Howard Flight was sacked as a Tory candidate ahead of the 2005 election A new Conservative peer has been quoted as saying changes to the welfare system will encourage “breeding” among people on benefits.
Downing Street swiftly distanced itself from the comments, in a newspaper interview, by former MP Howard Flight.
But Labour called on Prime Minister David Cameron to make Mr Flight apologise for the “shameful” remarks.
Mr Flight was named by Mr Cameron last week as one of more than 20 new Conservative peers.
The former MP for Arundel and South Downs, who is yet to take his seat in the House of Lords, was commenting on the government’s plans to axe child benefit for top-rate taxpayers.
He told the London Evening Standard: “We’re going to have a system where the middle classes are discouraged from breeding because it’s jolly expensive.
“But for those on benefits, there is every incentive. Well, that’s not very sensible.”
A spokeswoman for the prime minister said: “Clearly we do not agree with those remarks”. She stressed that Mr Flight was not a member of the government.
But Labour seized on the comments, which come a week after Tory peer Lord Young was sacked by Mr Cameron as an unpaid business adviser after saying most Britons “had never had it so good” during the “so-called recession”.
Shadow work and pensions secretary Douglas Alexander said: “These shameful but revealing comments cast serious doubt over David Cameron’s judgement in personally appointing Howard Flight to the House of Lords only a few days ago.
“Last week one of the prime minister’s senior advisers told us we’d never had it so good and now his latest hand-picked peer comes out with these comments.
“Instead of dithering for hours as he did with Lord Young, David Cameron should take swift action and make Howard Flight apologise.”
Mr Flight was removed as a Conservative candidate in the 2005 general election by then leader Michael Howard, after he was recorded saying the party would make cuts if it returned to power. He is a former deputy Conservative chairman.
He told the Evening Standard that Mr Cameron had privately hinted his nomination for a peerage was a tacit admission that Mr Howard was wrong to have axed him as a candidate.
Mr Flight also told the newspaper he suspected Chancellor George Osborne’s decision to remove child benefit from people earning more than £43,000 had been influenced by the Liberal Democrats.
And he attacked the coalition’s plans to increase university tuition fees, saying: “Two of my nieces and nephews, both of them very bright, gave up university half way through because they didn’t want the financial burden.”
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