If Truss, as widely expected, is elected Conservative leader and prime minister on Monday, she is expected to move into the four-bedroom apartment above 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 over the winter, Truss will be insulated from price rises beyond a certain point because of the way which its energy costs are paid for. As set out in the Treasury’s annual accounts, the electricity and heating bills for flat No 11 and the smaller house above No 10, which would be used by its chancellor, expected to be Kwasi Kwarteng, are paid by the state. These are then treated as benefits in kind, meaning the expenditure is added to the individual’s income and subject to tax. The amount of tax can vary, but even if Truss paid the highest rate of income tax, it would be 45% of the total. In another perk, Treasury rules stipulate that this allowance in kind is limited to 10% of the prime minister’s or chancellor’s salary. Truss’ salary as PM would be £75,440, meaning that for the rest of this financial year, until the end of March, the total amount on which she could be subject to additional tax for heating, electricity or other costs would be £ 4,000, or 10% of seven months’ pay. She also receives an MP salary, but the allowance in kind will only apply to her duties as prime minister. In turn, Truss wouldn’t have to cover all that 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 much the energy cap rises in the 2023-24 tax year, Truss would then be missing out on a total of £3,400 of her full annual salary. Abena Oppong-Asare, Labour’s shadow finance minister, said: “While Truss can rest easy knowing energy bills won’t skyrocket, the least she could do is offer millions of families reassurance and clarity about her plans. . Archie Bland and Nimo Omer take you to the top stories and what they mean, free every weekday morning Privacy Notice: Newsletters may contain information about charities, online advertising and content sponsored by external parties. For more information, see our Privacy Policy. We use Google reCaptcha to protect our website and Google’s Privacy Policy and Terms of Service apply. “Instead, it has left people deeply uneasy, worried about getting by as the energy crisis escalates, and offering only vague promises and lukewarm words. “Families deserve a government ready to act and respond to the magnitude 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 have been contacted for comment.
