Cameron hit by class war as new peer says benefits are 'incentive to breed'

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David Cameron's judgment was called into question last night after a new Conservative peer was forced to apologise over remarks that benefit cuts would encourage "breeding" among the poor.

The comment, by Howard Flight, whose elevation to the House of Lords was announced last week, was a new blow to Mr Cameron's drive to convince voters that the party is in touch with modern Britain.

The Prime Minister also faced intense embarrassment when his enterprise adviser, Lord Young of Graffham, claimed last week that most people had "never had it so good" during this "so-called recession". And he performed an abrupt U-turn the day before by taking a personal photographer, Andy Parsons, and film-maker Nicky Woodhouse, off the public payroll and sending them back to Tory headquarters.

Mr Flight, a millionaire banker, provoked uproar over an interview in which he condemned the Coalition Government's plans to remove child benefit from higher earners. "We're going to have a system where the middle classes are discouraged from breeding because it's jolly expensive, but for those on benefit there is every incentive. Well, that's not very sensible," he told the London Evening Standard.

The immediate storm over his words, with their hint of genetic engineering, overshadowed Mr Cameron's announcement of plans to measure Britain's "wellbeing". The Prime Minister said: "I don't agree with what he said and I am sure that he will want to apologise for what he has said."

Within minutes, the outspoken right-winger issued an unreserved apology and said he withdrew his comments.

Downing Street last night said Mr Cameron would not attempt to block the award of Mr Flight's peerage.

Political opponents claimed the episode was further proof that the party was not changing as rapidly as its leaders maintained. Douglas Alexander, the shadow Work and Pensions Secretary, said: "These shameful but revealing comments cast serious doubt over David Cameron's judgment in personally appointing Howard Flight to the House of Lords only a few days ago."

The Liberal Democrat MP Bob Russell said: "His comments are offensive and unacceptable. They are not appropriate for the 21st century."

Brendan Barber, the TUC general secretary, said: "Howard Flight has shown himself to be an insensitive throwback to the worst of 1980s politics. This is exactly the kind of remark that leads to political parties being thought of as nasty and shows just how shockingly out of touch with the lives of ordinary low and middle-income people some supporters of this Government can be."

Sally Copley, head of UK policy at Save the Children, said she doubted whether Mr Flight understood the plight of 3.9 million British children living in poverty. "We need to hear more from politicians about how to end child poverty by 2020, not offensive and ignorant remarks based on prejudice, not fact," she said.

The announcement of the former MP's peerage was regarded as a sign that Mr Flight had been rehabilitated by the party five years after he was forced to quit the Commons. He was secretly recorded during the 2005 general election campaign saying that the Tories planned deeper spending cuts than they had publicly admitted.

Michael Howard, the leader at the time, responded by sacking him as the party's candidate in the safe seat of Arundel and South Downs. However, his name appeared again this year on to the party's A-list of preferred election candidates. The Government's plans to remove child benefit from households with a higher-rate taxpayer from 2013 have caused dismay among right-wingers. They claim the move is unfair as it hits families where one parent stays at home to look after children and will be a financial disincentive to seek promotion.

In his interview, Mr Flight also denounced the Government's plans to raise tuition fees. He said: "Two of my nieces and nephews, both of them very bright, gave up university halfway through because they didn't want the financial burden." He went on to criticise the influence of Nick Clegg, who he described as "too much of a committed European", on the Coalition.

Last Friday Lord Young, a minister under Margaret Thatcher, resigned as an adviser to Mr Cameron after telling a newspaper that most people in Britain have "never had it so good" as low interest rates meant home-owners were better off, and dismissed the 100,000 job cuts expected in the public sector as being "within the margin of error" in the context of a 30 million-strong workforce.

Downing Street described his remarks as offensive and inaccurate.