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, Labor has calculated.
If Truss, as expected, is elected 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 by more than £4,000 over the winter, Truss will be insulated from price rises beyond a certain point in because of the way in which their energy costs are paid.
As set out in the Treasury’s annual accounts, the electricity and heating bills for floor number 11 and the smaller residence above number 10, which would be used by its chancellor, expected to be Kwasi Kwarteng, are paid by the state
They are then treated as a benefit in kind, meaning the costs are added to the person’s income and are taxable. The amount of tax can vary, but even if Truss paid the highest rate of income tax, that would be 45% of the total.
In another advantage, the rules of the Treasury state that this benefit in kind is limited to 10% of the prime minister’s or chancellor’s salary.
Truss’s salary as PM would be £75,440, meaning for the rest of this financial year, until the end of March, the total amount on which he could pay additional heating tax, the electricity or other expenses, it would be £4,000, or 10% of seven months’ salary. She also receives the salary of an MP, but the benefit in kind would only apply to her duties as Prime Minister.
In turn, Truss would not have to cover this entire cost, it would only have to pay the tax. With a tariff of 45p more, this would mean your energy costs would be capped at £1,980 this winter. However much the energy cap may rise in the 2023-24 tax year, Truss would pay no more than £3,400 in total on his full annual salary.
Abena Oppong-Asare, Labour’s shadow finance secretary, said: “While Truss can rest easy knowing his energy bills will not rise, the least he can do is provide reassurance and clarity to the millions of families about what their plans are.
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“Instead, it has left people deeply anxious, worried about making ends meet as the energy crisis deepens and offering only vague promises and lukewarm words.
“Families deserve a government ready to act and meet the scale of this national emergency. With Labour’s plan to freeze energy prices, households won’t pay a penny more this winter and we can get this crisis under control.” .
Downing Street and the Truss campaign were contacted for comment.