Labour is in crisis. The bitter divide across the party echoes the acrimony that drove the ‘gang of four’ to form the breakaway SDP. Will history repeat itself?

On a mild winter Sunday morning 35 years ago, political reporters were instructed to go to a riverside house in east London, and to wait outside for an important announcement. Inside were four former Labour ministers, all well-known national figures: Shirley Williams, David Owen, Bill Rodgers and Roy Jenkins. Over the previous year and a half, they had met with growing frequency, and written articles and given interviews that suggested a common disenchantment with Labour. They had become known by an increasingly expectant media as the gang of four.

In 1981, as now, British politics was in a state of rare flux. Margaret Thatcher was an inexperienced prime minister. Her austere economic and public-spending policies seemed disastrous. Meanwhile, the Labour opposition was being ineffectually led by Michael Foot, like Jeremy Corbyn a faintly otherworldly leftwinger in his late 60s. Under Foot, as under Corbyn, the party was becoming an unmanageable cauldron of leftwing and centrist factions, of London social liberals and northern social conservatives, of working-class trade unionists and middle-class constituency activists, of party loyalists and “entryists” – infiltrators from other, more confrontational leftwing groups such as Militant.

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“The four of us were very different from each other,” remembers Rodgers of his fellow rebels against this apparently fragile status quo. “We had no organisation. But we worked closely together. And we moved very quickly.”

On 24 January 1981, the gang of four went to their final Labour event: an acrimonious one-day conference that voted to drastically reduce the influence of MPs over the party’s choice of leader and deputy leader. Again, there is a seemingly precise parallel with Labour’s current internal struggles over whether Corbyn’s fate as leader should be decided by activists or the parliamentary party. As MPs or former MPs, and longstanding champions of the Labour right, the gang of four saw the conference vote as an intolerable strengthening of the left’s power. Owen spent much of the day pointedly sitting on the stairs of the hall, away from the other delegates, his expression one of photogenic fury.

The following day, the gang of four summoned the journalists to the east London house, which was Owen’s elegant family home. For several hours, while the reporters waited in the street, the politicians discussed and drafted a short manifesto – pausing for a lunch of wine, cheese and salad – that they titled the Limehouse declaration. At teatime, after 18 drafts, with the deadlines for the next day’s papers fast approaching, the document was handed out to the reporters. It announced the founding of a “council for social democracy”, which would “reverse Britain’s economic decline”, “eliminate poverty”, “create an open … more equal society”, and counter “the drift towards extremism in the Labour party”.

Over the next few weeks, this council haphazardly but quickly crystallised into a new political party. There were newspaper ads appealing for donations and other support, signed by centre-left notables such as Lord Young, the author of Labour’s famously successful 1945 general election manifesto. There were excited debates about what the party’s name should be: Progressive Labour, Democratic Labour and New Labour were all suggested. In March 1981, with the media already in the habit of describing them as “social democrats”, the gang of four settled on the Social Democratic party, or SDP.

Eighty thousand people joined in its first year. During 1981 and 1982, 28 Labour MPs joined, too – the largest parliamentary defection since 1886, when the Liberals had split over Ireland. The Liberals had subsequently been out of power for almost 20 years.

Facebook Twitter Pinterest David Owen (left) and David Steel, leaders of the SDP-Liberal Alliance, at the launch of the 1987 Alliance election campaign. Photograph: Hulton Archive/Getty Images

Yet in the SDP’s hugely optimistic early days, few dwelled on such precedents. “We were amazed by the scale of the reaction,” Williams says. “We were not completely prepared for it.” Owen told me in 2012 that Jenkins in particular “geared himself to think that if he became SDP leader”, which he soon did, “he could almost become PM” at the next general election. The SDP formed an alliance with the Liberals, who were also surging in popularity. In December 1981, a poll by Gallup put the alliance at 50.5%, a heady 27% ahead of both Labour and the Tories. At the Liberal party conference that autumn, their usually judicious leader, David Steel, told delegates: “Go back to your constituencies and prepare for government.”

In recent weeks – in fact, ever since it became clear last summer that Corbyn was going to be elected leader, and that many of his MPs were never going to accept that – it has seemed increasingly possible that Labour will split again, and that this time the divisions could be even worse. In 1981-2, only a tenth of Labour MPs deserted to the new party; last month, three-quarters of them backed a motion of no confidence in Corbyn, despite his huge electoral mandate from party members.

