THE SOCIAL DEMOCRATIC-LIBERAL ALLIANCE: BREAKING THE MOLD OF BRITISH POLITICS?

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84S00555R000200070003-2
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 15
• Document Creation Date: December 21, 2016
• Sequence Number: 3
• Content Type: REPORT

Approved For Release 2008/08/19: CIA-RDP84SO0555R000200070003-2
Directorate of Confidential
Intelligence
The Social Democratic-Liberal
Alliance: Breaking the Mold
of British Politics?
An Intelligence Assessment
State Dept. review
completed
Confidential
EUR 83-10152
May 1983
Copy 353
Approved For Release 2008/08/19: CIA-RDP84SO0555R000200070003-2
25X1
 Approved For Release 2008/08/19: CIA-RDP84SO0555R000200070003-2
Approved For Release 2008/08/19: CIA-RDP84SO0555R000200070003-2
 Approved For Release 2008/08/19: CIA-RDP84SO0555R000200070003-2
Directorate of Confidential
Intelligence 25X1
The Social Democratic-Liberal
Alliance: Breaking the Mold
of British Politics?
This paper was prepared by
Office of European Analysi
Comments and queries are welcome and may be
directed to the Chief, Western Europe Division,
EURA
Confidential
EUR 83-10152
May 1983
25X1
25X1
Approved For Release 2008/08/19: CIA-RDP84SO0555R000200070003-2
 Approved For Release 2008/08/19: CIA-RDP84SO0555R000200070003-2
Confidential
The Social Democratic-Liberal
Alliance: Breaking the Mold
of British Politics?
Key Judgments The fledgling Social Democratic-Liberal Alliance is aiming to capture the
Information available middle ground from Prime Minister Thatcher's Conservatives and the
as of 23 May 1983 increasingly leftist Laborites in the British general election on 9 June. We
was used in this report.
believe that problems of internal leadership rivalries and policy differences
and a slim campaign budget will keep the Alliance from breaking through
to national power. There is an outside chance, however, that the Alliance
could prevent either traditional party from winning a majority and. thus
emerge with the balance of power in the next Parliament.
The Alliance's electoral support has fluctuated considerably in the polls,
from a high of 50 percent in December 1981 to its current low of l7 per-
cent. Even if the Alliance increased its momentum and captured about a
third of the vote-probably the most it can hope for-it almost certainly
would not gain a third of the seats in Parliament. Under the British
electoral system, the parliamentary seat in each district goes to the
candidate who wins a plurality-a practice that works against the Alliance,
because its support, unlike that of the Labor and Conservative parties, is
spread out thinly across the country. Nevertheless, depending on how
evenly the vote divides between Labor and the Tories, 30 percent for the
Alliance could yield sufficient seats to prevent the other parties from
winning a majority.
If the Tories or Labor sought Alliance support in forming a minority
government, the Alliance would attempt to extract some concessions
designed to moderate the policies of the larger party. The Alliance
probably would not demand (or be offered) a coalition arrangement with
the other parties, but would bargain for policy compromises-especially
electoral reform to implement proportional representation-in exchange
for its parliamentary support. We believe that once Alliance leaders
entered a partnership with one of the major parties they would hesitate to
press their positions too hard, however, because they would be leery of
provoking an early election before rebuilding the party's finances. The
Alliance probably would still be in a position to encourage job creation and
slightly more expansionist monetary policies under a Tory government or
to soften the unilateralist defense policies and isolationist economic policies
that would evolve under a Labor government. The Alliance has said it
could support either major party, but its positions on such issues as the EC,
the economy and-to a lesser extent-defense probably would make it
somewhat easier for the Alliance to work with the Tories than with Labor.
iii Confidential
EUR 83-10152
May 1983
Approved For Release 2008/08/19: CIA-RDP84SO0555R000200070003-2
 Approved For Release 2008/08/19: CIA-RDP84S00555R000200070003-2
British relations with the United States and other Western allies undoubt-
edly would suffer under a minority government since it would be unstable,
possibly of short duration, and London's ability to meet its obligations
would be less certain. To accommodate Alliance reservations, a minority
Tory government ruling with Alliance support might delay INF basing or
the purchase of Trident. Conversely, however, NATO and the West would
be better off with a Labor minority government, no matter how unstable,
than with a Labor majority. The right wing of the Labor party probably
would use Alliance support as an excuse to avoid implementing unilateral
nuclear disarmament and a pullout from the European Community.
