Leading Article: How far would you go, Maggie?

It is natural that any speech by Margaret Thatcher should be examined primarily for its impact upon internal party battles. These are, after all, torrid times for the Tories. But it is also worth examining what she actually says. Her thought, informed as it is by political developments in the United States and Eastern Europe, might help her successors to define new strategies and political opportunities. So (on the evidence of this speech) does it?

Baroness Thatcher, as she herself pointed out, was speaking to commemorate the life of Keith Joseph, a genuine political radical. The title was "Liberty and Limited Government". Liberty referred to her well rehearsed aversion to further European integration, and included a quote from Kipling's "Reeds of Runnymede", an anthem for the new strain of English nationalism that can now be discerned on the right in this country.

Limited government, however, referred to a much more international debate. What is the right size for a modern state? Should it take 10 per cent (Hong Kong), 30 per cent (US), 40 per cent (UK) or more (Europe) of a nation's GDP? If the answer is one of the lower figures, which of its activities should the state cease or cede?

Here her top-line at least was clear: it is time, she said, to take the cause of limited government out of the "mothballs" to which it had been consigned. A radical approach demands that the state's role be significantly reduced.

In today's Britain, such a reduction does not mean privatisation (that programme has largely been completed) or efficiency savings (the scope for which is now limited). It means, as American politicians of left and right recognise, radical action to cut back state provision of welfare, substituting private insurance and payment for services. This does, indeed, seem to be what the former Prime Minister had in mind. She specifically commended a pamphlet (written last November by Professor Patrick Minford, and advocating huge tax reductions, followed by cuts in the unemployment and social security budgets) as "brilliant and provocative".

But if she wills the ends, does she will the means? After all, when in power Mrs Thatcher failed to dent the social security or unemployment pay-outs, and was forced to boast just how much the state had provided for education and health. So it is worth asking which of Professor Minford's views she specifically endorses. Unfortunately, she will not tell us. "Whether Professor Minford's proposals are deemed acceptable or not, they are extremely valuable in illustrating the possibilities," is as far as she is prepared to go.

This illustrates the current problem on the right - a reluctance to specify exactly how radicalism will be paid for. It was this that undermined John Redwood's campaign for the Tory party leadership last summer, leaving him clutching a collection of eccentric objectives (saving cottage hospitals and the Royal Yacht Britannia) and improbable efficiencies. It is this that leaves John Major forced to fight the coming battle on the middle ground, against an opponent undistracted by distinguished predecessors.