Welsh Government 'holding back' Enterprise Zone tax break bids over concerns about aid restrictions

The Business Minister has told AMs that she won't ask the UK Treasury for further tax breaks (known as Enhanced Capital Allowances) for enterprise zones until she gets clarity on restrictions being imposed on assistance the Welsh Government can offer businesses in the zones. Edwina Hart said:

These restrictions - which are contained in the Finance Bill currently before Parliament – seem to go far beyond the EU state aid rules.

The First Minister and I have taken this matter up with UK Ministers...

We need to provide certainty to potential investors about the offer to them. I am therefore holding back any further bids to HM Treasury for Enhanced Capital Allowances in Wales until their position is clear. I do not want to create false expectations in the business community.

But she added that won't mean work on the Enterprise Zones will grind to a halt:

I am not letting this stall our implementation. The interim Chairs of the Enterprise Zone Boards, with whom I meet regularly, are driving forward progress in each area. They will soon be providing me with advice on the permanent governance arrangements most suitable for their zones.

A Whitehall source said the UK Government would be 'keen to help resolve any outstanding issues' but called for an 'injection of realism' about what can be achieved, adding that 'the longer this drags on, the longer there is a lack of clarity for the businesses which would benefit.'