A letter on behalf of over 300 businesses has been sent to Members of Tynwald strongly opposing the implementation of a minimum wage increase.
In the letter, which was shared to Manx.News, highlights the Chamber of Commerce’s and its members “grave concerns” about the proposed wage increase.
The signatures for the 340 businesses, who employ over 8,000 staff, were collated in three days.
It includes businesses in engineering, construction, care, hospitality, automotive, corporate service, wholesale and retail distribution, tourism, event organisation, facilities management, and professional services.
Grave Concerns
All the businesses “agree that improving living standards is a laudable social policy, but social policies are for government to fund, and government can easily do so by increasing national insurance thresholds or tax allowances for those on lower incomes”.
The businesses believe that “the only guaranteed beneficiary of hiking headline wage rates is the government itself through higher national insurance and tax receipts”.
Hurting Business, Hurts Employees
The letter reads that “businesses will be heavily impacted, with the inevitable cascade effect of corporate failures, job losses, service reductions, and curtailment of investment.
“In turn this ultimately hurts our employees, the very people that the minimum wage policy is meant to help!”
It adds: “Many local businesses are buckling under the pressure of the existing minimum wage, which is already one of the highest in the world, and the generally high costs of operating on the Island. A further 10% hike to add to the double-inflation increases that have been applied since the pandemic will push many over the edge and make the concerns highlighted above a harsh reality.
“Conversely, combining affordable statutory wage rates with higher national insurance or income tax thresholds is guaranteed to put more money into pay packets without the downside of damage to the local economy. It will also lead to compensatory upside for government via more local spending and higher VAT receipts.”
Government’s Payroll Bill
The letter also highlighted tax breaks and how excessive governments own wage bill is, saying:
“To put the cost of providing tax breaks into context, government’s payroll bill for the current fiscal year will exceed £700m and its combined tax revenues are budgeted at nearly £1.4 billion.
“A fraction of one percent of these amounts could fund the changes required and avoid the inevitable economic damage that will ensue under the current proposals.”
The letter urges Tynwald members to “vote down the proposal as drafted and focus instead on a net pay approach that is better suited to providing increased take home pay whilst protecting local jobs and business investment.
The minimum wage increase will be brought to Tynwald next week for debate.
The full letter to Tynwald Members is below:
