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In the party's early years the Independent Labour Party (ILP) provided much of its activist base as the party did not have individual membership until 1918 but operated as a conglomerate of affiliated bodies.The Fabian Society provided much of the intellectual stimulus for the party.

The Labour Party originated in the late 19th century, meeting the demand for a new political party to represent the interests and needs of the urban working class, a demographic which had increased in number, and many of whom only gained suffrage with the passage of the Representation of the People Act 1884.Support for the LRC was boosted by the 1901 Taff Vale Case, a dispute between strikers and a railway company that ended with the union being ordered to pay £23,000 damages for a strike.The judgement effectively made strikes illegal since employers could recoup the cost of lost business from the unions.Some members of the trades union movement became interested in moving into the political field, and after further extensions of the voting franchise in 18, the Liberal Party endorsed some trade-union sponsored candidates.The first Lib–Lab candidate to stand was George Odger in the Southwark by-election of 1870.One of the first acts of the new Liberal Government was to reverse the Taff Vale judgement.

The 1910 election saw 42 Labour MPs elected to the House of Commons, a significant victory since, a year before the election, the House of Lords had passed the Osborne judgment ruling that Trades Unions in the United Kingdom could no longer donate money to fund the election campaigns and wages of Labour MPs.

The Labour Party is currently the largest party in the Welsh Assembly, forming the main party in the current Welsh government.

The party is also the third largest in the Scottish Parliament and sends the second most MEPs from the United Kingdom to the European Parliament, sitting in the Socialists and Democrats Group.

At the 1895 general election, the Independent Labour Party put up 28 candidates but won only 44,325 votes.

Keir Hardie, the leader of the party, believed that to obtain success in parliamentary elections, it would be necessary to join with other left-wing groups.

The party's platform emphasises greater state intervention, social justice and strengthening workers' rights.