Labour Party (UK)

2008/9 Schools Wikipedia Selection. Related subjects: UK Politics & government

Labour Party
Leader	Gordon Brown
Founded	February 27, 1900
Headquarters	39 Victoria Street London, SW1H 0HA
Political Ideology	Democratic socialism (Official Position) Social Democracy Third Way
Political Position	classically left-wing, today centre-left
International Affiliation	Socialist International
European Affiliation	Party of European Socialists
European Parliament Group	Party of European Socialists
Colours	Red (traditionally associated with socialist and communist parties)
Website	www.labour.org.uk
See also	Politics of the UK Political parties Elections

The Labour Party is a political party in the United Kingdom. Founded in the early 20th century, it has been since the 1920s the principal party of the left in England, Scotland and Wales (but not in Northern Ireland, where the Social Democratic and Labour Party occupies a roughly similar position on the political spectrum). It has formed the national government of the United Kingdom since 1997. It is also the largest party in the Welsh Assembly Government in Wales and the second largest party in the Scottish Parliament. It holds the London mayoralty and is represented in the European Parliament. Its current leader is Gordon Brown.

The Labour Party surpassed the Liberal Party as the main opposition to the Conservatives in the early 1920s. It has had several spells in government, first as minority governments under Ramsay MacDonald in 1924 and 1929-31, then as a junior partner in the wartime coalition from 1940-1945, and then as a majority government, under Clement Attlee in 1945-51 and under Harold Wilson in 1964-70. Labour was in government again in 1974-79, under Wilson and then James Callaghan, though with a precarious and declining majority.

Labour won a landslide 179 seat majority in the 1997 general election under the leadership of Tony Blair, its first general election victory since October 1974 and the first general election since 1970 in which it had exceeded 40% of the popular vote. The Labour Party's large majority in the House of Commons was slightly reduced to 167 in the 2001 general election and more substantially reduced to 66 in 2005.

Party ideology

The Labour Party grew out of the trade union movement and socialist political parties of the 19th century, and continues to describe itself as a party of democratic socialism. Labour was the first political party in Great Britain to stand for the representation of the low-paid working class and it is the working class who are known as the Labour Party grassroots and traditional members and voters

The Labour Party traditionally was in favour of socialist policies such as public ownership of key industries, government intervention in the economy, redistribution of wealth, increased rights for workers and trade unions, and a belief in the welfare state and publicly funded healthcare and education.

Since the mid-1980s, under the leadership of Neil Kinnock, John Smith and Tony Blair the party has moved away from its traditional socialist position towards what is often described as the " Third Way" adopting some Thatcherite and free market policies after losing in four consecutive general elections.

This has led many observers to describe the Labour Party as social democratic or even neo-liberal rather than democratic socialist. Blair himself has described New Labour's political position as a " Third Way".

Party constitution and structure

The Labour Party is a membership organisation consisting of Constituency Labour Parties, affiliated trade unions, socialist societies, and the Co-operative Party, with which it has an electoral agreement. Members who are elected to parliamentary positions take part in the Parliamentary Labour Party (PLP) and European Parliamentary Labour Party (EPLP). The party's decision-making bodies on a national level formally include the National Executive Committee (NEC), Labour Party Conference, and National Policy Forum (NPF) — although in practice the Parliamentary leadership has the final say on policy. Questions of internal party democracy have frequently provoked disputes in the party.

For many years, Labour has held to a policy of uniting Northern Ireland and the Republic of Ireland by consent, and had not allowed residents of Northern Ireland to apply for membership, instead supporting the nationalist Social Democratic and Labour Party (SDLP) which takes the Labour whip at the House of Commons. Yet Labour has a unionist faction in its ranks, many of whom assisted in the foundation in 1995 of the UK Unionist Party lead by Robert McCartney. The 2003 Labour Party Conference accepted legal advice that the party could not continue to prohibit residents of the province joining, but the National Executive has decided not to organise or contest elections there.

The party had 198,026 members on 31 December 2005 according to accounts filed with the Electoral Commission which was down on the previous year. In that year it had an income of about £35,000,000 (£3,685,000 from membership fees) and expenditure of about £50,000,000.

Party electoral manifestos have not contained the term socialism since 1992, although when Clause 4 was abolished the words "the Labour Party is a democratic socialist party" were added to the party's constitution.

