Energy crisis: PM and Sunak won’t feel heat of rising bills

Boris Johnson and Rishi Sunak will not be hit by the expected sharp rise in energy bills in April because of a cap on the contributions they have to make towards their Downing Street flats.

Oliver Wright

Under the rules, the prime minister and chancellor are allowed their “grace and favour” accommodation rent-free, with utility bills and council tax also covered by the government.

As part of an agreement with HM Revenue & Customs, unlike other “benefits in kind” paid to employees, their total taxable liability is limited to 10 per cent of their ministerial salary. This means they will not be expected to pay more when energy bills rise.

Ofgem, the energy regulator, is due next month to announce a rise in the maximum amount that energy companies can charge customers.

Analysts believe that, unless the government steps in to reduce taxes on bills, the cap could increase by about 50 per cent, pushing up the average cost of bills to almost £2,000 a year.

Johnson and Sunak will not have to pay the bill because of a longstanding agreement with the tax authorities that because they are expected to live in Downing Street for security reasons, it would not be fair to charge them the full cost of the benefit. The story, first reported by MailOnline, is likely to increase pressure on the government to take action to limit the effect on bills before Ofgem’s announcement.

A government spokeswoman said: “As has always been the case, the prime minister and chancellor are provided with residential accommodation in Downing Street.

“It is not possible to disaggregate the energy costs of 10-12 Downing Street, as it is one combined building.”

Asked what action was being taken on bills, the prime minister’s official spokesman said: “Discussions are still ongoing.”