Lamont was born in the Shetland Islands in 1942 and was educated at Loretto School and Fitzwilliam College, University of Cambridge. He worked in the finance industry (in particular N M Rothschild) before standing as a candidate for Member of Parliament for Hull East. He lost the election to the current Deputy Prime Minister, John Prescott. In 1972 he won a by-election to become MP for Kingston upon Thames.
Lamont served in successive governments under Margaret Thatcher and John Major for a total of 14 years, in the Departments of Energy, Industry, Defence and the Treasury. He was Chief Secretary to the Treasury at the time of Nigel Lawson's resignation and remained in that position under Major's Chancellorship. In this position he acquiesced in Major's decision to join the European Exchange Rate Mechanism (ERM) at a central parity of 2.95 Deutschmarks to the Pound. Shortly afterwards he successfully managed Major's election campaign to succeed Margaret Thatcher as party leader and Prime Minister. In the process he clashed angrily in private with Nigel Lawson who preferred Michael Heseltine as Thatcher's successor.
Lamont replaced Major as Chancellor in Major's new Cabinet, thereby finalising his commitment to Major's exchange rate policy. This policy proved unsustainable and collapsed on Black Wednesday, 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 but famously proclaimed 'Je ne regrette rien' about the incident. 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.
After the government's massive loss in the Newbury by-election in May 1993, Lamont left office giving a resignation speech in the House of Commons that made clear his feeling that he had been unfairly treated. 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 he became a fierce critic of the Major government, saying it 'gives the impression of being in office but not in power'. He is now regarded as a staunch euro-sceptic. In 1995 he authored Sovereign Britain in which he envisaged Britain's withdrawal from the European Union. He is the current co-chairman of the euro-sceptic Bruges Group.
Despite departing under a cloud, Lamont defends his budget record. The 1991 budget, in which he seized the opportunity presented by Mrs Thatcher's retirement to restriction mortgage interest tax relief to the basic rate of income tax and also cut the rate of corporation tax by two percentage points, was greeted by positive coverage in The Economist 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. Even Lamont's final budget in 1993 was more sympathically 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 (ie fiscal deficit) of these years to the depth of the recession triggered by his inability to cut interest rates sooner within the ERM.