Thatcher still divides 20 years after resignation

Even now, two decades after her resignation, Margaret Thatcher remains one of the most potent and divisive figures in the British political consciousness.

Margaret Thatcher on a tank while making an official visit to British forces in Germany.

On Monday it was 20 years since Margaret Thatcher resigned as Prime Minister of the United Kingdom. Her health is now frail and she has made no public comments since 2002. Yet she remains an undiminished figure in British politics.

Political leaders - including Gordon Brown and Tony Blair - have sought her approval and all discussion of British social and political life, sooner or later, features the word "Thatcherite". She is widely recognised as a great figure in a way that has not been true of any other British politician since Winston Churchill, yet she still arouses extraordinary levels of animosity.

She will probably receive, when the time comes, a state funeral, an honour rarely accorded to politicians in Britain, but for some her death will also be an occasion for rejoicing. Most oddly of all, Thatcher continues to arouse passionate feelings among my own students - people who were not, for the most part, even born when she was prime minister.

There is a sense, then, in which all British people, whether they admire or loathe her, are "Thatcher's children". In both social and economic terms, her government left legacies still evident today.

Certainly, two specific Thatcherite policies have become widely accepted in the decades since she withdrew from office. The first of these is privatisation. The sale of nationalised companies seemed such a dangerously radical idea in 1979 that it was barely mentioned in the Tories' pre-election manifesto. Nevertheless, when in power they embarked on a landmark programme which moved ownership of huge companies (most notably British Telecom, British Airways and British Gas) from the state into the hands of the general public.

Secondly, British trade unions are now much weaker than they were in the 1970s. This is partly because of legislation that sought to limit their powers but, more importantly, because the Thatcher government irrevocably changed the climate of labour relations, especially when it faced down the powerful National Union of Mineworkers in the famous strike of the mid-1980s.

It is true that the recent global economic crisis has changed the political climate of Britain, but this has rarely meant that policies enacted in the Thatcher era have been reversed. The nationalisation of some banks by Gordon Brown was a desperate and temporary expedient, rather than a new turn in economic management.

In economic terms, Thatcherism always meant more than voting for a government led by Margaret Thatcher. People who bought their own houses (especially when those houses had formerly been owned by local authorities), or people who subscribed to shares in privatised companies, were in one way or another fitting in with the Thatcherite vision. Similarly, those who crossed picket lines were accepting a broadly Thatcherite notion that keeping their own job and supporting their own family mattered more than showing solidarity with a trade union. (It is worth remembering that a significant proportion of coal miners, including those who had initially gone on strike themselves, eventually crossed picket lines in the strike of 1984 to 1985.)

Precisely because so many people bought into these values, there is often an element of hypocrisy in attacks on Thatcher. She has become a kind of alibi - someone who can be blamed for all the ills of modern British society.

For instance, before the 1980s, British building societies had been cautiously run associations that existed to provide mortgages for their members. The Liberal Democrat politician Shirley Williams remarked that the Thatcher government was directly responsible for the problems of Northern Rock (a building society turned bank that had to be taken over by the state in early 2008 after it got caught up in the sub-prime mortgage crisis) because she had demutualised building societies. She did nothing of the sort. Thatcher simply passed legislation that allowed these organisations to determine their own status. To a large degree, she was not the sole architect of a new economy but a prime minister who allowed the public to map out its own economic future.

When we turn away from economics, however, Thatcher's contribution to British life is less clear. In social and cultural terms, the concept of Thatcherism now seems remarkably dated. She came to power with much talk about law and order, restoring traditional values in education and defending the family against the supposed threat posed by alternative lifestyles. How sincere this rhetoric was is difficult to judge. It was certainly not very effective.

