The Local Economy Forum has discussed the potential job losses due to significant minimum wage increase as of April.
It believes this can be prevented by the implementation of a more realistic minimum wage increase combined with the introduction of tax credits for the lower paid.
Speaking to Manx.News, Forum Chair, Chris Robertshaw, emphasised the need for a tax system that protects low-paid workers as well as businesses.
The Local Economy Forum has proposed tax credits to help low-paid individuals without affecting higher earners.
Tax Credits
Forum Secretary Brett Martin explained how a “tax credit really is a focused way of helping low paid people”.
Speaking to Manx.News, Brett said: “If you change the tax allowances or the national insurance rates, then that change cascades all the way through the pay structures, from the lowest paid to the highest paid, and therefore the cost of doing that is very high.
“If you’re wanting to increase your personal allowances by 25% then that will have an impact, a positive impact, for the low paid, but also have a positive impact for the high paid.
“What tax credit allows you to do is just focus in on the low paid, because it’s effectively a below the line number. It’s a deduction from the tax bill, rather than deduction from the tax calculation. That’s what makes it very effective in this circumstance.”
Communication With Govt
Brett and Chris had hoped for a meeting with Treasury and the Department for Enterprise before Christmas, and were originally given a date before Christmas which has since been withdrawn.
They have now been told they will have to wait until the January 12 to meet the Treasury Minister Dr Alex Allison MHK.
Brett said this “seems like an awful long time. It’s on such a critical issue when jobs will actually be disappearing between now and that date”.
Chris explained that in this week’s Tynwald sitting the Treasury Minister “offered the excuse that he wasn’t speaking to us before Christmas because we’d specifically asked to speak to him”.
‘Unwillingness to Engage’
Although the LEF members did want to speak to the Treasury Minister, they also wanted to speak with the Enterprise Minister Tim Johnston MHK.
Following the agreement of the meeting between the Ministers and the LEF members, this was later cancelled as the Enterprise Minister became unavailable.
Chris responded swiftly to Treasury and explained the urgency of the meeting and how LEF were content with speaking to just the Treasury Minister.
However, Chris explained that this was not possible as the Treasury Minister had made other arrangements.
Chris said: “I’m using his words in Tynwald where he said the reason that he couldn’t meet us was because the Department for Enterprise Minister wasn’t available, so that, to me, indicated an unwillingness to engage. I hope he’ll think again seriously about this.”
Job Losses
When asked whether the LEF had been made aware of any job losses, Brett explained that it had.
Brett said: “The mood music from our forum is quite clear that people are already either incepting or planning job losses. I mean, obviously can’t go into the detail of the businesses concerned, but yeah. I mean, it’s clear the mood music is out there that job losses are going to follow.
“If I had to guess how things will go, there will be some immediate job losses. There will be service cuts on some job losses in the first quarter of 2026, some businesses will soldier on through the summer, and then there will be a sort of day of reckoning in late 26 early 2027, I think that’s when it really, really will impact people.”
Chris added: “There’s hidden losses as well, because as optimism disappears, with that goes future plans for investment, and so the damage sort of seeps in, almost like, rising damp, really. And it’s only until you’re freezing that you realise how awful the situation is.”
