Social Democrats met for their 1985 conference in a thoroughly optimistic mood. Facing a rally of activists in the Torquay sun, leader Shirley Williams invited loyal followers to recall the new party's birth half a decade before. When, in 1979, Margaret Thatcher's right-wing Conservatives had stormed to power, defeated Labour MPs included Mrs Williams herself. Next came a fast movement of events. Roy Jenkins delivered his Dimbleby lecture, 'Home thoughts from abroad'; the Social Democratic Alliance stood candidates against the Labour left; Bill Rodgers warned the party had "a year, not much longer, in which to save itself"; the Wembley conference statement 'Peace, Jobs, Freedom' backed unilateral nuclear disarmament and anti-EEC policies; and David Owen, Rodgers and Williams threatened to leave: "There are some of us who will not accept a choice between socialism and Europe. We will choose them both". Back in 1980, the now-SDP leader had warned that a centre party would have "no roots, no principles, no philosophy and no values". Her mission was to grow a radical party, guided by a faith in social and economic progress for ordinary families. The Limehouse Declaration promised to build an "open, classless and more equal society". In unity with the Gang of Four, Liberal leader David Steel called for people to "Go back to your constituencies and prepare for government". 1983 saw that dream realised. While Labour embraced Bennite socialism and the Tories sank with the fleet in San Carlos Water, the Alliance prospered and laid out a fresh path for Britain. The Liberal/SDP coalition passed from strength to strength, winning devolved elections and enacting a wide range of reforms. From July to September 1985, they consistently topped opinion polls. PM Steel and Mr Jenkins flaunted the 1983 manifesto to point out its fruition. Crowds of members gathered on the English Riviera knowing the fortunes of liberalism and social democracy were, once again, on the march and apparently unstoppable.
"Our priority is jobs, jobs, jobs." These words came from Mrs Williams against the backdrop of rising living standards. She spoke for public service managers, hopeful young families, welfarist middle earners and green innovators. Growth in domestic production boosted earnings, reinforcing the Social Contract. Due to investment, bold policies and workforce participation, unemployment had fallen by one million since the 1983 general election, a huge achievement. The Government's target was to cut it to a million within the next two years. At any one time, 20-30% of adults were supportive of Tony Benn, his leadership and the values of Labour; an equal percentage range were visciously opposed. That left an estimated 40-60% who were passively tolerant or actively disenchanted with the old two-party system. What determined the range in each case was the scale of any current crisis, making the 'mixed middle' into the crucial element of Alliance support sustaining overall popularity. Steel, Williams, Rodgers, Owen, Jenkins and Heath all recognised this new political landscape and were determined to take full advantage. However, views about strategic direction varied. On 10 September, matters came to a head. With the Owenites proposing increasingly ambitious social reforms (together with Mrs Williams but opposed by the Heathites) and, in Mr Jenkins' words, "sub-Thatcherite" economic de-regulation, cracks emerged. A small Limehouse Group had been formed to keep the SDP on the left. Williams and Rodgers backed a motion affirming the party as one "of radical social and constitutional reform, deeply concerned with the well-being of the people, the evil of unemployment and the need for a caring society". After winning the vote by a fair margin, the SDP leader and deputy PM told delegates: "We have become, on the centre-left of politics, the main challenger to the Conservatives and defeated it... by taking over many of the traditional values of the Labour Party".
The Torquay debate was a setback for Owen and Heath, who watched their two sides (married but dissimilar - ex-Tory wets were especially moderate) drift apart. Numerous motions were moved at conference. Broadly speaking, Owenites including former Communist Sue Slipman accepted references to equality, compassion and boldness; yet in terms of positioning, felt that in order to supplant Labour the party leadership would need to break all umbilical ties with it. "We are not a mark II Labour Party," said a grass-roots Owenite to loud applause. "The values of social compassion and social justice are Social Democratic values and are our values." In her main address Mrs Williams conceded that dissent existed regarding a left-leaning strategy. "The Labour Party was sick thirty years ago and died five years ago." Members enjoyed asserting their democratic rights and debated vigorously. In the round, the 1985 Torquay conference was a great success. More than 2,400 delegates attended and the atmosphere, while optimistic, was less feverish than it had been at the time of the first rolling conference four years prior. The SDP was in good heart and it had reason to think that, with the Liberals, it might well become the largest party in the next parliament. Yes, there were disagreements, but because Williams reigned unchallenged she was able to unite most of the disparate groups behind her vision. Social Democrats welcomed the chance to further their independence from the older parties. In any case, many had never belonged to either. The phrase "traditional Labour values" sparked protest; at the same time, the SDP reasserted its objective of creating a more equal, more caring society. More than one leading figure described the conference as a "watershed". A journalist wrote in
The Financial Times the day after: "The Social Democratic Party has found itself at Torquay... it has come together with a new self-confidence."