Lyon was a descendant of Sir Thomas Lyon of Auldbar, Forfarshire, the master of Glamis and lord high treasurer of Scotland, who died in 1608. His grandfather John Lyon lived at Castle Lyon, Perthshire and Kinnaird, Forfarshire, and married Jane Ochterlony of Pitforthy, Forfarshire, the aunt of General Sir David Ochterlony (1758-1825), the conqueror of Nepal. His father was in business in London as a West India merchant, with interests and property in Jamaica. Lyon seems to have been the only one of five brothers to have participated in the family business, and he was listed in the directories as a merchant at 5 Lime Street Square until 1831. He was appointed to the standing committee of the London West India merchants and planters in 1822, but played little part in their proceedings.
He took his seat, 10 Feb. 1831, but is not known to have spoken in debate during his brief parliamentary career. He divided against the second reading of the Grey ministry’s reform bill, 22 Mar., and paired for Gascoyne’s wrecking amendment, 19 Apr. 1831. At the ensuing general election he came in again for Bere Alston with Beverley’s son, after a token contest organized on behalf of two members of the government.
Bere Alston was disfranchised by the Reform Act and Lyon was never again in the House. On the eve of the general election of 1835 he reported the prospects of Conservative success at Arundel to Francis Bonham*, the election manager, with whom he was on friendly enough terms to feel able to advise him that William Holmes*, the whip, appeared to be ‘excessively angry’ with him.
