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Chancellor Philip Hammond rakes in £10k a month renting out luxury Belgravia townhouse

Chancellor Philip Hammond has reportedly described public sector workers as ‘overpaid’ (Dan Kitwood/Getty Images)

Philip Hammond is raking in £10,000 a month renting out his plush London townhouse – even as he is embroiled in a row over claims he said public sector workers are “overpaid”.

Hammond – who as Chancellor has the use of two rent-free properties – is reported to have begun letting the five bedroom property in exclusive Belgravia in February.

According to the Daily Record he bought the house in 2007 for £1.07 million. It is being let for £2,500 per week.

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The Chancellor lives rent-free at No.11 Downing Street – and also has use of Dorneywood, an 18th century country pile near Burnham, Buckinghamshire, which is handed over for use by chancellors or other cabinet ministers. Both come out of the public purse.

The grace and favour country pile of Dorneywood is used by the Chancellor (Scott Barbour/Getty Images)

Over the weekend, it emerged that Hammond apparently told Cabinet colleagues he thought many in the public sector – such as nurses, teachers and police officers – were overpaid compared with workers in the private sector.

When challenged on BBC’s Andrew Marr Show on Sunday, the Chancellor did not deny he had said it but sought to clarify the claims.

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“This is a relative question,” he said. “It is a simple fact that public sector workers on average are paid about 10% more than private sector workers.

“The only way we can create the high wage economy we want to have sustainably is to increase productivity, to get our public finances into good order. There isn’t a short cut. There isn’t a free lunch.”

He said that when “very generous” public sector pension contributions were includes, workers had a 10% “premium” over their private sector counterparts.

Prime Minister Theresa May and Hammond have come under severe pressure from within their own party to lift the 1% pay cap on the private sector imposed since 2013 as part of austerity measures.

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Many pundits say the success of Jeremy Corbyn at the general election was down to his pledge to use a tax increase to boost the pay of nurses and others. Hammond earns £67,505 as Chancellor on top of his MP salary of £74,000.

A report out on Monday from the TUC shows public sector pay has fallen by thousands in real terms since 2010.

As inflation has been running at over 2% for the majority of that time – and stands currently at 2.9% – the 1% rise is being swallowed up.

The TUC claims prison officers are £3,819 worse off, firefighters £2,888 and teachers £2,414.