A potential rethink on the Isle of Man’s planned near-10% minimum wage increase was hinted at in the House of Keys this week, as the Treasury Minister acknowledged the depth of concern among businesses and declined to rule out a change of course.

The island is currently due to raise the minimum wage to £13.46 an hour from April 2026, a 9.9% increase based on a policy of setting pay at 66% of median earnings.

A debate on the issue has already been tabled for next week’s Tynwald sitting by Onchan MHK Julie Edge, who is calling for a phased increase.

During Tuesday’s first sitting of the House of Keys in 2026, Treasury Minister Dr Alex Allinson said he would not ‘pre-empt’ that debate.

But Dr Allinson said he accepted that for some businesses the proposed increase was being viewed as ‘the last straw’, following a prolonged period of inflation, high energy costs, reduced footfall and changing consumer behaviour.

When asked in a supplementary question by Arbory, Castletown and Malew MHK whether he refuses to rule out a rethink of the increase, Dr Allinson said: ‘In terms of reconsidering a previous Tynwald resolution, I won't pre preempt the debate happening in the court next week.

‘In terms of concerns about the increase in the minimum wage of 9.9% the honourable member talked about, I absolutely agree with him that there are concerns there. I'm not negating those concerns.’

Ms Edge challenged the Minister on whether the government had produced any impact assessments examining the effect of the 9.9% increase on employment, working hours, youth jobs and the cost to taxpayers of any associated support schemes. She warned the policy could represent a breaking point for the Island’s diverse and fragile economy.

Dr Allinson confirmed no new impact assessments had been carried out since October 2025, arguing that international evidence showed no significant impact on employment or inflation where minimum wage rises remained below 15%. He stressed that the increase was a Tynwald decision, not one made unilaterally by Treasury.

However, he acknowledged that business concerns were genuine and multifaceted, and said the minimum wage announcement had compounded existing pressures for some employers.

Recognising the pressures businesses will face from the impending minimum wage increase, the Treasury Minister said a targeted support package will be developed, the cost of which, he said, ‘has not yet been finalised’.

Ms Edge said the support package - described by fellow backbencher Chris Thomas as ‘unfunded and uncosted’ - would impact every taxpayer in the island.

The proposed minimum wage hike has already triggered strong opposition from the private sector.

Late last year, dozens of business owners attended the inaugural Local Economy Forum (LEF) at the Palace Hotel in Douglas, where the current policy was described as ‘destructive’.

Chaired by former MHK Chris Robertshaw and supported by Palace Group chief executive Brett Martin, the forum has proposed an alternative approach: a lower gross minimum wage of £12.70 an hour, combined with a targeted tax credit system.