The government should have done more to protect people from the latest electricity price hike, says the Chamber of Commerce.
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%.
A spokesperson for the Chamber of Commerce said: ‘Chamber acknowledges the pressure that is being put upon on all energy suppliers due to global factors, and recognises 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.
‘We feel that it should still have done more to protect domestic and business users from the latest hike.’
They added: ‘Last week’s 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 are 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.
‘These impacts don’t affect all sectors, but they are hugely felt in those directly serving the local economy.’
One of Chamber’s major concerns in response to the latest Budget regards the increasing cost of the governments payroll and pensions expenditure, which has gone up to £50 million since the last Budget in 2022/23.
‘A different approach to its priorities regarding fiscal policy could have allowed the government to do more to protect residents, employees and businesses from electricity and gas tariff increases,’ Chamber said.
In the House of Keys on Tuesday, Manx Utilities chair Tim Johnston said: ‘During 2022 we engaged with an independent firm of professional advisors to assess our financial position At the start of this year they recommended that a 60% tariff increase was necessary for Manx Utilities to continue to fund purchases of energy.
‘The board determined it would be applied as 12kWh increase in two stages.
‘The deficit cumulated over the last 18 months have been met from a total of £25m of withdrawals from the bond repayment fund.
‘This is relying on operational cash balances to reduce [the deficit].
‘This has significantly weakened Manx Utilities’ financial position as it has been left in a position, regrettably, where it has had to further increase its tariffs.
‘The increases announced will mean that the Isle of Man domestic electricity tariff remains lower than those in the United Kingdom.’