The government should have done more to protect consumers from the big rise in electricity prices, business leaders said today.
On Monday, the Manx Utilities said that the standard domestic rate tariff will increase from 22 to 28p per unit on April 1 with a further rise on July 1, taking prices to 34p per unit. That means the cost of electricity will be 54.5% higher on July 1 than it is now.
In addition, electricity standing charges, as well as the water and sewerage charges, are going up by 9.8% in line with the rate of inflation as it was in September. The inflation rate is currently 8%.
Today the Chamber of Commerce released a statement saying that it acknowledged the pressure that was being put upon on all energy suppliers due to global factors, and recognised that local residents as well as businesses and their employees will be affected by the latest electricity tariff increases, and the shock in the level of increase in particular.
However, it added that it 'feels that Isle of Man Government should still have done more to protect domestic and business users from the latest hike
The organisation added that last week’s Isle of Man government Budget ignored the likely cumulative impact on the island’s small businesses caused by rising energy costs plus the minimum wage rise above the rate of inflation, which were all under government’s umbrella as a policy maker or investor.
'Proactive economic modelling is needed to assess cumulative impacts on the local economy (where consumer spending is declining or static and costs are rising disproportionately) is vital in current economic conditions,' the Chamber's statement added. 'These impacts don’t affect all sectors, but they are hugely felt in those directly serving the local economy.'
Chamber added that one of its major concerns in response to the Isle of Man Budget 2023/2024 regarded the increasing cost of government’s payroll and pensions expenditure (up £50million since the 2022/2023 Budget).
'A different approach to its priorities regarding fiscal policy could have allowed Government to do more to protect residents, employees and businesses from electricity and gas tariff increases,' the statement said.