Bottomley desired a career in politics and after joining the Liberal Party, he was elected to represent Hackney South in the 1906 General Election. By this time there were rumours about his business activities. In one debate in the House of Commons he described himself as the chancellor's "more or less honourable friend". He did not help his case by saying that all political parties "are organised hypocrisies" and political leaders "for the most part do nothing or seek only to serve their own ends".
Bottomley appointed Henry J. Houston as his personal assistant just before the 1910 General Election. He later recalled: "I had for a long time been a close student of politics, working ardently for my local political association, and I followed with interest the political work of Horatio Bottomley." Bottomley was no longer a supporter of the Liberal government and rejected the Liberal whip, and claiming he preferred "to occupy a position of dignified detachment". He formed the John Bull League and called on an alliance with right-wing MPs in order "to continue to criticise the Liberal party unhampered by Cobdenite shibboleths". He argued for the government of Herbert Henry Asquith to be replaced by one of business leaders.
In February 1912, facing demands from the Prudential Assurance Company, he admitted that his liabilities exceeded his assets by £200,000. As a bankrupt he could no longer remain an MP and on 24th May, he left the House of Commons.