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Nevertheless, protesting that it would be wrong to suggest that he needs the cash, Sir Richard is proceeding with the sale, although hanging on to rather more of the business than he had originally planned. His paramount aim, he maintains, is to give the people running the business the independence that flotation will bring. Had that not been the case, he could easily have raised cash through issuing a high-yield bond instead.

But it is not the greatest boost to managers’ morale to see the notional value of their stakes so cut back. The factors that have made investors cautious about Virgin Mobile might have encouraged the bankers to err on the side of the conservative in setting the price. The company operates in a highly competitive market and there remains a wariness in some quarters of the City about backing a Branson business.

A Branston business might have seemed more solidly appealing to investors but Hicks, Muse, Tate & Furst has also had to cut back its flotation expectations. Admittedly the cut is not quite as drastic as in Virgin’s case but then the original hopes had not been so overly optimistic. Set at the bottom of the new range, Premier should be selling on less than eight times its 2005 earnings, hardly a demanding rating. But investors have seen other food producers struggle as supermarkets relentlessly drive down prices and, despite the well-known names in Premier’s cupboard, do not have a huge appetite for the sector.

While the FTSE remains locked in the current narrow trading range, IPOs seem likely to remain a buyers’ market.

The high-in-fat Atkinson diet

GOVERNMENT accounts, like company accounts, can only measure what can be measured. Anything else is supposition and judgment. Accounts do not tell us if we are better off, let alone what “incremental benefit to individual or collective welfare” is provided by tanks exercising on Salisbury Plain. Sir Tony Atkinson tries vainly to avoid these simple truths in his report on measuring government output and productivity. He has to. Gordon Brown insists that official statistics should tell us what a great job he is doing improving the quality of hospital treatments and school education and cutting out the fat.

The Office for National Statistics has enough trouble trying to unpick transactions in the traded sector of the economy to see what are changes in output and quality or price. Quantifying the quality of, say, fire prevention advice, forces one to rely on the producer’s assessment.

The nearest Sir Tony can offer to a solution is the Atkinson diet: pile more fat into the ONS, so that it can make spurious guesstimates of how much wasteful fat has been shed by the public sector and how much slimmer it now looks.

As Oliver Letwin notes, the Atkinson diet may, apart from wasting money, have long-term side-effects. People may see the ONS as a branch of Downing Street’s propaganda machine. The untraded sector’s output is probably only a fraction of the money spent on running it but those inputs are the only figures the ONS can hope to measure accurately.

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