Several Tynwald members objected to the idea that the public sector should not grow in ways that threaten or compete with the private sector.
Recommendation One of the Economic Policy Review Committee, despite decades of government policy built on precisely that principle, saw several members dismiss.
The Economic Policy Review Committee report was put together by Arbory, Castletown and Malew MHK Jason Moorhouse, Glenfaba and Peel MHK Kate Lord Brennan and Douglas North MHK John Wannenburgh.
Recommendation 1, which called for reinstating benchmarks linking public‑sector growth to private‑sector performance, was the only recommendation to face open resistance.
Yet the committee’s report makes clear that the Isle of Man operated under such controls for 24 years, through the Personnel Control Mechanism (PCM), which explicitly prevented the public sector from outgrowing the private sector or government income.
The contradiction between that long‑standing policy and members’ objections shaped the entire debate.
‘No evidence’
Leader of the Manx Labour Party and Douglas East MHK Joney Faragher led the challenge, arguing that the report “provides no causational evidence” that the public sector threatens the private sector.
She noted that even the Council of Ministers acknowledged the lack of direct proof.
But the committee’s report states plainly that previous governments believed the risk was real enough to regulate for more than two decades. The PCM required that:
- “the rate of growth of the Government’s workforce should not be allowed to exceed the rate of growth of employment in the private sector,” and
- staffing increases must not surpass “the rate of increase in real terms in Government income.”
Ms Faragher’s insistence that no evidence exists sat uneasily alongside the historical record, and the fact that the island only abandoned these controls in 2015.
She also warned that adopting the recommendation could lead to “large‑scale public service reduction,” despite the recommendation simply proposing a return to the same safeguards that existed for nearly a quarter‑century.
Questioning the Premise
Rushen MHK Michelle Haywood and Gary Clueit MLC also pushed back, each asking for clarity on how the public sector could be considered a threat to private enterprise.
Yet both repeated the very issues the committee highlighted: Labour shortages, wage distortion and the public sector drawing workers away from private employers.
The committee’s report cites that “public sector median earnings exceed private sector earnings by almost £200 a week” and that “every additional government job is one fewer work available to the private sector.”
Mrs Haywood and Mr Clueit questioned the conclusion while reinforcing the underlying evidence.
Allinson Warns About Reserve Use
Ramsey MHK and former Treasury Minister Dr Alex Allinson also challenged the committee’s framing, particularly around the use of reserves.
But the report notes that “three Treasury ministers have taken over £500 million from our reserves” in recent years, a period that includes Allinson’s own time as Treasury Minister.
During Dr Allinson’s time as Treasury Minister, he took over £360million from reserves.
Ms Faragher underscored the inconsistency, reminding the court that “if it was as easy as simply dramatically reducing the use of reserves, it would have been done already.”
Dr Allinson’s critique of reserve dependency landed awkwardly against the backdrop of decisions he personally signed off on.
Raises More Questions
With a structural deficit approaching £100 million and public‑sector headcount at 7,837 FTEs, the question of whether the public sector is crowding out private enterprise is not going away.
But the debate showed that some members are now distancing themselves from principles that were once uncontroversial, even when those principles were government policy for nearly a generation.
The motion is now due to come back for a combined vote on Recommendation 1 and a delayed vote on the entire motion in April for it to form a resolution of Tynwald.