Labour has always been a potentially explosive coalition of idealists and pragmatists, of different interest groups and ideological tendencies: both a loose “Labour movement” and to varying degrees a disciplined party. Some of those aghast at the present in-fighting seem to have forgotten that even the party’s relatively stable periods have been marked by intimidation and intolerance, such as the malicious briefing and crushing of dissent practised by New Labour’s spin doctors. Yet the current turmoil feels as nasty as any since the early 80s, with threats of violence alleged by both sides, and all constituency meetings suspended until the leadership contest is decided in September in an attempt to reduce the acrimony (some local parties are meeting regardless). Last month, while Corbyn was being castigated by much of the parliamentary party in a room in Westminster, thousands of his supporters were massing and chanting his name in Parliament Square, directly outside. Labour already looked and sounded like two parties.

“The moderates now are pretty close to feeling the despair we did,” says one of the first Labour defectors to the SDP in 1981, who is still active in Westminster and asks not to be named. “It is a tragic situation,” Rodgers says. For all its excitement, the 1981 SDP breakaway also “caused pain to me and those who left the party. My friends and neighbours were divided. My three daughters stayed in the Labour party.”

Rodgers continues: “Even a week ago, I would have said that somehow the Labour party will scrabble along [intact]. I think now it is a possibility there will be a split.” Williams, revealingly, calls such a scenario “a crack-up”. The 1981 defector says: “I have a feeling these [anti-Corbyn] guys will declare themselves to be a parliamentary party. If they’re really disciplined, they will have more MPs than Corbyn, and become the opposition to the government.”

Facebook Twitter Pinterest David Owen, Shirley Williams and Bill Rodgers recreate their 1981 meeting at David Owen’s house in 2006. Photograph: Martin Argles/The Guardian

Last weekend, the Mail on Sunday reported that “more than 150 Labour MPs are plotting to form a breakaway party codenamed Continuity Labour”, if Corbyn wins the September leadership ballot.

David Winnick was first elected as an MP in 1966. He did not leave Labour for the SDP. “The crisis today is much more serious than in 1981,” he says. “The SDP had limited influence among party members. Very few constituency Labour parties crumbled. The defectors were seen as rightwingers, and their alliance with the Liberals demonstrated that. The party was left intact.”

Frank Field, another long-serving MP who stuck with Labour in 1981, remembers the split differently. “The people who were going to leave – I was just so anxious that they stay. Owen was a legitimate part of the Labour party.” But he agrees with Winnick that Labour in the 80s had a durability it may lack now: “The loyalty of the Labour vote then was strong.”

The 1981 crisis blew up much more gradually than Labour’s current one, which has been accelerated by social media, the faster modern news cycle and by a feverishness in British politics that has seen two referendums, a shock general election result, and five major parties changing their leaders, all in less than two years. The Labour-SDP split, by contrast, developed over almost a decade. In 1972, Dick Taverne, a former Labour minister, resigned from the party after a bitter dispute with leftwing Labour activists in his constituency, and the following year set up a sort of prototype SDP, the Campaign for Social Democracy. It failed to attract much support and was wound up in 1975. But the same year saw the formation of another SDP-ish group, the Social Democratic Alliance. Its main preoccupation was the infiltration of the Labour party by Militant and other hard-left organisations.

During the 70s, this “entryism” had become a significant phenomenon, as activists with non-Labour loyalties began to take control of some local Labour parties. Field’s constituency is in Merseyside, a focus for Militant in the 70s and 80s, and he experienced the sect’s methods at first hand. “Two things I learned are that you can have a level of intimidation in a group [setting] that stops people from saying things, and that the hard-left are wonderful liars. They always have a plausible person as their public representative. And when you say you’ve seen intimidatory behaviour, they always say, ‘We never saw that.’”

Facebook Twitter Pinterest Derek Hatton (centre) and other members of Militant sing the Internationale outside Labour’s HQ after being expelled from the party in 1986. Photograph: Paul Fievez/Daily Mail/Rex

However, in the early 80s, as now, the Labour right often did not draw a distinction between such sectarian activity and the increasingly leftwing tendencies of many genuine and unaggressive Labour members. The latter, like many in the party now, and in the pro-Corbyn pressure group Momentum, had grown disillusioned with the cautious, compromising approach that the party had recently followed in government, and that had arguably caused it to lose power. As Owen himself conceded in the New Statesman in 2011: “In the aftermath of electoral defeat [in the 1979 general election] … It was not unreasonable for those on the left to try to shift the balance of power in the party closer to their views.” Yet in the early 80s, he and the other founders of the SDP portrayed this leftward shift as a takeover of Labour by utterly foreign ideas.

