New economic approach to 'put money in pockets'

A proposal to roll back on a 9.9% minimum wage rise pledge but "significantly increase" personal allowances on the Isle of Man would "put more money in people's pockets," the chief minister has said.

On Monday, Alfred Cannan removed Alex Allinson as treasury minister to "reset the economy".

Defending his reshuffle in Tynwald, Cannan said "tensions had grown" in the community over issues - including the planned minimum wage rise in April - leading to the need for a new approach.

He said: "Public confidence has been drifting, sentiment among businesses has hardened, and, frankly, continuing without adjustment would be the wrong course."

Cannan also removed Michelle Haywood as minister for the infrastructure department as part of the reshuffle, citing push back over the roll out of 20 mph (32km/h) speed limits as one of the reasons.

Douglas Central MHK Chris Thomas has taken over as treasury minister, while Glenfaba and Peel MHK Tim Crookall has been re-appointed as infrastructure minister.

• Minister removed to allow economic 'reset'
• Firms welcome pledge to change economic approach
• The reshuffle was unexpected - what does it mean for the general election?

On Tuesday, Cannan announced that, subject to Tynwald approval, the government now planned to uplift the minimum wage by 5% from April, and at the same time, "significantly increase personal allowance for those who most need it" as part of February's budget.

Those measures combined, he said, would "ensure we put more money in people's pockets" which would "boost disposable income for many across the island".

In heated exchanges in Tynwald, Cannan rebutted those who continued to support the implementation of the planned 9.9% rise despite concerns raised by businesses.

"The left wing can laugh, and chuckle, and smile in this house, but there are businesses out there who are genuinely fearful for the future," he said.

He said the government had collectively ignored recommendations made by the minimum wage committee "in the name of ideology when we should have potentially been taking a different path".

"I have heard the shrill voices of socialism ringing around these chambers during these debates," Cannan said, "they have gone through these chamber halls and down out into the streets below and have sent a shiver through our economy."

Meanwhile, he said Crookall had already paused the 20mph (32km/h) speed limits across residential areas, and the department would now revisit plans "to ensure we protect children and vulnerable users" without imposing "overly prescriptive controls across large areas of the island".

The new infrastructure minister would also offer to pause and revisit the Local Government Amendment Bill, particularly regarding a clause that would enable the department to impose functions on authorities - something that faced opposition from several boards.

But Cannan's reshuffle drew a mixed response from Tynwald members, and while some supported the changes, others criticised the timing of the move.

Tim Glover said he was "astonished to learn" that Cannan had told him of the reshuffle on the phone on Monday morning ahead of informing either Allinson or Haywood about his decision to remove them from their posts.

However, Julie Edge argued Cannan had shown "leadership" in making the changes he had.

Rob Callister questioned why the enterprise minister, Tim Johnston, had not also been asked to leave the Council of Ministers when he was "shackled to the treasury minister in respect of the flawed policy" over the planned 9.9% minimum wage rise.

Questioning the chief minister's decision to step away from that plan, Allinson asked when a previous commitment set out to align the island's minimum wage and living wage by July 2025 had been "no longer deemed sustainable" by Cannan.

Lawrie Hooper branded Cannan as "economically and fiscally illiterate," arguing that he had pinned the future of his administration on "another substantial policy U-turn."

Defending her work on rolling out the 20mph (32km/h) limits, Haywood said the policy had been agreed by Tynwald, and the streets it was applied to was not down to the department but was a "function" of the consultation approved by communities involved - the responses to which had been published online.

Joney Faragher questioned why Cannan had decided to publicly move away from policies that had been agreed in Tynwald without telling members first.

Responding to the comments the chief minister said: "As a minister you are bound by collective responsibility, and at times it was difficult when I fundamentally disagreed with the direction of travel."

He said it had reached a point where he needed to decide whether he would act and prevent the government making further errors or resign himself.

The pace and timing of the decisions was "complex" but had to happen "quickly," he said, adding: "It is not easy for any party involved."

He said there had been "considerable frustration and aggression within the community" over the roll out of the reduced speed limits in urban areas, and steps needed to be taken to address the business community's fears over the wage rise.

"It gets to a point where you have to listen to what is happening in the economy.

"If you want to proceed cloth-eared, put that tin helmet on, without listening to business, without taking into consideration their concerns, without recognising the impact of what you are doing, then you are fool-hardy.

"Life is full of decisions, but you have to protect the economy, to protect work, to protect jobs.

"There will be no jobs if we carried on on the route we were going down."

Read more stories from the Isle of Man on the BBC, watch BBC North West Tonight on BBC iPlayer and follow BBC Isle of Man on Facebook and X.