DCSIMG

Economic report hails contribution of ultra-rich

Farmer Tom Brummit, from Hill Top Farm, Greeba, walking up to his flock with a sack of sheep feed after last Marchs record snowfall

Farmer Tom Brummit, from Hill Top Farm, Greeba, walking up to his flock with a sack of sheep feed after last Marchs record snowfall

  • by Adrian Darbyshire
 

The contribution made by wealthy residents to the Manx economy is highlighted in the latest quarterly economic report to the Council of Ministers.

It says the construction sector is expected to grow this year on the back of a high level of new planning approvals including new housing for the super-rich.

The report, which covers the final three months of 2013, explains that six recently approved properties have a combined value of £30m, which compares with a public sector housing programme in 2014 of £20m.

The boost for the local building industry is seen as one of a number of economic benefits brought by the sort of wealthy entrepreneur that the tax cap policy aims to attract.

Controversially, the tap cap was kept unchanged at £120,000 in last month’s Budget, although those that benefit from it can now elect to sign up to the cap for five years. Government estimates that such individuals are responsible for the creation of at least 360 jobs, paying wages of more than £27.5m with ITIP and National Insurance contributions of £6.65 million.

Total revenue for Government generated by tax cappers, including the income tax they pay directly, is estimated at £15.8m a year.

Chief Minister Allan Bell said: ‘The tax cap policy was introduced with the aim of attracting wealthy entrepreneurs who will be actively involved in supporting the local economy. The statistics show this small group of people is making a substantial and disproportionate contribution not only to the economy of the island but also to the government revenue that funds public services.’

The quarterly report states that the Manx economy continues to perform well with growth of between 3 to 4 per cent forecast.

However, it says this growth masks the problem of a twin-track economy, with domestic sectors continuing to struggle while export sectors are expanding quickly.

Manufacturing showed a mixed picture in 2013, with engineering growing by 10 per cent but general manufacturing shrinking by 7 per cent. It says the outlook is good for engineering with some parts projected to create 50 to 80 jobs this year.

The report says 2013 saw minor reductions in staff in the financial services sector but with significant regulatory challenges and downsizing of banks, the pressure will continue.

E-gaming’s growth is hailed. It now makes up 14 per cent of the economy and there are good prospects for growth in 2014. In contrast, construction remains depressed as does retail which saw tough trading conditions and shop closures last year but a more positive outlook is forecast.

The report reveals over £546,000 has been paid out to some 200 farmers out of the Agricultural Severe Weather Assistance Scheme following last year’s devastating snowfall. But it also shows no applications have been made for loans from the £1m Snow Scheme.

The report can be found at http://www.gov.im/media/1046718/quarterly_economic_report_october-december_2013.pdf

 

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