John Rentoul: A missed chance to tell the truth about Mrs T

Meryl Streep's new film could have nailed some of the more persistent myths about how Thatcherism changed Britain

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A professor told me, when Margaret Thatcher was Prime Minister, that he had marked out in chalk on the pavement outside his house the steps of the jig he was going to dance when she left office. By the time she was brought down, however, he was on the way to becoming respectable, and, anyway, his attitude to her had started to change.

That happened to a lot of people who are now over the age of 35, for whom her government was the reference point of their politics. Most of us have changed our view of her in the 21 years since she got in the car, eyes shining with tears, for her last trip to the palace as Prime Minister. For younger people, The Iron Lady, in cinemas this Friday, may be the first time they have seen the story. They may have heard snatches of myth – that she laid waste to the north of England, drank all the schoolchildren's milk and had knives fitted to the wheels of her chariot – but they have not seen it put together as an attempted true-life tale.

I have not seen a preview of the film. I am not keen on Meryl Streep and found her portrayal of Thatcher in the trailer laughably inadequate. As someone who was around at the time and interested in politics, I know I would complain throughout, probably aloud, that "it wasn't like that", or that the portrayal of Francis Pym or John Nott is wrong. And as for her wearing a hat in the Commons....

Colleagues who have seen the film say that it scrambles lightly over the great events of her time – the Falklands, the IRA bombing campaign, the miners' strike and the poll tax. Which is a pity, because a film could have been a good chance to try to understand the effect that she had on the nation. What was interesting about her is not that she is now a frail old lady whose faltering memory and family conversations have to be imagined, but that she earned respect not only from her ardent supporters but from her opponents – and, in both cases, especially after she had ceased to be prime minister.

Moreover, she divided both supporters and opponents. In her European policy, she signed the Single European Act, which conceded sovereignty for the sake of making a single market, but she drew the line at the next stage, saying, "No; no; no," to the three elements of a single government needed to make a currency union work. She was right, both times, but the way she went about it plunged her party into the Europhobic madness that helped to keep it out of power for 13 years, and from which it has not yet fully recovered.

Just as significant was the effect that she had on the left. I was strongly opposed to her economic policies in the 1980s; I was a member of CND; I pursued conspiracy theories about the sinking of the General Belgrano, the Argentine cruiser sunk outside the Falklands exclusion zone by a British submarine with the loss of 323 lives. I was wrong on all counts.

The Iron Lady, sadly, seems to shed no light on any of this. Neither did last week's release of Cabinet papers under the 30-year rule. They were reported according to the prejudices of 1981, as if nothing had changed. Thus we were told that Geoffrey Howe, the Chancellor, wanted to "abandon" Liverpool after the riots that year – the Thatcher Scourge of the North myth – when the story should have been that she overruled him. And The Guardian reported that she was warned by her top brass that defence cuts would "erode" maritime capability a year before the invasion of the Falkland Islands. Don't the military always warn against defence cuts? More relevant, and known at the time, was that Thatcher made a mistake by announcing the withdrawal from the South Atlantic of HMS Endurance, thus suggesting to General Galtieri that she wasn't prepared to defend the Falklands. With the advantage of hindsight, though, that was hardly decisive in tilting the Argentinian junta, which had been winding up the klaxons of nationalism for years, towards war.

Also with the advantage of post-conflict testimony, the Belgrano story has been long debunked. British intelligence had intercepted orders to the ship to attack British forces, which is what its captain admitted in 2003 that he intended to do.

We should remember, too, that even at the time Michael Foot out-jingoed all comers in demanding the dispatch of the task force to repulse Argentinian aggression – it was only after the ships sailed that the left reverted to warm and wet semi-pacifism. It took Labour a long time thereafter to rediscover the virtues of patriotism and national security.

It took the party just as long to come to terms with Thatcher's breaking of the trade unions and her re-education of the country in the essentials of free-market economics. I still think the country paid too great a price in social division for lessons which could have been learnt less painfully. Under Thatcher, millions were signed off sick and benefit dependency took hold. That is why she failed to cut the tax burden. But it is also why every prime minister since has tried to accept her central message about free markets while trying to present a more compassionate face.

Goodness knows it was an incomplete revolution. Not a day passes without people complaining about the energy companies or train fares as if high prices were a conspiracy of top-hatted, cigar-puffing capitalists against the downtrodden. Only yesterday the Labour Party issued a news release condemning rail fares and the "cost of living". No doubt the tooth fairy will provide. But I am not making a party-political point here. The third most popular e-petition on the Government website is the one drafted by Robert Halfon, a Tory MP – a Tory MP – demanding "cheaper petrol and diesel". This, too, will be funded from the free money tree, as if Thatcher never existed.

But she did exist, and the country is mostly better off for it. It is only a shame that this week's film will not help people to understand why.

twitter.com/JohnRentoul; independent.co.uk/jrentoul

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