History

Early years

The Labour Party's origins lie in the late 19th century numeric increase of the urban proletariat and the extension of the franchise to working-class males, when it became apparent that there was a need for a political party to represent the interests and needs of those groups. Some members of the trade union movement became interested in moving into the political field, and after the extensions of the franchise in 1867 and 1885, the Liberal Party endorsed some trade-union sponsored candidates. In addition, several small socialist groups had formed around this time with the intention of linking the movement to political policies. Among these were the Independent Labour Party, the intellectual and largely middle-class Fabian Society, the Social Democratic Federation and the Scottish Labour Party.

In 1899 a Doncaster member of the Amalgamated Society of Railway Servants, Thomas R. Steels, proposed in his union branch that the Trade Union Congress call a special conference to bring together all the left-wing organisations and form them into a single body which would sponsor Parliamentary candidates. The motion was passed at all stages by the TUC, and this special conference was held at the Memorial Hall, Farringdon Street, London on February 27-28, 1900. The meeting was attended by a broad spectrum of working-class and left-wing organisations; trade unions representing about one third of the membership of the TUC delegates.

The Conference created an association called the Labour Representation Committee (LRC), meant to coordinate attempts to support MPs, MPs sponsored by trade unions and representing the working-class population. It had no single leader. In the absence of one, the Independent Labour Party nominee Ramsay MacDonald was elected as Secretary. He had the difficult task of keeping the various strands of opinions in the LRC united. The October 1900 "Khaki election" came too soon for the new party to effectively campaign. Only 15 candidatures were sponsored, but two were successful: Keir Hardie in Merthyr Tydfil and Richard Bell in Derby.

Support for the LRC was boosted by the 1901 Taff Vale Case, a dispute between strikers and a railway company that ended with the union ordered to pay £23,000 damages for a strike. The judgement effectively made strikes illegal since employers could recoup the cost of lost business from the unions. The apparent acquiescence of the Conservative government of Arthur Balfour to industrial and business interests (traditionally the allies of the Liberal Party in opposition to the Conservative's landed interests) intensified support for the LRC against a government that appeared to have little concern for the industrial proletariat and its problems. The LRC won two by-elections in 1902–1903.

In the 1906 election, the LRC won 29 seats — helped by the secret 1903 pact between Ramsay Macdonald and Liberal Chief Whip Herbert Gladstone, which aimed at avoiding Labour/Liberal contests in the interest of removing the Conservatives from office.

In their first meeting after the election, the group's Members of Parliament decided adopt the name "The Labour Party" ( February 15, 1906). Keir Hardie, who had taken a leading role in getting the party established, was elected as Chairman of the Parliamentary Labour Party (in effect, the Leader), although only by one vote over David Shackleton after several ballots. In the party's early years, the Independent Labour Party (ILP) provided much of its activist base as the party did not have an individual membership until 1918 and operated as a conglomerate of affiliated bodies until that date. The Fabian Society provided much of the intellectual stimulus for the party. One of the first acts of the new Liberal government was to reverse the Taff Vale judgement.

The recession of 1908-09 and subsequent rise in unemployment led to increased industrial unrest and the desire for radical change among the working class. There was increasing support both for syndicalism and for change through parliament. In the two 1910 elections, Labour gained 40 seats and then 42 seats. Support grew further for during the 1910–1914 period along with an unprecedented level of industrial action with Seamen, rail workers, cotton workers, coal miners, dockers and many other groups all organising strikes. This was called the period of "Great Unrest" with many sympathy strikes also occurring. This was no doubt helped by the sometimes heavy-handed measures of the Liberal government (e.g., Winston Churchill's sending troops to the Rhondda valley in 1910 against coal miners, with some fatalities resulting).

World War I and the lead up to the first Labour government (1914-1923)

During the First World War the Labour Party split between supporters and opponents of the conflict and opposition within the party to the war grew as time went on. Ramsay MacDonald, a notable anti-war campaigner, resigned as leader of the Parliamentary Labour Party and Arthur Henderson became the main figure of authority within the Party and was soon accepted into H. H. Asquith's War Cabinet.

Despite mainstream Labour Party's support for the Coalition, the Independent Labour Party was instrumental in opposing mobilisation through organisations such as the Non-Conscription Fellowship and a Labour Party affiliate, the British Socialist Party organised a number of unofficial strikes.

