The 1992 budget introduced the 20p rate of income tax on the first £2,000 of earnings, as well as increasing personal allowances in line with inflation.

Lamont also confirmed plans to unify tax and spending into one annual budget statement should the Conservatives win the election.

Opposition Labour Party leader Neil Kinnock dismissed the statement as a "a panic-stricken pre-election sweetener", but Labour's opposition to introducing the lower tax rate enabled the Conservatives to paint them as a high-tax party, a strategy that ultimately succeeded in winning them the election.

By 1992 the UK was starting to emerge from the recession of the early 1990s, but the economy was still struggling, and the public sector borrowing requirement (PSBR) had reached £28bn.

Lamont also announced that should the Conservatives win the next election, in the future tax and spending would be incorporated into a unified budget that would be presented in the autumn.