Timing of minimum wage rises questioned by chamber

The Isle of Man Chamber of Commerce represents 500 organisations

A business lobby group has questioned the timing of moves to align the minimum and living wages and called for the government to consider deferring the first phase.

Last week the government announced plans to increase the minimum wage by £1.60 to £13.05 in a two stage approach by October, subject to Tynwald approval.

But the Isle of Man Chamber of Commerce has appealed to politicians to "give careful consideration" to whether it was the "right time" to make the change.

It said alternatives could include an increase in tax thresholds for lower paid workers to "put more money in people's pockets and reduce the burden on businesses".

The proposals being brought forward by the Department for Enterprise and the Treasury would see the current minimum wage of £11.45 rise to £12.25 on 1 April, with a further increase to £13.05 on 1 October.

But the chamber said it had been "raising concerns for some time" about "multiple rising costs" for the business community.

'Significant impact'

Last year, an independent report said aligning the two would mean increasing the mandatory hourly rate paid to £13.73 from April, however the minimum wage committee called for a review of that timeframe.

The proposed increase would also see the youth rate increase from £8.75 to £9.55 in April, with a further rise to £10.35 per hour from the later date.

The chamber said while it was "pleased" the government had proposed lower rates with a phased approach, which gave businesses more time to "adapt", any increase in the minimum wage would have a "significant impact".

The group said "a number of local firms" had closed over the past year, and there was a concern that the wage increases could mean "more businesses and jobs being lost".

If the proposals were approved, more government support for firms would be "essential", it added.