The Isle of Man Chamber of Commerce has welcomed aspects of this week’s Budget, describing it as a ‘step in the right direction,’ but has warned that structural reform is still needed to improve efficiency and protect the island’s finances.

The Chamber, the island’s largest and longest-running business network representing nearly 500 companies across all sectors, said it recognised the challenges facing the new Treasury Minister, Chris Thomas, who has been in post for only a few weeks.

Among the positive measures, the Chamber highlighted the increase in the personal tax allowance by £2,250 to £17,000, the freezing of the basic income tax rate at 21%, and the continuation of the National Insurance holiday for returning students.

Pensioners will also benefit from the continuation of the Triple Lock, with the Basic State Pension rising to £184.90 per week and the Manx State Pension increasing to £263.55 per week.

Additional funding of £4.4 million for childcare, vocational training, and apprenticeships was also welcomed.

However, the Chamber expressed concern that many workers are still no better off than when the basic tax rate was 20% two years ago.

Public sector costs remain high, with pay and pensions accounting for more than half of government expenditure, and overspends are forecast despite planned pay allowances.

The Chamber also warned that the continued reliance on reserves, with over £1 billion already drawn down in recent years, is unsustainable.

It said that without structural reform, including measures to control the cost and size of government, the island’s finances could be at risk.

While the Chamber welcomed measures that increase take-home pay and support students and pensioners, it stressed that ‘real, meaningful change will only come from reducing the cost base of Government’ and addressing long-term structural challenges.