In the
1988 Legislative Council election, the second indirect election to the
Legislative Council of Hong Kong, McGregor ran in the chamber's
Commercial (First) functional constituency as a liberal candidate in the chamber for the greater democratisation against Veronica Wu who was supported by the conservative lobby Group of 88. After defeating Wu by 478 to 236 votes, he claimed "this is a victory for greater democracy." In May 1989, he founded the
Hong Kong Democratic Foundation (HKDF) with legislator Dr.
Leong Che-hung of the
Medical constituency. He was re-elected in the
1991 Legislative Council election against
Paul Cheng, with 487 to 416 votes. In the
1994 Hong Kong electoral reform voting, he supported
Governor Chris Patten's reform proposals and independent democrat
Emily Lau's motion for fully direct elected legislature in 1995. As the Sino-British relations became tense due to the reform proposals, McGregor received a humiliating defeat in a general committee election of the General Chamber of Commerce in 1994, receiving 543 out of about 2,000 votes and was excluded from the general committee for the first time since 1989. He attributed his defeat to the fact that the chamber was heading in a more pro-China direction. He was also forced to resign as a director of the Hongkong Chinese Bank (HKCB) because of his pro-democracy beliefs in 1993. He stepped down from the Legislative Council in September 1995. In October 1995, McGregor was appointed to Governor Chris Patten's
Executive Council to succeed retiring
Senior Member Dame
Lydia Dunn, but he stayed with the HKDF as a senior member and mentor until his retirement to Canada in 1997. On the eve of the end of the colonial rule, he was knighted in June 1997 along with
Donald Tsang, the then
Financial Secretary who later became the 2nd
Chief Executive. ==Retirement and death==