Prepared by the Liberal Democrat History Group
The Liberal Democrats are the successors to two great reformist traditions in British politics – those of liberalism and of social democracy, which became separated from each other in the early part of the twentieth century, but are now reunited, in the shape of the Liberal Democrats. This page provides a concise history of the Liberal Party, SDP and Liberal Democrats; for a longer version, see the website of the Liberal Democrat History Group at www.liberalhistory.org.uk.
Whilst the history of the Liberal Democrats stretches back 150 years to the formation of the Liberal Party in 1859, Liberal political thought goes back a further 200 years to the ferment of the English Civil War and the struggles with the monarchy over the power of Parliament. The following century saw the gradual establishment of two parliamentary groupings, the Whigs and the Tories. Broadly speaking, the Tories were defenders of the Crown and the established Anglican Church, while the Whigs drew their inspiration from the Glorious Revolution of 1688, which established the supremacy of parliament over the monarchy.
In the late eighteenth century the revolt of the American Colonies and the French Revolution opened up a renewed debate about the ideological basis of government. Under Charles James Fox, the Whigs resisted Pitt’s authoritarian measures during the Napoleonic Wars and a prolonged period in opposition also encouraged them to embrace a more popular agenda, in the form of religious toleration and electoral reform. A Whig government under Lord Grey passed the Great Reform Act of 1832, which began the process of extending the franchise and, also, the need for politicians to engage with both ordinary electors and radical elements outside Parliament.
Out of this process grew the political parties that we recognise today. The Conservative Party came into existence in 1835 but it took longer for a cohesive liberal party to emerge. Uneasy alliances between the aristocratic Whigs and the middle-class liberals, elected after 1832 to represent the newly enfranchised industrial regions, could not be relied upon. There was also the problem of how to accommodate radical opinion, barely represented in the Commons. The glue to bind the various factions together was provided by the Peelites, a small but influential band of free-trade Conservatives who broke with their party in 1846 over the abolition of the Corn Laws (duties on the imports of grain). Free trade, which appealed both to the radicals and the working classes (because it kept food cheap) and the industrial manufacturers (because it made it easier for them to export) became a pre-eminent Liberal cause well into the twentieth century.
The Liberal ascendancy
The Liberal Party finally came together on 6 June 1859, when Whigs, Peelites and Radicals met at Willis’ Rooms in St. James, London, to agree to overthrow a minority Conservative government. The Liberals governed Britain for most of the following thirty years, benefiting from further extensions of the franchise in 1867 and 1885.
Liberal leader and four-times Prime Minister William Ewart Gladstone dominated British politics. In the 1850s he established his reputation for prudent financial innovation by sweeping away tariffs in the interests of free trade, replacing taxes on goods and customs duties with income tax, and by establishing parliamentary accountability for government spending. Gladstone won strong support from Nonconformists for his attitude to religious questions, which at that time deeply affected basic liberties and education. After victory in the 1868 general election, Gladstone’s government disestablished the Church of Ireland, passed the first Education Act and established the secret ballot.
Gladstone returned to power in 1880, partly because of the renown he had won for defending the rights of oppressed minorities in the Balkans. The Liberal government became increasingly concerned with bringing peace to Ireland, where sectarian differences and economic problems were intermingled. Gladstone made an unsuccessful attempt to navigate a home rule bill on to the statute book, and in the process split the Liberal Party, losing the 1886 election and keeping the party out of power for the next twenty years, apart from a minority administration in 1892–95.
Ireland was not the only source of dissension. There was no obvious successor to Gladstone and when he eventually retired in 1894, his replacement, Lord Rosebery, proved to be weak and indecisive. The party was split between those who thought the government should keep out of economic and social affairs and those – the ‘New Liberals’ – who argued for intervention to help the poorer sections of society. The new leader Henry Campbell-Bannerman helped heal the rifts in the party, and led it to the spectacular electoral landslide of 1906, exploiting Conservative splits over free trade and education. A further factor, secret at the time, was an electoral pact with the new Labour Party, which ensured that the impact of the progressive vote was maximised.
