Fiddling Tories were caught picking and choosing official statistics yesterday in a bid to dupe the public into believing that pay is on the up.

Downing Street faced a torrent of criticism after trying to dispel Labour's cost-of-living-crisis claims with dodgy figures showing that all but the top 10 per cent of earners had seen a real-terms increase in 2012/13.

It claimed that working families' pay rose a third faster than inflation of 2.4 per cent in the year up to April 2014.

Conservative Party Business Minister Matt Hancock said it meant the government's economic strategy was starting to work and feeding through to people's personal finances.

But Labour pointed out that ministers had ignored the impact of its vicious cuts to benefits.

Shadow Treasury minister Cathy Jamieson said real wages had fallen by more than £1,600 a year under the coalition while families were on average £891 worse off as a result of the tax and benefit changes.

"These highly selective figures from the Tories do not even include the impact of things like cuts to tax credits and child benefit, which have hit working families hard," she said.

Public-sector union Unison accused the government of "massaging the figures."

General secretary Dave Prentis said: "Average weekly earnings before tax rose by a paltry £3 between 2012 and 2013, which is little consolation for workers who have suffered from inflation growing faster than pay for the past five years.

"We need a step change on pay, not spin and wishful thinking."

TUC leader Frances O'Grady was even more scathing.

She said: "Today's claims need taking with several tons of salt. Living standards will still be lower at the time of the next election than they were before the crash and at the last election.

"That is the inevitable result of austerity economics that has delayed the return of growth and produced an unbalanced recovery based on household borrowing and rising house prices."

Unite general secretary Len McCluskey said the analysis combined with City greed was an insult to ordinary people.

He said: "The cost of living pressure on people is immense, yet the City, whose recklessness caused the crash, sits atop a multibillion-pound cash pile and next week the banking elite will be feted with mega bonuses.

"Let's have some real action to help people, like a £1.50 an hour hike in the minimum wage now."

Even right-wing think tank the Institute for Fiscal Studies said ministers' claims were out of step with reality.

"First, we have other sets of data - the Office for National Statistics publishes an average weekly earnings index. That went up quite a lot less quickly than inflation in the most recent months," said IFS director Paul Johnson.

He said household incomes had fallen so sharply since the coalition came to power in 2010, there was "very little chance" they will have recovered by the time of the next general election in 2015.