Liddell-Grainger was born on 23 February 1959 in Edinburgh to David Liddell-Grainger and Anne Liddell-Grainger (née Abel Smith). The Liddell-Grainger family were landed gentry, of Ayton Castle, Scottish Borders, formerly of Middleton Hall, Middleton, Northumberland. He was privately educated at Wellesley House School in the coastal town of Broadstairs in Kent and Millfield School in the town of Street, Somerset, before gaining a National Certificate of Agriculture at the South Scotland Agricultural College in Edinburgh. Before entering Parliament he ran a farm in the Scottish Borders from 1980–85 before becoming the managing director of his family's property management and development company.