UK Government intend to set up ‘low-tax investment zone’ in Wales
The UK Government intend to set up at least one ‘low-tax investment zone’ in Wales as part of plans to create parts of the UK where individuals and businesses pay next to no taxes.
According to sources within the UK Government the first zones will be set up in England, but they then plan to roll them out in Wales, Scotland and Northern Ireland.
It comes after the UK Government – after extended negotiations – came to an agreement with the Welsh Government to create one lower-tax freeport in Wales, with the benefits of simplified customs procedures, relief on customs duties, tax benefits, and development flexibility.
The now proposed “investment zones”, dubbed “full fat freeports”, were a staple of Ms Truss’s campaign for the Tory leadership.
Under her plan, Ms Truss said these areas would benefit from a low-tax burden, reduced planning restrictions and regulations tailored on a case-by-case basis.
The Sun On Sunday reported that the new PM is now weighing up whether personal taxes could be cut for people working there.
Chancellor Kwasi Kwarteng could announce as many as 12 of these “investment zones” in his high-anticipated mini-budget on Friday, according to The Sunday Times, although it made no mention of tax cuts for individuals.
Ministers are also said to have discussed whether environmental protections could be watered down in these areas to clear the way for new developments.
The Government is reportedly looking at the West Midlands, Thames Estuary, Tees Valley, West Yorkshire and Norfolk as the first potential sites.
Politics is set to return in full force following the Queen’s funeral, with ministers outlining support for businesses and plans to see the NHS through the winter, before the Chancellor’s so-called “fiscal event” rounds off the week.
Normal activity in Westminster has been put on hold since the late monarch’s death, with business in both Houses halted for the official period of mourning.
It is expected that MPs will return to the Commons on Wednesday, following the state funeral on Monday, where those who wish to do so can take a new oath or affirmation to the King.
Mr Kwarteng’s mini-budget, focused on tackling the cost-of-living crisis and boosting growth, will then be delivered on Friday.
It is expected to confirm Ms Truss’s plans to reverse the national insurance hike and cancel the planned rise in corporation tax.
It has also been suggested the Chancellor will pursue a move to scrap the cap on bankers’ bonuses, although PA understands no final decisions have yet been taken.
Last week Ms Truss announced her proposals to combat sky-high energy bills, with a move to cap prices and boost domestic supplies.
That included lifting the ban on fracking and new licences for North Sea oil and gas.
Ms Truss said she would “end the UK’s short-termist approach to energy security and supply once and for all”.
But her plans have come under fire from a former chief scientific adviser to the Government, as he has warned the PM’s drive for more oil and gas production is “completely at odds” with country’s net zero objectives.
Sir David King, who held the post from 2000 to 2007, told The Independent: “We’re looking at a situation where the crisis is with us here today.
“But we don’t recognise that when we say ‘let’s go ahead and start new fracking operations in this country’.
“It beggars belief.
“What it seems to show is that the leadership in the Government does not understand the nature of the climate crisis.”
The window of opportunity for Mr Kwarteng’s “fiscal event” has been highly constrained, with politics paused following the Queen’s death and the PM expected to fly to New York for the United Nations General Assembly following the funeral on Monday.
MPs had been due to break for the conference season on Thursday, but will now be asked to sit a day longer to make time for the mini-budget on Friday.
A parliamentary business paper also suggests MPs will consider a motion on Thursday proposing that the Commons returns from the conference recess early, on October 11.
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