Lord Young, the prime minister's enterprise adviser, was forced to issue a grovelling apology last night after he claimed most Britons "had never had it so good during this so called recession". He had also suggested that George Osborne, the chancellor, had deliberately inflated the rhetoric around the spending cuts to protect the pound.
He claimed that in a few years people would look back and wonder what all the fuss was about, and said most of the complaints were coming from those who thought the state had a right to support them. He also described the loss of 100,000 public sector jobs a year as within the margin of error in the context of a jobs market of 30m workers, adding "people will wonder what all the fuss was about".
Lord Young’s remarks have been seen as an offensive throwback to harsh Thatcherite rhetoric and are bound to lead to Labour calls for his dismissal as enterprise tsar on the grounds he is totally out of touch with the squeeze on living standards almost all voters are experiencing. Cameron had just appointed Young to the post after he had overseen a review of Britain's health and safety rules.
The PM has been desperate to portray the cuts as a difficult, but necessary, medicine even if he has on occasion himself pointed out that the cuts will still leave the public sector as a proportion of GDP back at quite recent levels. To help keep growth alive against the backdrop of 20% spending cuts over four years, the Bank of England interest rate has been cut to 0.5%, benefiting homeowners on tracker mortgages, but hitting those who rely on savings.
Lord Young told the Daily Telegraph: "For the vast majority of people in the country today they have never had it so good ever since this recession – this so-called recession – started, because anybody, most people with a mortgage who were paying a lot of money each month, suddenly started paying very little each month. That could make three, four, five, six hundred pounds a month difference, free of tax. That is why the retail sales have kept very good all the way through."
Lord Young also indicated that the coalition had deliberately overstated the impact of government spending cuts in an attempt to "protect the pound". Without the rhetoric, he said, there had been a danger of the value of the pound collapsing after the general election.
"Part of the rhetoric was to protect the pound," he said. "The fact that we seemed to be going through such big cuts really meant that the pound was saved, so far … If you actually look at the cuts after four years we will be back with government spend[ing] the same as it was in '07. Now, I don't remember in '07 being short of money or the government being short of money. So, you know, I have a feeling and a hope that when this goes through, people will wonder what all the fuss was about. Of course, there will be people who complain, but these are people who think they have a right for the state to support them."
No 10 made it clear last night that the prime minister was "deeply unimpressed" by Lord Young's comments. "Politicians need to be more careful with their choice of words, especially in these difficult times," said one official. "These remarks are as offensive as they are inaccurate."
Lord Young wrote to Cameron last night to apologise and express his "profound regrets". He described his comments as insensitive, adding: "I am not a member of the government and played no part in the spending review. I deeply regret the comments and I entirely understand the offence they will cause. I should have chosen my words more carefully. Low mortgage rates may have eased the burden for some families in this country. But millions of families face very difficult and anxious times."
Lady Thatcher praised Young while he was her business minister famously saying most ministers brought her problems but Young brought solutions. Downing Street was last night reversing that rule of thumb, grinding its collective teeth that someone so experienced could have said something so crassly insensitive at such a difficult time for many voters. They will also be worried that Young appears to be suggesting that the coalition spending cuts are unjustifiably large, and the level of UK deficit did not of itself warrant such steps.
Young was partly brought back to the centre of government to bring his experience, and brusque style to bear on key decisions, but it may be that sometimes experience can become a euphemism for someone out of touch with voters.
UPDATE – 18.30 19/11/10
David Cameron's enterprise adviser Lord Young has quit after claiming most Britons "had never had it so good". No 10 said Mr Cameron had accepted the peer's resignation from the unpaid advisory role he took on last month. Lord Young, an ex-cabinet minister, made the move after reflecting on media coverage of his remarks, it added. It followed criticism of his remarks about the impact of the recession and future spending cuts and calls for his departure by Labour.