Tynwald has voted to abandon plans to align the living and minimum wage in favour of a median earnings-based system, as one MHK accused the government of bottling it at the last minute.
The decision, debated on 14 July 2025, marks a significant shift from the 2021 commitment to transition to a living wage by 2026.
Enterprise Minister Tim Johnston moved the motion, arguing the current policy of aligning the minimum wage with the living wage had become “unattainable and out of sync with economic realities”.
He said: “The economic realities of the last few years have made the delivery of this policy increasingly difficult. We have had consistent feedback from businesses that this level of increase is unsustainable.”
The new approach will tie the minimum wage to 66% of median earnings.
Stagnant
Speaker Juan Watterson proposed amendments to retain the living wage link, calling the median earnings model “inappropriate.”
He argued: “Median wages can be stagnant. The cost of rent, food, transport, and energy are not. A median figure may be reasonably high now, but fluctuations in high earners will disproportionately impact it.”
His amendments were rejected, with only six MHKs supporting them.
Rob Callister opposed the change, citing a manifesto pledge to deliver a living wage by 2026.
He said: “Acknowledging, accepting, and ensuring a fair living wage is implemented by 2026 is one of the most powerful things this court can do to help people out of poverty.”
He also criticised the living wage calculation, stating it did not reflect Manx housing costs or working hours.
Joney Faragher also warned the median earnings model risked leaving workers behind.
“Tying the minimum wage to 66% of median earnings may appear tidy, but it isn’t the same promise. It’s about whether someone working full-time can afford to live independently or is forced to rely on food banks,” she said.
Huge U-Turn
Lawrie Hooper accused the government of a “huge U-turn” and criticised the evidence base for the change.
He said: “The government is fabricating an evidence base that doesn’t exist. Neighbouring jurisdictions do not base their living wage calculations solely on median earnings.”
He also dismissed a business survey cited in the report, noting it sampled just 31 firms.
Chris Thomas defended the median earnings approach, saying he wanted to correct misconceptions about its calculation.
“If you have three numbers one, two, and 33 the median is two. It isn’t biased by higher earners,” he said.
He argued the living wage was a “campaigning tool” and stressed the need for a “statistically calculated, academically based system”.
Kirstie Morphet MLC opposed lower wages for 16–17-year-olds, telling members: “There is no reason this threshold should be universally less for young people. Some are struggling to live independently, and £100 a week less makes this harder.”
Stability
Treasury Minister Dr Alex Allinson supported the median earnings model, citing stability.
He said: “This gives certainty to employers and employees. The living wage calculation we have now doesn’t reflect minimum income standards—it’s flawed.”
Stu Peters highlighted the burden on small businesses and said that “some owners earn less than the minimum wage because they’re the last to be paid”.
Paul Craine MLC emphasised the principle of a living wage.
“The living wage is about ensuring people can participate fully in society. If we abandon it, we’re saying workers don’t deserve even a basic standard of living,” he said.
Chief Minister Alf Cannan, who made the living wage increase part of his government’s “Island Plan” backed the change, calling median earnings a “more accepted methodology”.
Julie Edge criticised the lack of impact assessment. “We’re voting on a policy without knowing its effect. This is dangerous,” she said.
Tim Glover condemned the decision, urging members to “stand with lower-paid workers.”
He said: “Are you on the side of working people, or are you going to bottle it because of complaints from a small sample of businesses?”
The motion passed 16–8 in the Keys and 6–4 in the Legislative Council, with amendments setting fixed review dates.
The new minimum wage, which will be in the region, £13.46 per hour will take effect in April 2026.
6 Comments