Liz Truss will pay no more than £2,000 in total for all her energy bills in Downing Street this winter because of state subsidies, Labour has calculated.
If Truss, as widely expected, is elected as Conservative leader and prime minister on Monday, she is expected to move into the four-bedroom flat above 11 Downing Street, the larger of the two official residences.
While the energy price cap will mean the average annual bill is expected to rise well over £4,000 during the winter, Truss will be insulated from price rises beyond a certain point because of the way her energy costs are paid for.
As set out in the Treasury’s annual accounts, the electricity and heating bills for the No 11 flat, and the smaller residence above No 10, which would be used by her chancellor, expected to be Kwasi Kwarteng, are paid for by the state.
These are then treated as a benefit in kind, meaning the costs are added to the person’s income and subject to tax. The amount of tax can vary, but even if Truss paid the higher rate of income tax on it, this would be 45% of the total.
In another perk, the Treasury rules set out that this benefit in kind is capped at 10% of the prime minister or chancellor’s salary.
Truss’s salary as PM would be £75,440, meaning that for the rest of this financial year, taking her to the end of March, the total amount on which she could be liable for extra tax for heating, electricity or other expenses, would be £4,000, or 10% of the seven months of pay. She also receives an MP’s salary but the benefit in kind would only apply to her duties as PM.
In turn, Truss would not have to cover this entire cost, just pay the tax on it. At the 45p higher rate, this would mean her energy costs are capped at £1,980 this winter. However
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