Wallace was created a life peer on 19 December 1995, taking the title Baron Wallace of Saltaire, of Shipley in the County of West Yorkshire. He made his maiden speech on 17 January 1996 during a debate on education. He retains a house in Saltaire. From 1999 to 2005, parliamentarians from three chambers, Chris Leslie MP in the House of Commons, Lord Wallace of Saltaire in the House of Lords and Richard Corbett MEP in the European Parliament, all lived in Saltaire.