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). Labour also 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. Although Owen was one of the founding members of the party, he was not always enthusiastic about creating a
schism on the centre-left, saying to the
Glasgow Herald in January 1981 that he felt "haunted by the possibility that, if the Labour Party splits, the centre left will never again form the Government in Britain". 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. The alliance performed so well that for much of the early part of 1982, it appeared that it would become a centre-left coalition government at the next election. 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 six remaining SDP MPs. In 1982, during the
Falklands War, Owen spoke at the
Bilderberg meeting advocating sanctions against Argentina. Ironically, the success of the war ended any hope that SDP might have had of winning the 1983 election. The Tories were proving unpopular largely due to high unemployment and the
early 1980s recession. 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 strengthened further by the end of the year as the recession died down.
SDP leadership Owen is widely regarded as having been, at the very least, a competent party leader. He had high popularity ratings throughout his leadership as did the SDP–Liberal Alliance. Owen kept a high profile, so much so that
Spitting Image, the satirical puppet show, depicted the Liberal leader
David Steel popping up like a jack-in-the-box in Owen's pocket. He succeeded in keeping the party in the public eye and in maintaining its independence from the Liberals for the length of the 1983 Parliament. Moreover, under him, the SDP increased its representation from six to eight seats via the by-election victories of
Mike Hancock, at
Portsmouth South (1984), and
Rosie Barnes, at
Greenwich (1987). However, the progress of the SDP–Liberal Alliance as a whole was hampered, with policy splits between the two parties. The first was over the
miners' strike of 1984–85, with Owen and most of the SDP favouring a fairly tough line but the Liberals preferring compromise and negotiation. After the
killing of David Wilkie for driving a miner to work, Owen called for all miners to return to work on the following Monday to show their "gut reaction" to the killing. More significantly the Alliance had a dispute over the future of Britain's independent nuclear deterrent. Owen and the SDP favoured replacing
Polaris with
Trident as a matter of some importance, whereas most Liberals were either indifferent to the issue or committed disarmers. The SDP favoured a radical
social market economy, while the Liberals mostly favoured a more interventionist,
corporate style approach. The cumulative effect of these divisions was to make the Alliance appear less credible as a potential government in the eyes of the electorate. Moreover, Owen, unlike Jenkins, faced an increasingly moderate Labour Party under
Neil Kinnock and a dynamic Conservative government. The
1987 general election was as disappointing for the Alliance as the 1983 election and it lost one seat. Nevertheless, it won over 23% of the vote – at that time, the second-largest third-placed vote in British politics since 1929.
Full parties' merger In 1987 immediately after the election, the Liberal leader
David Steel proposed a full merger of the Liberal and SDP parties and was supported for the SDP by Roy Jenkins, Shirley Williams and Bill Rodgers. Owen rejected this notion outright, on the grounds that he and other Social Democrats wished to remain faithful to
social democracy as it was practised within Western Europe, and it was unlikely that any merged party would be able to do this, even if it was under his leadership. Nevertheless, the majority of the SDP membership supported the merger. The Liberal Party and SDP merged to form the Social and Liberal Democrats (SLD) in March 1988, renamed the
Liberal Democrats in October 1989. At the request of two of the remaining SDP MPs,
John Cartwright and
Rosie Barnes, Owen continued to lead a much smaller
continuing SDP, with three MPs in total. The party polled well at its first election, its candidate coming a close second in the 1989
Richmond by-election, but thereafter a string of poor and ultimately disastrous by-election results followed, including coming behind the
Official Monster Raving Loony Party in the
Bootle by-election of May 1990, prompting Owen to wind up the party in 1990. Owen blamed the SDP's demise on the reforms which had been taking place in the Labour Party since Kinnock's election as leader in 1983. Some branches, however, continued to function using the
SDP name;
Bridlington's was still extant in 2006.
Lord Holme later blamed Owen for the Alliance's failure to make a breakthrough at the 1987 general election, believing that a merged party would have performed much better and possibly gained more votes and seats than Labour. ==Post-SDP: Political allegiances as a life peer==