In fact, the period since 1979 has seen a considerable liberalisation in British cultural values. Indeed, if the parties of the left have adopted a largely Thatcherite agenda in terms of economics, the modern Conservative Party has claimed much of the anti-Thatcher agenda when it comes to questions such as gay rights. David Cameron's current coalition government is really an alliance of an economically right-wing incarnation of the Liberal Democrats with a culturally left-wing Conservative Party. In some ways, the very harshness of Thatcher's rhetoric on cultural issues has made it relatively easy for David Cameron to distance himself from her style while keeping much of her economic policy.

The question of Europe is the area in which Thatcher's legacy is most problematic. In the elections of 1979 or 1983, the Conservatives campaigned on a pro-European platform. The party regarded Europe as a vital bulwark of western values against the communism of the east and admired the success of European economies, particularly that of West Germany.

Thatcher, however, was unenthusiastic about European integration. As her own economic policies came to seem more successful, she increasingly viewed and presented Britain as a model for continental Europe rather than viewing continental Europe as a model for Britain. This issue divided Thatcher, not just from other Conservatives, but also from card-carrying Thatcherites (notably Geoffrey Howe and Nigel Lawson). Europe was one of the key factors in Thatcher's downfall and continues to split the Conservative Party today.

This can be seen in the clear blue water of the current coalition. David Cameron belongs to the Eurosceptic wing of his party. This separates him from the small, but surprisingly tough band of pro-European Conservatives, of whom the most important member is Kenneth Clarke.

It separates him even more from his new allies in the Liberal Democrats, always the most pro-European element in British politics. The coalition survives because the financial crisis has made Europe seem, for the time being, a relatively unimportant issue. It is, however, a problem that will return to haunt Cameron.

There is, of course, a danger that looking too hard at Thatcher's legacy can blind Britain to the changes that have happened in the world since 1990 and the fact that her policies were very much products of their time. This is most strikingly exhibited in foreign policy - an area where Thatcher's achievements are rarely recognised. The whole Thatcher era coincided with the last phase of the Cold War. For all her Iron Lady rhetoric, she knew that the nuclear stand-off with the Soviet Union imposed severe constraints on what she could do. She did not anticipate the fall of the Soviet Union and seems to have assumed that British policy should aim at containment of Communist power rather than its elimination.

She knew, too, that Britain had to coexist with countries with which it did not share common ideals. She was also sceptical about conflating grand principles and foreign policy. For example, her interactions with the Communist world were marked by a search for working relations rather than moral certainty. She sometimes opposed American sanctions against the Soviet Union and was surprisingly sympathetic to the government of Finland, a nation forced to live in the Soviet shadow. Her much-quoted remark that Gorbachev was someone "we could do business with" summed up her attitude.

Thatcher did not expect dramatic change to come in her lifetime and, in some ways, was disturbed by the fall of the Berlin Wall and the prospect of German reunification. She would almost certainly have felt more comfortable if Germany had remained divided and Gorbachev secure in his position. Indeed, in her memoirs, she admits to having told Gorbachev, at a meeting in Moscow in September 1989, that "although NATO had traditionally made statements supporting Germany's aspiration to be reunited, in practice we were rather apprehensive."

In terms of foreign policy, Thatcher differed sharply from Ronald Reagan, whose outlook was much simpler and more evangelical. Reagan really did believe it possible to free the world of communism and nuclear weapons - the things that he regarded as evil.

She also differed from Tony Blair, another leader with whom she is frequently compared. Blair and his associates believed in a moral vision of foreign policy. They thought that Britain should not simply be a state seeking to defend its interests but that it should be a force for "good" in the world - even if good meant imposing regime change on other, weaker nations. It was this belief that resulted in the British involvement in the 2003 invasion of Iraq - an offensive of which Thatcher is said to have disapproved.

The pragmatism of Thatcher's foreign policy offers a key to understanding this most divisive of British prime ministers in a far wider context, and should perhaps even make us less willing to draw comparisons or seek her heirs in present-day British politics. She was, above all, a practical politician, working within the constraints of her situation, not a visionary offering timeless truths.

Richard Vinen is a professor of modern history at King's College, London and is the author of Thatcher's Britain: The Politics and Social Upheaval of the 1980s.