The British Socialist Labour Party began as a faction of the Social Democratic Federation (SDF) headed nationally by Henry Hyndman.

A group of Scottish members of the organisation, led by an engineering worker named George Yates, strongly criticised the party leadership of the SDF for supporting the entry of conservative socialist Alexandre Millerand into the bourgeois French cabinet at the 1900 Congress of the Second International.

[4][5] Although deeply influenced by the Socialist Labor Party of America, members of the fledgling British organisation sought their intellectual independence from the start.

"[8]Radical Irish republican and trade union leader James Connolly attempted to play a vital role in the British SLP's formative days, energetically traveling back and forth across Scotland, addressing dozens of meetings on behalf of the organisation.

[9] The party's development was further hampered by Connolly's departure to the United States in September 1903, exacerbated by the resignation of the editor of The Socialist, George Yates, that same month.

[10] Still, the tiny group managed to persevere, with a young engineer named Neil Maclean serving as National Secretary.

The SLP instead focused on producing and distributing its own propaganda, leaflets, pamphlets, and papers calling for establishment of a bloc of industrial unions as a necessary first step to socialist revolution.

The group insisted that its members should avoid taking part in unemployment demonstrations as these were "sentimental" and built false hopes in the viability of the existing system.

The party sought to enforce the ideological purity of its printed propaganda through a strict requirement that no branch be able to distribute any literature not previously approved by the SLP's Executive Committee.

It has been noted that "there can have been scarcely a single person involved in the foundation of the Communist Party of Great Britain who was not, at some time, influenced by the SLP and its literature.

The leadership of the Glasgow-based Socialist Labour Party was quick to follow the lead of DeLeon and the American SLP, giving hearty endorsement of the new IWW organisation.

"[The decision] was so sharp and radical, and so opposed to our traditional attitude towards the leaders of the trade unions and Socialist Party, as to cause a certain confusion in our midst....

"[17]Despite its espousal of revolutionary industrial unionism, the SLP still believed in use of the ballot box for educational purposes in the short term and as a transformative tool in the future, when the working class had come over to its ideas.

[19] This group was essentially a propaganda society at its inception, attempting to disseminate the ideas of Daniel DeLeon about revolutionary industrial unionism.

The idea of industrial unionism permeated the left wing of the Social Democratic Federation, becoming more or less a permanent ideological feature of that organization and its successor after 1911, the British Socialist Party.

[22] The Socialist Labour Party was also extremely active in publicizing the struggle for national self-determination then taking place in Ireland.

A section of the organization, including key figures such as Shop Stewards Movement activist Jack Murphy formed an organised faction called the Communist Unity Group, which ultimately left the SLP to join the CPGB at its founding conference in the summer of 1920.