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Norman Stewart Hughson Lamont, Baron Lamont of Lerwick, (born 8 May 1942) is a British politician and former
Conservative Conservatism is a cultural, social, and political philosophy that seeks to promote and to preserve traditional institutions, practices, and values. The central tenets of conservatism may vary in relation to the culture and civilization ...
MP for
Kingston-upon-Thames Kingston upon Thames (hyphenated until 1965, colloquially known as Kingston) is a town in the Royal Borough of Kingston upon Thames, southwest London, England. It is situated on the River Thames and southwest of Charing Cross. It is notable as ...
. He served as Chancellor of the Exchequer from 1990 until 1993. He was created a
life peer In the United Kingdom, life peers are appointed members of the peerage whose titles cannot be inherited, in contrast to hereditary peers. In modern times, life peerages, always created at the rank of baron, are created under the Life Peerages A ...
in 1998. Lamont was a supporter of the
Eurosceptic Euroscepticism, also spelled as Euroskepticism or EU-scepticism, is a political position involving criticism of the European Union (EU) and European integration. It ranges from those who oppose some EU institutions and policies, and seek refor ...
organisation
Leave Means Leave Leave Means Leave was a pro-Brexit, Eurosceptic political pressure group organisation that campaigned and lobbied for the United Kingdom to leave the European Union following the 'Leave' result of the EU referendum on 23 June 2016. The campai ...
.


Early life

Lamont was born in
Lerwick Lerwick (; non, Leirvik; nrn, Larvik) is the main town and port of the Shetland archipelago, Scotland. Shetland's only burgh, Lerwick had a population of about 7,000 residents in 2010. Centred off the north coast of the Scottish mainland ...
, in the
Shetland Shetland, also called the Shetland Islands and formerly Zetland, is a subarctic archipelago in Scotland lying between Orkney, the Faroe Islands and Norway. It is the northernmost region of the United Kingdom. The islands lie about to the n ...
Islands, where his father was the islands'
surgeon In modern medicine, a surgeon is a medical professional who performs surgery. Although there are different traditions in different times and places, a modern surgeon usually is also a licensed physician or received the same medical training as ...
. He was educated at
Loretto School Loretto School, founded in 1827, is an independent boarding and day school for boys and girls aged 0 to 18. The campus occupies in Musselburgh, East Lothian, Scotland. History The school was founded by the Reverend Thomas Langhorne in 1827. L ...
,
Musselburgh Musselburgh (; sco, Musselburrae; gd, Baile nam Feusgan) is the largest settlement in East Lothian, Scotland, on the coast of the Firth of Forth, east of Edinburgh city centre. It has a population of . History The name Musselburgh is Old ...
, Scotland, and read economics at
Fitzwilliam College, Cambridge Fitzwilliam College is a constituent college of the University of Cambridge. The college traces its origins back to 1869 and the foundation of the Non-Collegiate Students Board, a venture intended to offer academically excellent students of all ...
, where he was Chairman of the
Cambridge University Conservative Association The Cambridge University Conservative Association, or CUCA, is a long-established student political society founded 1921, as a Conservative Association for students at Cambridge University, although it has earlier roots in the late nineteenth ce ...
and
President President most commonly refers to: *President (corporate title) *President (education), a leader of a college or university *President (government title) President may also refer to: Automobiles * Nissan President, a 1966–2010 Japanese ful ...
of the
Cambridge Union Society The Cambridge Union Society, also known as the Cambridge Union, is a debating and free speech society in Cambridge, England, and the largest society in the University of Cambridge. Founded in 1815, it is the oldest continuously running debati ...
in 1964.


Corporate career

Before entering Parliament he worked for
N M Rothschild & Sons Rothschild & Co is a multinational investment bank and financial services company, and the flagship of the Rothschild banking group controlled by the French and British branches of the Rothschild family. The banking business of the firm covers t ...
, the investment bank, and became director of Rothschild Asset Management. Lamont currently, in addition to his role as a
working peer In the United Kingdom, life peers are appointed members of the peerage whose titles cannot be inherited, in contrast to hereditary peers. In modern times, life peerages, always created at the rank of baron, are created under the Life Peerages Ac ...
, is a director of and a consultant to various companies in the financial sector. He is a director of the hedge fund company RAB Capital, Balli Group plc (commodities trading house), and he is an advisor to Rotch Property Group. He is also a director of a number of investment funds. In December 2008 he joined the board of
Phorm Phorm, formerly known as 121Media, was a digital technology company known for its contextual advertising software. Phorm was incorporated in Delaware, United States, but relocated to Singapore as Phorm Corporation (Singapore) Ltd in 2012. Foun ...
, an online behavioural advertising company, and he is a non-executive director of Balli Group PLC and the Honorary President of the British Romanian Chamber of Commerce, and Chairman of the British Iranian Chamber of Commerce.


