The economic downturn is a great time for business start-ups to increase their profits and grow because labor is cheap, said British cabinet member, Lord Young, enterprise advisor to the Prime Minister.
Lord Young of Graffham sent ministers a report saying that low wages during the recession make it easier to earn big profits. The advisor’s statements drew criticism from British unions, according to British newspaper The Observer.
“The rise in the number of businesses in recent years shows that a recession can be an excellent time to start a business. Competitors who fall by the wayside enable well-run firms to expand and increase market share. Factors of production such as premises and labor can be cheaper and higher quality, meaning that return on investment can be greater” said Lord Young, who in the past was forced to resign after he downplayed the impact of the recession on the population.
A spokesman for the Prime Minister said that Lord Young was only reporting on an existing situation, but his comments were described as “appalling and ill-timed” by union leaders.
Lord Young was forced to resign in 2010 from his position as advisor to the Prime Minister, after broad condemnation by public opinion of its claims that voters are better off during the “so-called recession” as a result of low interest rates.
Also, Lord Young said the British government’s spending cuts are criticized by people who think they are entitled to support from the government. In his report Lord Young said that “world-renowned firms such as GE, Microsoft and Disney all started during a recession.”
Lord Young was re-appointed 11 months after his resignation.
Prime Minister’s Office said that union leaders deliberately exaggerate advisor’s statements to serve their own interests, adding: ” Lord Young doesn’t say a recession is a good time, he says it can be a good time to start a business, which is borne out by the statistics.”
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