Margaret Thatcher’s former adviser Lord Powell caused a furore when he asserted that the Iron Lady would have been opposed to Brexit. Assorted biographers and other stewards of the Thatcherite faith were quick to hit back, taking to the opinion pages to point out how misguided Powell was in his assessment.

Artefact number one in the case against Powell is the famous Bruges speech that Thatcher delivered in September 1988 (and which was substantially drafted by one Charles Powell). The speech has become a sacred text for British Eurosceptics.

Strange then that, in it, Thatcher doesn’t come close to suggesting that Britain would be better off out of Europe. Here’s her unequivocal statement on the subject:

Let me be quite clear: Britain does not dream of some cosy, isolated existence on the fringes of the European Community. Our destiny is in Europe, as part of the Community.”

The speech is structured as a manifesto for the future of Europe – a Europe built on Thatcherite ideals of liberty and Atlanticism. It’s hardly an overstatement to say that the whole thrust of Thatcher’s argument is directed at one man, who, ironically, wasn’t in the audience that day: Jacques Delors.

Delors, a French socialist and committed European federalist, was President of the European Commission from 1985 to 1995. He is, one could say, Margaret Thatcher’s forgotten nemesis. Arthur Scargill’s name is still familiar to vast swathes of the British populace, but Delors is only remembered by a small set of Eurobores at Westminster, most of whom start to foam at the mouth at the mere mention of his name. (He was also the object of perhaps the most outrageously crass headline ever to grace the front page of The Sun. Admittedly there’s some stiff competition, but “Up Yours Delors”, the charming message the paper led with on 1 November 1990, takes the biscuit in my opinion.)

Two months before the Bruges speech, Delors, who had just been re-elected as Commission President, made a speech to the European Parliament arguing that:

In ten years, 80 per cent of the laws affecting the economy and social policy would be passed at a European and not a national level… We are not going to manage to take all the decisions needed between now and 1995 unless we see the beginnings of a European government.”

Bruges was Thatcher’s attempt to put Delors back in his box. She noted how ironic it was that:

Just when those countries such as the Soviet Union, which have tried to run everything from the centre, are learning that success depends on dispersing power and decisions away from the centre, there are some in the Community who seem to want to move in the opposite direction.”

Then came what, at least retrospectively, is considered the most famous line:

We have not successfully rolled back the frontiers of the state in Britain, only to see them re-imposed at a European level with a European super-state exercising a new dominance from Brussels.”

At that stage, it was just a warning shot across the boughs. Thatcher was not yet a fan of Brexit. Indeed she goes on to sound positively exuberant about the creation of a single market:

“The aim of a Europe open to enterprise is the moving force behind the creation of the single European market by 1992. By getting rid of barriers, by making it possible for companies to operate on a European scale we can best compete with the United States, Japan and the other new economic powers emerging in Asia and elsewhere.’

But a seed was sown that over time, as Europe developed more along Delorsian lines than Thatcherite ones, would grow into a mighty oak of Euroscepticism within the Thatcherite wing of British Conservatism.

The Delors-Thatcher face-off of 1988 also had a big impact on attitudes towards Europe on the Labour side. Up to that point, Labour was a more reliable bastion of Euroscepticism than the Conservative Party – especially since its leading Europhiles had mostly left to form the SDP in 1981.

Labour’s traditional hostility to Europe was based on a suspicion that the whole project was constructed along free market, anti-union lines. It was Delors who convinced them otherwise.

Less than two weeks before Thatcher was due in Bruges, Delors addressed the TUC Conference in Bournemouth. He made the case for collective bargaining at European level and promised to put social protection at the heart of his European project. This prompted a spontaneous rendition “Frère Jacques” that brought a tear to the Frenchman’s eye.

From that moment on, Labour scarcely looked back. Over the next five years, the Thatcherites became more and more dogmatic in their hostility to Europe (especially so after Thatcher herself became a martyr to the cause). And Labour went in the opposite direction – forgetting all its old qualms about “Eurocapitalism”, in the excitement of having found an effective stick with which to beat the Tories.

September 1988 was a pivotal moment in the history of Britain’s relationship with Europe. It triggered a dramatic realignment of attitudes in both main parties – creating a political dynamic that persists right down to the present day.

The debate about Thatcher’s views on Europe is a slightly false one. The truth is that, in spite of all the “not for turning” rhetoric, Thatcher’s views on Europe did change over time. 1988 was the beginning of her slide from soft Euroscepticism into a much harder and fiercer opposition to the European project.

The real debate should be about whether that slide was predominantly the result of the changing nature of Europe in the Delors era, or more to do with Thatcher’s psychological descent into paranoia and dogmatism in her final years as PM.