No reverse gear. Margaret Thatcher struck a bitter bargain for the Conservatives: she gave them 11 years of power but left a harsh legacy they have been unable to overcome. Douglas Hurd on an indomitable leader who did more for her nation than for her par

Margaret Thatcher: volume two - the Iron Lady

John Campbell <em>Jonathan Cape, 913pp, £25</em>

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John Campbell has changed his approach. He wrote his life of Ted Heath before his subject produced his own memoirs. Now he has followed after Margaret Thatcher's memoirs, publishing another solid but readable, and this time more controversial, account to add to the first volume of his biography, Margaret Thatcher: the grocer's daughter (2000). So these fat books sit side by side on the shelf, embodying the tricky relationship between the doer and the critic or, more flatteringly, between the star and the astronomer.

His book is so strongly centred on Thatcher herself that some errors of perspective creep in. Campbell is excellent on the way she operated as prime minister and, in particular, on her handling of colleagues. She was not a dictator but she liked above all to win an argument. Her tactics could be bruising and unfair; but it was possible for a minister who knew his subject to stand his ground and prevail. The impression that Campbell gives of constant interference in all important areas of policy goes too far. I found, for example, that Thatcher barely concerned herself with the huge complications of criminal justice, even though she held firm views on it. And although she strongly favoured capital punishment, never in my five years as home secretary did she suggest that her government should act to restore it. Two smaller points from my own experience: it was the Foreign Office, not the prime minister, who pressed for passports to be issued to Hong Kong residents (indeed I argued for a larger number than she agreed); and, contrary to Campbell's suggestions, Northern Ireland secretaries (Tom King and myself) played a central part in supervising the negotiation of the Anglo-Irish Agreement. Campbell, himself removed from party politics, feels no need to make purely partisan points and that is a big advantage. But there is a downside; if he had been closer to Westminster he might not have given so much credence to the stories of those entertaining courtiers Woodrow Wyatt and Alan Clark.

Campbell pauses to make his own judgements on each of the main controversies of the premiership. I do not agree with them all, but they are soberly and forcefully argued. He is good on Ireland. He brings out well the strenuous efforts that Thatcher made in private to secure the release of Nelson Mandela and the relaxation of apartheid. He emphasises one of the many paradoxes of her premiership: Thatcher was absolute in her beliefs and her rhetoric, and in her heart and in her speeches she despised half-measures and tepid individuals; when it came to policy decisions, however, her native shrewdness led her to compromise or at least delay. But once a decision had been taken she reverted to the absolute, fiercely resisting any attempt to modify let alone reverse it. The public myth of the Iron Lady, which she encouraged, hardly accommodates the truth that it was Geoffrey Howe, not the prime minister, who was bold in proposing to abolish exchange controls and later in working out his fierce 1981 budget. On each occasion, Margaret Thatcher doubted before agreeing. Similarly, on the poll tax, she hesitated, then decided, and finally was determined to the point of disaster. It sometimes happens in politics that a brilliant phrase becomes a millstone. Her hearty conference proclamation "The lady is not for turning" was a triumph, then a trap.

Thatcher took four important decisions against her original judgement - the Rhodesia settlement, the EU budget deal, the Single European Act and the Anglo-Irish Agreement. The last two of these she now regrets, as she also regrets her acquiescence to German unification in 1990. She also seems nowadays to forget that immediately after Saddam Hussein seized Kuwait she emphasised, to me and others, that our policy must be to reverse the aggression rather than to overthrow the aggressor in Baghdad. All these were realistic policies that were either inevitable or have been fully justified by events.

Certain prejudices emerge as the book proceeds, or perhaps my own prejudices assert themselves against the author's judgements. Campbell is patronising about the Falkland Islanders, unbalanced about arms exports and unkind in making a savage contrast between the different kinds of capitalism exemplified by Thatcher's father and her son. When he judges that the new Labour landslide of 1997 was Thatcher's greatest victory and that Britain today is Thatcher's theme park, he reveals his distaste not just for her but for Tony Blair, who has refused to reverse her main achievements. John Major's election victory of 1992 was crucial to this turn of events. A victory by Neil Kinnock over Thatcher in 1991 or 1992, before new Labour was fully formed, would have pushed the country back into the empty controversies of the 1970s.

Thatcher changed the standing of Britain in the world. To a large extent she benefited from good fortune. The two fundamental decisions that halted our decline had already been carried through by her predecessors, namely the peaceful ending of empire and our entry into the European Community. Thatcher's great courage over the Falklands and her determination against the Soviet threat did the rest. Campbell goes too far when he argues that in her overseas visits she displaced the Queen in authority and magnificence. Having travelled extensively with both ladies, I can vouch that the Queen, because of the nature of the monarchy, continued to reach wider audiences and touch deeper notes than Thatcher, even at the height of her glory. She did not bring the decline of Britain to an end - that had already happened - but she brought home that it had ended with a vividness no one could ignore and which endures to this day.

So far as the Conservative Party is concerned, she unwittingly struck a bitter bargain. She gave the party 11 years of power, a gift that no Tory will despise. But she bequeathed to it a sourness that still eats away at its prospects. While she was prime minister, this sourness and lack of generosity were manageable, because she usually tempered them in action with her own dramatic personality and shrewd pragmatism. John Major continued this process of tempering. But in opposition, the party has burdened itself with a damaging harshness - daily illustrated in the Conservative press - which two party leaders have so far been unable to overcome.

Margaret Thatcher did more for the nation than she did for her party. Her greatest single achievement, accomplished gradually over several years, was the taming of trade union power. It is hard now to remember how dark and pervasive was the cloud that hung over us in the 1970s. It was the abuse of trade union power that turned many Conservative moderates into hardliners, convincing us, for example, that the coal strike of 1984-85 had to be fought through to the end. On a wider front, Thatcher turned the country permanently away from excessive respect for the power of the state towards a preference for the free market. As Campbell shows, she was by no means the originator of privatisation, and in her rhetoric she often carried the arguments too far. But her premiership dramatically helped forward, not just in Britain but across the world, a shift in thinking towards the market that has been so clearly beneficial that it will not be reversed. I knew at the time, among the mistakes and exasperations, that I was working with someone who was dedicating exceptional powers of leadership to a necessary cause.

Douglas Hurd served in Lady Thatcher's government from 1979-90, ending up as foreign secretary. His memoirs were published by Little, Brown this month