Arthur Henderson resigned from the Cabinet in 1917 amidst calls for Party unity, being replaced by George Barnes. The growth in Labour's local activist base and organisation was reflected in the elections following the War, with the co-operative movement now providing its own resources to the Co-operative Party after the armistice. The Co-operative Party later reached an electoral agreement with the Labour Party.

The Liberal Party splitting between supporters of leader David Lloyd George and former leader H. H. Asquith allowed the Labour Party to co-opt some of the Liberals' support, and by the 1922 general election Labour had supplanted the Liberal Party as the second party in the United Kingdom and as the official opposition to the Conservatives. After the election, the now rehabilitated Ramsay MacDonald was voted the first official leader of the Labour Party.

Labour's electoral base resided in the industrial areas of Northern England, the Midlands, central Scotland and Wales. In these areas Labour Clubs were founded to provide recreation for working men, with many of these clubs becoming affiliated to The Working Men's Club and Institute Union. Because of the concentrated geographical nature of Labour's support, industrial downturns tended to hit Labour voters directly. Anecdotal evidence suggests that party membership was often working-class but also included many middle-class radicals, former liberals and socialists. Accordingly, the more middle-class branches in London and the South of England tended to be more left-wing and radical than those in the primary industrial areas.

The first Labour government (1924)

The 1923 general election was fought on the Conservatives' protectionist proposals; although they got the most votes and remained the largest party, they lost their majority in parliament, requiring a government supporting free trade to be formed. So with the acquiescence of Asquith's Liberals, Ramsay MacDonald became Prime Minister in January 1924 and formed the first ever Labour government, despite Labour only having 191 MPs (less than a third of the House of Commons).

The government collapsed after only nine months when the Liberals voted for a Select Committee inquiry into the Campbell Case, a vote which MacDonald had declared to be a vote of confidence. The ensuing general election saw the publication, four days before polling day, of the notorious Zinoviev letter, which implicated Labour in a plot for a Communist revolution in Britain, and the Conservatives were returned to power, although Labour increased its vote from 30.7% of the popular vote to a third of the popular vote - most of the Conservative gains were at the expense of the Liberals. The Zinoviev letter is now generally believed to have been a forgery.

The General Strike (1926)

The new Conservative government led by Stanley Baldwin faced a number of labour problems most notably the General Strike of 1926. Ramsay MacDonald continued with his policy of opposing strike action, including the General Strike, arguing that the best way to achieve social reforms was through the ballot box, although Labour claimed that the BBC was biased in its reporting against the party over the issue.

Second Labour government and the split under MacDonald

The election of May 1929 left the Labour Party for the first time as the largest grouping in the House of Commons with 287 seats, and 37.1% of the popular vote (actually slightly less than the Conservatives). However, MacDonald was still reliant on Liberal support to form a minority government. MacDonald's government included the first ever female cabinet minister Margaret Bondfield.

The Wall Street Crash of 1929 and eventual Great Depression occurred soon after this election, and the crisis hit Britain hard. By 1930 the unemployment rate had doubled to over two and a half million.

The Labour government struggled to cope with the crisis and found itself attempting to reconcile two contradictory aims; achieving a balanced budget in order to maintain the pound on the Gold Standard, whilst also trying to maintain assistance to the poor and unemployed. All of this whilst tax revenues were falling. The Chancellor of the Exchequer, Philip Snowden refused to permit deficit spending.

By 1931 the situation had deteriorated further. Under pressure from its Liberal allies as well as the Conservative opposition who feared that the budget was unbalanced, the Labour government appointed a committee headed by Sir George May to review the state of public finances. The May Report of July 1931 urged public-sector wage cuts and large cuts in public spending (notably in payments to the unemployed) in order to avoid a budget deficit.

This proposal proved deeply unpopular within the Labour Party grass roots, the trade unions, which along with several government ministers refused to support any such measures. MacDonald, and Philip Snowden, insisted that the Report's recommendations must be adopted to avoid incurring a budget deficit.

One junior minister Oswald Moseley put forward a memorandum in January 1930, calling for the public control of imports and banking as well as an increase in pensions to boost spending power. When this was turned down, Moseley resigned from the government and went on to form the New Party, and later the British Union of Fascists.

