Labour has been the principal progressive alternative to the Conservative Party since the 1920s, forming governments in 1924, 1929–31, 1945–51, 1964–70, 1974–9, and 1997. The Labour Representation Committee was established in 1900 by a conference of trade unionists and socialists orchestrated by Keir Hardie. Although it won only two seats in the 1900 ‘khaki’ election, the secret electoral pact with the Liberal Party negotiated by Ramsay MacDonald in 1903 helped the rechristened Labour Party enjoy a tally of 30 MPs after the 1906 election.
The First World War proved to be Labour's turning‐point. Arthur Henderson (parliamentary chairman after MacDonald's resignation on the outbreak of war) entered the cabinet on the formation of the wartime coalition in 1915 and from August 1917 worked with Sidney Webb in devising a new constitution. In 1918 Labour became formally committed to the socialist objective of ‘public ownership of the means of production’ (clause 4).
Under conditions of manhood suffrage, the 1918 ‘coupon’ election awarded Labour 63 seats. In 1922 Labour gained 142 seats to become the official opposition. Following the inconclusive 1923 election, it briefly formed the government with 191 MPs between January and October 1924, which demonstrated Labour's competence. However the second MacDonald government exposed the financial orthodoxy of ministers in the face of mounting unemployment and the financial crisis of 1931. The resignation of the Labour cabinet in August and the subsequent formation of the National (coalition) Government by MacDonald (with the support of only a handful of Labour figures such as Snowden and J. H. Thomas) caused lasting bitterness within the Labour Party. After the disastrous 1931 election (which reduced Labour from 288 to 52 seats), Labour began a gradual recovery and won 154 seats in 1935 on 38 per cent of the vote. The unassuming Clement Attlee was elected leader before this election. The participation of Labour in Churchill's coalition government from May 1940 rebuilt its image with voters and Bevin, Morrison, and Cripps played highly visible roles on the ‘home front’. The year 1945 heralded an unexpected landslide victory for Labour, which won 393 seats with 48 per cent of the vote. This strong administration, with Bevin at the Foreign Office, Dalton and then Cripps as chancellor, and ‘Nye’ Bevan at Health, was Labour's ‘finest hour’. Despite economic headaches, by 1950 the ‘Attlee consensus’ of a mixed economy with a welfare state was firmly established.
Despite achieving its highest ever poll in 1951, Labour began thirteen years of opposition. The period witnessed faction fighting between left‐wing ‘Bevanites’ and right‐wing followers of Hugh Gaitskell, elected leader in 1955. In response to three successive (and widening) election defeats, Gaitskell unsuccessfully attempted to persuade the conference to abandon ‘clause 4’ in 1959. The following year, Labour's anti‐war tradition resurfaced in conference support for unilateral nuclear disarmament (reversed in 1961).
However, a tottering economy together with Harold Wilson's invigorating leadership allowed Labour to squeeze back into office in October 1964 by a four‐seat majority. An easy victory in the 1966 ‘follow‐up’ election gave Labour a majority of 97. Despite positive achievements in the field of education and liberalizing social legislation, Wilson's government struggled to cope with the legacy of Britain's relative economic decline and was humbled by the 1967 devaluation of sterling and consequent policy U‐turns.