The Liberal government of 1906–15 was one of the great reforming administrations of the twentieth century. Led by towering figures such as Asquith, Lloyd George and Churchill, it laid the foundations of the modern welfare state. Labour exchanges were introduced, old-age pensions were paid by the state for the first time, and the national insurance system was created. This was the realisation of the New Liberal programme – removing the shackles of poverty, unemployment and ill health so as to allow people to be free to exercise choice and realise opportunity.
From the outset the Liberals had difficulty passing legislation through the Tory-dominated House of Lords. The crunch came when the Lords rejected Lloyd George’s 1909 ‘People’s Budget’, which introduced a supertax on high earners to raise revenue for social expenditure and naval rearmament. Two elections were fought in 1910 on the issue of ‘the peers versus the people’. In both, the Liberals triumphed, but lost their majority, remaining in power with the support of Labour and Irish Nationalist MPs. In 1911, with the King primed to create hundreds of new Liberal peers if necessary, the Lords capitulated and the primacy of the House of Commons was definitively established.
The strains of fighting the First World War, however, brought the Liberal ascendancy to an end. The disastrous split in 1916 over the direction of the war, which saw Lloyd George supplant Asquith as Prime Minister, left the Liberal Party divided and demoralised. In the 1918 and 1922 elections, factions led by the two former colleagues fought each other. The party’s grassroots organisation fell apart, allowing the Labour Party to capture the votes of the new working-class and women voters enfranchised in 1918; many of those who could later be identified as social democrats left the Liberals for the more evidently successful progressive alternative, the Labour Party.
The Liberals reunited around the old cause of free trade to fight the 1923 election, which left them holding the balance of power in the Commons. Asquith’s decision to support a minority Labour government, however, placed the party in an awkward position and effectively polarised the political choice between Conservatives and Labour; the disastrous 1924 election relegated the party to a distant third place as the electorate increasingly opted for a straight choice between the other two parties.
Despite a renewed burst of energy under Lloyd George, which saw the party fight the 1929 general election on a radical platform of Keynesian economics, the Liberals were by then too firmly established as the third party to achieve much influence on government. They split again in the 1930s, in the wake of the upheaval brought by the Great Depression, and continued to decline, although the party participated in Churchill’s wartime coalition.
By 1957 there were only five Liberal MPs left, and just 110 constituencies had been fought at the previous general election. Despite the political irrelevance of the party itself, however, the huge impact of the Liberal thinkers Keynes and Beveridge, whose doctrines underpinned government social and economic policy for much of the post-war period, showed that Liberalism as an intellectual force was still alive and well.
Revival came with the election of Jo Grimond as party leader in 1956. His vision and youthful appeal were well suited to the burgeoning television coverage of politics, and he was able to capitalise on growing dissatisfaction with the Conservatives, in power since 1951. In 1958, the Liberal Party won its first by-election for thirty years, at Torrington in Devon, and in 1962, Eric Lubbock (later Lord Avebury) won the sensational by-election victory of Orpington. Although the upswing receded under Wilson’s Labour government in the 1960s, a second revival came in the 1970s with Jeremy Thorpe as leader, peaking in the two general elections of 1974, with 19 and 18 per cent of the vote (though only 14 and 13 seats, respectively, in Parliament).
One reason for the revival in Liberal fortunes was the development of community politics, in which Liberal activists campaigned intensively to empower local communities. This strategy was formally adopted by the party in 1970 and contributed to a steady growth in local authority representation, and a number of parliamentary by-election victories.
Following Labour’s defeat in the 1979 election, the internecine strife and growing success of the left within the party alienated many MPs and members. Moderate Labour leaders had worked with the Liberal Party during the referendum on membership of the European Community, and during the Lib-Lab Pact which kept Labour in power in 1977–78. On 26 March 1981 a number of them broke away from Labour to found the Social Democratic Party (SDP). The new party attracted members of both the Labour and Conservative parties and also brought many people into politics for the first time. The Liberal Party and SDP formed the Alliance later the same year, agreeing to fight elections on a common platform with joint candidates.
The Alliance’s political impact was immediate, wining a string of by-election victories and topping the opinion polls for months. The two parties won 25 per cent of the vote in the 1983 general election, the best third-party performance since 1929, and only just behind Labour, on 27 per cent.