The dispute over spending and wage cuts split the Labour government; as it turned out, fatally. The cabinet repeatedly failed to agree to make cuts to spending or introduce tarrifs. The resulting political deadlock caused investors to take fright, and a flight of capital and gold further de-stabilised the economy. In response, MacDonald, on the urging of King George V, decided to form a National Government, with the Conservatives and the Liberals.

On August 24 1931 MacDonald submitted the resignation of his ministers and led a small number of his senior colleagues, most notably Snowden and Dominions Secretary J. H. Thomas, in forming the National Government with the other parties. MacDonald and his supporters were then expelled from the Labour Party and formed the National Labour Party. The remaining Labour Party, now led by Arthur Henderson, and a few Liberals went into opposition. The Labour Party denounced MacDonald as a "traitor" and a "rat" for what they saw as his betrayal.

Soon after this, a General Election was called. The 1931 election resulted in a Conservative landslide victory, and was a disaster for the Labour Party which won only 52 seats, 225 fewer than in 1929. MacDonald continued as Prime Minister of the Conservative dominated National Government until 1935.

Opposition during the time of the National Government

Arthur Henderson, who had been elected in 1931 as Labour leader to succeed MacDonald, lost his seat in the 1931 General Election. The only former Labour cabinet member who survived the landslide was the pacifist George Lansbury, who accordingly became party leader.

The party experienced a further split in 1932 when the Independent Labour Party, which for some years had been increasingly at odds with the Labour leadership, opted to disaffiliate from the Labour Party. The ILP embarked on a long drawn out decline.

Public disagreements between Lansbury and many Labour Party members over foreign policy, notably in relation to Lansbury's opposition to applying sanctions against Italy for its aggression against Abyssinia, caused Lansbury to resign during the 1935 Labour Party Conference. He was succeeded by Clement Attlee, who achieved a revival in Labour's fortunes in the 1935 General Election, winning a similar number of votes to those attained in 1929 and actually, at 38% of the popular vote, the highest percentage that Labour had ever achieved, securing 154 seats. Attlee was innitially regarded as a caretaker leader, however he turned out to be the longest serving party leader to date, and one of its most successful.

With the rising threat from Nazi Germany in the 1930s. The Labour Party gradually abandoned its earlier pacifist stance, and came out in favour of rearmament. This shift largely came about due to the efforts of Ernest Bevin and Hugh Dalton who by 1937 also persuaded the party to oppose Neville Chamberlain's policy of appeasement.

Labour achieved a number of by-election upsets in the later part of the 1930s despite the world depression having come to an end and unemployment falling.

Wartime Coalition

When Neville Chamberlain resigned as Prime Minister after the defeat in Norway in spring 1940, incoming Prime Minister Winston Churchill decided that it was important to bring the other main parties into the government and have a Wartime Coalition similar to that in the First World War. Clement Attlee became Lord Privy Seal and a member of the War cabinet, and was effectively (and eventually formally) Deputy Prime Minister for the remainder of the duration of the War in Europe.

A number of other senior Labour figure took up senior positions: the trade union leader Ernest Bevin as Minister of Labour directed Britain's wartime economy and allocation of manpower; the veteran Labour statesman Herbert Morrison became Home Secretary; Hugh Dalton was Minister of Economic Warfare and later President of the Board of Trade; and A. V. Alexander resumed the role of First Lord of the Admiralty he had held in the previous Labour government. The party generally performed well in government, and its experience there may have been partly responsible for its post-war success.

Post-War victory under Attlee

With the end of the war in Europe in May 1945, Labour resolved not to repeat the Liberals' error of 1918, and withdrew from the government to contest the 1945 general election (July 5) in opposition to Churchill's Conservatives. Surprising many observers, Labour won a landslide victory, winning just under 50% of the vote with a majority of 145 seats.

Although the exact reasons for the victory are still debated. During the war, public opinion surveys showed public opinion moving to the left and in favour of radical social reform. There was little public appetite for a return to the poverty and mass unemployment of the interwar years which had become associated with the Conservatives.

