David Laws’ latest book ‘Serpents, Goats and Turkeys: A century of Liberal-Labour relations’ is published by Biteback.
I wrote my new book for two reasons: firstly, because the history of relations between Labour and the Liberal Democrats is both fascinating and little understood, and secondly, because the arrival of a Labour government in July 2024 means that this issue is now highly topical.
Our story starts in 1903, when the Labour Party had literally a handful of MPs, and when the Liberals and Unionists (Conservatives) were the two dominant parties. In this year, the Liberal leadership entered into a secret pact with Ramsay MacDonald, then a leader of the Labour Representation Committee (soon to become the Labour Party). The pact involved the Liberals agreeing to give the LRC an unopposed run in around 30 seats. Some Liberals thought the pact was insanely risky – one warning that they were ‘nursing into life a serpent’ that would ‘sting’ their party to death.
But the background to the pact was that the Liberal Party had been largely out of power for two decades and had fielded a miserable total of 402 candidates for 670 seats in the 1900 election. It was short of money and feared any split in the anti-Unionist vote.
In the short term, the pact was a stunning success for both parties. The Liberals swept to power in 1906, and the Unionists suffered their worst ever defeat (until July 2024). The Unionists still polled over 43% of the vote (compared with 23.7% in 2024), but the Liberals and LRC had worked closely together in a highly successful and coordinated pincer movement.
At this point, Labour and the Liberals were closely aligned in many areas of policy. Both parties were in favour of free trade, progressive taxation and social policy, an internationalist outlook, and (mostly) Home Rule for Ireland. And Labour MPs supported Lloyd George’s ‘People’s Budget’ and Liberal plans on Lords reform.
The huge split in the Liberal Party during the First World War, and the gradual shift of Labour to being a much more socialist party, ended the early days of cooperation and alignment. Labour were now clearly aiming to replace the Liberals as the alternative to the Unionists. And the new big dividing line on economic policy was not tariffs versus free trade, but socialism versus capitalism – and on this issue, a Liberal Party could not side with Labour.
So in spite of some general Liberal support for the minority Labour governments of 1923/24 and 1929/31, the Liberals and Labour moved gradually apart – and this accelerated after 1931, as Labour also split and its moderate leadership departed. From 1931 to the mid-1950s, the Liberal Party only survived because most of its MPs were given a free run in their seats by the Conservatives. And in 1951, Churchill even made a Coalition offer to the Liberal leader, which was rejected.
Labour were moving sharply leftwards in the 1970s. After the short lived and risky Lib-Lab Pact (‘turkeys voting for Christmas’ according to one Liberal MP), the new SDP-Liberal Alliance attempted unsuccessfully to displace Labour as the main opposition to ‘Thatcherism’.
Four Conservative election victories in 1979, 1983, 1987 and 1992 eventually led to a ‘progressive renaissance’ on the centre-left, between Ashdown and Blair. But Blair’s huge 1997 majority meant a coalition was not needed, and after much debate about electoral reform, Blair eventually decided this was not in his interest. By the time Gordon Brown had decided to advocate for the Alternative Vote in 2009/10, it was too late – Labour lost power in the 2010 election.
What are the lessons of the last 120 years? The key ones are as follows. Firstly, Labour and the Lib Dems have much in common in their values and in many of their policy positions. But this has not always been the case on policy – the more socialist the Labour Party is, the less it is a natural ally of a Liberal party. Over the period covered by the book (1903-2019) only in the years 1903-1914 and 1992-1999 have the two parties been closely aligned.
Secondly, since the Liberals have been the third party, they have been consistently badly burned when they have got close to one of the other two parties or when a government has lacked a clear Commons majority. Voters seem to penalise smaller parties when they cooperate with governments or are seen as close to them. This was the experience of 1924, 1931, 1951, 1966, October 1974, 1979, and 2015. That is a powerful warning to Ed Davey that he needs to keep some distance from the Labour Party if he wants to avoid a third party squeeze in 2029.
But the third and final lesson is this: the split on the centre-left has helped the Conservatives stay in power for much of the last 100 years. To avoid this, and to enable any future co-operation with Labour, the Lib Dems need electoral reform to deliver a consistently fairer outcome for the third party. And to deliver electoral reform, they need to win Labour over to that cause. The Conservatives have consistently opposed reform, while Labour (though divided) have often favoured reform to preference systems such as AV or the supplementary vote. The Lib Dems and Labour have common interests over Lords reform, party funding reform, and electoral reform. Pursuing those interests is better done when the parties are in a position to deliver change.
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