Proposals to increase the rates of the island’s minimum wage are to go before Tynwald for consideration at the February sitting.

The new rates, brought forward by the Treasury and Department for Enterprise, are the result of recommendations made by the minimum wage committee.

This follows a two-year pay freeze and takes into account the UK’s increase in minimum wage rates and the continued pressure on the labour market for workers, as well as the direction from Tynwald in July 2021 that the minimum wage should transition to the level of the island’s living wage within five years.

If approved, the proposed changes will mean an increase of the minimum wage rate from £8.25 to £9.50 per hour - an increase of £1.25 per hour from April 1. That’s a 15% rise.

The rates for those aged 16 to 17 years old and for development workers will also be increased from £6.15 to £6.80 and £7.30 to £8.05 respectively.

Treasury Minister David Ashford MHK said: ’Following the recommendations from the select committee on poverty in July 2021, a key policy action outlined in the Island Plan is to transition the island’s minimum wage rates in line with the living wage within five years, in order to address income disparities in the island and ensure it remains a prosperous place for our residents to call home.’

Mr Ashford addressed the rising costs of living in the island.

’Since that report, we have also seen a dramatic increase in cost of living, alongside unprecedented low levels of unemployment, meaning that there is already upward pressure on wages above the legal requirement,’ he said. ’Through these proposed changes to the rates of minimum wage in the Isle of Man, both the Treasury and Department for Enterprise have endeavoured to strike a balance between the needs of employers and the needs of our working population, alongside supporting the position of our island as a progressive, diverse and attractive destination.’

Minister for Enterprise Alex Allinson MHK said that this is the first increase since 2019.

He said: ’While it is recognised that the proposed changes will impact some businesses, many have in effect already raised wage levels in order to retain and attract new workers in such a competitive market. Therefore we expect the actual number of workers on minimum wages to be much lower than previously was the case.

’It is imperative that the Isle of Man does not fall behind our close counterparts in the UK, and is able to maintain a strong and competitive proposition when working to fill labour shortages and promote the Island as a secure, vibrant and sustainable place to live and work.

’We must ensure that workers on the island are no worse off than their counterparts in the UK on headline rates and that pay keeps pace with other cost of living pressures.

’Whilst this will have an impact for some businesses, the Department for Enterprise and the Treasury have both provided extensive support to the local economy over the last two years and we will continue to work with businesses in affected sectors.’