The Chamber of Commerce has expressed its disappointment at Tynwald’s decision to proceed with a 9.9% minimum wage increase, despite repeated warnings from employers across the island.
The Chamber, which actively pushed for the methodology that was created to determine the minimum wage in the summer, says that since Covid, the minimum wage has risen by 48%, while inflation has increased by 24%.
It highlights that personal allowances have risen just 3.5% in the same period, and the 10% tax band has remained unchanged.
Leveraged
A Chamber spokesperson said: “This means the tax system is being leveraged to increase the effective rate of tax paid by employed persons at the expense of both businesses and individuals.
“If government truly wanted to support low-paid employees, it could have done so by increasing tax allowances or reducing National Insurance. Instead, it has chosen a policy that risks jobs, investment, and training.”
The wider response is reported as equally critical, with many seeing the policy as poorly planned and economically damaging. The Chamber states that the only real winner is government, through higher Treasury revenues.
Frustrated
“Our members are already expressing frustration that their concerns were ignored,” the spokesperson added.
“Chamber is deeply concerned that the true fallout will be felt next winter, when rising costs and depleted reserves may make survival impossible for many.”
The Chamber also noted its disappointment at being criticised in Tynwald. It said it will continue to stand up for the private sector employers and employees vital to the island’s economy.