Member of Parliament

Lamont stood as a candidate for Member of Parliament in the June 1970 general election for Kingston upon Hull East. He was defeated by John Prescott, who went on to become
Tony Blair Sir Anthony Charles Lynton Blair (born 6 May 1953) is a British former politician who served as Prime Minister of the United Kingdom from 1997 to 2007 and Leader of the Labour Party from 1994 to 2007. He previously served as Leader of th ...
's
Deputy Prime Minister A deputy prime minister or vice prime minister is, in some countries, a government minister who can take the position of acting prime minister when the prime minister is temporarily absent. The position is often likened to that of a vice president, ...
. Two years later, on 4 May 1972, Lamont won a by-election to become MP for
Kingston-upon-Thames Kingston upon Thames (hyphenated until 1965, colloquially known as Kingston) is a town in the Royal Borough of Kingston upon Thames, southwest London, England. It is situated on the River Thames and southwest of Charing Cross. It is notable as ...
.


In government

Lamont served in successive governments under Margaret Thatcher and
John Major Sir John Major (born 29 March 1943) is a British former politician who served as Prime Minister of the United Kingdom and Leader of the Conservative Party from 1990 to 1997, and as Member of Parliament (MP) for Huntingdon, formerly Huntin ...
for a total of 14 years, in the Departments of Energy, Industry, Defence and the Treasury. In 1986, he moved to the Treasury, first as
Financial Secretary to the Treasury The financial secretary to the Treasury is a mid-level ministerial post in HM Treasury, His Majesty's Treasury. It is nominally the fifth most significant ministerial role within the Treasury after the First Lord of the Treasury, first lord of th ...
, then
Chief Secretary to the Treasury The chief secretary to the Treasury is a ministerial office in the government of the United Kingdom. The office is the second most senior in the Treasury, after the chancellor of the Exchequer. The office was created in 1961, to share the burden ...
(succeeding John Major in the latter job on Major's promotion to Foreign Secretary in July 1989) under Chancellor
Nigel Lawson Nigel Lawson, Baron Lawson of Blaby, (born 11 March 1932) is a British Conservative Party politician and journalist. He was a Member of Parliament representing the constituency of Blaby from 1974 to 1992, and served in the cabinet of Margare ...
, whom he tried unsuccessfully to persuade not to resign from the government on the morning of 26 October 1989 – Lawson resigned that evening. Lamont remained as Chief Secretary to the Treasury under Major's Chancellorship. In this position he acquiesced in Major's decision to join the
European Exchange Rate Mechanism The European Exchange Rate Mechanism (ERM II) is a system introduced by the European Economic Community on 1 January 1999 alongside the introduction of a single currency, the euro (replacing ERM 1 and the euro's predecessor, the ECU) as p ...
(ERM) at a central parity of 2.95 Deutschmarks to the Pound, although neither he or any other Cabinet ministers were involved or informed about the decision before it had been made. The decision to join the ERM was announced on Friday 5 October 1990, the last trading day before the week of the Conservative party conference. Shortly afterwards he successfully managed Major's election campaign to succeed Margaret Thatcher as party leader and Prime Minister. In her memoirs, Thatcher listed Lamont along with six other Cabinet ministers as a potential successor to her. During the leadership election, Lamont clashed angrily in private with Lawson who preferred
Michael Heseltine Michael Ray Dibdin Heseltine, Baron Heseltine, (; born 21 March 1933) is a British politician and businessman. Having begun his career as a property developer, he became one of the founders of the publishing house Haymarket. Heseltine served ...
as Thatcher's successor, phoning Lawson up to remind him of his caustic remarks made about Heseltine's economic policies. Lamont eventually slammed the phone down on Lawson in temper, though he later wrote to Lawson to offer an apology. On 16 May 1991, Lamont stated in parliament that "Rising unemployment and the recession have been the price that we have had to pay to get inflation down. That price is well worth paying." The remark is regularly, but not always approvingly, recalled by commentators and other politicians. Seven months before Lamont made the statement, inflation (as measured by the annual change in the
Retail Price Index In the United Kingdom, the Retail Prices Index or Retail Price Index (RPI) is a measure of inflation published monthly by the Office for National Statistics. It measures the change in the cost of a representative sample of retail goods and servic ...
) reached 10.9%. In May 1991, inflation fell to 6.4%. A year after the Major government was reelected in the 1992 general election, winning the most votes of any political party in British electoral history, inflation fell to 4.3%, falling to 1.3% a year later. However the economy continued to contract until the third quarter of 1991. After economic growth resumed, the economy grew rapidly and by the third quarter of 1993, GDP was greater than the pre-recession peak in the second quarter of 1990.


