First elected to the House of Commons in the 2001 general election, in his first parliamentary term, Pugh served on the Transport, Local Government and Regions Select Committee and was Liberal Democrat education spokesperson with responsibility for schools. Following his re-election to Parliament in 2005, he served as shadow spokesperson for Transport and Health, and, subsequent to the election of Nick Clegg as party leader worked with Vince Cable as Shadow Treasury spokesperson. In the 2007 leadership election, Pugh supported Clegg in preference to Chris Huhne.