Treasury Minister Dr Alex Allinson gave a financial statement in Tynwald today. Here it is in full:

I am conscious that this is not my first statement on financial matters made to the Honourable Court recently, but in uncertain times I think it important that this Court and the People of our island have insight into the state of our economy and Treasury’s position.

Whilst we prepare for Christmas and celebrating with our friends, families and loved ones we should remember the hardship some of our community face. We should remember the destruction of people’s lives and homes being seen daily in Ukraine, and the bravery of the people in Iran protesting for women’s rights.

The beginning of this year saw our island emerge from the pandemic restrictions confidently being one of the first jurisdictions to remove mandatory testing and self-isolation. But on the 24 th February Russia invaded Ukraine, re-igniting a major war in Europe.

Our community stepped up to the challenge of hosting those fleeing the conflict and I am very grateful to them and our Government staff who quickly arranged schemes to welcome and support our visitors.

Government also quickly updated contingency plans to protect our island against all eventualities.

Over the spring and summer we saw international shortages and market speculation fuel inflation. Gas, oil and energy prices rose suddenly and have remained volatile. Whilst our shops’ shelves have remain stocked we have seen the knock on effects of inflation eat into household budgets and place extra strain on business finances.

This administration reacted with numerous financial support packages. In September we were the first nation in the British Isles to commit to an electricity price freeze and have gone further to cap bus fares, provide warm spaces, increase support to the Third Sector and provide advice and help to those anxious about their ability to cope.

Economic and political instability on the adjacent isle has led to a sudden increase in interest rates, affecting mortgages and loans.

Government have provided additional advice and support. But we have always been honest that we cannot effectively help everyone, and that as a society we will have to adjust and adapt to get through this winter and face the challenges 2023 may bring.

Honourable members will see that we have, as item 14 on the order paper before us today, a motion which makes provision to provide further support to those in a vulnerable financial position.

Specifically, it provides for a third round of Energy Support Payments and Family Support Payments. Energy Support Payments, worth £300 per household, are payable to households responsible for housing costs who are getting an income related benefit. The first round of these payments was made in April, the second in October and this Order provides for a third round payable in December. This third round of Energy Support Payments will replace the Winter Bonus normally paid in January to certain recipients of income support. However, Energy Support Payments are payable to a wider range of people who get income-related benefits, including those getting employed person’s allowance and income based jobseeker’s allowance, so giving additional help in this way will ensure more low income households will benefit.

The total cost of the three rounds of the ESP paid this year is estimated to be just over £3m, benefitting up to 3,500 households.

Family Support Payments worth up to £400 per household are payable to all families receiving Child Benefit. Those receiving full rate Child Benefit will receive £300. Furthermore, as with the previous two rounds, an additional £50 will be paid to all families receiving Child Benefit with two children, and £100 for families with at least three children. The first round of Family Support Payments was paid in May, the second round was paid in November, and it is now proposed that a third round of payments is made in December.

The total cost of these three rounds of Family Support Payments is estimated to be approximately £5.4million, benefitting over 6,000 families.

And we have committed to continue delivering the Christmas Bonus at a higher level and to a wider range of beneficiaries than in the UK.

Mr President, I’m sure this Court will recognise that, in the face of these very difficult financial times, the Government has stepped up to the challenge and provided significant sums of direct financial support to those in need. The total spent in direct support, including those measures before the Court today comes to some £11.9 Million.

This is in addition to the other support measures debated in this Court back in September.

It remains very difficult to estimate the cost of the electricity price cap also announced. Originally we estimated it may be up to £26m and continue to work with Manx Utilities to back their support for all residents and businesses on our island.

I would of course stress to Honourable Members that there remains a lot of uncertainty around gas pricing which would impact this number. While prices have come down since their peak in August, they are still substantially higher than this time last year.

The level of individual support provided by all these measures will of course vary depending on the recipients circumstances. For example a family on lower quartile earnings and with two children could have received almost £2000 this year. A lower income pensioner couple could have received over £1000.

The energy support payments and family support payments made and proposed have been targeted at those with the lowest levels of income and who our modelling shows are most affected by fuel and food price rises.

I am of course conscious that other sectors of our society will be feeling financial pressure this winter so I am currently working with Treasury officers to bring back a repeat payment of the Long Term Benefit Support Payment in January, which will directly benefit all pensioners, those with disabilities and those on other long term support. If approved this would add another £5.6 Million to the total amount of support given to our community.

The support provided so far has been to enable those most affected by increases in the cost of living to manage the transition through the current inflationary pressures. Mr President, I cannot stress enough that the Treasury cannot continue to provide financial support at this level, we all have to adapt. Making our homes and businesses as energy efficient as possible has never been more important, and I would encourage all those that may qualify for the various energy efficiency support initiatives to take advantage of these. The cheapest unit of gas is the one we do not use.

That is why I am very grateful to DEFA for their scheme which is before us today. This aims to directly benefit those on low or medium incomes, the so called squeezed middle, who haven’t benefited from targeted financial support so far but can now have access to up to £750 worth of materials to save energy and money not just during this winter, but during winters to come.

Despite our attention and emphasis on the economic pressures weface we must remember the more existential threat caused by Climate Change. What we do today to reduce energy use, make our homes more efficient, switch to public transport and adapt our behaviours will directly help our island meet its ambitious targets to secure a safe and sustainable future for the next generation.

The last two years have placed an unprecedented demand upon the nation’s resources; we have supported our people and the economy through the Pandemic, and now through a major economic upheaval which is directly affecting the cost of living for all of us. While Treasury has supported individuals and the economy with an unprecedented amount of financial support, Government itself has suffered from cost pressures and reduced incomes. The market value of Governments reserves themselves have been reduced as the financial markets in which they are invested have fallen – this means we need to be even more prudent about current and future spending.

I do not intend to breach any budget confidentiality in this statement, but I do think Honourable Members need to understand that we must focus what available resources we have on the key priorities. As I explained in September the budget I intend to place before this Court next February has been prepared in a different way to previous budgets, Departments have set their own priorities within agreed fiscal envelopes. The Capital programme has been reformed and will be subject to a new process as we move forwards.

As part of the changes in Treasury, Honourable members will know that we introduced a new form of financial reporting for the year ended 2021/22, with the intention of updating the light blue book and dark blue books by combining them into an annual report.

I am very conscious that this report has not yet been laid before this Honourable Court and for that I apologise. The transition to a new process has been complex and there have been a few delays whilst audit queries have been resolved. The Treasury team are working hard to get the new document finalised and through audit and it will of course be laid before this Honourable Court as soon as possible.

Mr President, the various motions on the order paper today yet again demonstrate a coordinated and comprehensive Government resolve to support our nation’s economy, its people and businesses.

Whatever the challenges we face now and in the future, we will confront them with honesty, unity and fortitude. That is the strength of Tynwald and I for one am proud to be a Member of this Honourable Court.