Clement Attlee's government proved to be one of the most radical British governments of the 20th century. It presided over a policy of selective nationalisation of major industries and utillities, including the Bank of England, coal mining, the steel industry, electricity, water, gas, telephones, and inland transport (including the railways, road haulage and canals). It developed the "cradle to grave" welfare state conceived by the Liberal economist William Beveridge. To this day, the party still considers the creation in 1948 of Britain's tax-funded National Health Service under health minister Aneurin Bevan its proudest achievement.

Attlee's government also began the process of dismantling the British Empire when it granted independence to India in 1947. This was followed by Burma (Myanmar) and Ceylon (Sri Lanka) the following year.

With the onset of the Cold War, at a secret meeting in January 1947, Attlee, and six cabinet ministers including foreign minister Ernest Bevin, secretly decided to proceed with the development of Britain's nuclear deterrent, in opposition to the pacifist and anti-nuclear stances of a large element inside the Labour Party.

Labour won the 1950 general election but with a much reduced majority of five seats. Soon after the 1950 election, things started to go badly wrong for the Labour government. Defence became one of the divisive issues for Labour itself, especially defence spending (which reached 14% of GDP in 1951 during the Korean War). These costs put enormous strain on public finances, forcing savings to be found elsewhere. The Chancellor of the Exchequer, Hugh Gaitskell introduced prescription charges for NHS prescriptions, causing Bevan, along with Harold Wilson ( President of the Board of Trade) to resign over the dillution of the principle of free treatment.

Soon after this, another election was called. Labour narrowly lost the October 1951 election to the Conservatives, despite their receiving a larger share of the popular vote and, in fact, their highest vote ever numerically.

Most of the changes introduced by the 1945-51 Labour government however were accepted by the Conservatives and became part of the " post war consensus", which lasted until the 1970s.

The "Thirteen Wasted Years"

Following the defeat in 1951, the party became split over the future direction of socialism. The "Gaitskellite" right of the party led by Hugh Gaitskell and associated with thinkers such as Anthony Crosland wanted the party to adopt a moderate social democratic position. Whereas the "Bevanite" left, led by Anuerin Bevan wanted the party to adopt a more radical socialist position. This split, and the fact that the 1950s saw economic recovery and general public contentment with the Conservative governments of the time, helped keep the party out of power for thirteen years

After being defeated at the 1955 general election, Attlee resigned as leader and was replaced by Gaitskell. The trade union block vote, which generally voted with the leadership, ensured that the bevanites were eventually defeated.

The three key divisive issues that were to split the Labour party in successive decades emerged first during this period; nuclear disarmament, the famous Clause IV of the party's constitution, which called for the ultimate nationalisation of all means of production in the British economy, and Britain's entry into the European Economic Community (EEC). Tensions between the two opposing sides were exacerbated after Attlee resigned as leader in 1955 and Gaitskell defeated Bevan in the leadership election that followed. The party was briefly revived and unified during the Suez Crisis of 1956. The Conservative party was badly damaged by the incident while Labour was rejuvenated by its opposition to the policy of prime minister Anthony Eden. But Eden was replaced by Harold Macmillan, while the economy continued to improve.

In the 1959 election the Conservatives fought under the slogan "Life is better with the Conservatives, don't let Labour ruin it" and the result saw the government majority increase. Following the election bitter internecine disputes resumed. Gaitskell blamed the Left for the defeat and attempted unsuccessfully to amend Clause IV. At a hostile party conference in 1960 he failed to prevent a vote adopting unilateral nuclear disarmament as a party policy, declaring in response that he would "fight, fight and fight again to save the party I love". The decision was reversed the following year, but it remained a divisive issue, and many in the left continued to call for a change of leadership.

The Wilson Years

Following Gaitskell's sudden death in 1963, Harold Wilson took over leadership of the party.

A downturn in the economy, along with a series of scandals in the early 1960s (the most notorious being the Profumo affair), engulfed the Conservative government by 1963. The Labour party returned to government with a wafer-thin 4 seat majority under Wilson in the 1964 election, and increased their majority to 96 in 1966 election remaining in power until the 1970 election which, contrary to expectations during the campaign, they lost.

Economic policies

The 1960s Labour government had a different emphasis from its 1940s predecessor. Harold Wilson put faith in economic planning as a way to solve Britain's economic problems. Wilson famously referred to the "white heat of technology", referring to the modernisation of British industry. This was to be achieved through the swift adoption of new technology, aided by government-funded infrastructure improvements and the creation of large high-tech public sector corporations guided by a Ministry of Technology. Economic planning through the new Department of Economic Affairs was to improve the trade balance, whilst Labour carefully targeted taxation aimed at "luxury" goods and services.

