Social Democratic Party and Liberal-SDP Alliance
Michael Foot's election as Labour party leader indicated that the party was likely to become more left-wing, and in 1980 committed itself to withdrawing from the EEC without even a referendum (as Labour had carried out in 1975). Also, Labour endorsed unilateral nuclear disarmament and introduced an electoral college, for leadership elections, with 40% of the college going to a block vote of the trade unions. Early in 1981, Owen and three other senior moderate Labour politicians – Roy Jenkins, Bill Rodgers and Shirley Williams – announced their intention to break away from the Labour Party to form a "Council for Social Democracy". The announcement became known as the Limehouse Declaration and the four as the "Gang of Four". The council they formed became the Social Democratic Party (SDP), with a collective leadership.
Twenty-eight other Labour MPs and one Conservative MP (Christopher Brocklebank-Fowler) joined the new party. In late 1981, the SDP formed the SDP-Liberal Alliance with the Liberal Party to strengthen both parties' chances in the UK's "first past the post" electoral system. In 1982, uneasy about the Alliance, Owen challenged Jenkins for the leadership of the SDP, but was defeated by 26,256 votes to 20,864. In the following year's General Election, the Alliance gained 25% of the vote, only slightly behind the Labour Party, but because of the first-past-the-post voting system, it won only 23 out of 650 seats. Although elected, Jenkins resigned the SDP leadership and Owen succeeded to it without a contest among the 6 remaining SDP MPs.
In 1982, during the Falklands War, Owen spoke at the Bilderberg Group advocating sanctions against Argentina.
Ironically, it had been the success of the Falkland War, which had put paid to any hopes that the SDP might have had of winning the 1983 election. Many of the opinion polls in late 1981 and early 1982 had shown the SDP with a comfortable lead over the Tories, who were proving unpopular largely due to high unemployment and the early 1980s recession and ahead of the Labour Party whose democratic-socialist policies were driving away moderate voters. However, Britain's success in the conflict saw Margaret Thatcher and her Tory government surge back to the top of the opinion polls, and her position was stengthened further by the end of the year as the recession ended and more voters had faith in her economic policies.
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