Lord Young, an economic adviser to David Cameron, provoked controversy last night as he questioned whether Britain really was in recession.

Similar comments two years ago, when he insisted that "the vast majority of people in the country today have never had it so good", forced him to resign as the Prime Minister's business adviser. He was brought back shortly afterwards, to encourage enterprise.

Speaking at a festival for entrepreneurs in Sheffield, Lord Young said that after hosting the most successful Olympics ever, Britain should have the confidence to "get up and get on with it". He added: "I have experienced every recession since 1955 and I have never known a recession where employment goes up and at a time when the population is growing.