Chancellor of the Exchequer

Lamont replaced Major as Chancellor in Major's new Cabinet, thereby inheriting Major's exchange rate policy. In his memoirs, Lamont recalls a senior Treasury civil servant answering his question on why Britain had joined the ERM as replying, "It's politics," to which Lamont replied, "I don't think I would have given up the flexibility of the exchange rate." In public, Lamont justified the decision to join the ERM in terms of the government's counter-inflation strategy. In the House of Commons debate shortly after the pound joined the ERM, he argued that under a regime of floating exchange rates, the consequences of depreciating the currency had been short lived in terms of output and competitiveness, "but have been lasting in terms of inflation. That is one of the reasons why the Government concluded that it would be right to join the ERM." By the time Lamont was appointed Chancellor, the Conservative government's principal economic objective was to regain control of inflation. The Thatcher government had been elected in 1979 on a manifesto that had listed restoration of sound money as its first priority. Having peaked at 21.9% in 1980, inflation (as measured by the 12-month increase in the Retail Prices Index) fell to 3.3% at the beginning of 1988. However controlling inflation through the targeting of the growth of the domestic money supply, as proposed in that manifesto, turned out to be more problematic than its authors had envisaged and during his time as Chancellor, Lawson had increasingly been drawn instead to targeting the exchange rate to provide an external monetary anchor. From its low point in February 1988, inflation rose with apparent inexorability: of the 31 months until it peaked at 10.9% in October 1990, there were only four months when inflation fell. In response, interest rates were progressively increased, doubling from 7.4% in June 1988 to 15% in October 1988, being cut by one point to 14% when the pound entered the ERM, the level of interest rates Lamont inherited as chancellor. As a result, the economy began to slow, contracting by 1.1% in the third quarter of 1990 and shrinking a further 0.7% in the final quarter of the year. Thus Lamont's period as Chancellor started with inflation at its highest level since 1982 and the economy in recession. Asked at his first appearance as chancellor at the
Treasury Select Committee The House of Commons Treasury Committee (often referred to as the Treasury Select Committee) is a select committee of the House of Commons in the Parliament of the United Kingdom. The remit of the committee is to examine the expenditure, administ ...
whether he agreed with his predecessor's view on the depth and duration of the recession and not wishing to contradict Major, Lamont replied that "there are reasons why one could believe that it will be relatively short-lived and relatively shallow." In October 1991, based on CBI and
Institute of Directors The Institute of Directors (IoD) is a British professional organisation for company directors, senior business leaders and entrepreneurs. It is the UK's longest running organisation for professional leaders, having been founded in 1903 and inco ...
business surveys, he said "what we are seeing is the return of that vital ingredient – confidence. The
Green shoots Green shoots is a term used colloquially and propagandistically to indicate signs of economic recovery during an economic downturn. It was first used in this sense by Norman Lamont, the then Chancellor of the Exchequer of the United Kingdom, durin ...
of economic spring are appearing once again." The comment was widely criticised as premature. However,
Gavyn Davies Gavyn Davies, OBE (born 27 November 1950) is a former Goldman Sachs partner who was the chairman of the BBC from 2001 until 2004. On 28 January 2004 he announced that he was resigning his BBC post following the publication of the Hutton Inquiry ...
, then chief economist at
Goldman Sachs Goldman Sachs () is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered at 200 West Street in Lower Manhattan, with regional headquarters in London, Warsaw, Bangalore, Hong ...
, wrote in a newspaper article at the time of Lamont's removal from the Treasury that the "Green shoots" speech had turned out to be "remarkably prescient. From that moment onwards, output stopped declining, and within a few months, it started to rise. Estimates of Gross Domestic Product show the trough of the recession occurring in the fourth quarter of 1991, with sustained growth resuming in the third quarter of 1992, when GDP grew 0.4% compared to the second quarter.


Negotiating the Maastricht Treaty

On succeeding Thatcher, the Major government had to decide its position on the negotiations on European
Economic and monetary union An economic and monetary union (EMU) is a type of trade bloc that features a combination of a common market, customs union, and monetary union. Established via a trade pact, an EMU constitutes the sixth of seven stages in the process of economic ...
(EMU) which would lead to the
Maastricht Treaty The Treaty on European Union, commonly known as the Maastricht Treaty, is the foundation treaty of the European Union (EU). Concluded in 1992 between the then-twelve member states of the European Communities, it announced "a new stage in the p ...
. It had been Thatcher's opposition to EMU which triggered the end of her premiership. Like Thatcher, Lamont was a long-standing opponent of EMU and the European single currency. In his memoirs, Lamont wrote that he was "horrified" when Ted Heath in 1972 announced Britain that it was accepting the Werner Plan for monetary union. Newly appointed as Chancellor, Lamont therefore supported Major's idea of Britain negotiating an opt-out from the single currency. Negotiations on the economic aspects of the proposed treaty began in earnest at the end of 1990 with monthly meetings of European finance ministers. At an Intergovernmental Conference held in Rome on 15 December 1990, Lamont declared, "I remain unconvinced that the potential benefits of a single currency are as great as its supporters allege."Norman Lamont, ''In Office'', Little, Brown and Company (1999), p. 116. In a minute to the Cabinet's Defence and Overseas Policy committee the following month, Lamont set out his three objectives for the negotiations: first, to ensure that Britain did not have to join the single currency; second, to ensure the opt-out was legally water-tight; and third, to ensure that during the period in the run-up to the single currency, there should be no binding obligations on Britain. In meeting the third of these, Lamont had to overcome the resistance of the prime minister and the foreign secretary,
Douglas Hurd Douglas Richard Hurd, Baron Hurd of Westwell, (born 8 March 1930) is a British Conservative Party politician who served in the governments of Margaret Thatcher and John Major from 1979 to 1995. A career diplomat and political secretary to ...
, who told Lamont: "I can't see what you are so worked up about. We are in the ERM. What difference does it make if it is in the Treaty?" Lamont decided to ignore their objections. At the next negotiating meeting on the treaty, he told his fellow European finance ministers that Britain would not accept membership of the ERM as a treaty obligation. As a result, the meeting agreed to remove it. Lamont decided that the best way of securing the first two of his negotiating objectives was for Britain to draw up a protocol listing those parts of the treaty from which Britain would be exempted. When
Wim Kok Willem "Wim" Kok (; 29 September 1938 – 20 October 2018) was a Dutch politician and trade union leader who served as Prime Minister of the Netherlands from 22 August 1994 until 22 July 2002.Maastricht Maastricht ( , , ; li, Mestreech ; french: Maestricht ; es, Mastrique ) is a city and a municipality in the southeastern Netherlands. It is the capital and largest city of the province of Limburg. Maastricht is located on both sides of the ...
, decided that the meeting should review the British opt-out line-by-line, Lamont said the text was not negotiable. After Kok persevered, Lamont walked out of the meeting. In his absence, the protocol was endorsed without amendment.


