David Cameron’s enterprise advisor Lord Young has resigned after claiming most Britons “never had it so good” during the recession.

Young quit at lunchtime only two hours after Cameron had accepted his apology, and appeared to accept that he would stay in post.

The multi-millionare sparked outrage after giving an interview to the Daily Telegraph, in which he said low interest rates meant “for the vast majority in the country today, they have never had it so good ever since this recession – this so-called recession – started”.

Lord Young of Graffham also said those complaining about the cutbacks “think they have a right for the state to support them”.

Overnight Downing Street had described Lord Young’s remarks as inaccurate and offensive. His remarks had sparked criticism from Labour and silence from Liberal Democrats.

The Labour leader Ed Miliband said: “Lord Young is right to go. I think his remarks are frankly disgraceful and many of the people who are struggling up and down this country with the consequences of the recession that we had, the consequences of the spending cuts that we are seeing, will be insulted by his comments.”

However, in many ways Lord Young was right in what he says.
Lord Young

Firstly, his claim that 100,000 job losses are within “the margin of error” in the context of the 30 million-strong job market is quite correct. In an excellent blog, stumblingandmumbling explains how the ONS estimates that the sampling variability of its estimate of employment is 152,000. Indeed, the BBC’s Chris Buckler explains how interest rates have been at 0.5% for the last 18 months, compared to 20 years ago, when they were at a peak of 15%.

Secondly, lets take a look at Young’s suggestion that “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.”

In fact, since December 2007  the average standard variable mortgage rate has dropped from 7.68% to 3.93%. With the average mortgage just over £100,000 (11.1 million mortgages with total debt of £1.2 trillion) this implies a monthly saving of around £350. Those on fixed rates will have benefited less. Others, some tracker mortgages, will have gained more.

However, the gains are extremely minor compared to the overwhelming amount of people who have lost out in the recession. Primarily there are those who have lost their jobs – a net 876,000 full-time jobs have gone since the cyclical peak. Furthermore, since December 2007 average earnings have risen 3.7%, but the constant tax CPI has risen 7.6%. Furthermore, in real terms people’s disposable incomes have fallen over the past year. Job insecurity is a genuine concern for thousands, and it is impossible to deny we are experiencing an age of austerity.

Last night Lord Young said he had written to Cameron to “apologise profoundly” for his “inaccurate and insensitive” comments.

“I deeply regret the comments I made and I entirely understand the offence they will cause,” he said. “They were both inaccurate and insensitive. Low mortgage interest rates may have eased the burden for some families. But millions of families face a very difficult and anxious future as we come to grips with the deficit. I should have chosen my words much more carefully.”

One lorry driver from Barnsley told the BBC: “He’s living on cloud coo coo land isn’t he? Everybody’s struggling aren’t they? He’s got to come into the real world.”

Lord Young’s comments have come at the worst possible time for the coalition government. The Conservatives, desperate to break away from the long-standing image of being the “nasty party”, have continually reiterated how “we are all in this together”. The comments of Lord Yong completly contradict this, and have sparked outrage across the country.

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