Michael Foot was elected leader of the Labour party in 1980, replacing Callaghan. Foot was a sign that the core of the party was swinging to the left and the move exacerbated divisions within the party. In 1981 a group of senior figures including Roy Jenkins, David Owen, Bill Rogers and Shirley Williams left Labour to found the Social Democratic Party (SDP). The SDP agreed a pact with the Liberals for the 1983 elections and worked as The Alliance.
The campaign displayed the huge divisions between the two major parties. The Conservative's key issues were employment, economic growth and defence. Labour's Manifesto pledged to leave the EEC, abolish the House of Lords, abandon Britain's nuclear deterrent by cancelling Trident and removing Cruise - a heady mix of far left thinking, dubbed by Gerald Kaufman "the longest suicide note in history", "although, at barely thirty-seven pages, it only seemed interminable" noted Roy Hattersley. Over the campaign Labour were repeatedly forced to moderate their views, especially on defence.
On the day the opposition vote was almost evenly split between the Alliance and Labour. The Labour vote fell by over 3 million from 1979, with a national swing of almost 4% towards the Conservatives. The Conservative vote actually fell slightly but the disarray of their opponents gave them a majority of 144 and Labour had its worst performance since 1918.
Foot resigned soon after the election and was succeeded by Neil Kinnock
| Party | Votes | Seats | Loss/Gain | Share of Vote (%) |
| Conservative | 13,012,316 | 397 | + 58 | 42.4 |
| Labour | 8,456,934 | 209 | - 60 | 27.6 |
| Liberal & SDP | 7,780,949 | 23 | + 12 | 25.4 |
| Others | 1,420,938 | 21 | + 5 | 4.6 |