Lloyd was born on 15 June 1957 in the coastal city of Mombasa, Kenya, to John Lloyd and Nuala Lloyd. He was educated in the UK from the age of eight at the independent St. George’s College, Weybridge in Surrey.

In 2002, Lloyd was selected by the Liberal Democrats to be their next candidate for the constituency of Eastbourne in East Sussex. Viewed as a high target seat for the party, selection was competitive and he beat future parliamentary colleagues Duncan Hames and Tessa Munt to the final nomination. Lloyd spent the next three years becoming engaged in local causes, in preparation for the next general election. At the 2005 general election, Lloyd lost to the sitting Conservative MP, Nigel Waterson.

Lloyd continued to campaign locally for various causes, including leading opposition to plans to build a new B&Q megastore in Sovereign Harbour, which was subsequently refused by the planning committee of the Liberal Democrat-controlled Eastbourne Borough Council in October 2005.

At the 2010 general election, Lloyd’s campaign centred on local issues and highlighting of the expenses claims of his Conservative Party opponent, Nigel Waterson. He also asked to be lent votes by local supporters of the Labour and Green parties. Liberal Democrat leader Nick Clegg hosted his eve of poll rally, where former Conservative MP Ernle Money, who had moved to Eastbourne, pledged his support to Lloyd. On 7 May, Lloyd was elected the MP for Eastbourne with a majority of 3,435 votes.

From 2010 to 2015, Lloyd served as the Liberal Democrats’ spokesperson for Northern Ireland in the House of Commons. Over the same period, Lloyd served on the Work and Pensions Select Committee in the House of Commons. He was thought by the Labour opposition to be wavering about supporting changes to housing benefit presented to the committee, but declared that he supported the “direction of travel” of the government. He campaigned for concessions from the Department for Work and Pensions in relation to Personal Independence Payment descriptors to ensure that people with reduced mobility would still be entitled to their Motability vehicles.

In 2010, Lloyd lobbied the Government to reconsider its planned reforms to student visa regulations, which threatened the future of English language schools, arguing it was “nonsensical” to require overseas students to speak the language before they came to study it.

Lloyd founded the All Party Parliamentary Group on religious education in schools in 2010. He has led campaigns to improve, encourage and support RE teaching of the world’s major faiths, and of the non-religious, in schools in England and Wales. The chair of the Religious Education Council praised him in The Times as a “key player” in promoting the importance of effective RE teaching in schools.

In 2010, Lloyd created an “MP’s Commission”, composed of local business and community leaders in his Eastbourne constituency. Its initiatives included: bringing back the Eastbourne ‘Sunshine’ Carnival; and organising a procurement conference to encourage further economic cooperation between the private sector and major public sector bodies in the town. In 2011, Lloyd developed a successful local apprenticeship initiative, aiming to recruit 100 apprenticeships in 100 days in Eastbourne. The initiative ultimately created 181 apprenticeships and received praise from then-Prime Minister David Cameron. In 2014, Lloyd was awarded the Grassroot Diplomat Initiative Honouree for this work. During the same year, Lloyd was also associated with lobbying for additional funds for local housing projects and supporting negotiations over the regeneration of Eastbourne’s Arndale shopping centre.

Waterson subsequently sued Lloyd for libel over the contents of Lloyd’s election leaflets, which had called Waterson an “expenses scandal MP”. On 9 December 2011, the High Court ruled that Lloyd had defamed Waterson. Lloyd appealed, and on 28 February 2013 the Court of Appeal found in Lloyd’s favour, overturning the original judgment.

Writing in a 2013 publication for the Liberal Democrat group Liberal Reform, Lloyd criticised both the left and the right for their attitudes to welfare, accusing the right of “boneheaded vituperation” and the left of “complacency” and of being patronising. He considers the Work Programme workfare scheme and Universal Credit introduced by the coalition government to be the liberal solution for unemployment. Although he was publicly supportive of welfare reforms, he repeatedly warned Employment Minister Chris Grayling against the use of negative language to describe the unemployed.

From January to December 2014, Lloyd served as Parliamentary Private Secretary to the Secretary of State for Energy and Climate Change Ed Davey. Lloyd resigned this position in December 2014 over his “profound disappointment” that the Department for Transport’s new road investment strategy did not meet the demands of a local campaign to properly improve the A27 road.

In 2014, The Guardian reported that Lloyd’s “toil has yielded high levels of recognition and support, some of it close to admiration.” Christina Patterson in The Independent remarked that “a political system that can produce elected representatives like this may well be as good as it gets.”

In 2015, Lloyd supported appeals made by the parents of a five-year-old girl who died in his constituency, when the child’s grandparents were denied visas to enter the UK to attend her funeral. He offered to personally guarantee their return to Zimbabwe.

In July 2016, Lloyd announced that he would seek selection as the Liberal Democrat candidate at the next general election. He attributed his change of mind to a petition created by local supporters two months before, which had asked him to stand again.

Lloyd stood at the snap general election in 2017 and won, beating the same Conservative MP who had unseated him in 2015, Caroline Ansell, by 1,609 votes. Lloyd was selected under an all-disabled shortlist, the first time any political party had restricted its selection to disabled people. In June 2017, Liberal Democrat Leader Tim Farron appointed Lloyd as the party’s frontbench spokesperson for the Department for Work and Pensions. Lloyd was reappointed to this position after Sir Vince Cable was elected as Leader of the Liberal Democrats in October 2017. In January 2018, Lloyd sponsored a parliamentary debate on Universal Credit’s impact on the private rented sector.

Lloyd successfully campaigned for an inquiry into patient deaths at Gosport War Memorial Hospital, having “long supported the case” for an independent investigation. On 20 June 2018, the Gosport Independent Panel published a report finding that “there was a disregard for human life” at the hospital and that “456 patients died where medication – opioids – had been prescribed and administered without appropriate clinical justification”. In response, Lloyd called for a criminal investigation into the deaths at Gosport.

On 6 December 2018, Lloyd resigned the Liberal Democrat whip in Parliament over Brexit. In his resignation letter to Liberal Democrat Chief Whip Alistair Carmichael, Lloyd said “[t]hough I fought as a Remainer during the referendum…I also made a clear promise to my constituency…that I would accept the result, support the deal the PM brought back from the EU and not back calls for a second referendum…I will be keeping my word to my town…Consequently I have decided the only honourable thing for me to do is to resign the party whip in Parliament.