Iain Duncan Smith misled Parliament by passing off figures from a property comparison website owned by the Daily Mail as official government figures.
In a parliamentary debate, the Work and Pensions Secretary claimed that the Office for National Statistics (ONS) found that private sector rents had fallen by 5 per cent last year. At the same time he claimed the amount local authorities paid to private landlords had risen by 3 per cent.
But, in fact, the ONS does not collect such statistics and the figures he quoted came from the website findaproperty.com owned by Daily Mail publisher Associated Newspapers.
The claim was then repeated yesterday – although without attribution – by the Housing minister Grant Shapps on Radio 4's Today. After being contacted by The Independent yesterday the department contacted the parliamentary authorities to correct the record.
The revelation comes a day after the paper revealed that the Government had used a "statistical sleight of hand" to make thousands of the poorest graduates pay back university fees earlier than had been expected – bringing in millions of pounds in extra revenue to the Treasury.
The housing figures, first uncovered by Inside Housing, are central to the Government's claim that private landlords took advantage of the Labour government's local housing allowance, helping to push the annual housing benefit bill to £21bn. Private landlords claim the rising bill has been driven by increasing demand and that cutting payments will cause the most vulnerable in society to suffer.
Taking part in the debate on the Government's welfare reform plans, Mr Duncan Smith told the House of Commons: "We now know that, according to the Office for National Statistics, the private market place in housing fell by around 5 per cent last year. At the same time, local housing authority rates, which the previous government had set and left to us, had risen by 3 per cent. There is thus a 7 per cent gap with what is going on in the market place."
But when contacted, the ONS said it collected neither statistics: "We have nothing to do with that at all," said a spokeswoman.
But what is worse, the figures quoted by Mr Duncan Smith from findaproperty.com appear to be out of date. Between March and September 2010, findaproperty's index rose 3.8 per cent from £820 a month to £851.
Ian Fletcher, director of policy at the British Property Federation, said: "DWP press officers and Ministers should not cut fast and loose with dodgy stats." A DWP spokesman said: "This is a distraction from the important point the Secretary of State was making. We have not sought to hide the source of this data."