Johann Hari: Why is the Labour Party still seduced by Thatcher?

The celebrations of the 30th anniversary of Margaret Thatcher's ascent to power have had a surreal quality. The moist panegyrics from David Cameron and Boris Johnson – followed by an army of cheering commentators, and a distant, shameful echo from Gordon Brown – have been filled with statements that are the opposite of the truth. Yet there they stand, unchallenged, as the road-map for our future.

The arguments in defence of Margaret Thatcher invariably have three prongs. She made it possible for ordinary British people to "get ahead", and "aspire" once more. She expanded freedom. And her strip-down-the-state economic model saved Britain – and spread prosperity across the world. Each of these is simply asserted, as if these claims can't be measured objectively. Just shut up and rejoice!

But your ability to "get ahead" – to rise up the social ladder – isn't simply a matter of hunches; it can be tested scientifically. And every study has found one thing: social mobility collapsed under Margaret Thatcher. As a massive recent London School of Economics study showed once again, in the 1980s and 1990s we became a country where if you were born rich, you stayed rich, and if you were born poor, you stayed poor.

This shouldn't have been a surprise. Every country that adopts a low-tax, low-investment model sees the same. The evidence shows only countries that tax the wealthy and use the cash to lift up the rest – like Sweden – consistently achieve the dream of allowing anyone with talent to make it.

So thanks to her policies, a whole generation of poor and lower middle class children remained stuck, unable to achieve their potential. Look at the new generation of rising Tory candidates and MPs and you see this failure of social mobility writ large. They are overwhelmingly the children of the wealthy – educated at the most expensive schools. Everybody else is stuck, unable to get up and out.

While you are entitled to your own opinions, you are not entitled to your own facts. To claim Thatcher boosted aspiration is false – unless you mean merely the aspiration of the rich to become super-rich.

How about Thatcher's support for freedom? This is a leader who called Nelson Mandela a "terrorist" and vandalised all attempts to place sanctions on Apartheid South Africa, while her husband cheerfully referred to black Africans as "coons". This is a leader who called the self-described "fascist" General August Pinochet "a great man", after he toppled an elected leader in a violent coup and rounded up thousands of dissidents to torture to death.

This is a leader who upheld a system of Protestant supremacism in Northern Ireland, while the police there conspired with criminal gangs to murder Catholics. This is a leader who at the height of the Aids crisis criminalised any mention of homosexuality in our schools. Freedom?

What about the idea that her economic model "saved" us? Thatcher wanted to build a "nightwatchman state", where the government stopped anyone invading the country or your home, but otherwise stood inert and passive. She saw regulation as "red tape", and boasted of building a "bonfire" of it. And what happened? Her apostles took this to its logical conclusion, building a "shadow" banking system free of all government interference. If she had been right, it would now be the self-regulating engine of the global economy, pulling us all to a better world.

It didn’t quite turn out that way. As John Campbell, her best biographer, has written, the tragedy of Margaret Thatcher is that she sincerely believed rolling back the state would create a generation like her father, a moral, self-reliant grocer. Instead, it created a wave of businessmen like her son, an amoral parasite who has contributed nothing to the economy.

Yet David Cameron's election song could be the old Honeybus hit "I Can't Let Maggie Go". He cheered the ugliest of Thatcher's policies while they were happening: he even accepted a free holiday jaunt to Apartheid South Africa paid for by one of the most depraved corporations backing the whites-only regime. Today, he says she will be his inspiration in power, as his claims to moderation burn away under the pressure of recession.

But oddly, the party that has found it hardest to get out of Thatcher's shadow is Labour. They drank so deeply of Thatcherism after the collective trauma of 1992 that they have become tarred with its worst failings.

As Labour now collapses into a mess of fratricidal soundbites, it would do well to pause and remember a slap-in-the-face fact. Contrary to the ahistorical waffle pumped out over the past week, Margaret Thatcher never won over a majority of the British people. At every single election where she was leader, 56 per cent of us voted for parties committed to higher taxes and higher public spending. She won because the centre-left majority was divided and at war with itself – and because of our lousy electoral system.

Over the past year, there have been small hints of what a de-Thatcherized Labour Party could look like – and it's a world away from both Toryism and the old, hellish Scargillite closed shops. It is simple Scandinavian-style social democracy that marries thriving markets to an interventionist state. It would tax the rich more, both to reduce inequality and to pay for public services. Despite the out-of-touch press shrieking, some 68 per cent of people supported the new 50 per cent top rate of tax on the richest one per cent of Brits.

It would argue for a Keynesian stimulus directed at transforming Britain into a low-carbon economy – the only sane response to a depression and an unravelling climate. And it would put at the forefront of its agenda moves like Harriet Harman's excellent Equality Bill, which will require local authorities to spend most on the poorest areas, and to put greater equality at the heart of all decisions.

The logic of this legislation fits with the egalitarian, European mindset of the silent liberal majority of British people. If we leave it to the market Thatcher-style, it will take 80 years before women are paid the same wages as men for the same work – and we will all be dead. Who wants to defend that? Who wants to say companies shouldn't even have to publish their gender gap, as the Bill demands? A long queue has been forming outside TV studios of Tory MPs saying just that. But a recession is the time when we can least afford to waste talent and promote mediocrities just because they are men. We need the best talents in the best positions now.

Yet all this is far too little too late. Brown's "Green New Deal" is pitifully small, and his ability to sell any policy is limited by his own lousy communication skills and his refusal to decisively cast off the shroud of Thatcher. Even the 50 per cent tax rate was introduced with a nervous, quaking commitment to reverse it once the recession ends. Who will point out that during America's largest boom – the 1950s – it had a 92 per cent top rate of tax under a Republican President?

And so the window to a better, more social democratic Britain seems to be creaking shut. Gordon Brown stands frozen as his Blearsy-eyed colleagues hiss and snap all around him, protesting at even the tiniest nudges to the left. Why won't Labour let the Iron Lady rust?