Exchange Rate Mechanism exit

Within the constraints of the ERM, sterling interest rates were cut seven times in 1991, falling from 14% to 10.5% in September, with inflation halving from 9.0% to 4.5% over the course of the year, leaving real interest rates just 0.5% lower. The scope for swifter cuts in interest rates was squeezed by an event that few had anticipated when Britain joined the ERM: based on OECD indices of consumer prices, inflation in Germany, which had been 2.7% in 1990, rose to 5.1% in 1992, whilst in Britain inflation fell from 7.0% to 4.3%. In response, the
Bundesbank The Deutsche Bundesbank (), literally "German Federal Bank", is the central bank of the Federal Republic of Germany and as such part of the European System of Central Banks (ESCB). Due to its strength and former size, the Bundesbank is the mos ...
increased its discount rate from 6.0% in 1990 to 8.75% in July 1992, creating the conditions for the turbulence the ERM was to experience later that autumn. Despite the Conservatives' surprise victory in the April 1992 general election, for these reasons, the ERM policy proved increasingly unsustainable and collapsed on
Black Wednesday Black Wednesday (or the 1992 Sterling crisis) occurred on 16 September 1992 when the UK Government was forced to withdraw sterling from the European Exchange Rate Mechanism (ERM), after a failed attempt to keep its exchange rate above the ...
, when Lamont was forced to withdraw the pound from the ERM despite assuring the public that he would not do so just a week earlier. He faced fierce criticism at the time for his apparent insouciance in the face of the collapse of the stated central plank of his economic policy. Later that month, at a press conference in the garden of the British embassy in Washington, DC in response to a question as to why he appeared so cheerful, Lamont commented that it was a beautiful morning, adding, "My wife said she heard me singing in the bath this morning," a response which led to the story that he was singing in the bath with happiness at leaving the ERM. After Major left office and published his memoirs, Lamont publicly denied Major's version of events, claiming that Major had effectively opted out of his responsibilities and left Lamont to carry the can for that day's actions. On the evening of Black Wednesday and for days after, Major contemplated resigning, drafting a statement to that effect, but wrote Lamont a note instructing him not to resign. Major's verdict on the ERM was that it was the medicine that cured Britain of inflation; "it hurt but it worked." Speaking a few days after Black Wednesday, the Governor of the
Bank of England The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694 to act as the English Government's banker, and still one of the bankers for the Government o ...
, Robin Leigh-Pemberton, argued that "the decision to join the ERM two years ago in the circumstances; that, having joined, we were right to endeavour to stick it out; and that, in the circumstances which evolved, we were right to withdraw." Lamont's view expressed in his memoirs was more nuanced: without the discipline of the ERM, the Major government would have given up on the fight against inflation before Black Wednesday; ERM membership delivered a sharp break in Britain's inflation performance; the judgment of the markets that the higher rates needed to maintain Britain's membership was undoubtedly correct; "the ERM was a tool that broke in my hands when it had accomplished all that it could usefully do." Sir
Alan Budd Sir Alan Peter Budd (born 16 November 1937) is a prominent British economist, who was a founding member of the Bank of England's Monetary Policy Committee (MPC) in 1997. He left the MPC in May 1999, and between August 1999 and 2008 was Provos ...
, the Treasury's Chief Economic Adviser during the period and later appointed by
Gordon Brown James Gordon Brown (born 20 February 1951) is a British former politician who served as Prime Minister of the United Kingdom and Leader of the Labour Party from 2007 to 2010. He previously served as Chancellor of the Exchequer in Tony B ...
to the
Monetary Policy Committee Monetary Policy Committee (MPC) may refer to: * Monetary Policy Committee (India) of the Reserve Bank of India * Monetary Policy Committee (United Kingdom) The Monetary Policy Committee (MPC) is a committee of the Bank of England, which meets ...
, in an economic assessment of Britain's membership of the ERM, has written, "although it was certainly a political disaster, the case can be made that it was an economic triumph and marked the turning point in our macro-economic performance." During the autumn of 1992 Lamont became a press target in a string of largely fabricated stories: that he had not paid his hotel bill for "champagne and large breakfasts" from the Conservative Party Conference (in fact his bill had been forwarded on for settlement); that he was in arrears on his personal Visa credit card bill (true); that in June 1991 he had used taxpayers' money to handle the fall-out from press stories concerning a sex therapist, who was using a flat he owned (the Treasury contributed £4,700 of the £23,000 bill which had been formally approved by the Head of the Civil Service and the Prime Minister; there was never any suggestion that he had ever met her); and that he had called at a newsagent in a seedy area of Paddington late at night to purchase champagne and cheap " Raffles" cigarettes. The last story turned out to have been entirely invented.


