No 10 backs peer's business remarks

Claims by a senior adviser to David Cameron that lower wages in a recession help make it a better time to start a business have been defended by Downing Street.

Trade unions and Labour seized on the analysis by Lord Young, accusing him of "revelling in" the availability of cheaper workers.%VIRTUAL-SkimlinksPromo%
But Number 10 said the Tory former minister was simply reflecting the fact that start-ups tended to multiply and thrive during economic downturns and accused critics of deliberately misinterpreting his words.

The peer was previously forced to resign as Mr Cameron's enterprise expert for underplaying the effects of the recession but was subsequently brought back.

His latest comments are in a report for the Prime Minister on measures to promote small business growth. In it he writes: "The rise in the number of businesses in recent years shows that a recession can be an excellent time to start a business. Despite tough economic conditions the number of new businesses has remained remarkably resilient and at historically high levels. Business closures have remained stable and lower than pre-recession levels.

"It has always been the case that a recession can be a good time to grow a business. This is true for a number of reasons. Competitors who fall by the wayside enable well-run firms to expand and increase market share. Factors of production such as premises and labour can be cheaper and higher quality, meaning that return on investment can be greater."

Giant US firms such as GE, Microsoft and Disney all started during a recession as did half the firms on the 2009 Fortune 500 list, he points out.

TUC general secretary Frances O'Grady told The Observer: "The 2.5 million people still out of work will wonder what planet Lord Young is living on when he claims recessions bring economic gains. Not only is the Government failing to deal with the living standards crisis, their advisers are revelling in the jobs and wage squeeze that is putting people's finances under strain."

Labour vice-chairman Michael Dugher said: "This is yet more evidence of just how desperately out of touch David Cameron's government has become. Whilst millions of hard-pressed families are feeling the squeeze and the Government gives out tax cuts for millionaires, Cameron's adviser seems to celebrate low wages for many in a recession."

A Downing Street spokesman said: "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. The TUC is deliberately misrepresenting his report to suit their political agenda."

The Sunday Times rich list 2013
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No 10 backs peer's business remarks

The 59-year-old billionaire has an almost 30% stake in Arsenal Football club and tops the list with an estimated worth of £13.3 billion.

Blavatnik's wealth rose from £3.4 billion last year to £11 billion in 2013 making him the biggest climber. He owns Warner Music and received £2 billion in April for his stake in TNK-BP.

Indian tycoons Sri and his brother Gopi Hinduja have a wealth of £10.6 billion from the industry and finance sector. The brothers made their fortune from their family firm Hinduja Group, a textile and trading exporter founded by their father in 1914.

Mittal spent eight years at the top of the rich list but slipped down to fourth place this year when the 40% stake he holds with his wife Usha in steelmaking giant ArcelorMittal plummeted from £28 billion to £5.95 billion.

With wealth totalling £9.3 billion, Roman Abramovich is most famous for buying Chelsea FC. A £200 million drop in his fortune lowers Abramovich from third to fourth spot.

Although largely unknown in Britain, 68-year-old Fredriksen is notorious in his native Norway as owner of the world's largest fleet of oil tankers. Once Norway's richest man and now a Cypriot national, the high-school dropout's companies are major players in shipping, offshore drilling and seafood.

The British-born billionaires, the Reuben brothers, are best-known for their vast UK property empire, which includes the John Lewis Partnership's headquarters in London's Victoria.

The Duke of Westminster is the second-highest ranked British billionaire and is worth an estimated £7.8 billion. He owns property group Grosvenor Estates, and half of London's Mayfair and Belgravia, as well as vast portions of the UK and Scotland.

With no change to their wealth this year, the Bertarellis are worth £7.4 billion. Born Kirsty Roper in 1971 into the Churchill China dynasty, 41-year-old Kirsty was a model and wrote the All Saints worldwide hit 'Black Coffee'.

Charlene de Carvalho-Heineken inherited a huge stake in Heineken, the world's third-largest brewer on the death of her father Freddy Heineken in 2002. Michel is an investment banker, former Olympic skier and toboganner, and and actor who appeared in the desert epic 'Lawrence of Arabia.'


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