The Alliance has managed to throw a serious scare into both traditional
parties. Its success to date points out that over the long term, the increased
polarization of British politics and the growing swing vote that is evolving
with the decline in support for both the Labor and Conservative parties
probably will provide ample opportunity for a moderate middle-of-the-road
party.
Approved For Release 2008/08/19: CIA-RDP84S00555R000200070003-2
 Approved For Release 2008/08/19: CIA-RDP84SO0555R000200070003-2
Confidential
The Social Democratic-Liberal
Alliance: Breaking the Mold
of British Politics?
In late 1980 and early 1981, a group of Labor Party
notables made public their deep unhappiness with
their party's swing to the left. In particular, the group
publicly declared it would not support unilateral
nuclear disarmament, leaving the European Commu-
nity, or changes giving the Labor left wing more say
in choosing the party leader. Encouraged by the
positive public response to its proposals, the so-called
Gang of Four-Shirley Williams, David Owen, Wil-
liam Rodgers, and Roy Jenkins-formally launched
the Social Democratic Party (SDP) in March 1981. In
total, 13 Members of Parliament from the Labor
Party and one from the Conservative Party moved to
the SDP, making it immediately the third largest
party in Parliament. Allied with neither big business
nor with the labor unions, SDP leaders indicated they
were interested in attracting the "moderate main-
stream" by rejecting the class basis for parties-"the
board room versus the trade unions"-and by steering
a path between the two.
The SDP got off to a heady start,' initially attracting
500 to 1,000 members per week according to press
reports. A poll of 4,000 SDP members at the First
Party Congress in October indicated that more than
two-thirds were professionals, managers, teachers,
civil servants, or self-employed businessmen. More
than half of the delegates had no previous political
affiliation, less than 7 percent were former Tories,
and just over 30 percent had left the Labor Party. The
rank and file was also determinedly democratic, as it
demonstrated at the SDP constitutional conference in
February 1982 when the floor favored a one-man,
one-vote selection of the party leader by all party
members as a way of distinguishing the SDP from the
old parties. In midyear, the SDP elected Roy Jenkins
as leader in the first-ever postal ballot by any British
party.
David Martin Steel
Leader of the Liberal Party and the Alliance election campaign ...
Britain's most popular party leader ... in 1965, aged 27, he
Before the SDP was a month old, Liberal Party leader
David Steel had agreed with the four collective SDP
leaders to form an electoral Alliance. The Liberal
membership dragged its feet a bit, afraid of being
swamped by the new "pop-star" SDP, according to
press and Embassy reporting.' Ultimately, however,
the Liberal conference approved Steel's overture.
Embassy reporting indicates the Liberals thought the
SDP could help their cause by providing government
experience gained in Labor cabinets and attracting
more working class votes.
'The US Embassy in Lisbon reported that a large Liberal Party
delegation, in an unusual move for a British party, even visited
Portugal to ask the advice of Portuguese Social Democrats on how
the Liberals could hold their own in the proposed coalition.
Approved For Release 2008/08/19: CIA-RDP84SO0555R000200070003-2
 Approved For Release 2008/08/19: CIA-RDP84SO0555R000200070003-2
Roy Harris Jenkins
Leader and one of the founders of the Social Democratic Party ...
Prime Minister-designate of the Alliance ... held posts of Minis-
ter of Aviation, Home Secretary and Chancellor of the Exchequer
under Labor governments ... President of the EC Commission
from 1977-81 ... considers the SDP to be centrist ... supports
toward the United States .
David Anthony Owen
A founder of the Social Democratic Party ... party vice president,
deputy parliamentary leader and defense spokesman ... held posts
of Under Secretary of State for Defense for the Royal Navy,
Minister ofState in the Department ofHealth and Social Security
and, ultimately, Foreign Secretary in various Labor governments
... sees SDP as left of center ... supports INF deployment if
Geneva negotiations fail but calls for "dual key" arrangement ...
favors a battlefield nuclear free zone in central Europe and a
similar chemical weapons free zone ... pro-United States ...