Post-ERM chancellorship

Following Britain's exit from the ERM, Lamont had two major tasks: to replace the ERM with a new framework for
monetary policy Monetary policy is the policy adopted by the monetary authority of a nation to control either the interest rate payable for very short-term borrowing (borrowing by banks from each other to meet their short-term needs) or the money supply, often ...
, and to address the sharp increase in government borrowing caused by the recession and the rapid fall in inflation. In a letter to the Chairman of the House of Commons
Treasury Select Committee The House of Commons Treasury Committee (often referred to as the Treasury Select Committee) is a select committee of the House of Commons in the Parliament of the United Kingdom. The remit of the committee is to examine the expenditure, administ ...
in October 1992, Lamont set out a new basis for the conduct of monetary policy centred on
inflation targeting In macroeconomics, inflation targeting is a monetary policy where a central bank follows an explicit target for the inflation rate for the medium-term and announces this inflation target to the public. The assumption is that the best that moneta ...
. He set a target range for inflation excluding mortgage interest rate payments of 1–4%, falling into the lower part of the range by the end of the Parliament. In assessing progress toward meeting the inflation target, there was a target for the growth of narrow money (M0) and monitoring ranges for the growth of broad money (M4). Decisions on interest rates would also take account of house and asset price inflation and the exchange rate. Transparency and market credibility would be enhanced by publication of a monthly monetary assessment and the Bank of England was asked to produce a quarterly inflation report. These innovations marked a decisive break with the past and a necessary step toward central bank independence. Inflation targeting was the basis on which the Bank of England was made independent by the Blair government in 1997, the Bank's
Monetary Policy Committee Monetary Policy Committee (MPC) may refer to: * Monetary Policy Committee (India) of the Reserve Bank of India * Monetary Policy Committee (United Kingdom) The Monetary Policy Committee (MPC) is a committee of the Bank of England, which meets ...
being made accountable for achieving the government's inflation target. The new framework enabled interest rates to be cut from the 10% that they had been within the ERM to 6% by January 1993. Inflation continued to fall. In June 1993, the first month after Lamont had left the Treasury, Britain recorded its lowest monthly rate of inflation since February 1964. According to Alan Budd, the Treasury's Chief Economic Adviser during the period, the important step of central bank independence could only have been successful once monetary stability had been achieved; "In 1997 the Bank of England was not asked to succeed where politicians had failed; it was asked to maintain the rate of inflation, namely 2.5%, that it inherited." In Budd's view, the essential elements of the new framework and its success in achieving low and stable inflation were the establishment of an inflation target and the institution of monthly meetings with the governor of the Bank of England to discuss interest rates. The new framework, according to Budd, "worked extraordinarily well." "Credit must be given to those, principally Norman Lamont, who designed and implemented it." Lamont's second task was to reduce government borrowing, which was rising sharply because of the twofold impact of the ERM on the public finances. The loss of output had reduced tax revenues and increased public spending as unemployment rose. The sharp falls in inflation further reduced tax revenues compared to previous forecasts at the same time as increasing public spending after inflation, because public spending is planned in cash terms which becomes worth more in real terms if inflation falls. The March 1993 budget forecast a Public Sector Borrowing Requirement for 1993-94 of £50bn, equivalent to 8% of GDP. In terms of the Public Sector Net Cash Requirement, the definition currently in use to measure the UK government deficit, the actual deficit for 1993–94 of 6.9% was the highest since 1975–76 at 9.2% but just over half the 13.3% deficit projected for 2009–10 in the April 2009 budget. To reduce government borrowing, the March 1993 budget announced a rising wedge of tax increases – £0.5bn in the first year, £6.7bn in the second, rising to £10.3bn in the third, the aim being to give markets confidence that government borrowing was under control without damaging the recovery. Although the budget provoked a fierce reaction in some parts of the press, its reputation improved with the passage of time. After the 2009 budget, the ''Sunday Times'' editorialised that Lamont's budget had been so badly received that he was out of his job within two months, "but it fixed the public finances and set up the prosperity of the 1990s and beyond" and Derek Scott,
Tony Blair Sir Anthony Charles Lynton Blair (born 6 May 1953) is a British former politician who served as Prime Minister of the United Kingdom from 1997 to 2007 and Leader of the Labour Party from 1994 to 2007. He previously served as Leader of th ...
's economic adviser from 1997 to 2003, wrote that Lamont was "rightly praised" for putting in place the post-ERM framework, that stage of Lamont's career being "due for rerating since, in addition to designing a proper framework for monetary policy (later consolidated by Bank of England independence in 1997), he also took most of the tough decisions on spending and tax to put the public finances on the road to recovery." Sir
Alan Walters Sir Alan Arthur Walters (17 June 1926 – 3 January 2009) was a British economist who was best known as the Chief Economic Adviser to Prime Minister Margaret Thatcher from 1981 to 1983 and (after his return from the United States) again for f ...
, whose opposition to the ERM as Mrs Thatcher's economic adviser triggered Nigel Lawson's resignation as chancellor, wrote on the buoyant state of the British economy in 2001 that "all the difficult and correct decisions that produced this happy state of affairs were taken and implemented by Norman Lamont, who thus showed himself, in his Mark 2 post ERM version, to be not only the most effective but also the bravest Chancellor since the War."


