services are being cut and that impacts on living standards. In that climate, to see wealthy individuals and global companies thinking they can avoid paying their rightful share to the common purse for the common good is an outrage.

“It really galls people. Tax is not a clear black and white issue. Aggressively avoiding tax and exploiting the weakness of HMRC is as much a moral issue as a legal one. There’s a duty on rich individuals and the global companies to pay their fair share.”

Working hard and contributing to society are characteristics which resonate powerfully with Hodge.

Born in Egypt, she moved to south London at the age of four after her father, Hans Oppenheimer, sensed a growth of antisemitic fervour in Cairo after the founding of Israel. The welcome afforded to the Oppenheimers in Britain instilled in her a desire to give something back.

“I remember arriving here — the horrible porridge, the cold. I have a strong memory of us getting our British passports. I was nine. My mum died when I was 10. These experiences have fuelled my championing of the underdog. I was really deeply embedded in my community. My values about equality, which is at the root of being a Labour member, completely come out of my experience of being an immigrant.”

As well as remaining Barking and Dagenham’s MP, Hodge intends to continue leading her committee for as long as possible. She may be passing the conventional retirement age, but her work is clearly not finished yet.