In practice however, Labour had difficulty managing the economy under the "Keynesian consensus" and the international markets instinctively mistrusted the party. Events derailed much of the initial optimism, especially a currency crisis which mounted until 1967 when the government was forced into devaluation of the pound and pressure on sterling was intensified by disagreements over US foreign policy.

Harold Wilson publicly supported America's engagement in Vietnam but refused to provide British assistance. This infuriated President Johnson who in response felt little obligation to support the pound. For much of the remaining Parliament the government followed stricter controls in public spending and the necessary austerity measures caused consternation amongst the Party membership and the trade unions, unions which by this time were gaining ever greater political power.

As a gesture towards Labour's left wing supporters. Wilson's government renationalised the steel industry in 1967 (which had been denationalised by the Conservatives in the 1950s) creating British Steel.

Social and educational reforms

The 1960s Labour government is probably best remembered for the liberal social reforms introduced or supported by Home Secretary Roy Jenkins. Notable amongst these was the legalisation of homosexuality and abortion, reform of divorce laws, the abolition of theatre censorship and capital punishment (except for a small number of offences - notably high treason) and various legislation addressing race relations and racial discrimination.

In Wilson's defence, his supporters also emphasise the easing of means testing for non-contributory welfare benefits, the linking of pensions to earnings, and the provision of industrial-injury benefits.

Wilson's government made significant reforms to education, most notably the expansion of comprehensive education and the creation of the Open University.

In Place of Strife

Wilson's government in 1969 proposed a series of reforms to the legal basis for industrial relations (labour law) in the UK, which were outlined in a White Paper entitled " In Place of Strife", which proposed to give trade unions statutory rights, but also to limit their power. The White Paper was championed by Wilson and Barbara Castle. The proposals however faced stiff opposition from the Trades Union Congress, and some key cabinet ministers such as James Callaghan. The opponents won the day and the proposals were shelved.

The 1970s

In the 1970 general election, Edward Heath's Conservatives narrowly defeated Harold Wilson's government reflecting some disillusionment amongst many who had voted Labour in 1966. The Conservatives quickly ran into difficulties, alienating Ulster Unionists and many Unionists in their own party after signing the Sunningdale Agreement in Ulster. Heath's government also faced the 1973 miners strike which forced the government to adopt a " Three-Day Week". The 1970s proved to be a very difficult time for the Heath, Wilson and Callaghan administrations. Faced with a mishandled oil crisis, a consequent world-wide economic downturn, and a badly suffering British economy.

Following the perceived disappointments of the 1960s Labour government, the party moved to the left during the early 1970s "Labour's Programme 1973", pledged to bring about a "fundamental and irreversible shift in the balance of power and wealth in favour of working people and their families". This programme referred to a "far reaching Social Contract between workers and the Government". Wilson publicly accepted many of the policies of the Programme but the condition of the economy allowed little room for manoeuvre.

Return to power in 1974

Labour returned to power again under Wilson a few weeks after the February 1974 general election, forming a minority government with Ulster Unionist support. The Conservatives were unable to form a government as they had fewer seats, even though they had received more votes. It was the first General Election since 1924 in which both main parties received less than 40% of the popular vote, and was the first of six successive General Elections in which Labour failed to reach 40% of the popular vote. In a bid for Labour to gain a majority, a second election was soon called for October 1974 in which Labour, still with Harold Wilson as leader, scraped a majority of three, gaining just 18 seats and taking their total to 319.

European referendum

Britain had entered the EEC in 1973 while Edward Heath was Prime Minister. Although Harold Wilson and the Labour party had opposed this, in government Wilson switched to backing membership, but was defeated in a special one day Labour conference on the issue leading to a national referendum on which the yes and no campaigns were both cross-party - the referendum voted in 1975 to continue Britain's membership by two thirds to one third. This issue later caused catastrophic splits in the Labour Party in the 1980s, leading to the formation of the SDP.

In the initial legislation during the Heath Government, the Bill affirming Britain's entry was only passed because of a rebellion of 72 Labour MPs led by Roy Jenkins and including future leader John Smith, who voted against the Labour whip and along with Liberal MPs more than countered the effects of Conservative rebels who had voted against the Conservative Whip.

