Lord Young has praised the contribution that immigrants make to British society.
The former Conservative cabinet minister, who is a small-business and enterprise adviser to David Cameron, was made a companion of honour in the Queen's New Year's Honours for his public service.
He is thought to be only the second Jew to receive the award, after former Tory leader Michael Howard.
He said: "It's an incredible compliment. I really didn't expect it". The 82-year-old peer, whose father was a Lithuanian immigrant, said the Jewish community had made an "immense" contribution to life in Britain.
"Across all sectors, from science to business to philanthropy, you name it, we punch well above our weight."
He added: "It shows that immigrants bring benefits and are not a burden to the state. I'm first-generation."
He said he had been inspired by the Jewish notion of tzedakah - charity.
"Tzedakah is not just about giving money, it's also about giving time and service," he said.
Much of his public service has been carried out in the Jewish community. He was the first president of Jewish Care and a former president of World Ort.
He is the current president of Chai Cancer Care and chairman of the Jewish Museum in London.
Lord Young served as Employment and then Trade and Industry Secretary in Margaret Thatcher's government during the 1980s.
He came to politics from a successful career in business, having set up his own property group in 1961.
He now is pushing forward his Enterprise Passport report, which focuses on entrepreneurship in education.
The passport will provide a digital record of all enterprise-related activities that students take part in throughout their education.
He said: "It's going to be something really big. It's going to come in for students aged 12, not in sixth-form as they do it now.
"One-third in the UK leave school barely literate - we will target that, too."
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