Isle of Man looks East in challenging times
The Isle of Man’s chief minister says he wants to turn the Manx economy into an enterprise zone attracting new sources of business from abroad, as the island braces itself for major cuts in government jobs and services
After four months in the post, Chief Minister Allan Bell believes he is past the “pulling the duvet over my head” phase in what are difficult times and claims he is leading the island forward.
The Isle of Man (Other OTC: MAGOF.PK - news) budget this month included serious and unpopular cuts to government staff numbers and salaries after several economic setbacks.
Mr Bell sought to prepare the island with a pre-budget announcement that explained exactly how he plans to steer the island through what he admits will be “the most challenging year it has faced for a generation”.
He said the government wages bill, standing at well over £300 million, would need to be cut by 10 per cent within three to four years, adding: “We are probably going to be losing services that many of us grew up with and loved for many years. But that’s a fact of life.”
Housing, health care, pensions, welfare, planning and judicial systems will all come under the chief minister’s scrutiny, as he warned: “There will be no sacred cows. There will be nothing that can be ring-fenced. Where savings can be squeezed out they must be squeezed out.”
On top of the problems caused by a global economic downturn, last year the UK adjusted its VAT-sharing agreement with the island, costing the Manx government approximately 40 per cent of its annual income.
The loss in revenue was compounded by Standard & Poor ’s credit ratings downgrade in November (Stuttgart: A0Z24E - news) to double-A plus, in which the Isle of Man was judged to be “constrained by its undiversified small economy, which makes it more vulnerable to external shocks”.
Focusing on the island’s positives, the chief minister is seeking to reassure his people that they can look to the future with confidence.
“There are no quick and easy answers to the problems which confront us,” he says. “However, we must take courage from knowing our economy is still in a position of relative strength, that we have a high quality of life and that we are a haven of peace and political stability.”
Mr Bell has taken on board the criticisms of Standard & Poor’s and is seeking to bring new business opportunities.
“The island is currently researching business opportunities with India, China and Russia,” he says, “and in doing so hopes to generate new income streams, particularly in the clean tech and bioscience technology fields, that will add to revenue already boosted by an increase in personal tax.”
“My aspiration is to ensure the island as a whole becomes an enterprise zone committed to promoting innovation and entrepreneurialism and I have tasked my minister for economic development, John Shimmin, to deliver this.
“We must clear away impediments to economic growth, ensuring that our policies and processes facilitate rather than inhibit the future prosperity of our island.
“My vision as chief minister reflects my longstanding ambition to maintain a prosperous and caring society based on fairness, opportunity for all, social cohesion and quality of life.
“Our top priorities have to be: delivering further economic growth and diversification to provide new income for government and jobs for our people; living within our means by achieving a balanced budget and protecting the vulnerable in society.”
This piece was originally published in the Telegraph Weekly World Edition.
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Isle of Man looks East in challenging times