Wilson steps down

In April 1976 Wilson surprisingly stood down as Labour Party leader and Prime Minister claiming a long-standing desire to retire on his sixtieth birthday. There was immense suspicion of his reason for his resignation but it is now known that he was in the early stages of Alzheimer's. He feared following his mother's path who had been a towering, impressive personality but who did not accept her failing abilities and carried on for too long spoiling her reputation. He was replaced by James Callaghan who immediately removed a number of left-wingers (such as Barbara Castle) from the cabinet.

In the same year as Callaghan became leader, the party in Scotland suffered the breakaway of two MPs into the Scottish Labour Party (SLP). Whilst ultimately the SLP proved no real threat to the Labour Party's strong Scottish electoral base it did show that the issue of Scottish devolution was becoming increasingly contentious, especially after the discovery of North Sea Oil.

Economic and political troubles

The 1970s Labour government faced enormous economic problems and a precarious political situation. Faced with a global recession and spiralling inflation. Many of Britain's traditional manufacturing industries were collapsing in the face of foreign competition. Unemployment, and industrial unrest were rising.

In the autumn of 1976 the Labour Government was forced to ask the International Monetary Fund (IMF) for a loan to ease the economy through its financial troubles. The conditions attached to the loan included harsh austerity measures such as sharp cuts in public spending, which were highly unpopular with party supporters. This forced the government to abandon much of the radical program which it had adopted in the early 1970s, much to the anger of left wingers such as Tony Benn.

The 1970s Labour government adopted an interventionist approach to the economy, setting up the National Enterprise Board to channel public investment into industry, and giving state support to ailing industries. Struggling companies such as British Aerospace and British Leyland were nationalised. The Government succeeded in replacing the Family Allowance with the more generous child benefit, and introduced redundancy pay.

The Wilson and Callaghan governments were hampered by their lack of a workable majority in the commons. At the October 1974 election, Labour won a majority of only three seats. Several by-election losses meant that by 1977, Callaghan was heading a minority government, and was forced to do deals with other parties to survive. An arrangement was negotiated in 1977 with the Liberals known as the Lib-Lab pact, but this ended after one year. After this, deals were made with the Scotish National Party and the Welsh nationalist Plaid Cymru, which prolonged the life of the government slightly longer.

The "Winter of Discontent" and defeat by Margaret Thatcher

The 1973 oil crisis had caused a legacy of high inflation in the British economy which peaked at 26.9% in 1975. The Wilson and Callaghan governments attempted to combat this by entering into a social contract with the trade unions, which introduced wage restraint and limited pay rises to limits set by the government. This policy was initially fairly successful at controlling inflation, which had been reduced to under 10% by 1978.

Callaghan had been widely expected to call a general election in the autumn of 1978, when most opinion polls showed Labour to have a narrow lead. However instead, he decided to extend the wage restraint policy for another year in the hope that the economy would be in a better shape in time for a 1979 election. This proved to be a big mistake. The extension of wage restraint was unpopular with the trade unions, and the government's attempt to impose a "5% limit" on pay rises caused resentment amongst workers and trade unions, with whom relations broke down.

During the winter of 1978-79 there were widespread strikes in favour of higher pay rises which caused significant disruption to everyday life. The strikes affected lorry drivers, railway workers, car workers and local government and hospital workers. These came to be dubbed as the " Winter of Discontent".

The perceived relaxed attitude of Callaghan to the crisis reflected badly upon public opinion of the government's ability to run the country. A vote of no confidence on the government was held and passed on 28 March 1979, forcing a general election.

In the 1979 general election, Labour suffered electoral defeat to the Conservatives led by Margaret Thatcher. The numbers voting Labour hardly changed between February 1974 and 1979, but in 1979 the Conservative Party achieved big increases in support in the Midlands and South of England, mainly from the ailing Liberals, and benefited from a surge in turnout.

The actions of the trade unions during the Winter of Discontent were used by Margaret Thatcher's government to justify anti-trade union legislation during the 1980s.

The 1980s

Michael Foot era

The aftermath of the 1979 election defeat saw a period of bitter internal rivalry in the Labour Party which had become increasingly divided between the ever more dominant left wingers under Michael Foot and Tony Benn (whose supporters dominated the party organisation at the grassroots level), and the right under Denis Healey. It was widely considered that Healey would win the leadership election, but he was narrowly defeated by Foot.

