A good friend of Labour party leader John Smith and Peter Mandelson, Montague was a member of the Millennium Commission from February 1994 until May 1997 Continuing his friendship of the Labour party via Mandelson with new leader Tony Blair, he was created a life peer on 1 November 1997 taking the title Baron Montague of Oxford, of Oxford in the County of Oxfordshire. It later emerged that this was after he had made a donation of £5,000 to the Labour party.