Prime minister James Callaghan called a general election for 19 October 1978. Labour won with a majority of seven seats, gaining 39% of the votes with the Tories at 36% and Liberals at 15%.
However, within a month of the election, Britain was being hit by the first of a series of strikes which deepened as the winter wore on, bringing the country to a virtual standstill. Inflation shot up from less than 10% to nearly 30% in the space of a few months. Opinion polls showed the Tories 20-25 points ahead of Labour. The strikes began to ease off by March 1979 but inflation was still not far off 20% by the summer. Callaghan's economic policies, including wage restraints, increased interest rates and reduced public spending only had a minimal effect, and in September 1979 his leadership was challenged by Tony Benn, who only narrowly failed to oust Callaghan. There was no repeat of the Winter of Discontent in 1979/80 but strikes were still significant and inflation remained above 10%, with unemployment heading for two million as a recession kicked in.
Labour suffered a surprise by-election loss to the SNP in Glasgow in June 1980, even falling behind the Conservative candidate in a traditional Labour stronghold. Council election results a month earlier were shambolic. Callaghan's leadership was challenged in September that year by Denis Healy, who like Benn 12 months earlier was unsuccessful. Callaghan finally handed in his resignation as prime minister on 1 December 1980, with unemployment pushing 2.5 million, inflation at 18% and Labour trailing the Tories in most opinion polls by 25-30%. His successor Michael Foot was announced 4 days later.
Foot's left wing policies failed to improve Labour's showing in the opinion polls, and barely two months into his leadership the government's majority was reduced to a single seat after two of its MP's broke away to form the SDP, who by June that year were in alliance with the Liberals. The government's majority was finally wiped out in July 1981 when former minister Roy Jenkins won the Warrington seat in a by-election, and on 30 July 1981 (the day after the Royal Wedding) a vote of no confidence was delivered on the Labour government after Foot was unable to convince any of the other parties to form an electoral pact. He was forced to call an election, which was held on 15 October 1981 and saw the Tories secure a 112-seat majority in an expanded parliament, with Labour down to 205 seats and the Alliance on 36, although the Alliance only narrowly trailed Labour in votes. Margaret Thatcher, who had led the Conservatives in opposition for over six years, became Britain's first female prime minister. Foot stepped aside as Labour leader and Denis Healy was announced as his successor on 20 November.
Just five months into government, the Conservatives were faced with a huge challenge when Argentina invaded the Falkland Islands in March 1982. Victory was secured on 16 June and further enhanced the government's standing, boosted by strong results in local council elections, in spite of spending cuts and increased interest rates to tackle already-high inflation which resulted in higher unemployment. The Tories had inherited 2.7 million unemployed and 17% inflation from Labour, but by the end of 1982 unemployment exceeded three million although inflation was below 10%. The rise in unemployment was halted by the summer of 1983, with inflation continuing to fall, and local elections results that year were once again impressive. Labour's failure to do well in the face of tough economic conditions, as well as the defection of more MPs to the Alliance, saw them left with 202 MP's by the time of Healy's resignation as leader on 24 June 1983. Neil Kinnock was announced as his successor on 20 July, and set about modernising the party.
Thatcher faced another challenge in March 1984 when the miners began a 12-month long strike which divided the nation. She refused to back down on union reform or on plans to close many of the country's coalpits. At the same time, she was pioneering privatisation of nationalised industries and utilities, which was proving controversial with voters. During the year, the Tories lost three seats in by-elections - one to Labour, one to the SDP and another to the Liberals. The miners' strike ended in defeat in March 1985, by which time Britain still had three million unemployed but had the highest rate of economic growth in Europe as well as its best ever output. Opinion polls and council election results remained in Tory favour, although Neil Kinnock had the cut the lead and the Alliance was no longer appearing convincing. Thatcher called a general election for 1 May 1986, winning by a majority of 90 seats. Labour increased their standing in parliament to 231 seats, while the Alliance obtained a mere 17 seats and collapsed soon afterwards as the Liberals and SDP merged to form the Social and Liberal Democrats in March 1988, settling on the Liberal Democrats in October 1989.
Britain went on an economic boom between 1986 and 1989, unemployment falling from three million to 1.6 million and record economic growth being established. However, this contributed to inflation creeping back up to 10% in 1989 and the government put 0interest rates up once again to tackle inflation. Chancellor Nigel Lawson resigned in October 1989 amid the first significant economic crisis of the Thatcher government, and was succeeded by John Major. Inflation fell during 1990 but unemployment began to creep upwards again, and the economy stagnated in the third quarter of 1990, before returning to growth in the final quarter to prevent 1991 beginning with another recession.