In his classic, recently republished history of Militant, the veteran political reporter Michael Crick points out that in 1981 the group had at most 2,500 members. Labour had a hundred times that; Militant’s influence over the party was smaller than defectors to the SDP often claimed.

Since the 80s, Militant has renamed itself as the milder-sounding Socialist party. Its newspaper is generally supportive of Corbyn – sometimes referred to as Jeremy – and of Momentum. Since his election as leader, it has been claimed more and more widely that Militant’s power inside Labour is on the rise again. Field says: “The same [Militant] people who we expelled from the party in the 80s are tormenting Angela Eagle.” Eagle faced a revolt in her Merseyside constituency after announcing her abortive leadership challenge against Corbyn.

And yet, as Crick records in his book, “Corbyn was never anywhere near being a member of Militant”. That has not changed. Similarly, last December, Momentum declared: “We can’t allow Momentum to be used as a vehicle for other parties. So if you are a member of the Socialist Party … for instance, you cannot also be involved in decision-making within Momentum.”

If the party does split again, what might happen to the two sides? Rodgers has a warning for anyone contemplating a SDP-style breakaway: “Members of parliament are not that strong – they’re not like soldiers. When it comes to the moment [to defect] they get rather shaky, they try to find a way to avoid it happening.” The 28 Labour defections to the SDP were fewer than the gang of four hoped for.

The 1981 defector who doesn’t want to be named says: “The anti-Corbyn side have moved too quickly against him. They never gave him a real chance to fail demonstrably. They’ve been seen off, for now. If he holds on in the leadership ballot this September, a lot of power will accrete to him. A coalition of the [mostly pro-Corbyn] trade unions and all the young people in Momentum would take a lot of Commons seats from any anti-Corbyn party [at a general election].” For that reason, it has been alleged, some on the Labour left are sanguine about the party splitting.

Facebook Twitter Pinterest Shirley Williams in 1981. Photograph: Herbie Knott/Rex/Shutterstock

Alternatively, the British electoral system, which is almost uniquely biased against all but the biggest parties – as Ukip learned to its cost when 3.9m votes at last year’s election earned it a single Commons seat – may crush both Labour offshoots. “The ultimate nightmare,” Winnick says, “is that neither survives electorally. The party must remain as one … even if under the present leader. Better a dismal result than splitting.”

Williams disagrees. “Splits are unavoidable, if the issues are big enough. I don’t think either Labour or the Conservatives can hold together. There are too many issues – such as Brexit – that cut across party boundaries.” She argues that a “loose coalition of parties of the left” would be much more effective than the current, dysfunctional Labour party.

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But history is against her. In June 1983, two years after the SDP was founded, the SDP-Liberal alliance contested its first general election. It got 25% of the vote, exceptional for a new party but exactly half its giddy rating in the 1981 Gallup poll. Labour, despite still being led by the derided Foot, got 2% more. Labour also held on to 209 of its Commons seats. The SDP got six.

The split in the left-of-centre vote kept Thatcher in office with crushing Commons majorities for seven more years. In 1990, after never quite regaining its initial popularity, the SDP was disbanded.

Roy Jenkins died in 2003. The remaining members of the gang of four, and more disinterested politicians and historians, have long argued that the SDP’s ideas – such as the “classless society” and “more responsive public services” called for in the Limehouse declaration – outlived the party, shaping the Lib Dems, New Labour, even the Conservatives. “Theresa May’s first [surprisingly left-leaning] speech as prime minister – that was pure social democracy,” claims the 1981 defector from Labour to the SDP. Williams says: “People still come up to me and say: ‘I weep that the SDP are no longer with us.’”

Affection, influence, the adventure of a new party – many political careers fail to achieve these. But will the possibility be enough to tempt the anti-Corbyn mutineers, some of whom were ministers only a few years ago? We may find out within weeks, or it may take years.

• Andy Beckett’s Promised You a Miracle: Why 1980-82 Made Modern Britain is published by Allen Lane