David Cameron has appointed Sir George Young shadow leader of the Commons to replace Alan Duncan, the Conservative Party announced on Tuesday.

Sir George will have responsibility for the sensitive issue of reform of the parliamentary expenses system - the topic which led to Mr Duncan’s downfall.

Mr Cameron demoted Mr Duncan from the shadow cabinet late on Monday in retribution for the former shadow Commons leader’s gaffe on MPs’ expenses. The move by the Conservative leader reflected his determination to respond to voters’ concerns over MPs’ perceived greed and abuse of the expenses system.

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A secret film emerged last month of Mr Duncan complaining that MPs were being forced to live on “rations” and had been treated like “shit”. His private outburst contrasted with his public stance on the furore over expenses, where he insisted that he “understood” public anger.

Mr Duncan’s comments were particularly embarrassing to the Tory leadership because his erstwhile role as shadow Commons leader gave him responsibility for leading the opposition party’s work on reforming the parliamentary expenses system.

“This is a sensible decision,” Mr Duncan said, in a statement released late on Monday. “You have to be realistic about how difficult the expenses issue has been. What matters most is winning the election and David Cameron becoming the prime minister.

“I don’t want to be a brake on that by making a difficult issue more problematic. I am very happy to get stuck into another job.”

Mr Duncan has been moved to a junior role on the Tory front bench, taking responsibility for prisons as a shadow justice minister. He replaces Edward Garnier, who has been moved to shadow attorney-general, freeing Dominic Grieve to focus full time on being shadow justice secretary, rather than trying to cover both briefs. Mr Duncan’s successor will be announced on Tuesday.

Mr Duncan’s demotion will not surprise Westminster. The multi-millionaire had been perceived as living on borrowed time since the gaffe surfaced.

But questions may be raised on the length of time it took Mr Cameron to act. An aide said late on Monday the Tory leader wanted time to consider the situation when he returned from holiday last week before deciding on the best course of action.

Sir George, one of the longest-serving Tory MPs, entered parliament in 1974 and served as a minister under Margaret Thatcher and John Major, rising to Transport Secretary. He was previously shadow Commons leader under William Hague, but left the front benches in 2000 to mount the first of two unsuccessful campaigns to become Speaker.

The North West Hampshire MP has most recently been chairman of the Commons Standards and Privileges Committee, which acts as an internal watchdog overseeing MPs’ behaviour, but he has not been at the forefront of demands for reform of expenses.