Resignation from the Major Government

During the Newbury by-election in May 1993, Lamont was asked at a press conference whether he most regretted claiming to see "the green shoots of recovery" or "singing in his bath". He replied by quoting the
Edith Piaf Edith is a feminine given name derived from the Old English words ēad, meaning 'riches or blessed', and is in common usage in this form in English, German, many Scandinavian languages and Dutch. Its French form is Édith. Contractions and va ...
song " Je ne regrette rien", a dry response which raised a laugh at the press conference but which played poorly when quoted later on the television that evening and afterwards. When called to defend him on ''
Newsnight ''Newsnight'' (or ''BBC Newsnight'') is BBC Two's news and current affairs programme, providing in-depth investigation and analysis of the stories behind the day's headlines. The programme is broadcast on weekdays at 22:30. and is also avail ...
'' his friend the former Labour MP
Woodrow Wyatt Woodrow may refer to: People *Woodrow (name), a given name and a surname Places Canada *Woodrow, Saskatchewan, an unincorporated community United Kingdom *Woodrow, Buckinghamshire, England *Woodrow, Cumbria, England United States *Woodrow, Color ...
caused further merriment by claiming that Lamont could do an excellent impersonation of a Scops-owl (whose cry, Lamont later explained, "sounds like a tennis ball emitter"). Three weeks after the government's massive loss in the by-election, on 27 May 1993, Lamont was sacked (technically resigning from the government because he declined a demotion to become Secretary of State for the Environment), throwing (by his own account) Major's letter of regret at his departure unopened into the wastepaper basket, and giving a resignation speech in the House of Commons on 9 June, that made clear his feeling that he had been unfairly treated, saying that the government "gives the impression of being in office but not in power"; the then Party Chairman
Norman Fowler Peter Norman Fowler, Baron Fowler, (born 2 February 1938) is a British politician who served as a member of both Margaret Thatcher and John Major's ministries during the 1980s and 1990s. He held the office of Lord Speaker from 1 September 201 ...
dismissed the speech as "dud, nasty, ludicrous and silly". Major and Lamont agree that Lamont had offered his resignation immediately after Black Wednesday and that Major pressed him to remain in office. Lamont came to the view that Major had sought his survival in office as a firebreak against the criticism of the ERM policy rebounding on himself. In the following years Lamont became a fierce critic of the Major government. He is now regarded as a staunch euro-sceptic. In March 1995 he voted with the Labour party in a vote on Europe, and later that year he authored ''Sovereign Britain'' in which he envisaged Britain's withdrawal from the European Union, and was talked of as a potential leadership challenger to John Major; in the event it was
John Redwood Sir John Alan Redwood (born 15 June 1951) is a British politician who has been the Member of Parliament (MP) for Wokingham in Berkshire since 1987. A member of the Conservative Party, he was Secretary of State for Wales in the Major governmen ...
who challenged for the leadership. Lamont supported Redwood's campaign, which was managed by David Evans MP. He is the current
vice president A vice president, also director in British English, is an officer in government or business who is below the president (chief executive officer) in rank. It can also refer to executive vice presidents, signifying that the vice president is on ...
of the euro-sceptic Bruges Group. Despite departing under a cloud, Lamont defends his budget record to this day. The 1991 budget, in which he seized the opportunity presented by Thatcher's resignation to restrict mortgage interest tax relief to the basic rate of
income tax An income tax is a tax imposed on individuals or entities (taxpayers) in respect of the income or profits earned by them (commonly called taxable income). Income tax generally is computed as the product of a tax rate times the taxable income. Tax ...
and also cut the rate of
corporation tax A corporate tax, also called corporation tax or company tax, is a direct tax imposed on the income or capital of corporations or analogous legal entities. Many countries impose such taxes at the national level, and a similar tax may be imposed a ...
by two percentage points, was greeted by positive coverage in ''
The Economist ''The Economist'' is a British weekly newspaper printed in demitab format and published digitally. It focuses on current affairs, international business, politics, technology, and culture. Based in London, the newspaper is owned by The Econo ...
'' which dubbed him a ''Nimble Novice''. In the 1992 budget his proposal to advance to a 20% basic rate of income tax through a combination of a narrow initial band, a cut in tax on deposit interest and curtailment of tax allowances was hailed as an elegant way of combining populism with progressivism, though events were later to lend support to Nigel Lawson's view that this approach was strategically inept. His final budget in 1993 was more sympathetically received by financial specialists than John Major's 1990 budget or Kenneth Clarke's budget of November 1993. Lamont attributes the large public sector borrowing requirement (i.e. fiscal deficit) of these years to the depth of the recession triggered by his inability to cut interest rates sooner within the ERM. The day after his dismissal from the Treasury, Sir
Samuel Brittan Sir Samuel Brittan (29 December 1933 – 12 October 2020) was an English journalist and author. He was the first economics correspondent for the ''Financial Times'', and later a long-time columnist. He was a member of the Academic Advisory Council ...
wrote in the ''
Financial Times The ''Financial Times'' (''FT'') is a British daily newspaper printed in broadsheet and published digitally that focuses on business and economic current affairs. Based in London, England, the paper is owned by a Japanese holding company, Nik ...
'' that history was likely to record him as one of the better Chancellors, citing his structural reforms of taxation, his determination to give priority to securing and maintaining low inflation and the delayed tax increases in his final budget. "He leaves behind an economy with a faster growth rate than that of any other of the main G7 countries and an underlying rate of inflation lower than in most." According to Ruth Lea, writing 12 years later on the factors behind the subsequent performance of the British economy, Lamont had introduced path-breaking macro-economic reforms including inflation targeting and the first steps towards an independent Bank of England and had begun a programme of fiscal consolidation, which transformed the public finances. "These macro economic reforms, along with the Thatcher economic reforms of the 1980s, effectively transformed the British economy."


