Ken Loach sits with his hands clutching his chair for dear life, his head shrinking into his shoulders, a skinny question mark of a man. Never did a man appear so diffident. And then he opens his mouth.

Loach has spent the past half-century making films that shake with anger, and is just about to release his angriest yet. I, Daniel Blake, winner of the Palme d’Or at the 2016 Cannes film festival, is about a man broken by the British benefits system. His doctor says he is too sick to work after a near-fatal heart attack, but the Department for Work and Pensions decides he is not entitled to sickness benefit. Blake finds himself trapped in a downward spiral after his jobseeker’s allowance is suspended, because he is thought not to be trying hard enough to find the work he is unfit to do. The film is so spare and spartan, it could be a parable. It is also immensely moving – particularly a scene in a food bank, when a young mother Blake has befriended breaks down in a manner that borders on the feral.

“Angry? Mmmmmmm,” Loach says so quietly it barely registers. He talks about the people he and his regular writer Paul Laverty met while doing their research: the young lad with nothing in his fridge who hadn’t eaten properly for three days; the woman ashamed of attending food banks; the man told to queue for a casual shift at 5.30am, then sent home an hour later because he wasn’t needed. “That constant humiliation to survive. If you’re not angry about it, what kind of person are you?”

Carol White as the heroine of Loach’s 1966 film Cathy Come Home. Photograph: Dave Pickthorne/BBC

We are in a cafe close to his office in Soho, London. Loach orders coffee and croissants. Meekly, of course, but his meekness is deceptive: even when ordering coffee, he knows exactly what he wants. “I’ll have a little glass of tap water, please, and a tiny drop of cold milk, thank you. Yes,” he continues, “we met so many people who had been humiliated and destroyed and lost all sense of being able to hold their own in the world.”

In many ways, I, Daniel Blake can be seen as a companion piece to Cathy Come Home, Loach’s seminal 1966 film about a young family’s descent into homelessness, which resulted in a parliamentary debate and raised public awareness of homelessness. But while Cathy led to real social change, Loach predicts people will not be outraged by Daniel: they will accept it as normal that a man should be cheated out of benefits by the state, or a young single mother has to move from London to Newcastle to find herself a scrap of a home.

Whose world would he rather share: Cathy’s or Daniel’s? “That’s a complicated question. In the world of Cathy, we still had the main elements of the welfare state in place, even though they were being eroded. People were still employed directly by the health service. We still owned the gas, the electric, the water, the railways. As a world to live in, Cathy’s was more congenial, with a stronger sense of social responsibility. When she was shown as homeless, people were angry about it. Now society is nowhere near as cohesive. The consequences of Thatcher and Blair have eroded the sense that we are responsible for each other, that we are our brothers’ and sisters’ keeper. So in that sense I prefer the days of Cathy.”

In the 60s and 70s, Loach belonged to small leftist groups: the Socialist Labour League (forerunner of the Workers Revolutionary Party), the International Socialists, the International Marxist Group, all critical of both western capitalism and the Stalinism of the Soviet Union. They’d swot up on Marxism, debate it intensely and tell anybody who’d listen that capitalism was unsustainable: it would devour itself, and the working classes in the process. But it was all guesswork. At the time, the ready availability of jobs and a relatively well-funded welfare state suggested capitalism was actually doing just dandy.

People are getting the sense that the world cannot be sustained like this, that we really have to change things now

It’s only now, Loach says, that the collapse they predicted is coming to pass. “We said that every crisis means more demands on the working class, more exploitation, but we were saying it in the abstract. People weren’t imagining zero-hours contracts, agency work, food banks. Who would have thought in the 60s that it would be acceptable and normal to starve unless you got charity food? It’s grotesque that we now accept this.”

He gives a brilliantly simple explanation as to why capitalism will ultimately fail society, particularly in a globalised world: “Each corporation is trying to get more sales through lower prices, therefore profits reduce, therefore they have to find the cheapest labour wherever it is, therefore capital can never be stable.”

