Liz Truss is considering plans to slash personal taxes in addition to business levies in new “investment zones”, as she seeks to set the wheels of her economic strategy in motion.
Those who live and work in the low-tax areas envisaged by the Prime Minister could see their own contributions cut, with the burden also lightened for firms – although no decisions have yet been made.
The proposed “full fat freeports” were a staple of Truss’ campaign for the Tory leadership, with the planned areas having low-tax burden, reduced planning restrictions and regulations tailored on a case-by-case basis.
The Sun On Sunday reported that she is now weighing up whether personal taxes could be cut for people working there.
Chancellor Kwasi Kwarteng could announce as many as 12 of the investment zones in his 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 UK Government is reportedly looking at the West Midlands, Thames Estuary, Tees Valley, West Yorkshire and Norfolk as potential sites.
With speculation building over the direction policy will take as Truss seeks to put her stamp on No 10, it has also been suggested she could lift the ban on new grammar schools within months.
Senior Tory MP Sir Graham Brady is planning to table an amendment to the Schools Bill in a move to bring about the change, and believes political conditions are promising, according to The Sunday Telegraph.
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 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, where those who wish to do so can take a new oath or affirmation to the King.
The PA news agency understands that Business Secretary Jacob Rees-Mogg will also set out further details of the government’s plans to help firms through the energy crisis.
Heath Secretary and Deputy Prime Minister Therese Coffey is expected to outline her vision to see the NHS through the winter months on Thursday.
Kwarteng’s mini-budget, focused on tackling the cost-of-living crisis and boosting growth, will then be delivered on Friday, confirming 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, Truss announced her proposals to combat rising energy bills, with a move to cap prices and boost domestic supplies, including lifting the ban on fracking and new licences for North Sea oil and gas.
But her plans have come under fire from a former chief scientific adviser to the government, as he has warned this 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.”
Separately, Truss has conceded that negotiations for a post-Brexit free trade deal with the US will not restart for years, as she flew to New York ahead of a meeting with Joe Biden.
The Prime Minister stressed her trade priority is striking agreements with India and the Gulf states, and joining a trade pact with nations including Australia and Japan.
But she heavily downplayed the chances of talks even resuming to get the comprehensive deal with the US that was billed by Brexit backers as a major benefit of leaving the EU during the referendum.
Truss, a former Brexit opponent who has switched to becoming a supporter, said the deals with Delhi and other allies are “our trade priorities” ahead of talks with the US president at a United Nations summit on Wednesday.
“There aren’t currently any negotiations taking place with the US and I don’t have an expectation that those are going to start in the short to medium term,” she told reporters flying with her to New York.
Officials did not deny that Truss was effectively conceding it will be years before talks with the White House resume.
Biden has stalled on trade negotiations and, vocally proud of his Irish heritage, has raised concerns about the impact of Brexit and the Northern Ireland Protocol on the peace process.
The next presidential election is in 2024 and the more trade-focused Donald Trump may run again for the Republicans.
When Boris Johnson last visited the US as prime minister, Biden downplayed the chances of a deal with the UK as he warned against tampering with the “Irish accords” amid a row over the post-Brexit protocol.
Truss named among her priorities the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), one of the world’s largest trading blocs which includes Australia, Canada and Japan.
The other she cited is the Gulf Co-operation Council, which includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, and is the EU’s sixth largest export market.
Johnson and Indian Prime Minister Narendra Modi set deadline for striking a deal by Diwali, the Hindu celebration being held on 23 October.
So far the UK and the US have been striking smaller state-by-state agreements, with Britain signing deals with Indiana and North Carolina.
But these are far less ambitious than the comprehensive free trade deal touted by Brexit supporters during the 2016 referendum.
One of the issues facing future talks is Truss’ threat to override parts of the Northern Ireland Protocol, which the EU says would break international law.
Senior figures in Biden’s Democratic party have warned a trade deal could be jeopardised by the UK single-handedly tearing up the agreement, which was part of the Brexit divorce deal.
While in New York, Truss is also set to have talks with French President Emmanuel Macron and the EU’s Ursula von der Leyen, which are bound to prominently feature Brexit.
Truss will meet Macron on Tuesday, before seeing Biden and von der Leyen on Wednesday. She had been set to talk to the US President in Britain over the weekend as he visited for the Queen’s funeral, but the meeting was postponed.
Labour’s Shadow foreign secretary David Lammy, who was also attending Unga, said: “After being snubbed by the Biden administration within her first weeks in office, Liz Truss urgently needs to wake up to the damage her reckless approach to foreign policy is doing to the UK’s national interest.
“The Prime Minister must use the UN General Assembly to bring the UK back in from the cold and begin rebuilding our country’s diplomatic influence.”
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