More support for those struggling in the face of rising costs of living has been announced by the Treasury minister.

David Ashford made a statement to Tynwald on Tuesday with details.

Inflation hit 6.7% last month, making a big dent on spending power.

The Treasury’s new support package is for those who didn’t receive the energy support payment but cannot work.

Mr Ashford said those eligible would be the same who receive the ‘Christmas bonus’, so those receiving state pension, persons who are long term sick, carers and the recently bereaved.

This will be payable at a rate of £150 and will be distributed in June. Mr Ashford said that increased costs are expected to ‘bite’ further much later in the year, predicting inflation could hit ‘up to 10%’, so it was sensible not to spend all of the government’s reserves now.

The minister added that the Treasury was still monitoring its position in regards to the Christmas bonus and considering paying it earlier than usual to provide additional security.

A provisional date of October was proposed but Mr Ashford said he would return to Tynwald during that month with another statement.

‘I fully recognised it doesn’t protect everyone but it is targeted, measured support to help ease the pressure for those who would struggle most,’ he said.

Other departments are also exploring options for a holiday activity and food scheme which will have the benefits of food provision and providing enrichment activities for children, according to Mr Ashford.

interventions

These ‘initial interventions’ will likely be ‘only the beginning’, he added.

Mr Ashford said that the government’s plan for targeted support for the most vulnerable included support low income households, supporting households disproportionately affected, and the stimulation of the economy.

Measures to stimulate the economy include the LoveIOM gift card as it will encourage residents to spend in the island.

In addition to this, measures already announced include the energy support payment and family support payment, plus others.

Mr Ashford said: ‘The global economy is facing a perfect storm and just as economies ramped up production that had been on hold, Russia’s invasion of Ukraine has thrown economic recovery into disarray. There is increased volatility in energy markets and we can expect it to be abnormally high in 2022 as a minimum.’

Wholesale price of gas previously averaged 45p per therm but is now averaging about 200p per therm.

‘Upward pressure on prices is to continue and the UK is experiencing acute inflationary measures,’ Mr Ashford said. ‘Impacts of prices rises are already being felt and we recognise for lower income households, options are limited.

‘The effects of the current situation for businesses will not be felt equally.

‘We have to be upfront and honest to people – it’s not possible for government to step in and protect people from this.

‘Government finances are also under pressure in a number of areas.’

He added that the government has a large workforce and so there are significant implications for its finances.

‘Government continues to monitor this fast-moving situation,’ he said. ‘Further increases are likely.’

Though it’s under pressure, the government ‘remains stronger than other counterparts with low levels of debt’, according to the minister.