55. Mr. Scott-Elliot
asked the Chancellor of the Exchequer if he will make a statement with regard to the treatment for taxation purposes of the expenses which have to be met by the occupant of the post of Prime Minister, having regard to the changed conditions since the salary of the post was fixed by Statute in 1937.
§ The Chancellor of the Exchequer (Mr. Dalton)
Yes, Sir. An additional £5,000 a year was added to the salary of the Prime Minister in 1937 in order to enable him to discharge the public duties indispensable to his office and to his residence at No. 10, Downing Street. While there has been no reduction in these duties, the effect of taxation has been to reduce the net salary to about the same sum as before the increase. It has, therefore, been decided that £4,000 of the salary of the office should be treated as an expenses allowance which will be deducted for Income Tax. I am sure that the House will agree that the arrangement is a fair and reasonable means of ensuring that the Prime Minister may be able to fulfil his duties with dignity and efficiency.