Despite everything, Loach is an optimist. “I think people are getting the sense that the world cannot be sustained like this,” he says. “The impulse behind Syriza, Podemos, Bernie Sanders in the US and Jeremy Corbyn is that another world is possible. There is a sense that we really have to change things now.”

***

I first interviewed Loach 23 years ago, soon after he made the film Raining Stones, written by Jim Allen (with whom he collaborated until he died in 1999), about a man who cannot afford to buy his daughter a communion dress and involves himself disastrously with loan sharks. It was classic Loach territory: exploitation, the indignity of unemployment, the resilience and humour of working-class people. I remember walking through Soho and Loach stopping to buy us a punnet of strawberries from a market stall, while telling me pity was a rightwing construct: the answer to all setbacks, as the great American trade unionist Joe Hill said, is, “Don’t mourn, organise!”

I recently watched The Big Flame, Loach’s 1969 TV film about 10,000 Liverpool dockers staging a work-in. In the film, one docker strums the song Joe Hill on his guitar, while another explains that Hill’s famous line was delivered when he was facing the firing squad after being framed for murder. Today, Loach argues that the struggle to organise is made tougher by the fact that so many workers are technically self-employed and not part of a collective. Again, he quotes Joe Hill at me.

Critics say Loach’s weakness is that he has never changed: he is still delivering the same Marxist sermon he was half a century ago. His fans argue that this is his strength. Loach himself, now an unlikely 80 years old, would ask why on earth he should change when the system remains the same.

Loach’s latest film, I, Daniel Blake: ‘I prefer the days of Cathy,’ he says. Photograph: Everett/Rex/Shutterstock

But Loach was not always a lefty – far from it. At school, he represented the Tories in a mock election. “I don’t think too much should be made of that,” he says. I had assumed he was playing devil’s advocate, or it was just a passing teenage whim, but no, he says: these were the values with which he was brought up. Loach’s father was an electrician who became a foreman in his factory in Nuneaton – a classic working-class Tory, he says. His mother was a hairdresser. When Loach’s father was asked to join the staff and become a manager, he refused, because it would mean a monthly payment into the bank rather than weekly cash in a brown envelope. (He hated the idea of being in debt, and always wanted money to hand.) He was a bright, shrewd man who had passed the grammar school exam but didn’t go, because his mother couldn’t afford the uniform. He read books about the great barristers and dreamed of a future in law for his son.

Young Kenneth was clever and ambitious. He went to grammar school (a form of education he despises because it plucks a few working-class kids out of their lives to “succeed”, leaving the others to fail) and had a voracious appetite for learning. He would sneak-read Shakespeare under the sheets when the bedroom light was supposed to be out. The family took the rightwing Daily Express, and Loach would read it cover to cover, never questioning its values. As far as he was concerned, it simply reflected the world. “I adopted the Tories like you adopt a team,” he says, embarrassed. How long did he adopt them for? “Probably until I was 19, when I went into the RAF.”

After the air force, he went to Oxford University to study law. He became active in the drama society, performed sketches with Dudley Moore, started to direct, slacked on the academic front, graduated with a third and decided his future lay in the theatre. His father was devastated.

Loach had always wanted to act. “I had that bee in my bonnet since I was 15.” Did he have a role model? “I remember seeing an old actor called Marius Goring play Richard III, and thinking that was the bee’s knees. There were probably echoes of that in what I tried to do.” Was he any good? He giggles. “I couldn’t possibly say. Well, I got away with it.” Even today, you sense he believes he could have been a contender. His wife Lesley, usually loyal beyond the call of duty, has told me he was a hopeless ham, the kind of actor he would be least likely to cast in his own films. Is there a bit of him that prickles at this? “Of course. But who knows?”

He got a job as assistant director at Northampton rep. “I thought I could still play a part or two, but the director obviously had no confidence in me. I didn’t even get a part in the pantomime, so I thought maybe I’d better stick to directing.”

With Eric Cantona on the set of 2009’s Looking For Eric. Photograph: Everett Collection/Rex Features

In 1963, he moved to the BBC as a trainee director and before long was directing the police drama Z-Cars. There, he met a group of young socialist writers – Troy Kennedy Martin, Roger Smith, Nell Dunn, Barry Hines, Jeremy Sandford – who fed him their best work and politicised him.

