Bid to align minimum and living wages from October

Plans to align the Minimum Wage with the living wage from October are set to be put forward for political approval next month.

In 2021 Tynwald committed to matching the two hourly figures by 2025.

The proposed £1.60 increase, which is set to go before Tynwald next month, would see the hourly rate rise in two phases to £12.25 from 1 April, and to £13.05 four months later.

Treasury Minister Alex Allinson said it was "imperative" to strike a balance between "prioritising fair wages whilst also supporting the financial stability of businesses".

The change, which has been supported by the Treasury and the Department for Enterprise (DfE), would also mean the youth rate would increase from £8.75 to £9.55 from 1 April, with a further rise to £10.35 per hour from 1 October.

Allinson added that when Tynwald resolved to align the two rates, "no one was aware of the significant challenges businesses would face", including inflationary pressures in recent years.

In October, an independent minimum wage committee called for a review of the government's existing timeframe, which had resolved to align the hourly rates by April.

Enterprise Minister Tim Johnston said the two-phased proposal "seeks to provide a slightly longer lead in for businesses" but ensured the island did not fall behind counterparts in the UK, Channel Islands and Ireland.

It would mean the island could "'maintain a strong and competitive proposition when seeking to fill labour shortages", he continued.

Johnston urged businesses with concerns about the change to contact his department to find out about the support available.

The DfE and Treasury have also agreed to undertake a review that would look at the current calculation of proposed rises, the government's legal requirements surrounding the minimum wage, and its policy on aligning the two.

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