WI SDP-Liberal Alliance breakthrough in 1983

Fooling around with www.electoralcalculus.uk, I got the following result for the 1983 general election:

Popular vote (inputted by me)

SDP/ Liberal Alliance 38%
Conservative 32.2%
Labour 26.6%

I increased the OTL Alliance vote by 12%, taking roughly 10% from the Tories and 2% from Labour.

Seats (calculated by Electoral Calculus)

Labour 213
Conservatives 207
Alliance 205
NI Unionists 12
SNP/ PC/ SDLP 9
DUP 3

I went through each constituency on Wikipedia to get the breakdown of returned Liberal MPs as opposed to returned SDP MPs, and calculated 112 Liberals and 93 SDP.

POD would be no Falklands War or the war somehow goes badly to the British, with unemployment as high as it was that would probably be enough but you can add other government misteps. Note that the Labour vote share is close enough to OTL that they really just need the Alliance as being seen as a more viable potential government.

So what happens next?
 
The aftermath would be pretty chaotic, but my money would be on a Labour/Alliance coalition. I believe that the Alliance had little preference for Tories or Labour ideologically, but Labour make more sense practically, as it would be the Tories who had the most to gain from a second election, since they would have the most resources available for it. They would also be more open to PR (or at least historically Labour have been) which would be a key demand in any coalition negotiations. Also, Michael Foot would probably be easier to work with.

It would be a Foot led government with a pretty large number of concessions to the Alliance, particularly on the economy. Jenkins would probably be sent to the Treasury, and David Steel would probably be handed one of the other two great offices of state. STV would be implemented, possibly resulting in breakaways from the Tory right and Labour left to form new parties. However, come the next election, the Alliance would probably be punished for effectively being the junior partner in the coalition and landing the country with Foot, and the Tories, led by a wet like Heseltine, would overtake them in the popular vote and become the largest party. An important question would be whether the Alliance still remains in some form even with PR, which it probably would if it looked like it would be a bad result.Michael Foot's Labour Party is hardly going to form a government with the Tories, so it would be down to the Alliance to be the junior partner in the coalition again, this time to the Conservatives. The Alliance (probably still merging into one party as in OTL) would be the only natural coalition partners for either party, and so its vote share would drop over time to the point when it isnt realistically going to challenge for power any longer, it would just be a prominent minor party, like the Lib Dems were in OTL.
 
The aftermath would be pretty chaotic, but my money would be on a Labour/Alliance coalition. I believe that the Alliance had little preference for Tories or Labour ideologically, but Labour make more sense practically, as it would be the Tories who had the most to gain from a second election, since they would have the most resources available for it. They would also be more open to PR (or at least historically Labour have been) which would be a key demand in any coalition negotiations. Also, Michael Foot would probably be easier to work with.
The SDP had just split from Labour because they felt it was too left-wing for government. Personal animosity alone would probably make such a coalition unworkable.
 
At a guess, Tory minority administration with UU/DUP support, followed by an autumn General Election where the Alliance return to their constituencies and prepare for government.
 
At a guess, Tory minority administration with UU/DUP support, followed by an autumn General Election where the Alliance return to their constituencies and prepare for government.

In this situation, the Conservatives have only 207 (did you misread as 307?). They have no chance of forming a minority administration being second in terms of seats and votes and easily outvoted by Labour/Alliance together.
 
The SDP had just split from Labour because they felt it was too left-wing for government. Personal animosity alone would probably make such a coalition unworkable.

The SDP was created out of a belief that both the Tories and Labour were to extreme, and that there needed to be a party that stood for the centre ground between them. Thatcher was probably just as badly disliked by them as Foot was. Though I will admit I hadnt considered the possible personal animosity. But then again, the Tories have much to gain by remaining as the de jure government and waiting for a second election, so it might seem like the best possible solution to both parties.
 
Good comments, but there are two points that struck me with the above scenario:

1. Thatcher would likely go as Conservative leader after a result like that. However, as the incumbent Prime Minister, she stays in office until she either resigns or loses a vote of no confidence. For this reason, she stays in Downing Street for awhile since it increases the Tories leverage to have her there, the Alliance parties and Labour have to come up with an alternative government before throwing her out, and if they can't you get the minority government and second election scenario.

2. If my figures on the Liberal and the SDP seats are correct, then Labour plus the Liberals alone can get within one seat of a majority, and the Speaker supports the government, plus there is Plaid Cymru and John Hume. So if the SDP balks at any deal with Labour, the Liberals can credibly threaten to break up the Alliance and go for another Lib-Lab pact. Foot actually worked well with the Labour moderates, but he could always step down like he did IOTL if he became an obstacle.

The point on STV or some other form of proportional representation was good, but actually with that you no longer need the Alliance at all. The SDP and the Liberals no longer need to pull together to compete in "first past the post" single member districts. With PR, the Tories and Labour will still be the two biggest parties, but there is now space for a party to the left of Labour, a Monday Club party to the right of the Tories, and even two centrist parties, a Blairite/ establishment one (SDP) and a more hippy one (the Liberals). And the SDP would support a Labour government that implements PR, since that prevents the scenario they feared, the left controlling Labour which in turn gets a parliamentary majority through first past the post.

However, you still quite a bit of chaos with this result.
 
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