Luckily David “two brains’’ Willetts has been on the case. Terrier-like, Willetts has been niggling at his opponents in the Department of Work & Pensions about these crucial figures. He was otherwise engaged when the ultimate answer to his queries was slipped out onto the internet. Jo Moore would probably have advised that the day that Ian Duncan Smith was delivering his leader’s address at the Bournemouth party conference was not a bad day for trying to sneak something past the opposition, and, for a while, that must have appeared to have been a successful strategy.

But Willetts caught up with the report and deciphered it. It shows that for years, the Office for National Statistics has been producing desperately misleading figures. This is important because, on the basis of duff information, the Government has been dangerously complacent about pensions.

In May, Ian McCartney, the Minister of State for Pensions, boasted that: “The figures suggest that the stable economy has created the right conditions to save and that our policies to encourage higher levels of private saving are having a positive effect.’’ Yet Willetts had pointed out as early as February that the figures simply did not add up.

The fact is that in 2001, the amount contributed to non-state pensions actually fell. The Government was looking at figures which told it that pension savings had risen from £74 billion the previous year to £86 billion in 2001. According to the Office for National Statistics, Britons, undeterred by Gordon Brown’s £5 billion a year raid on pension funds, the gloomy state of the economy and tumbling share prices, were shovelling more of their cash into pension funds.

The truth was altogether different: the ONS figures over-estimated the amount being saved by 43.5 per cent. As Willetts had discovered months earlier, ONS was effectively double counting, boosting the total by including transfers of funds as well as new money.

That any error was involved is not immediately apparent from the opaque prose of the review which was eventually commissioned by the National Statistician, Len Cook. The Working Group which was established to examine the numbers, and which had representatives of the Department of Work and Pensions and the Inland Revenue as well as the hapless statisticians, has produced prose worthy of Alice in Wonderland.

Its gems include this. “The Working Group concluded that a) the IR and National Accounts data differ because the concepts required by each party are different; after allowing for that, they are consistent.’’

Is that clear? Perhaps no clearer than much of what the Government has to say on pensions at the moment. At the weekend, it seemed that higher-rate taxpayers were to be deprived of relief on pension fund contributions. Not so, declares the Government on Monday morning. Yet the source of the rumours appears to have been close to those currently working on the pensions white paper. Similarly, the proposal that the Government was contemplating doing away with the right for pensioners to take part of their cash in a lump sum was known to be an option that the Government was considering. Once the news had leaked, the plan was forcibly denied.

Such stories may be the Government testing the water on particular proposals. But are the denials any more reliable than the ONS figures? Business Editor’s Commentary

Shareholders serve notice on business

THE owners of British business indulged in an overdose of worthy intentions yesterday. It is doubtful whether those who run British businesses were left nervously rethinking their standards of corporate governance as a result.

The Institutional Shareholders’ Committee was lauding itself on having produced its first code of practice for those who invest savers’ money. Those same savers might feel perturbed that the ISC judged it necessary to devise a code which basically says that institutional investors should take a bit of an interest in those companies where they put the cash.

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