William Thomas Rodgers
Founding member of the Social Democratic Party ... party vice
president... greatly interested in defense matters since holding
number-two position at Defense in mid-1970s and shadow defense
Shirley Williams
One of the founders of the SDP ... elected party president in
September 1982. .
considers herself left of center
... was Secretary of State or Prices and Consumer Protection,
then for Education and Science in Labor governments during the
1970s ... supports NATO and EC membership ... opposes
unilateral nuclear disarmament ... well-disposed to the United
States.
25X6
2bAb
25X6
2JXb
25X6
2oxb
Approved For Release 2008/08/19: CIA-RDP84SO0555R000200070003-2
 Approved For Release 2008/08/19: CIA-RDP84SO0555R000200070003-2
Confidential
The Liberal Party, whose antecedents date back to
the Whigs, was supplanted in the 1920s by Labor as
one of the two major parties in British politics. Its
share of the vote in recent years has hovered between
10 and 20 percent, and in 1979 it elected only 11
Members of Parliament. Nevertheless, the SDP lead-
ership probably considered Liberal participation
nearly indispensable in its effort to establish a centrist
party. Although Liberal strength is higher on the
Celtic fringes of Scotland and Wales, the party has a
significant following elsewhere and a nationwide or-
ganizational structure. Ideologically, the Liberal
Party maintains a resolutely classless approach (al-
though most members come from the middle class),
which complements the ideas of the new-born SDP.
Association with the Liberal Party has its drawbacks,
however, since the public has long viewed a vote for it
as a throwaway, and it has had trouble fielding
credible candidates and raising money.'
Although the Embassy reports the two parties saw
themselves as complementary at the outset, the effort
to find common platform positions has not been easy.
Each side has been fearful of a "takeover" by the
other and each at times has maintained a separate
policy line while agreeing to a joint program. If the
Alliance can generate renewed interest in the polls,
however, we believe it can probably pull together
during the campaign in the interest of gaining power.
Perhaps the most divisive policy issue has been disar-
mament. Since 1981 the Liberal rank and file has
voted at its annual conventions in favor of unilateral
disarmament. At its last national meeting in Septem-
ber 1982 the party called for a "phaseout of the
' The Times has described the Liberal party, a little maliciously, as
"a curious cross section of historical, geographic, and sociological
strata. At the bottom, heavily submerged, are a few Whig grandees.
Above them lie the remnants of the 19th century Liberal tradi-
tion-middle class, libertarian, nonconformist, high minded, but by
no means as free market orientated as (you might) expect. Then
there is a thick layer of discontented lower middle-class refugees
from conservatism-what might be called the Poujadist element.
Next come ... radical idealists from the 1960s, preaching commu-
nity politics, federalism, and devolution. Finally, as a top sprinkling,
there are the new radicals of the past five years-all ecological
purity and antinuclear enthusiasm. This rather ill-assorted alliance
has naturally had considerable difficulty in getting its act
together."
Polaris force as soon as possible" and came out
against "the deployment of cruise missiles" in the
United Kingdom. In contrast, the SDP policymaking
body-the 400-strong Council for Social Democ-
racy-voted decisively in January against canceling
the deployment of cruise missiles and recommended
that Parliament make the ultimate decision on de-
ployment in light of progress in the Geneva
negotiations.
The two parties' positions have been reconciled only
because Liberal leader Steel has openly ignored his
party's sentiment on this issue and essentially ac-
cepted the SDP position. According to press reports,
Steel believes that nuclear defense issues will be of
key importance in the election campaign and thinks
that the Alliance can capitalize on the rift between
Tory and Labor to capture the middle ground. As
long as Steel sees it as beneficial, therefore, we believe
he will continue to ignore dissent in his own party and
work with the SDP multilateralists.
Choosing a Prime Minister-designate also continues
to raise hackles. The Alliance never got around.
formally to choosing a leader, but Jenkins tacitly
assumed the role. Jenkins had both cabinet experience
and the aura of international statesman from his stint
as EC Commission president. The Liberals began to
have second thoughts about Jenkins, however, as
Thatcher recaptured the limelight and the Alliance
plummeted in the polls after the Falklands campaign.
