Manx government reserves raid threatens future pensions, MHK warns

Tynwald voted through Alex Allinson's first budget as treasury minister

Repeated raids on the Isle of Man's National Insurance (NI) Fund could threaten the future affordability of Manx pensions, an MHK has warned.

Tynwald backed a bid to use £8.5m from the fund to help plug a health care spending gap as part of the 2023-24 Manx budget.

Juan Watterson SHK said he was "extremely concerned" the move was unsustainable.

Treasury Minister Alex Allinson said it was "imperative" to fund health care.

It comes despite former treasury minister David Ashford's vow last year that withdrawals from the fund for this purpose would not be repeated following an £8m drawdown in 2022.

'Calculated risks'

Unveiling his financial plan to Tynwald, Dr Allinson acknowledged the second withdrawal would break that promise, but said it was necessary to give additional funds to the Department of Health and Social Care.

The £958m reserve fund, used to pay for state pensions and some benefits, has been forecast to run out by 2048 by a UK government actuary without extra financing.

Dr Allinson said it highlighted future pressures on the scheme, but added the £8.5m drawdown was needed to address a "significant" health funding gap.

Efforts were underway to find a long-term solution, he added.

David Ashford told Tynwald he was worried it would become the "go to fund" to cover extra health spending and "temporarily paper over the cracks".

He was one of six MHKs to vote against the proposal.

The government is set to use about £152m in total from its £1.7bn of reserves to pay for extra funding for government departments as well as increases in raft of benefits.

Daphne Caine MHK said questioned whether the investment outlined was a "big gamble" for public finances.

And John Wannenburgh MHK said using reserves to pay for day-to-day expenses was "deeply troubling" and ,could "inflict an unjust intergenerational debt" on future generations.

Dr Allinson said government's plans to boost jobs and raise revenue were aimed at correcting this structural deficient.

"We are taking some risks but they are very finely calculated risks," he said.

"By investing in our people we can and will succeed."