Minimum wage rise will hit care industry - charity

Crossroads has more than 500 people under its care

A 9.9% rise in the Isle of Man's minimum wage will drive up the cost of care and will cause a reduction in services, a charity has warned.

Politicians approved the new rate for the island in this week's Tynwald sitting.

It means from April 2026, the base wage for any Manx worker will go from £12.25 to £13.46 per hour.

The chief executive of Crossroads Care, Jackie Betteridge, said the increase in costs meant the organisation would not be able to afford the same level of care it currently provided.

Despite the increase being welcomed by some Manx workers, the Chamber of Commerce has raised concerns about the impact it could have on businesses.

Echoing these fears, Ms Betteridge said: "In principle the minimum wage is a fantastic idea - do I think we can afford it as an island? Absolutely not."

She said the move "will undoubtedly push up the price of care" making it "even more expensive".

'Absolutely awful'

Crossroads employs 120 staff and cares for more than 500 people, who are all living in the community and range from children to senior citizens, with a further 200 people on its waiting list.

While Ms Betteridge said she was not against an increase to the minimum wage, 9.9% was "just too much of a hike".

She said: "Our business prices will have to go up to meet the income that needs to come in to pay the wages."

Looking ahead to April, she said "the only thing we could do is to reduce our output, to reduce care".

That felt "absolutely awful", she said, asking: "Who's going to pick up that care?"

A care charity has raised big concerns about the impact on services

The Chamber of Commerce, representing more than 450 local businesses, released a statement following the decision in Tynwald.

A spokesman said it was "deeply disappointed" about the increase "despite repeated warnings from employers across the island".

He said instead of raising the minimum wage, government could have increased tax allowances or reduced national insurance to support low-paid workers.

"In recent months, more small independent businesses have shut their doors, and job cuts have been announced," he said.

"The approval of the minimum wage increase risks accelerating that trend leading to further closures, job losses, and automation, with younger and less-experienced workers likely to be hardest hit."

'Manageable'

Enterprise Minister Tim Johnston said: "We do recognise that increases in minimum wage rates will create challenges for businesses, particularly small employers."

The department offered a "range of support" and was also "building on wider concerted efforts to increase footfall and demand" in the local economy.

Treasury Minister Alex Allinson also acknowledged concerns.

He said: "While we are mindful that any increase must be manageable for businesses, fair pay is fundamental to a strong and inclusive economy.

"By linking the minimum wage to median earnings, we are ensuring that wage growth remains connected to the island's wider economic performance".

The increase was voted through in Tynwald on Thursday, with seven MHKs voting against it.