IoM Budget 2025 - 'Responsible & Sustainable'

In response to the Isle of Man Budget unveiled on Tuesday 18 February, Steve Billinghurst IoD Isle of Man Chair commented

“As with every budget, there are winners and losers and this one is no different.  The IoD welcomes the Treasury Minister’s maintenance of employers’ National Insurance contributions at 2024 rates and the reduction in the higher rate of income tax by 1%.  However, we look for continued commitment from Treasury to ensure Island businesses aren’t disadvantaged in the ‘battle’ to attract and retain relocating workers required to fill key vacancies by maintaining differentiation.  What is concerning is the ongoing planned withdrawal from reserves of £110m in 2025/26, reducing to £50m by 2029/30 to balance the books.

While there is focus on the changes to revenue generation, we should not overlook the ongoing cost of public services, that is both the current and future cost.   Locking in future expenditure commitments through pension guarantees must be scrutinised and challenged, for the benefit of future generations.  With the overriding principle of seeking to balance the Island’s income and expenditure, what is critical to achieve that balance is that there must be a laser focus to ensure the efficient and effective deployment of resources that the Island gives to Government to deliver public service to our resident population and businesses.  The IoD seeks Government’s commitment to a root and branch review of spending, ensuring the enhancement of service delivery alongside the removal of waste and bureaucracy in the ‘middle’ and ‘back’ offices of the machinery of government.  The issue of public sector productivity continues to receive attention in the UK and it cannot be ignored here too.  We will be seeking in detail the views of our members on this topic in our early March Policy Voice.

With ongoing criticism of the manner in which the Government has enacted its Island Plan, what is needed are reforms to the Government’s fiscal strategy, a tax roadmap and an industrial strategy.  There is a need to shift away from short term budget management, but to create a stable, long-term light touch policy framework that can free up businesses for more productive endeavours.  With the backdrop of global shocks and increasing global unrest, it is more important than ever that the policy environment in which Island businesses operate is as stable and predictable as possible.  The recent delayed publication of the 2022/23 Island National Income report raises a question on the capability of Government to understand where the economy is and in collecting and reporting key economic data critical to drive the economy forward.   To deliver a higher standard of living for all, it is important that the Government delivers a clear strategy and a framework for increasing the Island’s potential growth and in doing so improve Government revenues.

There is more detail in the Pink Book to be digested and a fuller IoD commentary looking at other areas of the Budget will be issued over the coming days”.

Full summary Isle of Man Government – 2025-26 Budget