Jenkins was not effective in Parliament, and Embassy
reporting indicates that the Liberals now believe
Steel-who leads all British leaders in polling popu-
larity-should be named Prime Minister-designate of
the Alliance despite his lack of government experi-
ence. A compromise was announced in late April
whereby Steel would head the Alliance election cam-
paign and Jenkins would be named the Alliance
candidate for Prime Minister. Although the compro-
mise has not satisfied everyone, we think it will help
limit interparty squabbling during the campaign.
Approved For Release 2008/08/19: CIA-RDP84SO0555R000200070003-2
 Approved For Release 2008/08/19: CIA-RDP84SO0555R000200070003-2
Alliance unity is most severely tried, however, over
the splitting of constituencies. Liberals were vocally
unhappy that in about half the contests for the
general election their candidates-some of whom had
worked for years to build up a following-were told to
step aside in favor of Johnny-come-lately Social Dem-
ocratic candidates. Some Liberals refused to stand
down even when Steel said he would endorse the SDP
candidate in their stead, and in the Darlington byelec-
tion in March about 25 percent of Liberal voters did
not cast their votes for the SDP Alliance candidate.
Social Democrats, for their part, have complained
publicly over the number of winnable seats their party
was allocated. A study done last November by three
Oxford University professors shows that the Liberals
were given eight of the nine "safest" seats and 13 of
the top 20. According to the study, some of the Gang
of Four might even lose their seats in the June
election. Another survey conducted in April by two
British political scientists contradicts the earlier find-
ings, however, and suggests that the SDP could win as
many seats as the Liberals. The SDP grievance has
probably been held too long now for this newer study
to have much of a mollifying effect.
Both sides have had to moderate individual party
stances in order to effect a joint Alliance program.
The Alliance manifesto, published on 13 May, in-
cludes some careful wording to minimize differences
in contentious areas, especially defense. In other
areas, the manifesto calls for cutting the unemploy-
ment rate through public investment and tax cuts,
joining the European Monetary System, expanding
UK regional and social activities in the European
Community, and electoral reform to institute propor-
tional representation.
Defense
Defense policy leans heavily toward the SDP position
but makes some bows to the Liberals. According to
the manifesto, the Alliance approves of multilateral
disarmament and cancellation of Trident. Any deci-
sion on INF basing would be delayed both until the
Geneva talks conclude and until there is a dual key
agreement guaranteeing that the missiles would not
be fired without UK consent. Polaris would be in-
cluded in the Geneva talks. Differences of opinion
over whether this means that Polaris would be as-
signed to NATO control and not be used "indepen-
dently" by the United Kingdom-as the press reports
Liberal leader Steel would prefer-or whether the
British Government would retain control-as the
press reports SDP defense spokesman Owen prefers-
have apparently been swept under the rug.
Economic Positions
An Alliance government would not only maintain EC
membership, but would make Britain a full member
of the European Monetary System. In the domestic
arena, the manifesto proposes a middle-of-the-road
economic program that emphasizes public investment,
tax cuts, and schemes to cut unemployment by 1 mil-
lion over two years. Public sector borrowing would
rise, and there are proposals to encourage industrial
democracy, limit pay and price increases, and provide
more government aid to children, pensioners, unem-
ployed, and the disabled.
When most of these same economic policies were first
proposed in a March position paper, at least one
newspaper, The Guardian, endorsed them as having
"a better chance of shrinking the dole queues than
any other in the arena." Many of the job creation
ideas had already been espoused by the Tory left
wing, leading the Financial Times to note that much
of the economic program appeared designed as a
prospectus for partnership with the Tories if the
election failed to return a clear majority.
Approved For Release 2008/08/19: CIA-RDP84SO0555R000200070003-2
 Approved For Release 2008/08/19: CIA-RDP84S00555R000200070003-2
Confidential
The SDP/Liberal Economic Program
Policy Focus: Unemployment, costs and prices.
Unemployment:
Incomes Policy:
Industry:
Create 465,000 new jobs in FY 1983-84 through fiscal stimulus, including a 1.4
billion pound ($2.2 billion) special employment program. Restore 5 percent to
benefits.
A formal incomes policy with both wage and price controls backed by Parlimen-
tary authority and possibly backed by an inflation tax on firms that allow above
average wage boosts.
Increased investment in infrastructure and nonnuclear energy sources. Increased
aid to small businesses. An end to denationalizations, would consider renational-
izing automobile, transport and energy sectors.
Tax/Budget Measures: ? Eliminate proposed cuts in income taxes.
