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By March 1977, the Labour government which had narrowly been re-elected in the October 1974 election, had lost its parliamentary majority, and was facing a vote of confidence tabled by the Conservative opposition. Senior Labour figures thus desperately sought to secure support from one of the minor parties. Unable to broker a deal with either the Ulster Unionists or the Scottish National Party (SNP), largely due to ideological differences, the Labour leadership entered into negotiations with the Liberal leader, David Steel. The result was that the Liberal Party agreed to provide the Labour government with parliamentary support, in return for consultation, via a joint committee, over future policies, coupled with the reintroduction of devolution legislation, and a pledge to provide for direct elections for the European parliament (ideally using some form of proportional representation). There was some surprise that Steel had not pressed for more, or stronger, policy commitments or concessions from the Labour prime minister, James Callaghan, but Steel was thinking long term; he envisaged that Liberal participation in the joint consultative committee would foster closer co-operation between Liberals and Labour moderates/social democrats, and eventually facilitate a realignment of British politics by marginalising both the Labour left, and the increasingly right-wing Conservatives Party.
