Plans to align minimum and living wages scrapped

Plans to align the minimum wage with the living wage have been scrapped following "industry feedback", the Isle of Man Government has said.

Original plans would have seen the hourly rate rise in two phases to £12.25 from 1 April, and, subsequently, to £13.05 in October.

However, the figure will now increase to £12.25 from 1 April but remain at that level - with no further increase planned in October.

Treasury Minister Alex Allinson said, while the government was "committed to delivering the Tynwald resolution" to align wages, they also had a "duty to listen" to the concerns of peers and "the wider business community".

Initial plans, outlined last month, had been questioned by the island's Chamber of Commerce, who had expressed concerns about the timing of such a move.

The increase to £12.25 in April represents an 80 pence uplift from the current hourly rate of £11.45.

The rate for those aged under18 will increase from £8.75 to £9.55 at the same time.

Government has said, instead of bringing in a further increase in October, it would "prioritise a review into the current methodology of agreeing proposals" - and would report on those findings to Tynwald in July.

Dr Allinson said Treasury would be "carrying out further work" to "meet our obligations to the lowest-paid workers in our community, while also recognising the challenge for businesses".

Enterprise Minister Tim Johnston said raising the minimum wage was "often a difficult topic", and the government was endeavouring to "strike the right balance of increasing the safety net for low-paid workers, whilst also considering the impact on the wider economy and local businesses".

"We still have the ambition of achieving parity with the living wage," he explained, while suggesting there were economic pressures that still needed to be considered.

Mr Johnston said there was a "need to strike the right balance", adding he hoped to continue working with businesses "to find a way forward".

Tynwald will be asked to approve the revised plans later this month.

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