? Cut value added taxes (VAT) by 2.5 percent at a cost of I billion pounds ($1.6
billion).
? Raise excise taxes in line with inflation. Gasoline and diesel fuel would be
exempted.
? One billion pounds ($1.6 billion) in tax relief to small businesses and increased
unemployment and child benefits.
? Abolish the National Insurance Surcharge, which supports unemployment
benefits. Raises borrowing requirements by 450 million pounds ($716 million).
? Increase capital spending by 850 million pounds ($1.4 billion) in an effort to cre-
ate jobs and speed the recovery.
? Increase public sector borrowing by 2.8 billion pounds ($4.5 billion) to offset
other budgetary measures.a
Monetary:
Exchange Rates:
Trade:
Allow slight increases in the rate of money stock growth, but hold interest rates at
or below current levels.
Join the European Monetary System and fix sterling at some as yet unspecified
rate.
Closer ties to the EEC. While basically antiprotectionist, would support added
protection for troubled British industries and in some high-technology areas.
a The Tories are calling for a deficit of 8 billion pounds ($12.7 billion) while the Labor proposal calls
for a 16.7 billion pound deficit ($26.6 billion).
Approved For Release 2008/08/19: CIA-RDP84S00555R000200070003-2
 Approved For Release 2008/08/19: CIA-RDP84SO0555R000200070003-2
Parliamentary Reform
Another aspect of government reform touches on the
House of Lords. Jenkins espoused a long-held Liberal
policy last year when he stated in a press conference
that he would end participation by hereditary peers
and take away the voting rights of life peers. The new
second chamber would have members elected by the
regional assemblies and be able to delay for up to two
years any government bills except for financial meas-
ures. This latter reform is unlikely to go far, even
should the Alliance gain a voice in government.
Carping about the Lords has been endemic for years,
but we believe there is no strong support among the
tradition-conscious Britons for changing its role so
drastically. Perhaps more importantly, the present
House of Lords is unlikely to acquiesce in such a
revision and could retaliate by holding up most of an
Alliance government's legislation until the plans are
dropped.
The issue to which both parties are most committed is
proportional representation, and this is the one both
claim they will hold out for if the Alliance holds the
balance of power after the election. Alliance solidarity
on this issue stems from the dissatisfaction of all small
parties with the electoral system's awarding of parlia-
mentary seats to the candidates winning pluralities in
their districts. Traditionally the system favors the
large parties and works against small parties whose
support is spread evenly across the country. Under
proportional representation, majority government
could become a thing of the past even if current voting
patterns remain stable, and with the encouragement
that such a system would grant to third parties, voting
patterns probably would change markedly over the
longer term. While we believe the Alliance would be
unable to obtain anything better than a promise of
some kind of referendum on the subject, this might be
enough to garner its support, especially since the SDP
and the Liberals are both anxious to participate in
government.
Conservative and Labor Support at
General Elections
1966
1970
Feb 1974
Oct 1974
1979
Source: Ivor Crewe, "Britain's New Party: Can It Make It?", Public Opinion,
June/July 1981.
undercurrent of public dissatisfaction with the two
major parties-not yet apparent in the polls-that
will translate into Alliance votes on election day.
Support for the two traditional parties has eroded over
the last 30 years, creating a volatile swing vote on
which the Alliance is pinning its hopes. At the other
extreme, Alliance members could find they do little
better than did the Liberals in the general election in
1979, when they won 13.8 percent of the popular vote
but only 1.7 percent (11 seats) of the 635 seats in the
House of Commons. In this worst case, the Alliance
could find itself disintegrating in frustration.'
' The Alliance will not be the only small party that could provide
support in the case of a hung Parliament. Ulster Unionists will
probably win about 12 seats and would probably be the first party
that the Conservatives would try to deal with if they are only a few
seats short of a majority. Since neither major party is anxious to
encourage Alliance aspirations, the Alliance would almost have to
come in a strong third before it was approached for support.
We believe that the Alliance at best has an outside
chance of winning enough contests to deny an abso-
lute majority to Labor or the Tories. This slim
prospect rests on the possibility that there is a large
Approved For Release 2008/08/19: CIA-RDP84SO0555R000200070003-2
 Approved For Release 2008/08/19: CIA-RDP84SO0555R000200070003-2
Confidential
Monthly Poll Standings of Major
British Parties'
a Excluding those who answered "Don't know"-a response which ranged
from 15-20 percent over this time period.
b Source: Gallup Political Index.
