The Liberal Party, the party of Gladstone, Asquith and Lloyd George, was a dominant force in Britain, and the world, at the height of the power of the British Empire. It emerged in mid-Victorian Britain from a combination of Whigs and Peelite Tories. Split by Gladstone's Home Rule Bills, it nevertheless returned to power in Edwardian England and held it until after the outbreak the First World War. Riddled by internal divisions and with its traditional ground increasingly occupied by Labour, the party lost ground in Parliament, becoming little more than a token for many years. With the foundation of the Social Democrats in 1981, and their subsequent merger with the Liberals as Liberal Democrats in 1988, a modern version of the party emerged, under Paddy Ashdown and now Charles Kennedy as a significant third force in British politics.