His "political crime" was stating the bleeding obvious. That was that despite the economic times "the vast majority are better off". That is true. Most are in employment. Most have very low mortgage rates. Most have more disposable income. However, lots of other people will bear the brunt of the cuts, will lose their jobs and will find it hard going.
The difficulty with modern politics is that political antennae have to pick up all kinds of signals. Unfortunately, Lord Young was not tuned into Ms Eagle's wavelength. Her AM band crackle was being heard loud and clear elsewhere. It got picked up by the media, never ones to enter the cerebral heights of political debate, and relayed ad nauseam.
David Cameron realised that Lord Young's remarks were politically unsustainable. However, the truth should find more favour with him. He should be pleased that so many have actually "never had it so good". If he would prefer to tell us that we have never had it so bad, let him say so.