In 1986 he was employed by the Parliamentary Liberal Party as their Economic Policy Researcher and assigned to the then Truro MP
David Penhaligon who was the Liberal Party's Treasury Spokesman and Deputy Leader. Penhaligon died in a car crash at the end of that year; Taylor was selected to run as the
Liberal candidate in the
subsequent by-election, which he won in early 1987. Three months later he retained the seat at the
1987 general election. and announced the policy of raising the upper rate to 50% for people earning over £100,000. He was asked to lead the preparation of the 2001 General Election manifesto, which he co-authored with Professor
Richard Grayson who was then Charles Kennedy's Director of Policy. After being replaced in the Treasury role by
Vince Cable MP in 2003, Taylor became Party Chairman. In this role he returned formally to his leading role in Party Campaigns and Communications, with responsibility for oversight of both the Parliamentary Party's communications team and its policy team, and was again tasked with writing the 2005 General Election manifesto. He was one of a small number of people in the immediate leadership team aware of and attempting to get Kennedy to address his increasing problems with alcohol, eventually giving Kennedy an ultimatum in the approach to the 2005 General Election that if he failed to address the issue he would have to stand down as leader. Following the 2005 election he re-stood for chair of the Liberal Democrats (a role elected by Liberal Democrat MPs) but lost to
Paul Holmes by 36 votes to 23. According to a biography of Charles Kennedy, Holmes was seen as a "shop steward" of the backbenches, whereas Taylor was within the leader's inner circle. ==Career after House of Commons==