The Chamber of Commerce is concerned about the ’little time’ businesses have to plan for the rise in the island’s minimum wage in April.

Many businesses will be forced to raise their prices if the island’s minimum wage increases this year.

The government recently said it plans to set the rate to £9.50, subject to Tynwald approval. This is an increase of £1.25 an hour.

A survey by the Chamber of Commerce took views from a range of sectors, including finance, retail, transport, tourism, hospitality and others, and found they were not prepared for the quick turnaround.

Chamber president Kristan McDonald said: ’From our survey, it’s clear that many feel that they have had very little time to respond to the financial impact this increase will have. It appears likely that it will have a knock-on effect for proportionate wage rises across the board, and that a majority of businesses may have no choice other than to push the 13% rise onto the consumer which, when combined with the other inflationary pressures we are seeing, will discourage spending in the local economy.

’If the proposed minimum wage increase is introduced in April, a phased implementation would give businesses more time to adapt.

’With many still recovering from the impact of events over the past two years, tax and national insurance breaks would also help to support recovery, and reducing VAT to 5% for the food and drink sector would certainly benefit cafes, bars and restaurants that have been hit harder than most businesses during the pandemic.’

Meanwhile, Minister for Enterprise Alex Allinson has said he recognises the concerns businesses have.

He was asked in a House of Keys sitting this week what discussions had taken place with Treasury and local businesses about the cost increases by Arbory, Castletown and Malew MHK Jason Moorhouse.

Dr Allinson said: ’Recently here on our island and around the world there have been a number of cost pressures due to a number of underlying causes, these include wage inflation, energy prices, increase in cost of travel and supplies, and services generally.

’The department’s agencies are predominantly made up from private sector representatives who are able to reflect and discuss some of these challenges within their own sectors and across the whole department. We meet regularly with a range of groups to talk through the issues and opportunities facing businesses.

’Chamber of Commerce meets regularly with the department to discuss specific issues, representing around 500 local businesses.

’The costs of inflation and other general rises in costs are clearly a concern and we will continue to review the overall situation with Treasury.

’Looking forward, our costs and barriers to businesses are also being assessed as part of the work with KPMG on our proposed new economic strategy for the island, this work will be considered by the economic strategy board, on which both department’s are represented.

’We will continue to keep situation on the Isle of Man under review.’

The minister explained that in regards to VAT rates, the island follows the UK. Treasury hasn’t made any approaches to review the current VAT rate outside the UK position.