The Labour Representation Committee (LRC) was established after disappointing attempts from trade unions to become a part of the party system. This party went on to become the Labour Party in 1906 and replaced the Liberal party to become the opposition to the Conservatives. This was a rapid take over and occurred due to the Representation of the People Act 1918, which extended male suffrage and the split in the Liberal Party in 1916 over Asquith's leadership. In the 1924 elections the Liberals were well beaten by Labour and it was clear that Britain's essentially two party system had changed in composition with social class as its principal and social cleavage. This was however short lived as economic collapse resulted in the formation of the National Government in 1931, which went onto govern Britain until the end of the Second World War. The National Government was dominated by the Conservatives.
The British party system during the post war period until the 1970s has been described as bipartisan in character. The Liberals were reduced to such a small majority that consideration was taken to a merger with the Conservatives. This was however not carried out and the Liberals continued as a minority in the House of Commons. At this time political life was dominated by Labour and Conservatives and their combined share in general election vote never dipped below 87.5%. Between 1945 and 70 the general elections produced a governing majority allowing one party to rule without coalition partnerships. Although there were majorities there was alternation in government. Conservatives were in power for 13 years, Labour for 12 years and each won four elections. The party system at this time can be seen as stable and impenetrable.
The 1970s saw this party system being challenged. The 1974 general election saw a dramatic change to the status quo with a minority Labour government and a surge in support for the Liberal Party. They achieved 19.3% of the vote, which was a post war high. Between them the Conservatives and the Labour Party only managed to secure 755 of the vote. Labour decided to call another general election in October 1974 but again received a slim majority. Gains were made, however, to the parties in Scotland and Wales. A series of by-election defeats followed for Labour and not even a pact with the Liberals, who would allow Labour to stay in office lasted long. After a vote of no confidence Margaret Thatcher won the 1979 general election and the Conservative Party began a new era of Thatcherism.
Throughout the 1980s Labour underwent a period of turmoil. The left and anti-European wings of the party became more powerful and this prompted four prominent Labour figures in 1981 to form the Social Democratic Party. Due to the unpopularity of the Conservative government and Labour opposition, the SDP scored impressive by-election victories. When the SDP announced an electoral pact with the Liberal Party it seemed that the party system was again about to change. In the 1983 election this became a possibility when the Alliance vote came within 2% of Labour's. However, even though they achieved such a large amount of public support the SDP only secured 23 seats compared with Labour's 209. The Alliance was regionally strong and in the 1987 elections it performed well again, however, the Labour Party was back on its road to recovery by this stage. In 1988 the merger of the Liberal Party and the SDP was clearly not working since they continued to fight elections under their old party names. When the Green Party beat the Liberal Democrats in the European elections of 1989, it was clear that third party politics was in serious decline. National parties also struggled in Scotland and Wales at this point, further proving that Britain was once again becoming a two party system. The Liberals fell further into turmoil in the early 90s.
In 1997 general election the Labour Party won a landslide majority. The Liberal democrat party also did particularly well in this election and they secured more parliamentary seats in 97 than any third party since 1929. Their 2001 election also proved this was not just a blip. The Liberals increased their vote share by 2% and gained 6 more seats bringing their representation in the House of Commons to 52 seats - nearly a third held by the Conservatives. There was also a significant impact on the party systems in Scotland and Wales from this election. Some have described the 1997 general election as the "collapse" of the Conservative Party.
The Labour Party held referendums for devolution in Scotland and Wales soon after they came into power and subsequently a Scottish Parliament and Welsh Assembly was formed. Since devolution has occurred Scotland and Wales have grown more in favour for nationalist parties. In Scotland Labour was denied a majority in both the 1999 and 2003 elections and in Wales after 1999 but not 2003. Where Labour has not gained a majority a coalition has been formed with the Liberal Democrats. It can therefore be seen that Scotland and Wales contain multi party systems.
It can therefore be said that the British party system has changed significantly in the post war period. Labour and Conservatives used to dominate politics whereas now their combined vote share has decline and small parties such as the Liberal Democrats have increased their electorate. In addition nationalistic parties have become more popular since devolution has occurred. It would be inaccurate to describe Britain as having a two party system but it would be an exaggeration to say it is a multi party system. Although Labour and the Conservative Party do still dominate national politics it is also fair to say that Britain has several party systems in Scotland, Wales and Northern Ireland and at European and local level. It is also evident that since there has been more use of proportional representation there is much more evidence to suggest that Britain does have a multi party system. At present, however, the only real opposition to the current Labour government is the Conservatives thereby suggesting that the two party system is still apparent in the UK.