In November 1896 Hornby wrote to the Conservative leader in Blackburn offering his resignation; as a result a delegation was organised to persuade him to change his mind.
Some suspected that the fact that the other Blackburn MP William Coddington had recently been awarded a Baronetcy may have influenced Hornby's decision, and pressure was put on the Prime Minister to follow up.
In the New Year's Honours list of 1899, Hornby was himself created a Baronet; flags were hung around the town's public buildings to mark the award.
He responded by uncharacteristically making speeches vigorously defending himself; unfamiliar as he was, he took to offering large sums of money in challenges to rebut personal attacks on him.
Against Hornby and another Conservative Free Trader stood the future Chancellor of the Exchequer Philip Snowden as a Labour candidate, and Edwin Hamer as a Liberal, running in effect a joint campaign.