The Isle of Man Chamber of Commerce (Chamber) provided testimony on 30th September 2024 to the Economic Policy Review Committee, outlining their views on the Government’s Economic Strategy, the business environment in the Island, and the role of Government. The Committee heard from Kristan McDonald (President), Claire Watterson (Vice President) and Carol Glover (Vice President (Strategy)). Since the meeting, Claire Watterson has taken over from Kristan McDonald as President.

Below are the key findings from their evidence session:

Economic Strategy

• The Chamber called for the Government to look again at the Economic Strategy targets of growing the population to 100,000 residents and creating 5,000 new jobs. The Chamber’s opinion was that the Island should be focusing more on improving productivity of the existing population and on improving infrastructure and services, and should be less concerned about hard job numbers or population numbers which in themselves would not necessarily result in a stable, resilient economy. Other metrics are in use around the world to measure the overall health and wellbeing of the population.
• The Chamber thought the population target would have been ambitious, even if everything had gone the Island’s way since it was adopted. In fact, everything has not gone the Island’s way. The Island needs to stop trying to fight reality.
• The AI workshops now being run by the Digital Agency were welcomed. But the Chamber was concerned that the broader Economic Strategy approved in 2022 could be fundamentally flawed because it did not mention AI to any great degree. AI was said to be causing disruption in the economy and driving significant productivity gains. It is necessary to be able to adapt to this and to other black swan events.

Business Environment

• While accepting that it was a positive aspiration to align the minimum and living wage, the Chamber said the current challenge for a lot of businesses is the uncertainty around this.
• Another challenge noted by the Chamber was that whilst the minimum wage was scheduled to rise, personal tax allowances had not risen in line with inflation. So actually, what the vast majority of that minimum wage increase did was put more money in Treasury’s coffers – essentially a tax on business.
• The Chamber said that one of the biggest challenges for them around tax was engagement from Treasury. Ten to fifteen years ago there had been a lot of engagement prior to the Budget being announced – perhaps too much – but now it had gone too far in the other direction.

Role of Government

• The Chamber stated that Government isn’t the entity that creates jobs. Rather, Government has to create the environment in which the private sector can flourish.
• Government should be looking at how it can incentivise types of work rather than sectors.
• To attract skilled workers, the Island needs to improve connectivity and make it easier for people to relocate or even just commute. To retain people, the Island must get the basics right: hygiene factors such as health, education and housing.
• Bureaucratic burdens on business would be reduced if there was a “single KYC” or identity regime, centralised in a single portal, rather than having to take copies of your passport to every Government agency.
• The Chamber stated the Island doesn’t make the most of relations looking westward to the island of Ireland, connectivity and communication with which was very poor.
• The Chamber had also looked at whether there might be mileage in creating special economic zones within the Island where planning laws would be less restrictive.