The Alliance gained further by-election victories in the 1983–87 Parliament, and made significant progress in local government, but tension between the leaderships of the two parties also became apparent. David Owen, the SDP’s leader from 1983, was personally less sympathetic towards the Liberals under David Steel than had been his predecessor Roy Jenkins, and was also more determined to maintain a separate (and in practice more right-wing) identity for his party; differences emerged most notably on defence. The Alliance’s share of the vote dropped to 23 per cent in the 1987 general election.
A new party
The Alliance parties spent the following eight months in lengthy negotiations over merger; the new party’s constitution and even its name both proved to be subjects of sometimes bitter controversy. The Social & Liberal Democrats were born on 3 March 1988, with Paddy Ashdown elected as the party’s first leader in July. Owen led a significant faction of Social Democrats opposed to merger, but after a couple of encouraging by-election results, the ‘continuing SDP’ declined into irrelevance and wound itself up in 1990.
After a difficult birth, the new party suffered a troubled infancy. Membership, morale and finances all suffered from the in-fighting over merger; the nadir was reached in the 1989 European elections, when the party secured just 6 per cent of the vote, being beaten decisively into fourth place by the Green Party. The merger did allow the resolution of the policy differences highlighted by the Alliance, however, and agreement was finally reached on ‘Liberal Democrats’ as the party name.
Under Ashdown’s leadership, slowly the party recovered. In 1990 the Liberal Democrats re-established themselves on the political scene by winning the Eastbourne by-election, and local election advances resumed in 1991. In the 1992 general election the party won 18 per cent of the vote and 20 seats. Paddy Ashdown was consistently described in opinion polls as the most popular party leader, and the party’s policies, especially its pledge to raise income tax to invest extra resources in education, and its clear commitment to environmentalism, were widely praised.
Five years of weak and unpopular Conservative government after 1992 paved the way for further advances. In 1995, the Liberal Democrats became the second party of local government, and in many urban areas became the main opposition to Labour. The party won its first-ever seats in the European Parliament in 1994, and by-election successes continued, even after Tony Blair’s election as Labour leader, which had seen many political commentators predicting that New Labour would destroy the Liberal Democrats. In the 1997 election, the party won 46 seats, the highest number won by a third party since 1929. Whilst its overall share of the vote fell slightly, to 17 per cent, ruthless targeting of resources on winnable constituencies showed how the detrimental effects of the first-past-the-post electoral system could be countered.
Ashdown saved the party from oblivion; but the more controversial part of his legacy was ‘the project’, his attempt to work with Labour to defeat the Conservatives’ seemingly endless political hegemony. Ashdown and Blair even discussed a formal coalition between their parties, but the scale of Labour’s triumph in 1997 made such an arrangement impossible. Nevertheless, a pre-election agreement on constitutional reform helped ensure that the Blair government introduced devolution for Scotland and Wales, started to reform the House of Lords and brought in proportional representation for European elections. Blair’s refusal to stick to his commitment to hold a referendum on electoral reform for Westminster, however, helped convince Ashdown that the project was finished, and he stood down as leader in August 1999 – after seeing the party’s representation in the European Parliament rise from two to ten MEPs (the largest national contingent in the European Liberal group), and a Labour – Liberal Democrat coalition established in the new Scottish Parliament (followed by a similar coalition in the Welsh Assembly in 2000).
From the outset Ashdown’s successor, Charles Kennedy, was less inclined to work with Labour, focusing instead on replacing the Conservatives as the principal party of opposition. The Liberal Democrats began to benefit from the electorate’s disillusionment with New Labour, gaining ground in by-elections and local elections, and increasing their vote share in the 2001 general election to 18 per cent, with six net gains.
The terrorist attacks in the US on 11th September 2001, and the Labour government’s decision to join the US invasion of Iraq in 2003, transformed the political situation. The Liberal Democrats were the only one of the three main parties to oppose the war, and also to attack the steady infringements of civil liberties perpetuated by New Labour in the name of the war on terror. The party’s policy platform was popular and distinctive, with its critique of over-centralised and micro-managed public services, its proposals for a fairer tax system, its consistent support for strong environmental policies, and its opposition to Labour’s introduction of tuition fees for university students.
