Enterprise Minister Tim Johnston says allowing businesses time to adapt to the increase in the minimum wage was behind the two step proposal for this year.
The minimum wage is due to rise twice this year, with the total rise of £1.60 an hour seeing it reach £13.05 per hour from October 1, which would align it with the current living wage.
Under the proposal, it will first rise to £12.25 in April, up from £11.45, before that October rise.
It has been Tynwald policy going back to the previous administration to align the two, but the government’s own timeline had to be altered slightly due to rising inflation, the economic impacts of the war in Ukraine, and feedback from businesses.
Mr Johnston, before the Chamber of Commerce issued its own statement, told Manx.News: “We just wanted to try and do it in two steps to recognise the challenges at the moment.
“So having an increase in April to £12.25 and then giving business a chance, especially those sectors [retail and hospitality] a chance over the summer and over TT to, hopefully, do well and then look at that second part coming in in October,”
Balance
The Enterprise Minister said that the government has held discussions with businesses about the rise and acknowledges that there are some difficulties that remain, but there has to be progress to help the people who are the lowest paid in society.
He said: “We do talk to business through the business agencies and obviously, we also consult with the minimum wage committee on this as well.
“We recognise that this is a challenge for some sectors, as I say, but there’s always that balance between recognising the challenge of low skilled workers and their need then for a fair wage balanced against the needs of business.
“So I think it’s right that we make sure that safety net, as much what it is, is in place.”
Support
While some businesses have suggested tax changes would better suit low paid workers and raised concerns about the impact the rise could have, Mr Johnston said there will be guidance and advice on hand for businesses that need it.
Mr Johnston said: “It’s certainly something that’s in train and the Treasury are looking at going forward, because we do recognise that there is that argument around allowances, but ultimately these increases will put on more money in people’s pockets, and that’s important.”
He added: “I appreciate there is concern from business and it is a difficult balance.
“But as always, what we would say to business, or any individual businesses, that are concerned, is to come and speak to us the department, we do have some support mechanisms in place and business advice to help anyone who is concerned, and obviously will always do what we can to help in that situation.”
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If you’re a business owner or worker who is concerned/pleased with the proposed rise, contact us at newskdesk@manx.news.
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