The Thatcher government was determined not to be deflected from its agenda as the Heath government had been. A deflationary budget in 1980 led to substantial cuts in welfare spending and an initial short-term sharp rise in unemployment. The Conservatives reduced or eliminated state assistance for struggling private industries, leading to large redundancies in many regions of the country, notably in Labour's heartlands. However, Conservative legislation extending the right for residents to buy council houses from the state proved very attractive to many Labour voters. (Labour had previously suggested this idea in their 1970 election manifesto, but had never acted on it.)

The election of Campaign for Nuclear Disarmament (CND) veteran Michael Foot to the leadership disturbed many Atlanticists in the Party. Other changes increased their concern; the constituencies were given the ability to easily deselect sitting MPs, and a new voting system in leadership elections was introduced that gave party activists and affiliated trade unions a vote in different parts of an electoral college.

The party's move to the left in the early 80s led to the decision by a number of centrist party members led by the Gang of Four of former cabinet ministers ( Shirley Williams, William Rodgers, Roy Jenkins, and David Owen. ) to issue the " Limehouse Declaration" on January 26, 1981, and to form the breakaway Social Democratic Party. The departure of even more members from the centre and right further swung the party to the left, but not quite enough to allow Tony Benn to be elected as Deputy Leader when he challenged for the job at the September 1981 party conference.

Under Foot's leadership, the party's agenda became increasingly dominated by the politics of the hard left. Accordingly, the party went into the 1983 general election with the most left wing manifesto that Labour ever stood upon. The manifesto contained pledges for abolition of the House of Lords, unilateral nuclear disarmament, withdrawal from the European Community, withdrawal from NATO and a radical and extensive extension of state control over the economy.

This alienated many of the party's more right-wing supporters. The Bennites were in the ascendency and there was very little that the right could do to resist or water down the manifesto, many also hoped that a landslide defeat would discredit Michael Foot and the hard left of the party moving Labour away from explicit Socialism and towards weaker social-democracy. Labour MP and former minister Gerald Kaufman famously described the 1983 election manifesto as "the longest suicide note in history". Michael Foot has countered, with typical wit, that it is telling about Gerald Kaufman that it is likely that his one oft quoted remark will be all that he is remembered for.

Much of the press attacked both the Labour party's manifesto and its style of campaigning, which tended to rely upon public meetings and canvassing rather than media. By contrast, the Conservatives ran a professional campaign which played on the voters' fears of a repeat of the Winter of Discontent. To add to this, the Thatcher government's popularity rose sharply on a wave of patriotic feeling following victory in the Falklands War, allowing it to recover from it initial unpopularity over unemployment and economic difficulty.

At the 1983 election, Labour suffered a landslide defeat, winning only 27.6% of the vote, their lowest share since 1918. Labour won only half a million votes more than the SDP-Liberal Alliance which had attracted the votes of many moderate Labour supporters.

Neil Kinnock

Michael Foot immediately resigned and was replaced by Neil Kinnock, initially considered a firebrand left-winger, he proved to be more pragmatic than Foot and progressively moved the party towards the centre; banning left-wing groups such as the Militant tendency and reversing party policy on EEC membership and withdrawal from NATO, bringing in Peter Mandelson as Director of Communications to modernise the party's image, and embarking on a policy review which reported back in 1985.

At the 1987 general election, the party was again defeated in a landslide, but had at least re-established itself as the clear challengers to the Conservatives and gained 20 seats reducing the Conservative majority to 102 from 143 in 1983, despite a sharp rise in turnout. Challenged for the leadership by Tony Benn in 1988, Neil Kinnock easily retained the leadership claiming a mandate for his reforms of the party. Re-organisation resulted in the dissolution of the Labour Party Young Socialists, which was thought to be harbouring entryist Militant groups. It also resulted in a more centralised communication structure, enabling a greater degree of flexibility for the leadership to determine policy, react to events, and direct resources.

During this time the Labour Party emphasised the abandonment of its links to high taxation and old-style nationalisation, which aimed to show that the party was moving away from the left of the political spectrum and towards the centre. It also became actively pro-European, supporting further moves to