By-election and local election gains continued, and the Liberal Democrats emerged from the 2005 general election with 62 seats, the highest number of Liberal MPs since 1923, and 22 per cent of the vote. Despite this, there was a widespread feeling amongst party members that in the wake of a deeply unpopular war, and with the Conservatives still not mounting effective opposition, they should have done better. Amidst mounting dissatisfaction with Kennedy’s laid-back leadership style, MPs became increasingly concerned over the party’s drift and lack of direction, and also the leader’s rumoured alcoholism. Following two attempts to persuade Kennedy to resign, he finally stood down in January 2006. In March, Sir Menzies Campbell, the party’s deputy leader, was elected as the third leader of the Liberal Democrats.
The Campbell leadership, which lasted just nineteen months, was not, in general, a happy period. Campbell was a well-respected foreign affairs spokesman, but found it difficult to adjust to the rough and tumble of Prime Minister’s questions. Although he restored a sense of purpose and professionalism to the party organisation and drove through important reforms of party policy, local election results under his leadership were not encouraging. The party’s slide in the opinion polls throughout 2007 caused panic amongst some parliamentarians and led to a systematic undermining of his leadership. Prime Minister Gordon Brown’s decision not to call an election in autumn 2007 signalled the end, and Campbell announced his resignation in October.
After a hard-fought election, Nick Clegg narrowly beat Chris Huhne for the leadership; both men had been MEPs from 1999 to 2004, and both had been newly elected to the House of Commons in 2005.
Clegg’s assumption of the leadership stopped the slide in the opinion polls and stabilised party morale, and the Liberal Democrats performed strongly in the local elections in 2008 and 2009. However, the world-wide credit crunch and the bail-out of a series of major banks by the government in 2008–09 resulted in a major deterioration in British public finances, and a transformation in the political scene.
Liberal Democrat policy clearly had to change: the party’s 1990s’ pledge of higher public expenditure in key areas was no longer viable, and Labour’s record of costly, ineffective and increasingly centralised public services measures had in any case undermined support for central state activity.
This process led to some tensions within the party, particularly between the so-called ‘economic liberals’ (aligned with the proposals published in 2004 in The Orange Book: Reclaiming Liberalism), who argued for a smaller state and less government intervention, and the so-called ‘social liberals’ who in their turn pointed to the need for continued government action, in particular to reduce inequality and deal with the growing environmental challenge (set out in 2007 in Reinventing the State: Social Liberalism for the 21st Century). The divisions between the two groups were never as hard and fast, or as deep-rooted, as the media liked to pretend, however, and in general the leadership won support for its proposals for cutting the public deficit and prioritising public expenditure more sharply.
The Liberal Democrats entered the 2010 election with a programme based on fairness, including redistributive taxation, a ‘pupil premium’ to improve school education for children from poorer families, an economic stimulus package focused on low-carbon investment, and a far-reaching programme of political and constitutional reform. After a dramatic campaign, featuring the country’s first-ever television debates between the three main party leaders – in which Nick Clegg performed strongly – and wild swings in the opinion polls, the Liberal Democrats ended with a small increase in their total vote, to 23 per cent, although the vagaries of the electoral system delivered a net loss of six seats.
The election outcome of a hung parliament gave the Liberal Democrats their first real chance of power, and negotiations for a coalition began with both Conservative and Labour parties. In the end, a coalition programme containing a substantial portion of the Liberal Democrat manifesto was agreed with the Conservatives. On 11 May 2010, the Liberal Democrat parliamentary party and Federal Executive voted almost unanimously to enter coalition, a decision endorsed overwhelmingly by party members at a special conference five days later.
For the first time in 65 years, Liberal ministers sat on the government benches of the House of Commons. Five Liberal Democrats entered the cabinet, including Nick Clegg as Deputy Prime Minister, and a further fourteen became junior ministers.
