In the 1980s, John Taylor was elected to Solihull Council for the safe Conservative ward of St Alphege at a by-election in 1985 and was re-elected for a 4 year term in May 1988. He contested Birmingham Perry Barr for the Conservative Party at the 1987 general election, losing by 6,933 votes. He was selected by Conservative Party's Central Office to become the Conservative candidate for Cheltenham at the 1992 general election. The campaign was seen as having been influenced by race, with Taylor's Caribbean background reportedly causing concern to some members of the local Conservative Party Constituency Association, which was completely split by the issue. Conservative Central Office expelled Association Members over the issue. John Major, then Prime Minister, campaigned for Taylor in Cheltenham, but he lost the seat to Nigel Jones of the Liberal Democrats by 1,668 votes, the first time since 1950 Cheltenham had not voted for a Conservative candidate and the first time since December 1910 it had voted for a Liberal-aligned candidate.

Taylor was made a life peer as Baron Taylor of Warwick, of Warwick in the County of Warwickshire on 2 October 1996, on the recommendation of Prime Minister John Major. At 44, he became one of the youngest life peers to sit in the House of Lords at the time.

In early 2009, a major political scandal was triggered by the leaking and subsequent publication of expense claims made by members of the United Kingdom Parliament. On 16 July 2010, Taylor resigned the Tory Whip after being charged with offences connected with claims totalling £11,277.

Several hundred members of the House of Commons and House of Lords were involved in the expenses scandal but only six members of the House of Commons and two, including Taylor, of the Lords, were charged and convicted.

Taylor's defence in the Crown Court was that on appointment to the House of Lords he had asked other peers for advice on expenses and allowances and that he was told that the overnight subsistence allowance, the office allowance, and the travel expenses were provided in lieu of a salary, as well as the daily attendance allowance. As a result of claiming for the cost of journeys he had not made, and the cost of accommodation he had not occupied, Taylor was convicted of six counts of false accounting.

In his summing up to the jury, Mr Justice Saunders observed that Taylor was a man of good character who had devoted a lot of time to helping others. The judge imposed a sentence of 12 months' imprisonment, relating to £11,277 in falsely claimed expenses. He also said that the expenses scandal had "left an indelible stain on Parliament". About 15 members of the House of Lords refused to give evidence to support Taylor's defence.

Conservative peer Lord Taylor was convicted of false accounting in 2011 after claiming thousands of pounds in travel and maintenance costs for his non-existent home in Oxford. After being sentenced to a year in jail Taylor was temporarily barred from the House of Lords but is now able to attend as a full member of the legislative body. He was also ordered to pay back £151,000 under the Proceeds of Crime Act.

In 2016, he appeared on the Fox News channel to discuss the potential impact of Britain leaving the European Union (Brexit).