Did he discuss his evolving politics with his father? “No, because he didn’t like the idea of his son challenging him. I think he thought I didn’t know what I was talking about. To know what you were talking about, you had to work where he had, and have dealt with the people he dealt with, and faced the rigours of just not seeing the sunlight.”

Who took most pride in his achievements, his mother or father? “I think they shared a pride. He wouldn’t go in for praise, but he’d acknowledge it had happened. He’s a working man from the West Midlands. People are quite reserved. There were no metropolitan hugs in the 1950s, I’ll tell you!”

Although his work on Z-Cars was praised for its new dirty realism (accepting that the police could be prejudiced or even corrupt), Loach didn’t feel it was real enough, so he went back to first principles and analysed the films he most admired: the Czech new wave and the Italian neorealists. “In these films, people are just being, not performing. And what I was doing was getting performances I didn’t believe. So I learned from my mistakes.”

He took his craft to pieces and rebuilt it, borrowing some techniques (using natural light whenever possible and casting nonprofessional actors alongside professionals) and establishing new ones of his own (shooting chronologically; feeding the storyline to actors bit by bit, so their reactions are real; combining improvised shots with closely scripted ones). It is perhaps this level of realism that distinguishes his films more than anything: Cathy, wonderfully played by Carol White, looks shocked when her child is taken away because the actor was; ditto the boy who cries in Kes when he is caned on the hand.

David Bradley in 1969’s Kes. Photograph: Everett/Rex/Shutterstock

From the mid-60s to the end of that decade, everything Loach did created headlines and set agendas. It wasn’t just that the films looked and felt different; the subject matter was radical, too. Up The Junction started a debate about backstreet abortions, The Big Flame about workers’ rights and Three Clear Sundays about the death penalty. This run culminated in 1969 with Kes, the film based on the Hines novel about a working-class boy whose love for a kestrel brings him out of his shell. Loach’s film is as unsentimental as it is heartwrenching, as brutal as it is beautiful, and features one of the funniest football scenes in the history of cinema when the games teacher, played by Brian Glover and kitted out in a Bobby Charlton top, insists on taking a penalty that never was.

But in 1971 Loach’s world collapsed. He was driving on the outside lane of the M1 when a car on the inside lane lost a wheel, crashed into Loach and pushed his car into the upright of a bridge. His five-year-old son Nicholas was killed, Lesley’s grandmother also died, and Lesley was left fighting for her life. Loach didn’t work again for more than a year. “We lost a child, and then your whole personal… Everything you have about you is concentrated on that loss. So you don’t have the emotional space or strength to do anything other than just grieve, and that’s a long process.”

His sentences become stubbly and broken when he talks about it. Loach will refer to his son or his child, but tends not to use his name. Does he find it difficult to say? “Well, I always have, yes... Nicholas.” He says the name so quickly, you could miss it. “Because the wound is so deep. And I think that’s part of the problem. We probably have never been able to grieve and resolve things. I think now there are processes that would encourage you to express your grief and to reach some reconciliation with it. At the time we didn’t, despite trying to be clever about other people’s situations. At one level we were conscious that it had to happen, and at another we were too wounded to begin it.”

Loach on set in 1980. Photograph: David Farrell/Getty Images

When he returned to work, it was in an unlikely way, adapting Chekhov’s short story A Misfortune for television. He went on to make the epic TV series Days Of Hope, covering the period between the first world war and the national strike of 1926, and The Price Of Coal, about a mining disaster; but his film career floundered. Even the most devoted fan found 1981’s Looks & Smiles painfully miserable, and Loach says he made a mess of the only other film he made in the 80s, Fatherland.

