Just 18 months on from resigning his advisory role to the government, Lord Young is in trouble again after appearing to support the proliferation of low wages.

In a new report to the Prime Minister entitled Growing Your Business (PDF), Young made the claim that a recession “can be an excellent time to start a business … factors of production such as premises and labour can be cheaper and higher quality, meaning that return on investment can be greater”. Unions have reacted with anger to the claim, with Frances O’Grady of the TUC responding that “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”. Advisors such as Young, she added, are “revelling” in the current “living standards crisis”.

While Young was undoubtedly in the wrong with the comments he made in November 2010 – suggesting that most British people “had never had it so good” during the “so-called recession” – this time it seems much more as though people have misinterpreted his message. For a start, the report presents No 10 with a host of sensible recommendations, such as removing the age cap on access to start-up loans and creating a voucher scheme to help “micro-firms”: the 95% of companies with fewer than 10 employees on their rosters. Young is also fundamentally correct that low wages for good quality labour are good for businesses at the start of their lives – and, like it or not, that is currently the situation in the market.

Over the longer term, however, the notion of low wages as a general company policy could lead to situations in which workers are not valued and their rights are eroded. In fact, Tory MP Robert Halfon has brought this very point to light in a column for the New Statesman that flagged up alleged poor treatment of workers by the Harlow branch of Tesco. The corporate behaviour that Halfon cites is unacceptable, and unions perhaps see comments such as Young’s as a slippery slope towards that kind of maltreatment.

Nonetheless, it is likely that Young is simply speaking as he finds, with the intention of trying to encourage new firms and entrepreneurs: surely a positive move. Perhaps this time, the criticism he has faced is not justified.