Lord Ponsonby is probably most remembered for the statement: "When war is declared, truth is the first casualty", which he made in his book Falsehood in Wartime: Propaganda Lies of the First World War (1928). However, this line had previously been spoken in 1917 by US Republican Senator Hiram Johnson.
He was opposed to Britain's involvement in World War I, and joined with George Cadbury, Ramsay MacDonald, E. D. Morel, Arnold Rowntree and Charles Trevelyan, to form the Union of Democratic Control (UDC), which became a very prominent anti-war organisation in Britain.
He was defeated in the 1918 general election, when he stood as an "Independent Democrat" in the new Dunfermline Burghs constituency. He then joined the Labour Party and was elected at the 1922 general election as the MP for the Brightside division of Sheffield.
Ramsay MacDonald appointed him to be Parliamentary Under-Secretary of State for Foreign Affairs in 1924, and Under-Secretary of State for Dominion Affairs and later Parliamentary Secretary to the Ministry of Transport in 1929. He became a Baron in 1930 and served as leader of the Labour Party in the House of Lords from 1931 until 1935, resigning in opposition to the party's policy on sanctions against Italy for its invasion of Abyssinia.
In 1940 Ponsonby resigned from the Labour Party, opposing its decision to join the coalition government of Winston Churchill.