Tynwald asked to back plan to raise Manx minimum wage to £10.75

The Manx government has plans to bring the minimum and living wages into line by 2025

The Isle of Man's minimum wage could rise to £10.75, if Tynwald backs the increase next month.

A bid to increase the current £9.50 hourly rate by £1.25 in April has been put forward by the Manx government.

Enterprise Minister Lawrie Hooper said whilst some firms would be impacted by the move, disposable income had been affected by the rising cost of living.

The 12% increase would also help bring the minimum wage into line with the Living Wage by 2025, he added.

Aligning the two rates in the next two years is one of the goals set out in the government's Island Plan strategy document, which commits to achieving the merger a year earlier than a previous Tynwald commitment to do so by 2026.

'Upward pressure'

The Minimum Wage Committee initially recommended a rise in the rate to £11 to cut the gap between it and the Living Wage by 30%, but that figure was revised to £10.45 following feedback.

The independent body said it had lowered its recommendation after it heard from businesses that the move could risk putting some firms out of business when coupled with inflation and other financial pressures.

But in a memo to Tynwald the Department for Enterprise and Treasury said the £10.45 suggestion "did not go far enough" given the Living Wage, which is currently £11.05, was also likely to rise.

Treasury Minister Alex Allinson said the increase to £10.75 was needed after continued "upward pressure" on wages on the island in 2022 due to "global economic turbulence".

This had been caused "by rising fuel and energy prices, together with an acute skills shortage", he added.

Other proposals also include raising minimum wages for 16 and 17 year-old from £6.80 to £8.05, and scrapping the Development Worker rate, which is payable to those aged 18 to 25 in their first six months of employment.