I would disagree.

The winter of discontent got the Tories in. And if you look at the voting in the marginals, the few key seats the SDP held and looked like they could take, it held labour out of government..

Even overal, the alliance gain considerable percentage over what liberal would have got by themselves.

http://upload.wikimedia.org/wikipedia/en/thumb/b/b7/Popular_vote.jpg/800px-Popular_vote.jpg

They were mopping up Labour voters.