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UK Government intend to set up ‘low-tax investment zone’ in Wales

19 Sep 2022 4 minute read
Liz Truss. Photo Rob Pinney PA Images

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.

‘At odds’

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.”

Motion

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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Ann
Ann
7 days ago

We need our own taxation system!

Y Cymro
Y Cymro
7 days ago
Reply to  Ann

We also need a Nationalist Welsh government. 🏴󠁧󠁢󠁷󠁬󠁳󠁿✊

Arwyn
7 days ago

With zero electoral mandate to do so here in Wales. And I bet that they would pursue this ideological neoliberal policy regardless of the wishes of the democratically elected Welsh Government.

The UK is truly broken. This cannot be allowed to continue. I won’t hold my breath for Gordon Brown’s constitutional review though.

Cwm Rhondda
Cwm Rhondda
7 days ago
Reply to  Arwyn

Gordon Brown? Constitutional Review? all Gordon Brown is, ever has been, and ever will be interested in is the British Labour party. He will do anything to ensure the survival of the British Labour party. He knows that if Scotland and Wales leave the union the Labour party would struggle to win a general election in England. I guarantee at the heart of his constitutional review will be recommendations which will implicitly support the future well-being of the British Labour party. The people of Wales and Scotland should come first not the British Labour party!

Last edited 7 days ago by Cwm Rhondda
George Thomas
George Thomas
7 days ago
Reply to  Cwm Rhondda

Labour might be more ready to win in England if Telegraph couldn’t use Scotland and Wales as scare stories with their dodgy and inaccurate reporting.

Ernie The Smallholder
Ernie The Smallholder
6 days ago
Reply to  Cwm Rhondda

This is why the social democratic (Labour party) should have separate parties in Wales, Scotland and England and each decide their own policies according to their respected memberships.
An independent Labour party in England would be more relevant to England if it was able attend to English only issues and therefore electable in England.

It would enable Wales and Scotland to address our own issues.

Cathy Jones
Cathy Jones
7 days ago

What a truly revolting idea… ENOUGH IS ENOUGH.
Will these freeports have the same lax Health and Safety standards and workers rights that they do in other places too?

We are being overrun, Cymru is being overrun and smothered by Liz Truss and the Tories…. WE ARE IN VERY SERIOUS TIMES.
Cymru faces destruction. Lord Frost told the truth! They are destroying our democracy bit by bit and we aren’t doing enough to stop them. The Senedd isn’t doing enough to stop them either. Drakeford appears to have fallen asleep at the wheel.THE TORIES ARE WINNING!

Kenneth Vivian
Kenneth Vivian
7 days ago
Reply to  Cathy Jones

Impostation of cheap about will unify the U K by increasing further the invisibility of the Welsh residents of Britain.

Kenneth Vivian
Kenneth Vivian
7 days ago
Reply to  Kenneth Vivian

Importation of cheap labour!

Gareth
Gareth
7 days ago

Continuing the Tory agenda of low taxes for business, whilst creating what are essentially wharehouse jobs, with low pay and even lower rights for its workers. They are trying to turn Cymru into some sort of equivalent to cheap Chinese labour, via the backdoor. Local authorities will gain nothing from this, as opposed to what the take now in business rates etc. I am not surprised by this move.

George Thomas
George Thomas
7 days ago

While there are regulations that can be streamlined, the obsession with stripping back all government involvement will create as many problems and potentially more than it will solve.

At the very least there needs to be strict regulations about which private companies get the chance to play without regulations and tax. If this is about who is best mates with a Tory, then bad businesses will run amok and no one will be able to challenge them.

Gareth
Gareth
7 days ago
Reply to  George Thomas

The deregulation of almost everything is what this neoliberal lot want. They want a society where the gov only has control of the legal system,the police, armed forces, taxation,and foreign policy. Every other aspect eg health, welfare, education, prisons, they want under private ownership, because they have the money to operate these things as private citizens. They want to be as close as they can to the American system, and emulate it here.

Dai Rob
Dai Rob
7 days ago

Low tax, low investment, low skill economy.
Bargain!

Y Cymro
Y Cymro
7 days ago
Reply to  Dai Rob

That’s the Tory mantra for Wales. Low aspiration. Low growth. Low levels of investment etc……….

Last edited 7 days ago by Y Cymro
hdavies15
hdavies15
6 days ago
Reply to  Y Cymro

Ably delivered by their little helpers in the Bay bubble !

Y Cymro
Y Cymro
7 days ago

The Tories only know opposition in Wales , so rule from a far with impunity whilst ignoring the democratic will if the Welsh people who consistently reject Conservatism in favour of Socialist Pro-Devolution parties.

And even though the Conservatives have caused so much pain & anguish during their 12 years of chaotic corrupt misrule at Westminster, are unashamedly proud of what they’ve done in office. We in Wales don’t need more devolution. We need full independence to realise our true potential as a country.

#YesCymru 🏴󠁧󠁢󠁷󠁬󠁳󠁿✊. #Ymlaen 🏴󠁧󠁢󠁷󠁬󠁳󠁿✊ #Westminster 🇬🇧👎 #Unionism 🇬🇧👎

Kerry Davies
Kerry Davies
7 days ago

Seems the IFS reckons that I will be 63 pence a month better off with the forthcoming tax cuts Be able to buy a cappuccino in about 5 months, innit?

Gareth Wyn Jones
Gareth Wyn Jones
6 days ago

Freeports are conduits of corruption, how apt

Ernie The Smallholder
Ernie The Smallholder
6 days ago

It is NOT their decision to force on us as the Welsh nation.

It must be the whole decision of the Welsh parliament and government who we elect.

Finish this occupation of our country. INDEPENDENCE NOW !

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