It is still unclear how much electoral support the
Alliance will command, however, especially since the
polls reveal considerable fickleness in voter prefer-
ence. After peaking at a remarkable 50 percent in the
Gallup poll taken during December 1981, the Alli-
ance slid to about 20 percent in mid-1982 following
the Falklands war before climbing back to a second
place 30 to 34 percent, ahead of Labor, early this
spring. More recent polls reflect support for the
Alliance at below 20 percent, a drop it can ill afford.
The Alliance needs to regain momentum in order to
appear an attractive option for disaffected voters
during the election and not just a between-elections
"event."
Should the Alliance regain lost ground and capture as
much as a third of the vote, it would gain less than a
third of the parliamentary seats. According to politi-
cal scientist Ivor Crewe, a vote that runs between 25
and 30 percent and is spread evenly across constituen-
cies, as is the Alliance's, would gain the Alliance few
victories under the plurality electoral system. He
calculated in the June/July issue of Public Opinion
Performance at Bermondsey and Darlington
The Alliance's stunning upset win in the Bermondsey
byelection on 24 February has worried the traditional
parties. Bermondsey had been a safe Labor seat for
generations, but a combination of Labor inf'ighiing-
there were two Labor candidates running against each
other-and long-held antipathy for the Tories fn the
constituency swung the election to the Liberal candi-
date of the Alliance. When the dust settled, the
Alliance had changed an 11,700 vote Labor majority
in 1979 to a 9,300 vote Liberal majority, a fear` that
required an almost unprecedented 44 percent swing in
the vote.
Election analysts have dwelt at length on the "tacti-
cal voting" that seemed to help the Alliance in
Bermondsey. Three quarters of the small Tory con-
tingent voted for the Alliance candidate as the one
who seemed to have the better chance, while half of
the Labor voters, their loyalties split, did the same.
This trend has buoyed Alliance hopes, and SDP
president Shirley Williams predicts that supposedly
safe Tory or Labor seats may be as vulnerable as
marginal ones. We believe these conditions are un-
likely to develop very often, however, during the
national election.
The Alliance euphoria following Bermondsey was
followed by a drastic letdown the following month in
the Darlington byelection. Although the SDP candi-
date began the campaign the oddsmakers'favorite, he
finished third, while the Labor candidate actually
increased Labor's winning vote total over the 1979
results. Moreover, with the Tory candidate only
2,400 votes behind Labor, Darlington has provided
the Tory campaign with a readymade warning that to
vote for the Alliance is to throw the election to Labor.
that it would capture only 30 to 35 seats out of the
635 in the present Parliament.' According to Crewe,
the Alliance would begin to win significant numbers
Approved For Release 2008/08/19: CIA-RDP84SO0555R000200070003-2
 Approved For Release 2008/08/19: CIA-RDP84SO0555R000200070003-2
of seats only if it gained more than 34 percent of the
vote. Above 37 percent, the Alliance would be the
second-largest party in Parliament; higher than 39
percent, it could gain a plurality and have a chance at
forming the government.
According to their own projections, Alliance strate-
gists think they could take anywhere from 50 to 100
seats in the next Parliament if they can win Labor
votes in the south where the Conservatives dominate.
A bloc of 100 seats for the Alliance would almost
guarantee a hung Parliament and give the Alliance
the balance of power. Such a large number of seats
going to the Alliance seems highly unlikely at this
point, since it implies about 35 percent of the popular
vote. It is not totally out of the question, however,
given the recent volatility of the British electorate.
Capturing close to 50 seats in Parliament-around 30
percent of the vote according to Crewe's study-
might still be enough to steal a majority from the
traditional parties and give the Alliance influence
over government policies-depending on the vote
spread between the Tories and Labor.
If the Alliance did obtain enough seats to hold the
balance of power, it would probably not join a coali-
tion but would simply negotiate for policy concessions
in return for its support. It is not in the British
tradition to form coalition governments, and both
Thatcher and Foot have already made press state-
ments ruling out this option. The Alliance leaders
have told the press that they would be willing to work
with either a Labor or Conservative minority
government.
