Lobby group backs government efficiencies drive

The Isle of Man Chamber of Commerce represents 500 organisations

A drive to make efficiencies and streamline services in a bid to reduce the Manx government's spending has been backed by the president of a business lobby group.

Treasury Minister Alex Allinson recently revealed his financial plan for 2025-26, which saw department's budgets rise, while drawing down £110m from reserves.

Claire Watterson from the Isle of Man Chamber of Commerce said businesses were "tightening their belts" and "we need to see government doing the same thing".

"Tough conversations" were also needed about which services were essential so key infrastructure, which attracts and keeps recruits on island, were protected, she said.

The chamber previously said some measures in Allinson's budget, such as a 1% decrease in the higher rate of personal income tax, were "steps in the right direction" but more could have been done for businesses.

Ms Watterson said firms were having to adapt due to rising costs such as utilities and the overall cost of living, which were "things the budget didn't directly address".

Urging government to continue to explore ways to reduce costs and improve efficiencies, she said it had been "wonderful" the government had provided all that it had in the past, but questioned if that approach was "right in this day and age".

But the chamber president said protecting funding for cornerstone services such as health and education would help to encourage future recruits to move to the Isle of Man and settle.

While most government departments have been given an uplift of 2% on pay costs and a further 1% on non-pay costs, the budget of the Department of Health and Social Care includes a 5.3% uplift for Manx Care.

Claire Watterson said the chamber would have like to have seen more to support firms

Chamber has also welcomed the government's plans to defer aligning the minimum wage with the living wage, which would have had a "serious impact" on Manx firms.

Original plans would have seen the hourly rate rise in two phases to £12.25 from 1 April, before rising to £13.05 in October.

However, the later increase has been put on hold for the time being.

Ms Watterson said while members were "fully in support" of being able to pay a living wage, the extra employment costs could lead to staff being laid off or some firms having to close, which could lead to a "greater reliance on benefits".

Calling for a transparent conversation with government on the issue, she said the government "should be looking at the economic circumstances now" following a "significant change" due to the pandemic and the war in Ukraine.

Employers want to provide "the best standard of living" but needed "to make sure we bring business along with us when finding that balance", she added.