Houghton became a Companion of Honour on 5 January 1967 and was dropped from government in 1967 and became Chairman of the Parliamentary Labour Party (PLP) which is a post designed to help shape and reflect the backbench Labour MPs' views but keep them in dialogue with the Labour leadership. His predecessor, Emanuel Shinwell, could be rather fiery and unpredictable. By contrast, Houghton had a tenacity and command of detail that made him a highly suitable person for the task, given there was perceived to be quite a lot of factionalism in the party at the time. He retired from the House of Commons at the February 1974 General Election and was elevated to the House of Lords as Baron Houghton of Sowerby, of Sowerby in the County of West Yorkshire a few months later on 20 June.