At the 1997 general election, Holmes unsuccessfully contested the New Forest West constituency. Later that year, he was elected leader of UKIP. In 1999, he and two other UKIP candidates were elected to the European Parliament at the election of 1999 and in his maiden speech there he made some comments in defiance of party policy:[3]
This Parliament does not appear to be very democratic... To get a democratic structure, we have to change over the years so that Parliament is not the servant of the Commission but the Commission is the servant of the elected representatives of the electorate of Europe. It would be better if the future of Europe was entrusted to elected representatives who can be dismissed from office at elections and not to nominated bureaucrats in the form of Commissioners... If Mr Prodi and his colleagues wish to remedy Euro-scepticism and Euro-apathy, I am calling for true democracy and for the elected representatives to have much more authority over the programme and policies of this institution.[3]
After the European Parliament election, UKIP suffered from rivalry between groups supporting Holmes, the leader, and Nigel Farage, the party chairman, both now MEPs.[4] At a National Executive Committee meeting later that year, Holmes dismissed Craig Mackinlay as his deputy and Tony Scholefield as Party Secretary. This prompted an immediate vote of no confidence in Holmes, who the following month agreed to resign.[5] A party conference also voted no confidence in him, and in January 2000 he resigned as leader.[4]Jeffrey Titford was then elected as the new leader.[5]
Holmes left the party, but continued to sit as an independent MEP until 2002, when he resigned his seat and was replaced by Graham Booth, who had been the next candidate on the UKIP party list for South West England.
Holmes died on 29 September 2023, at the age of 85.[2]