Sir David Mitchell: Transport minister under Margaret Thatcher who also successfully led his family's wine business, El Vino

David Mitchell was a Conservative minister under Margaret Thatcher and a successful wine merchant. Born in 1928, he came from a comfortable but not an academic background. He left his minor public school Aldenham, in Hertfordshire, aged 16. With few qualifications and no clear purpose in mind he turned to market gardening.

But he was well-connected. His maternal grandfather, Sir Alfred Bower, was a wine merchant and a Mayor of London, his father a naval architect. Two of his 18th century ancestors had been MPs. At 21 he started at the bottom with the family's bar and wine merchant business El Vino, before becoming a buyer, a director, and eventually chairman. His hospitality brought him a wide circle of friends in and out of politics. His firm supplied the drinks for Sir Ian Gow, Thatcher's formidable PPS, as he listened to the complaints of Tory MPs. "Cars run on petrol. I run on (Vino's) alcohol," he said.

Mitchell started as a Tory councillor in the Labour stronghold of St Pancras North and fought the seat in the 1959 general election. He entered the Commons in 1964 as MP for Basingstoke. He spent over two years in the Whips' office then resigned because, sitting on the front bench but denied a voice, he felt "like a stuffed owl". In fact his owlish appearance later earned him the nickname "the Owl".

He was close to Sir Keith Joseph (as his former PPS) in 1974 when Sir Keith was being touted as a free-market challenger to Ted Heath for the Tory leadership. He had a ringside seat as Sir Keith withdrew and made way for Margaret Thatcher to take up the baton. As a backbencher he made a significant intervention when declaring that Heath "has not got the freehold of the leadership for life". He was a Thatcherite before the term was invented.

He was a strong believer in small business. In 1976 he founded the Conservative Small Business Bureau, charged with conveying the views of the sector, and in 1979 Thatcher appointed him Minister for Small Business in the Department of Industry. He called for measures to curb strikes, ease restrictions on redundancies and cut regulations. This agenda annoyed James Prior, the Employment Minister who was trying to be conciliatory with the unions.

In 1981 he moved to a junior post in the Northern Ireland Office at the time of the Maze hunger strikes. He warned that "the Government will neither negotiate with prisoners nor concede to the principle of political status", though he did allow visits by politicians from the Republic.

In 1983 came a more satisfying post as a minister in the Department of Transport. The department was a backwater under the Thatcher and Major governments, and during his five years at Transport he worked with four different Secretaries of State. He started with responsibility for aviation and for buses: he deregulated London buses and, to the anger of rural communities, cut bus subsidies.

Promoted to Minister of State in 1986 as a rail aficionado, he was delighted to have more responsibility for British Rail. He introduced the debate to set up the Channel Tunnel and had the satisfaction of being the first minister to walk through it when French and British tunnellers met. He raised Labour's ire in 1988 when he mentioned rail privatisation as a possible option.

He also courted controversy with his handling of BR's proposal to close the scenic Carlisle-Settle line on the grounds that it had too few passengers and required heavy investment. He allowed the protestors time to produce an alternative rescue package in 1988 and the following year, by which time he was no longer in office, the government decided against closure. When Thatcher called time on his ministerial career in 1988 she rewarded him with a knighthood; he announced his decision to step down in 1995 and retired in 1997. By then he had been joined in the Commons by his eldest son Andrew.

For some admirers his political career, spanning 33 years, never seemed to take off. Although an entertaining speaker at social events he was boring, if safe, when speaking in the House. A lack of presence at the despatch box ruled out promotion beyond the middle rung of the political ladder yet he was the kind of MP who is essential to the smooth working of government. He was straightforward, loyal and reliable, not hugely ambitious for office, and had a life outside politics.

In retirement he chaired the El Vino Company between 1992 and 2001 and enjoyed his post as Master of the Vintners' Company. His memoir From House to House celebrated his interests in politics and wine. He died at his Hampshire home after a lengthy illness. His oldest son Andrew has served as a Secretary of State for International Development and Chief Whip under David Cameron, and was caught up in the "plebgate" affair.

David Mitchell was popular among the Labour MPs of the 1960s, writes Tam Dalyell partly on account of one long forgotten episode, which was the source of much mirth – and gnashing of teeth – throughout the Palace of Westminster. Robert Maxwell, then a few months old as an MP, had stomped in to Harold Wilson's office in the House and badgered the PM that he be made a minister. Somewhat nonplussed, Wilson responded that he would test him by making him chairman of the Commons Kitchen Committee, in succession to Bessy Braddock, who had just been removed after a row with the Leader of the House, Dick Crossman.

Maxwell decided that he would make his name as a potential minister at the Board of Trade, as it then was, making the Refreshments Department finances look better by selling off a substantial proportion of the carefully amassed Commons wine cellar. Young Mitchell challenged him: first of all he had no right to authorise such a sale; secondly, it was a short-term expedient; and thirdly, Maxwell had sold off the wines well below market value. Legend has it that Maxwell bought for himself, at knockdown prices, a considerable proportion of the wines. The contretemps was volcanic.

David Bower Mitchell, wine merchant and politician: born 20 June 1928; MP for Basingstoke 1964–83, Hampshire North West 1983–97; Minister of State for Transport 1986–88; Kt 1988; married 1954 Pamela Elaine Haward (died 2005; one daughter, two sons); died 30 August 2014.