Lord Young quits as enterprise tsar

David Cameron’s enterprise minster Lord Young has departed from the role just one month into the mandate, following controversial comments he made that appeared to downplay the state of the UK’s economic woes.

In an interview with The Telegraph published on 19 November Lord Young said that the “vast majority” of people in the UK had “never had it so good ever since this recession – this so-called recession – started.”

Speaking on the currently low interest rate he added: “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 said that “in a few years people would look back and wonder what all the fuss was about”, and that he thought most of the complaints were coming from those who thought the state had a right to support them. His decision to refer to the loss of 100,000 public sector jobs 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”, cost him his job. He resigned this morning and Cameron accepted.

The comments put the government in an extremely awkward position as they seemed to contradict Cameron’s well-worn argument that Labour Party rule left the UK broken, while Lord Young’s words suggest that the state of the economy is currently better than it had been prior to Labour coming to power.

The comments drew comparisons with those made by former prime minister Harold Macmillan in 1957 as the UK recovered from the Second World War and fought with the spectre of inflation. He said: “Most of our people have never had it so good. Go around the country, go to the industrial towns, go to the farms and you will see a state of prosperity such as we have never had in my lifetime – nor indeed in the history of this country” Two years later Macmillan imposed a wages freeze.

Financial Director recently asked FDs how the appointment of Lord Young might benefit them in the latest FD Question. The response was surprisingly positive, with 42 percent of respondents believing he would be able to get the banks to start lending to SMEs.