Lord Young forced to quit over ‘never had it so good’ gaffe

David Cameron forced his enterprise czar Lord Young to resign today for declaring that most Britons had "never had it so good".

The Prime Minister ruthlessly withdrew full support for the peer whose "offensive" remarks were seen as belittling the misery suffered by victims of the recession.

Lord Young, a veteran of Margaret Thatcher's Cabinet, fell on his sword at 1pm today — less than two days after he was made Peer of the Year for leading the drive against red tape.

He plunged the Government into crisis by arguing in an interview, conducted at one of Westminster's smartest restaurants, that this "so-called recession" had left most people better off because of low interest rates.

The 78-year-old also dismissed complaints about spending cuts as coming from "people who think they have a right for the state to support them".

Mr Cameron showed his anger this morning by saying he should be "doing a bit less speaking in the future". Critically, No 10 refused to say that the Prime Minister had "full confidence" in his beleaguered adviser.

Lord Young's departure was described officially as a voluntary resignation by a peer who wanted to limit the damage to the Government caused by his gaffe. Mr Cameron did not demand Lord Young's resignation when the story first broke late last night, but when the row dominated news bulletins all morning it became clear that Downing Street was holding back full support.

The Prime Minister's spokesman would only express limited "confidence" in Lord Young and the Prime Minister laid bare his displeasure in comments that suggested Lord Young should shut up for a while. The end came in the late morning when Lord Young, after discussing the crisis with No 10 advisers, offered his resignation to the Prime Minister. It was immediately accepted.

"It was Lord Young's decision to resign. He felt that his continuing in the role would damage the Government," insisted a No 10 official. But another source said: "The PM felt it was only fair to sleep on it before making a final decision but decided during this morning that Lord Young had to go."

"Be brutally honest" was Lord Young's brief when he was recently appointed as the Government's enterprise czar.

The life peer was tasked with slashing red tape for small firms. But today Lord Young of Graffham's straight-talking has left him clinging to his job. The former Cabinet minister, aged 78, was one of the less high-profile figures during the Thatcher era. He was nicknamed "Lord Suit" and Westminster observers say he was grey before his time.

He held a series of Cabinet posts in the Eighties including minister without portfolio, to advise the government on unemployment issues. He became employment secretary in September 1985, and was promoted to trade and industry secretary in 1987.

The son of a businessman who imported flour, he briefly practised as a lawyer. He learned the tricks of the entrepreneurial trade at Great Universal Stores. He survived the property crash of 1973-74, then helped Jeffrey Sterling lay the foundations for what became known as shipping group P&O.

His political comeback came when the Government asked him to review health and safety laws and the compensation culture.