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, [13] whilst Labour carefully targeted taxation aimed at "luxury" goods and services. In spite of the economic difficulties faced by Wilson's government, it was therefore able to achieve important advances in a number of domestic policy areas. As reflected by Harold Wilson in 1971,

The Wall Street Crash of 1929 and eventual Great Depression occurred soon after the government came to power, and the crisis hit Britain hard. By the end of 1930 the unemployment rate had doubled to over two and a half million. [36] The Poplar Guardians justified the generous scales of relief they paid out, together with their abandonment of principles of less eligibility in terms of a politics of redistribution of the financial burden of unemployment, stating that 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. Smith's leadership once again saw the re-emergence of tension between those on the party's left and those identified as "modernisers", both of whom advocated radical revisions of the party's stance albeit in different ways. At the 1993 conference, Smith successfully changed the party rules and lessened the influence of the trade unions on the selection of candidates to stand for Parliament by introducing a one member, one vote system called OMOV – but only barely, after a barnstorming speech by John Prescott which required Smith to compromise on other individual negotiations. In the decade following the Second World War, Labour councils played an important part in the housing reconstruction that followed the end of the conflict, and stood as important players in the reconstruction of housing and city centres. In Newcastle, under the leadership of the visionary but corrupt T. Dan Smith, an accelerated "modernisation" of the city took place, as characterised by an ambitious programme of road construction and public building and the replacement of slum terraces with new innovative estates such as the Byker "wall." [3]The party's move to the left in the early 1980s led to the decision by a number of centrist party members led by the Gang of Four of former Labour cabinet ministers ( Shirley Williams, Bill Rodgers, Roy Jenkins, and David Owen) to form the breakaway Social Democratic Party (SDP) on 25 January 1981. The broader aims of the party were set out in the Limehouse Declaration the following day. [134] Labour councils not only brought relief to the poorest sections of the community, they provided opportunities for employment and, through the funding of education and library facilities, self-improvement. In November 1990, Margaret Thatcher resigned as prime minister and was succeeded by John Major. Most opinion polls had shown Labour comfortably ahead of the Tories in the 18 months leading up to Thatcher's resignation, with the fall in Tory support blamed largely on the introduction of the unpopular poll tax, combined with the fact that the economy was sliding into recession at the time. One of the reasons Thatcher gave for her resignation was that she felt the Tories would stand a better chance of re-election with a new leader at the helm.

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. It was indeed dubbed by the Labour MP Gerald Kaufman as " the longest suicide note in history".

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Meanwhile, the Liberal Party declined rapidly and the party suffered a catastrophic split that allowed the Labour Party to co-opt much of the Liberals' support. 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. [36] There was little public appetite for a return to the poverty and mass unemployment of the inter-war years which had become associated with the Conservatives. Labour has been in opposition in the House of Commons since the 2010 general election. However Welsh Labour has led a Labour minority administration continuously since the creation of the Senedd (Welsh Parliament ) in 1999. The Labour Party's origins lie in the growth of the urban proletariat in the late 19th century 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. [2] 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. At the 1983 election, Labour suffered a landslide defeat, winning only 27.6% of the vote and securing just 209 seats. This was their worst performance at a general election 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, although the Alliance only won 23 seats. Michael Foot criticised the Alliance for "siphoning" Labour support and allowing the Tories to win more seats.

This article is about the history of the British Labour Party. For information about the wider history of British socialism, see History of socialism in Great Britain. The Supplementary Benefits Act 1976 introduced new levels of financial support for those on little or no income, [123] while new benefits were introduced for those with disabilities. [124] For families with children, the system of child cash and tax allowances was replaced in 1977 by a universal Child Benefit for all families with at least one child, [125] For those at work, a supplementary pension scheme was introduced to provide members of the workforce with an additional income in retirement. [126]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 Aneurin 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. In 1892, Fred Jowett (a member of the Independent Labour Party) became the first socialist to be elected to Bradford City Council. A few months later, Jowett founded a branch of the Independent Labour Party in that city. As a member of Bradford City Council, Jowett was responsible for the passage of several important reforms that were eventually adopted by other local authorities. In 1904, for instance, Bradford became the first local authority in Britain to provide free school meals, while a successful campaign led to the clearing of a slum area and its replacement with new houses. Jowett was also a supporter of reforming the 1834 Poor Law, and attempted to improve the quality of the food given to the children in the Bradford Workhouse after being elected as a Poor Law Guardian. 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 7.4% by 1978. [13] Co-operators, in common with the trade unions and labour, pressed hard from the outset of the war for the extension of the food rationing system to cover all essential supplies, arguing that the existence of an unrationed sector would create class injustices and result in time wasted on seeking supplies from shop to shop. Labour responded to Co-operative demands on these issues in March 1941 by establishing a Food Deputation Committee to work for more effective control and rationing of food supplies, together with the creation of an effective Consumers' Council. [18]