Coalition was an unfamiliar political arrangement in Britain, and against a background of economic crisis and a record budget deficit, many speculated that it would be short-lived. Yet the coalition provided stable government for a full five-year term, managed a partial recovery in government finances and oversaw a faster rate of economic growth than any other G7 country at that time.
Key Liberal Democrat policies from the party’s 2010 manifesto were implemented: a significant rise in the income tax threshold took an estimated three million low-paid people out of tax altogether; the ‘pupil premium’ provided more resources for schools to teach children from deprived backgrounds; and significant investment was made in renewable energy. Liberal Democrat influence led to increases in the state pension, a higher priority to mental health, legislation for same-sex marriage, the development of an industrial strategy, the creation of the world’s first Green Investment Bank, and an expansion in the apprenticeship programme. In addition, Liberal Democrat ministers blocked or ameliorated Conservative proposals that would otherwise have adversely affected workers’ rights, disability benefits, support for young people and immigration. They also blocked a referendum on EU membership, and extensions to covert surveillance – policies which were promptly reinstated by the Conservative government elected in 2015.
The party’s constitutional reform agenda saw major failures, however, with a change in the voting system being blocked by referendum defeat in 2011, reform of the House of Lords by a Conservative rebellion in 2012, and party funding reform by Conservative ministers’ desire to protect their own donors. Offsetting these disappointments were the introduction of fixed-term parliaments and the devolution of greater powers to Scotland.
The challenging economic climate, and the Conservative Party’s austerity programme, meant that difficult compromises had to be made. Liberal Democrat ministers fought, often successfully, to slow down or reverse cuts in public services and to soften their impact, but this work was not generally visible to the electorate. Particularly damaging was the raising of university tuition fees, which led to a disastrous loss of trust in the party and its leadership, because the party had consistently campaigned against such fees, and in the 2010 election all Liberal Democrat candidates had pledged to vote against any rise.
Support for the party fell sharply. Between 2011 and 2015 every round of local elections saw hundreds of Liberal Democrat councillors lose their seats, and Liberal Democrat members were toppled in elections to the Scottish Parliament, the European Parliament, and finally in the 2015 general election. For five years, the Liberal Democrats had proved that they could handle power competently, but their efforts and successes had been inadequately communicated to the public and were swamped by the false perception that the party had colluded wholesale in a Conservative agenda. In addition, during the 2015 election campaign fears of a Labour and Scottish Nationalist coalition in the event of a hung parliament swayed many voters towards the ‘safer’ option of a Tory vote, and the Conservatives won with a small overall majority. The Liberal Democrats shrank from 57 MPs in 2010 (with 23 per cent of the vote) to eight in 2015 (with just 7.9 per cent of the vote).
Could the party have handled coalition better? The debate continues, but the party’s experience of a fall from favour mirrors that of other smaller partners in coalition governments across Europe.
Survival and Recovery
The morning after the 2015 general election, Nick Clegg resigned as leader of the party, and was replaced in July by Tim Farron.
Throughout the rest of 2015 and 2016, support for the party in opinion polls remained low, but there are growing signs that the Liberal Democrats have the foundations in place for revival.
In the 2016 local elections the party made a net gain in council seats for the first time since 2009, though in London the party lost one of its two remaining Assembly Members. In Scotland the party retained five seats, whereas in Wales it was reduced to just one, though the Welsh Liberal Democrats subsequently joined Labour in coalition government in Cardiff.
Party membership surged after the 2015 election, indicating a determination to keep the Liberal flame alive, and leapt again after the EU referendum in June 2016, with new members being drawn to the party’s pro-European stance in the wake of the country’s vote to leave the EU. A string of Liberal Democrat gains in local government by-elections after the referendum was capped, in December 2016, by victory in the Richmond Park by-election after a campaign fought overwhelmingly on the Brexit issue; Sarah Olney became the ninth Liberal Democrat MP.
Not for the first time in the party’s history, Liberals are reviving from disaster and near-disappearance. At a time of turmoil in national politics, with the breakdown of traditional voting patterns and the other major parties suffering internal divisions, the Liberal Democrat slogan ‘open, tolerant and united’ offers a clear beacon round which to rebuild the party and champion the cause of Liberalism once again.