As well as a loss of confidence, there was another problem: Loach kept getting banned. In 1983 he made Questions Of Leadership, a series that asked whether workers were being betrayed by trade union officials, but Channel 4, which had commissioned it, refused to broadcast it, saying it was unbalanced. His 1984 film Which Side Are You On?, about striking miners’ songs and poems, made for Melvyn Bragg’s South Bank Show, was shelved by London Weekend Television for being too political. In 1987, his production of Jim Allen’s play Perdition, which examined an alleged collaboration between Zionist leaders and the Nazis, was cancelled by Max Stafford-Clark at the Royal Court theatre just 36 hours before opening night. By the late 80s, he couldn’t get anything commissioned, let alone shown, for love nor money. To his eternal shame, he made a commercial for McDonald’s.

In the recent television documentary Versus: The Life And Films Of Ken Loach, the film-maker comes across as mild and lovable – until he talks about those who betrayed him. On screen, he describes Stafford-Clark as a coward, and the ferocity of the attack is shocking.

You’re not afraid of making enemies, are you, I ask. It depends, he says. “My mum was a peacemaker, and in personal things I tend to do that, because I can’t deal with personal conflict. I find that horrible.” Loach and Lesley have four surviving children, two of whom – Jim and Emma – are also film-makers. “I couldn’t argue with the people you rely on and trust, and care for, and cherish, because the cost would be too great. But step outside that and face the world, come on!”

I rephrase my earlier question: is he afraid of making enemies in public life and politics? “No, because they are enemies. When we did those films back in the 80s, the rightwing trade unionists and the rightwing Labourites and the people who joined them were out to destroy what I’d done. They did destroy what I’d done.”

The Wind That Shakes The Barley, winner of the 2006 Palme d’Or. Photograph: Snap Stills/Rex

Does he ever feel he’s too unforgiving? “No, because you’ve got to be clear it’s not personal, but if somebody consciously sabotages something because they are afraid of the consequences, that is unforgivable. And particularly in our business. If you’re a politician, you can see there might be times when, to secure the greater good, you have to take a backwards step. That is a matter of tactics. But for people who make films or who are journalists, our function is to say these are the underlying ideas and principles. And this is what people have got to be judged on. That is at the heart of the play that Max Stafford-Clark killed, and was at the heart of the documentaries that the Labourite rightwingers censored.”

Did he ever think his career was over? “Yes. Towards the end of the 80s, I started to think about going back to the law, even though I had no qualifications and a very bad degree. I just didn’t know what to do. Teaching film, I suppose. We had to take out loans, living a bit hand-to-mouth.” He stops, apologetically. “I mean, it was middle-class poverty! We were still in a house. But I couldn’t see where I fitted in.”

***

Next day, we meet again, this time at Loach’s office. At the top of the narrow stairs is a framed poster for Hidden Agenda, the 1990 film about state terrorism in Northern Ireland that heralded his comeback. Naturally, it caused a stink. Loach was accused of being an IRA propagandist and a British traitor by the film critic Alexander Walker. It was also the first Loach film produced by Rebecca O’Brien, and the two have worked together ever since.

He has continued to make film after film since then, winning award after award. At the heart of every movie, all made on small budgets and drawing on a hotchpotch of British and European money, there has been a cause; from the Spanish civil war (Land And Freedom) to the Contra insurgency against the Sandinistas in Nicaragua (Carla’s Song), from trade union rights in the US (Bread And Roses: the only film he has made in North America) to Ireland’s war of independence (The Wind That Shakes The Barley) and, most of all, the struggle for work, dignity and justice (Raining Stones, Sweet Sixteen, It’s A Free World, My Name Is Joe, The Angels’ Share – basically all of them). Loach has made stars of some actors (Ian Hart, Peter Mullan, Cillian Murphy), but rarely uses them more than once. He prefers his actors to come with no baggage: the less familiar the face, the more believable the story. The one celebrity he has cast is Eric Cantona, the eponymous hero of Looking For Eric, but Loach made the exception because Cantona plays himself in a one-off foray into magic realism.

With wife Lesley (on left) and producer Rebecca O’Brien at the 2010 Cannes film festival. Photograph: Michael Buckner/Getty Images

Since Jim Allen’s death, most of Loach’s films have been written by Paul Laverty. At the occasional parties Loach reluctantly hosts (his 70th birthday, his 80th earlier this year), old collaborators such as producer Tony Garnett and writer Roger Smith mingle with newer ones. As he says, he doesn’t fall out with friends and family easily.