Brexit

In the period after his resignation, Lamont became the first leading politician to raise the prospect of Britain withdrawing from the European Union. Shortly before the
2016 United Kingdom European Union membership referendum The United Kingdom European Union membership referendum, commonly referred to as the EU referendum or the Brexit referendum, took place on 23 June 2016 in the United Kingdom (UK) and Gibraltar to ask the electorate whether the country shoul ...
, the journalist Matthew d'Ancona wrote that someone must have dared to make the initial leap to retrieve the "frozen thesis" from its glacial prison. "In the case of Brexit, it was Norman Lamont, the former chancellor of the exchequer, who dragged the idea back from the snowy wastes." At a private meeting of the Conservative Philosophy Group in 1994, he argued that withdrawal from the European Union was an option that should be restored to the range of serious possibilities, d'Ancona, who attended the meeting, wrote. Later that year at the Conservative Party conference in Bournemouth, Lamont addressed a fringe meeting of the
Selsdon Group The Selsdon Group is a British free-market economics pressure group, closely associated with the Conservative Party. Selsdon Group members believe that economic freedom is the indispensable condition for political and social freedom. The group's ...
. "When we come to examine the advantages of our membership today of the European Union they are remarkably elusive. As a former Chancellor, I can only say that I cannot pinpoint a single concrete advantage that unambiguously comes to this country because of our membership of the European Union," Lamont told the group. He rejected the argument made by
Douglas Hurd Douglas Richard Hurd, Baron Hurd of Westwell, (born 8 March 1930) is a British Conservative Party politician who served in the governments of Margaret Thatcher and John Major from 1979 to 1995. A career diplomat and political secretary to ...
, the foreign secretary, who had claimed that the debate in Europe was turning Britain's way. "We deceive the British people and we deceive ourselves if we claim that we are winning the argument in Europe ... There is not a shred of evidence at Maastricht or since then that anyone accepts our view of Europe."Norman Lamont, "Speech to the Selsdon Group", Conservative Party Conference, 12 October 1994 Lamont implicitly challenged the view expressed by John Major, the
Prime Minister of the United Kingdom The prime minister of the United Kingdom is the head of government of the United Kingdom. The prime minister advises the sovereign on the exercise of much of the royal prerogative, chairs the Cabinet and selects its ministers. As modern p ...
: "It has recently been said that the option of leaving the Community was 'unthinkable.' I believe that this attitude is rather simplistic." He stopped short of arguing Britain should unilaterally withdraw from the European Union "today," but warned: "the issue may well return to the political agenda." Instead, he outlined an alternative to membership of a federal EU. "This means looking at all the options ranging from membership of an outer tier to participating solely in the European Economic Area. One day it may mean contemplating withdrawal."


1997 election

In boundary changes enacted for the 1997 general election Lamont's constituency of Kingston upon Thames was split up. The northern parts were merged with Richmond and Barnes to form
Richmond Park Richmond Park, in the London Borough of Richmond upon Thames, is the largest of London's Royal Parks, and is of national and international importance for wildlife conservation. It was created by Charles I in the 17th century as a deer par ...
, and the southern parts merged with the larger
Surbiton Surbiton is a suburban neighbourhood in South West London, within the Royal Borough of Kingston upon Thames (RBK). It is next to the River Thames, southwest of Charing Cross. Surbiton was in the historic county of Surrey and since 1965 it has ...
to form Kingston and Surbiton. Lamont lost the contest for the candidacy for the new seat to the incumbent Surbiton MP
Richard Tracey Richard Patrick Tracey, (8 February 1943 – 19 March 2020), was a British Conservative Party politician, journalist and news presenter. He was the Member of Parliament for Surbiton from 1983 to 1997, and served as Minister for Sport betwee ...
. He then embarked on a high-profile search for a new constituency and was eventually adopted as the Conservative candidate for the new seat of Harrogate and Knaresborough in Yorkshire. The move was seen as an attempt to parachute in an outsider, with Lamont seeming like an opportunist next to the Liberal Democrat candidate, Phil Willis, a local teacher and long-time local politician. When the general election came, his unpopularity, and that of the Conservatives in general, led a massive tactical voting campaign in the constituency and the Liberal Democrats won the seat. He was not recommended for a peerage in John Major's resignation honours, but the following year
William Hague William is a male given name of Germanic origin.Hanks, Hardcastle and Hodges, ''Oxford Dictionary of First Names'', Oxford University Press, 2nd edition, , p. 276. It became very popular in the English language after the Norman conquest of Eng ...
recommended him, and Lamont was made a
life peer In the United Kingdom, life peers are appointed members of the peerage whose titles cannot be inherited, in contrast to hereditary peers. In modern times, life peerages, always created at the rank of baron, are created under the Life Peerages A ...
as Baron Lamont of Lerwick, of Lerwick in the Shetland Islands, on 24 July 1998.


