Lobby group backs Isle of Man government's drive for efficiencies

The Isle of Man government's initiatives to enhance efficiency and streamline services in order to cut spending have garnered support from the chairman of a business lobbying group. Treasury Minister Alex Allinson recently unveiled his financial plan for 2025-26, which reveals increased budgets for various departments while utilizing £110 million from reserves.

Claire Watterson of the Isle of Man Chamber of Commerce stated that businesses are "tightening their belts," and therefore "we need to see the government doing the same." She also indicated that "difficult conversations" are necessary regarding which services are essential, in order to safeguard crucial infrastructure, thereby attracting and retaining employees on the island.

The Chamber had previously expressed that some measures in Allinson's budget, such as reducing the higher rate of personal income tax by 1%, were "a step in the right direction" but more could have been done for businesses. Ms. Watterson mentioned that businesses have had to adjust due to rising utilities and overall living costs, which are "issues that the budget doesn't directly address."

She urged the government to continue exploring ways to reduce costs and improve efficiency, stating that all the support the government has provided in the past was "fantastic," but questioned whether this approach is "still right in this day and age." However, the Chamber president stated that protecting funding for cornerstone services like healthcare and education will help encourage future employees to relocate to and settle on the Isle of Man.

While most government departments saw a 2% increase in salary costs and a 1% increase in non-salary costs, the Department of Health and Social Care's budget includes a 5.3% increase in funding for Isle of Man Healthcare. The Chamber also welcomed the government's postponement of the plan to align the minimum wage with the living wage, as this would have a "significant impact" on Isle of Man businesses.

The initial plan was to increase hourly wages to £12.25 in two stages starting April 1st, followed by an increase to £13.05 in October. However, the latter increase has been temporarily shelved. Ms. Watterson stated that while members are "fully supportive" of being able to pay a living wage, the additional employment costs could lead to employees being laid off or some companies being forced to close, potentially leading to "greater reliance on benefits."

She called for a transparent dialogue with the government on this issue, stating that the government "should be focused on the economic situation now" after the "significant changes" caused by the pandemic and the war in Ukraine. She added that employers want to provide "the best standard of living" but need to "make sure that as we're looking at that balance, we're bringing businesses along with us."