Right-wing baggage of new Tory chief dismays activists

Of everything Iain Duncan Smith has done since he became Conservative leader, nothing is causing more dissension and disquiet both among moderates at party headquarters and in the rank-and-file than the appointment of Mark MacGregor as chief executive.

No one doubts his ability to do the job. Former colleagues speak highly of him. "Very cool and collected" was one comment. "Very efficient, very talented" was another.

They all mention his campaigning and organisational skills. Nobody questions his business credentials, either. He has had a successful career, developing his firm, Market Force, into one of the leading public relations agencies.

The trouble with Mr MacGregor is that he arrives at Conservative Central Office with considerable baggage, much of it relating to an episode in the party's history that many members would prefer to forget. The old workmates who speak so warmly of him all remember Mr MacGregor from the days when he ran the Federation of Conservative Students (FCS), a body that brought embarrassment upon the party until it was eventually closed by Lord Tebbit when he was Conservative chairman.

As now, Mr MacGregor inherited a body that was in deep trouble. As now, he was presented as a calming, unifying presence. Unfortunately, it all went horribly wrong.

His predecessor as FCS chairman in 1985 was Marc Glendening, best described as an outspoken libertarian. Decriminalising heroin, legalising prostitution, removing all curbs on the sale of alcohol, the right to discriminate against black people – these were high on the Glendening agenda.

Mr MacGregor came in as a moderate. The former chairman of the Scottish FCS, he claimed to be from the "sound" faction of student right-wing politics.

His two deputies were Doug Smith and David Hoile. Mr Smith distributed leaflets to students encouraging them to collect information on left-wingers: "Subversives at your college." Mr Smith also proposed the firing of Edward Heath as FCS life president because he was too moderate. Mr Hoile established the Committee for a Free Nicaragua, a body supporting the right-wing Contra guerrillas.

Under Mr MacGregor, the FCS continued to attract headlines for all the wrong reasons. Some members insisted on sporting "Hang Nelson Mandela" shirts at parties.

An FCS rally at Loughborough University was followed by allegations of drunken, loutish behaviour and a bill for damage to property. Mr MacGregor backed a "Shankill, No Surrender" call from extreme loyalists in Northern Ireland opposed to the Anglo-Irish Treaty.

FCS was closed down, finally, when one of its magazines ran an article accusing the former prime minister Harold Macmillan of being a war criminal over the repatriation of 40,000 Cossacks to the Soviet Union and almost certainly their deaths.

From FCS, Mr MacGregor went on to run Pulse, a group promoting privatisation in the health service and local government. Then he formed Market Force, which had as one of its clients Dame Shirley Porter, the now disgraced former leader of Westminster council. Dame Shirley attracted a number of young, sharply dressed right-wingers who moved around Westminster, socially and politically, mixing with councillors and the higher- profile politicians up the road in Parliament.

Mr MacGregor was a key player in this bunch, becoming a "Pimlico Portillista" supporting Michael Portillo for leader and running Conservative Way Forward, which campaigned to stop pro-Europeans being chosen for seats.

In his new role, Mr MacGregor has enormous influence on the selection process. One senior activist said: "It must spell the end for people from the left having any chance of being candidates for winnable seats."

According to Mr Duncan Smith, the new chief executive is "young, sharp and has a brilliant mind". Nobody is saying he isn't – it is what he does with these undoubted attributes that is causing concern.