After Parliament

In 1998 the former
military dictator A military dictatorship is a dictatorship in which the military exerts complete or substantial control over political authority, and the dictator is often a high-ranked military officer. The reverse situation is to have civilian control of the m ...
of Chile, General
Augusto Pinochet Augusto José Ramón Pinochet Ugarte (, , , ; 25 November 1915 – 10 December 2006) was a Chilean general who ruled Chile from 1973 to 1990, first as the leader of the Military Junta of Chile from 1973 to 1981, being declared President of ...
visited Britain to obtain medical treatment. This prompted a debate about whether he should be arrested and put on trial over his
human rights Human rights are moral principles or normsJames Nickel, with assistance from Thomas Pogge, M.B.E. Smith, and Leif Wenar, 13 December 2013, Stanford Encyclopedia of PhilosophyHuman Rights Retrieved 14 August 2014 for certain standards of hum ...
record. Lamont joined with Margaret Thatcher in defending Pinochet, calling him a "good and brave and honourable soldier". His stance was highly criticised. He attempted to be selected as a candidate for the
1999 European Parliament election The 1999 European Parliament election was a European election for all 626 members of the European Parliament held across the 15 European Union member states on 10, 11 and 13 June 1999. The voter turn-out was generally low, except in Belgium and L ...
, but was unsuccessful. In February 2005, it was reported in ''
The Times ''The Times'' is a British daily national newspaper based in London. It began in 1785 under the title ''The Daily Universal Register'', adopting its current name on 1 January 1788. ''The Times'' and its sister paper ''The Sunday Times'' (fo ...
'' that Lamont and John Major had held up the release of papers concerning Black Wednesday under the Freedom of Information Act. The two wrote to the paper to deny the reports. Later it emerged that the source of the story had been
Damian McBride Damian McBride (born 1974) is a British political advisor. He is a former Whitehall civil servant and former special adviser to British Prime Minister Gordon Brown. McBride began his civil service career at HM Customs and Excise. He worked wit ...
, then a Treasury civil servant who as a result of this became a special adviser to the then Chancellor, Gordon Brown who in 2009 resigned from a similar position in
Number 10 Downing Street 10 Downing Street in London, also known colloquially in the United Kingdom as Number 10, is the official residence and executive office of the first lord of the treasury, usually, by convention, the prime minister of the United Kingdom. Along wi ...
following publication of emails indicating a plan to smear leading Conservative politicians. In October 2006, he complained that the new party leader
David Cameron David William Donald Cameron (born 9 October 1966) is a British former politician who served as Prime Minister of the United Kingdom from 2010 to 2016 and Leader of the Conservative Party from 2005 to 2016. He previously served as Leader o ...
(Lamont's political adviser around the time of Black Wednesday) lacked policies. In late 2008, Cameron asked Lamont, together with fellow former chancellors Geoffrey Howe, Nigel Lawson and Kenneth Clarke, to provide him with strategic political and economic advice as Britain's banking and fiscal position worsened. In June 2007, Lamont became Honorary Patron of the Oxford University History Society, one of the university's largest societies, and he was, from 1996 to 2008, chairman of
Le Cercle Le Cercle is a secretive, invitation-only foreign policy forum. Its focus has been opposing communism and, in the 1970s and 1980s, supporting apartheid when the group had intimate ties with and funding from South Africa. The group was described by ...
, a secret anti-Communist group which meets bi-annually in Washington, DC. In 2008, he became the President of the Economic Research Council, Britain's oldest economics-based think tank. In February 2015, Lamont resigned as a director of Phorm Corporation Limited, an internet personalisation technology company.
Yanis Varoufakis Ioannis "Yanis" Varoufakis ( el, Ιωάννης Γεωργίου "Γιάνης" Βαρουφάκης, Ioánnis Georgíou "Giánis" Varoufákis, ; born 24 March 1961) is a Greek economist and politician. A former academic, he served as the Gree ...
maintained that Lamont provided him with "counsel", "advice" and was "a pillar of strength" while he unsuccessfully negotiated Debt relief with the Troika during his six months as Greek Finance Minister in 2015.Yanis Varoufakis, ''Adults in the Room'', Vintage Penguin Random House (2018), p. 123.


References


Bibliography

* (autobiography)


External links

*
Announcement of his introduction at the House of Lords
House of Lords minutes of proceedings, 19 October 1998 , - , - , - , - {{DEFAULTSORT:Lamont, Norman 1942 births Alumni of Fitzwilliam College, Cambridge Chancellors of the Exchequer of the United Kingdom Conservative Party (UK) life peers Conservative Party (UK) MPs for English constituencies Living people Members of the Bow Group Members of the Privy Council of the United Kingdom People educated at Loretto School, Musselburgh People from Shetland Presidents of the Cambridge Union UK MPs 1970–1974 UK MPs 1974 UK MPs 1974–1979 UK MPs 1979–1983 UK MPs 1983–1987 UK MPs 1987–1992 UK MPs 1992–1997 N M Rothschild & Sons people Life peers created by Elizabeth II Chief Secretaries to the Treasury British Eurosceptics