The introduction of Poll Tax, announced in 1989, proved unpopular with voters, as did increased interest rates, and by the summer of 1990 Labour had a double-digit lead in the polls. Thatcher's leadership was challenged by Michael Heseltine in November 1990, and despite winning the first round of the leadership election, her backing was not enough to avoid a second ballot, and she resigned on 22 November 1990, with John Major succeeded her six days later. He was left with just six months to win a general election for the Tories.
The general election was finally called for 9 May 1991, and the Tories surprisingly won by a 19-seat majority, in spite of the economy falling into recession a month earlier and with unemployment pushing two million, with the abolition of Poll Tax seen as Major's election winning card, while increased income tax and a reversal of privatisation seen as the factor in Neil Kinnock's election defeat. Kinnock resigned as Labour leader within hours of it becoming clear that he would not win the election, and John Smith (shadow chancellor) was announced as his successor on 28 May.
The Tories suffered a double blow on 7 November 1991 when losing two seats in by-elections - one to Labour and another to the Lib Dems. Opinion polls nationally were also showing Labour starting to creep ahead of the Tories as leader John Smith had more appeal to voters than his predecessor, and was continuing with the modernisation process, including abandoning support for closed shops.
The real blow for the Tories came on 16 September 1992 with Black Wednesday, which sparked the resignation of chancellor Norman Lamont and led to a quick surge in Labour support. The Tories lost two more seats in by-elections over the next year, leaving them with a majority of just 11 seats by July 1993, in spite of the recovery from recession. Major's leadership was unsuccessfully challenged by former chancellor Norman Lamont in September that year.
1994 brought more misery for the Tory government with dismal results in the European parliament elections in June, a month after the death of Labour leader John Smith, who was succeeded by Tony Blair. Further by-election defeats left them with a majority of just seven seats by Christmas. 12 months later, that majority had been reduced to a single seat and Major was left with a mere six months left before the next election.
A general election was finally called for 6 June 1996 and Labour won by a majority of 143 seats. John Major stepped down as Tory leader and Michael Heseltine was announced as his successor on 17 July.
Tony Blair's victory in June 1996 was laid down to his recent decision to abandon Labour's commitment to nationalisation, promising not to go back on union reform, and not to increase income tax, while promising improvements to schools and the NHS. He came under criticism in late 1997 after he abandoned plans to ban all tobacco advertising, having just accepted a million-pound donation from Bernie Ecclestone. He came under heavy media and public criticism in the autumn of 1998 for refusing to rule out Britain joining the Euro, which saw Labour's lead in the opinion polls shrink dramatically and saw the five-year-old anti-EU UKIP drawing level with the Lib Dems. Labour lost a Leeds seat to UKIP leader Nigel Farage in a June 1999 by-election, followed three months later by another by-election defeat this time to the SNP. Public anger over the Euro seemed to ease off as Labour recovered in the opinion polls, only to be hit in September 2000 by fuel protests which threatened to bring the UK to a standstill. The Tories managed to overtake Labour in the opinion polls and Blair's decision earlier in the year not to hold a general election was looking like a costly mistake, although it seemed doubtful that the Tories could form a majority when Labour's was still so far into triple digits. By early 2001, Labour had regained their lead of the opinion polls, only to lose it again that spring as public fury over its handling of the Foot and Mouth crisis took hold. Blair called an election on 7 June 2001 and managed to remain in power, although his majority was cut to 87 seats.
In November that year, following the Al Qaeda terrorist attacks on the USA in September, Blair took the controversial decision to send UK forces to Afghanistan to fight alongside the Americans. This resulted in Lib Dem leader Charles Kennedy publicly denouncing the war, which led to a rise in his party's support and saw them draw level with the Tories in opinion polls, as well as snatching three seats from Labour in by-elections by July 2004. The invasion of Iraq, also in conjunction with the USA, to oust Saddam Hussein in March 2003 proved even more controversial and did nothing to boost Blair and Labour's popularity.
Blair called a general election for 5 May 2005, a year before the deadline, as opinion polls still showed Labour in the lead. He was re-elected with a majority of just 14 seats. This was reduced to a mere four seats by July 2009, as by-election defeats reflected a nationwide slump in Labour support not helped by the 2007/08 financial crisis and subsequent recession. Labour finished fourth in the 2009 European parliament elections, behind the Tories, UKIP and Lib Dems. Blair had stepped aside on 21 June 2007 to be succeeded by Gordon Brown, who became the most unpopular PM in postwar history.
Brown went to the country on 6 May 2010, and the Tories (led by David Cameron since December 2005) won by a majority of 120 seats.