Treasury Minister Alfred Cannan has been criticised for delays in setting new rates for personal injury compensation payments.

He was called on to explain why the Isle of Man had not pushed ahead and created its own framework, instead waiting for the outcome of a review in the UK following controversy over its negative rate.

It came after changes to the compensation for injuries - how a ’discount’ was deducted to take into account interest accrued on a lump sum payment - sparked fears in the UK that the financial implications could cripple the National Health Service with multi-million-pound additional costs.

The new discount rate was actually a negative discount - moving from 2.5% to minus 0.75% - effectively increasing the amounts awarded.

The Isle of Man kept the previous rate at 2.5 per cent and decided to maintain a watching brief before making any changes.

Clare Bettison (Douglas East), who raised the issue in the House of Keys last week, complained: ’Isle of Man residents have been greatly disadvantaged for well over a year now, both in insurance premiums and their payment calculations.

’Why, on one hand, will we not move our position until the UK review is completed, and on the other hand not amend our current position to mirror that of the UK as per their previous review and change of rate?’

She pointed out that in July last year, Mr Cannan had told Tynwald that if the UK had failed to resolve its problem ’in the next few months’ the Isle of Man would ’have to have a very serious consideration as to how we then progress to try and give some certainty to the many different individuals and bodies who are interested in the stance of the Isle of Man Government’.

To chuckles from the back benches, Miss Bettison added: ’It is now 16 months later - more than a few even in [Policy and Reform Minister Chris] Thomas’s opinion, I suspect.

Discount

’If the newly calculated rate were to be set at the same level as the current UK rate, would we still adopt it?’

But Mr Cannan defended the Treasury’s position.

He insisted: ’We will react quickly to the setting of any new discount rate.

’There is now a transparent framework in the UK for the setting of the previous discount rate - whereas before I would suggest it was potentially rather subjective.’

He said when the UK’s Civil Liability Bill became law an independent panel would be appointed to advise on introducing a new discount rate ’if considered appropriate’.

The minister added: ’I have stated my intent to consider the outcome of this review as soon as it is available and to then act swiftly to bring appropriate Isle of Man legislation forward for Tynwald consideration and approval.’