March marks thirty years since the birth of the Social Democratic party. For those too young to remember, this 1981 Labour schism may seem an obscure footnote in history. Those of us who were part of it tend to rewrite the history to suit whatever we did next. The handful who later joined the Tories – Andrew Lansley, Danny Finkelstein, Chris Grayling and Andrew Cooper now joining No 10 – see it quite differently from those of us who rejoined Labour. The spectacle of SDP founders such as Shirley Williams and Vince Cable appearing on Newsnight to champion George Osborne's economic policies leaves many dumbfounded, political compasses spinning.
The SDP launch as seen through Polly's rose-coloured spectacles
In 1981 Michael Foot was leading Labour to certain destruction: his 700-page 1983 manifesto was for pulling out of Europe and nationalising a swath of industries – including the banks (rather more credible now). Local parties were under hostile takeover by Militant tendency and Trotskyite impossibilists, on instruction to move into bedsits in vulnerable seats and pass late-night motions beyond the patience and bedtimes of ordinary members of parliament. All this was supported by Tony Benn, a ruthless destroyer now curiously regarded as a charming national treasure. My own Lambeth Labour party was a wreckage of extremism, running the council into disrepute.
In power, Margaret Thatcher was wielding an axe more bloody than any since the war, although she seems positively pragmatic compared with this government's revolutionary dynamiting of the state. She was the most unpopular PM since polls began, with riots in Brixton, Bristol and Toxteth. Between the Scylla and Charybdis of these two unpalatables there was no voice for a European-style social democratic party of a kind that brought prosperity and social progress to Scandinavia and Germany. In alliance with the Liberals, the SDP nearly broke the two-party grip, coming just 2% behind Labour in 1983. But the first-past-the-post mincer saw 25% of the vote deliver a tiny handful of seats. Roy Hattersley said on Radio 4's Archive on 4 documentary, Breaking the Mould : "Had we come third the SDP would have taken off, and it would have been all over for Labour." But it didn't happen. Thatcher's Falklands victory made her triumphant. Within Labour, late at night, embers of old arguments rekindle: did the SDP let her win by splitting the vote – or did the SDP help bring Labour back to electability?
What-ifs are an idle pastime, but history needs constant rewriting in the light of following events. Political ground shifts. Now the far left has vanished from effective politics, those of us who fought them often find ourselves called "the left" without having changed our views. What matters is where the people are, and where they have moved in the last decades. From the polling, they stand pretty much where they always did – and a majority was always pragmatic social democrat.
Tony Blair was wrong to think this an essentially conservative country. The voting system gifted conservative rule for most of the last century: no wonder they fight to the last against voting reform. Two-thirds of the Lib Dem vote identifies itself as left, rather than right, of centre: under proportional voting with a horseshoe Commons reflecting more shades of opinion, this coalition would not be so extreme. Blair would have been denied the hegemony that led to such hubris. The alternative vote may be a poor apology, but it's a first step towards governments that better reflect the national view.
Talking to David Owen, the former SDP leader, I was looking for clues as to where his old party would be now on a political spectrum that the coalition has sent haywire. He warns Ed Miliband in private meetings as well as in public to cast off Blairism and go back to Labour values.
That might strike some as ironic, but this Labour deserter still declares undying love for the party that he sees standing at a new crossroads. He vigorously disavows Blair as any heir of the SDP, with withering scorn for his corrupting fascination with wealth and his lack of ideological moorings. Blair, he says, opened the door to much that Cameron now espouses. He sees the "any willing provider" explosive opening-up of the NHS and all public services to any private company as a toxic Blair legacy: "The NHS is poised to be destroyed." The SDP first advocated an internal market as a way to define prices within a public service – but never to open them to private markets.
Is any SDP history remotely relevant to Labour now? Miliband and his team are struggling under the Conservative assault on all things public, branded as statist, centralising supporters of fat-cat public employees. MPs' expenses, and BBC and local authority executive pay are used to rouse popular indignation and distract the public's attention from the savagery of the cuts.
Owen points Miliband towards the social market model of the SDP, based on European social democracy, acknowledging the necessity for markets, but that markets exist for social purposes – and capitalism can only thrive when well-regulated. He urges Miliband not to be afraid to stand up for public service and the public good. Don't shun trade unions, as Blair did. A social market needs unions – markets working together with unions and government, as in northern Europe.
Owen's great regret is the SDP's failure to bring unions with it. Labour's electoral college with the unions needs urgent reform – but build on union roots or risk being as un-anchored as the party was under Blair. All these seem wise words from one who can hardly be called old Labour.
Miliband needs a clean break with the recent past. But he was only 12 when the SDP had its brief firefly moment, so why bother with it now? Because Labour has lost a clear idea of itself, confused by years of third-way boxing clever, stricken with taboos about its core values. The Tories' unexpected plunge rightwards helps give Labour back its identity and purpose. Some SDP thinking – reformist, redistributionist – might strengthen Labour's nerve to espouse the public good against the anti-government anarchy Cameron has let loose. But no doubt old SDP politicians now so strangely inside the coalition will draw quite different historical lessons.
