Tributes have been paid to Liberal Democrat peer Lord Taverne, who has died aged 97.

As Dick Taverne, he served as a Labour MP for Lincoln between 1962 and 1974. He was also chief secretary to the Treasury as the UK prepared to move to decimal currency.

Lord Taverne resigned from the Labour party over his pro-European views and became a founder of the Liberal Democrats, when the SDP merged with the Liberal Party in 1988.

Sir Ed Davey, leader of the Lib Dems, said: “Dick was a passionate, principled and thoughtful colleague who will be sorely missed by all of us in the Liberal Democrat family.”

He added: “A founding member of our party, Dick was a passionate European who inspired us all with his sharp intelligence and incredible experience in government, politics and beyond over many decades.”

In a statement, Lord Taverne’s family said: “He died peacefully early this morning at home in London. He was a much loved and loving husband, father and grandfather. We will all miss him enormously.”

Lord Taverne famously won the 1973 Lincoln by-election as a Democratic Labour candidate, having resigned from the Labour party over his stance on the European Common Market.

He lost his Lincoln seat in the general election held in October 1974.

Lord Taverne was appointed the first director of the Institute for Fiscal Studies in 1970, and he was appointed to the House of Lords in 1996.

He is survived by his wife of 70 years, Janice, and daughters Suzanna and Caroline.