If the next election results in a hung Parliament with
the Alliance holding the balance of power, British
relations with the United States and other EC or
NATO partners will become unsettled, because such
a government probably would be unstable and might
last only one to two years. In trying to press its views
on the governing party, however, we believe the
Alliance would be unwilling to push any issue to the
point of rupture, especially in the early months. As
the weaker partner (and the poorest party financially)
the Alliance would be leery of forcing a new election,
which could be run "on its back." Therefore, it would
be cautious in promoting even strongly held views and
would likely back down if the government dug in on
an issue. Even so, the Alliance would have a moderat-
ing effect on the extreme tendencies in either party it
supports.
An Alliance partnership with a Labor government
would be better for US interests than Labor governing
on its own, because it would work to eliminate the
more radical planks in Labor's program, such as
immediate unilateral disarmament, and would try to
stop Labor's planned withdrawal from the European
Community. The Labor right wing probably would
welcome Alliance participation in beating back the
Labor left, and there is even a chance that such
cooperation could so enrage the radical left-whose
policies have dominated Labor's election programs-
that the Labor Party would divide. Under this scenar-
io, the moderate Laborites and the SDP might co-
alesce and the radical Labor group could shrink into a
small leftwing party.
In support of the Conservatives, the Alliance would
work to implement some of its populist aims-such as
creating more jobs-although it seems unlikely that
Thatcher would agree to anything that could set back
one of her most heralded accomplishments, the strik-
ing decline of British inflation. A minority Tory
government would have to weigh Alliance reserva-
tions about cruise missiles and might even be forced to
delay deployment. Based on its platform, the Alliance
would also try to prevent the purchase of Trident on
the grounds that it is too expensive. As in the case of
Labor, Alliance influence on Tory policies could even
be welcomed by many in the party who have thought
the Thatcher policies too extreme. This influence
probably would not have the same divisive effect on
the Conservatives, however, because internal dis-
agreements lack the bitter quality that has marked
disputes in Labor ranks.
Approved For Release 2008/08/19: CIA-RDP84SO0555R000200070003-2
 Approved For Release 2008/08/19: CIA-RDP84S00555R000200070003-2
Confidential
The Alliance has said it could cooperate with either
Labor or the Tories, and it is likely to try to work out
a deal with whichever party gains a plurality. The
Alliance probably could cooperate more easily with
the Tories, whose positions on such issues as the EC,
the economy, and-to a lesser extent-defense, are
close enough for the two to find compromises. The
Tories, whose support has not eroded over time as
drastically as that of the Labor Party, might also be
better able to make a bow toward the Alliance
demands on proportional representation. The Alliance
probably would be better off trying to support Labor,
however, if it is ever to entice the right wing of that
party into its camp and realize its goal of replacing
Labor as the alternative to the Tories.
We believe the gradual, long-term decline in electoral
support for both Labor and Tory parties, the in-
creased polarization of British politics, and a large
sector of the population that seems willing to try
something new, has left space for a moderate party in
the middle.' Current downward trends in support for
the two major parties, moreover, seem to indicate that
the share of voters looking for a moderate alternative
will continue to grow. All of this has undoubtedly
encouraged the Alliance in its hope of eventually
replacing the Labor Party as an alternative to the
Tories or at least gaining a permanent balance of
power position in the center of the British political
spectrum.
The Alliance has no room for complaisance, however.
The large swing vote has proven to be fickle, as
illustrated by the outcome of the Darlington by-
election, and Alliance solidarity has been tenuous at
the local level. Even the national leaders might be
tempted to split, especially if members of Parliament
are lopsidedly elected from only one of the Alliance
partners. In an April press statement, Steel firmly
ruled out the possibility that the Liberals would make
agreements with one of the larger parties on their
own, but SDP members publicly concede that the
strength of their commitment depends on the election
result. Other problems-the rivalry for leadership
preeminence, financing, policy differences, and the
public's low expectations about Alliance prospects-
could all scuttle Alliance hopes of a breakthrough at
the national level.
Approved For Release 2008/08/19: CIA-RDP84S00555R000200070003-2
 Confidential
Approved For Release 2008/08/19: CIA-RDP84SO0555R000200070003-2
Confidential
Approved For Release 2008/08/19: CIA-RDP84SO0555R000200070003-2