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 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 to allow people to be free to exercise choice and realise the 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 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 a 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 steady growth in local authority representation and many 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, winning 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 the 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.