On the mantelpiece in the office is a monobrowed mask of Cantona, a picture of the three-legged dog that features in I, Daniel Blake, and the two Palme d’Ors he has won (the first was for The Wind That Shakes The Barley). Above one is a red dog collar. I ask what it is. Loach giggles: “That’s the Palme Dog, an award given to the most impressive dog in a film. We were given a lifetime achievement award for three-legged dogs.”

Now I’m staring at a photograph of a naked Ricky Tomlinson in Riff-Raff, playing a builder who has just treated himself to a shower in a posh apartment block he is working on. There always seems to come a point in a Loach film where a character sticks two fingers up at authority – whether in the form of Tomlinson’s bottom or Daniel Blake graffiti-ing his name on the jobcentre wall. “It’s a toss-up which is the more potent symbol of resistance,” Loach says. “Ricky Tomlinson’s backside or Daniel’s graffiti? People fight back. People are not docile victims. In rightwing art, films, books, whatever, they like the poor as victims, because that is the politics of charity – the lady of the manor going around on Christmas. ‘The poor are always with us, the order of society is fixed and we have to be kind to the poor.’ Leftwing politics argues that poverty is a by-product of class society, and that people will resist it, and it is that resistance we want to value, to show, to celebrate. So Daniel Blake is not a supplicant, he’s a man of dignity.”

First thing in the morning, I feel about 85. But after a good coffee, I feel 79

He smiles mischievously. “If you read the Morning Star as opposed to the Guardian, you’d see story after story, day after day, about people who are actually taking action. There’s the Durham teaching assistants, for example – it took you ages to cover it. They are saying, we are not putting up with having our wages cut and being put out of work.”

In recent years, Loach has been active in political parties such as Respect and Left Unity that have presented themselves as an alternative to Labour. (After 30 years as a Labour party member, he left in disgust at Tony Blair.) When deputy Labour leader Tom Watson recently complained that his party was being infiltrated by Trotskyists, was he talking about people like Loach? “Well, I’m not in the Labour party yet!” He is still a member of Left Unity. “But since Jeremy Corbyn took over as leader, it hasn’t stood in elections. It is not standing in opposition to Labour.” Would he consider leaving Left Unity and rejoining Labour? “It’s a possibility, because that’s where the big discussion will be happening. And Jeremy Corbyn stands for things that I’ve supported for 50-odd years.”

‘Step outside and face the world, come on!’ Photograph: Harry Borden for the Guardian Photograph: Harry Borden/The Guardian

A common criticism of Corbyn, I say, is that he is more interested in growing the movement than in winning power. “I think that is nonsense,” Loach says: the stronger the movement, the greater the chance of winning an election. “It has to be a movement, in that it isn’t just an electoral machine. That’s what Blair and his acolytes never understood or never wanted. They just wanted the machine that would give them power as a clique. What the Labour movement is about is a broad mass of people actively engaged in a democratic process.” Back in the 60s, he says, it was just those small groups talking to themselves; he loves the fact that there are now so many people engaged in the debate.

The political climate seems to have given him a renewed appetite for work. In 2013, Rebecca O’Brien suggested that he had made his last feature film; that he would focus on documentaries. Three years on, all talk of retirement has been banished. “It was only a casual remark,” Loach gulps. “It got rather spread abroad too much.”

Why do so many directors have such staying power, I ask. “It’s a great privilege to make a film, to have it shown, and for people to see it.” He’s not going to do a Sinatra, constantly announcing his retirement and making a comeback. “Nononono, let’s not even talk of this.” Eighty is a perfectly sensible age, and as long as he’s physically capable, he will keep making films. Does he never feel his age? “First thing in the morning, I feel about 85.” He grins. “But after a good coffee, I feel 79. People go on a long time now, don’t they? It’s not something you want to think about much. Just keep pedalling.”

• I, Daniel Blake is released on 21 October.