Statement re IOM Government support package announced on August 24th, 2022

Broadly speaking, Chamber welcomes the Government’s announcement.

Date: Tuesday 30 August 2022

Broadly speaking, Chamber welcomes the Government’s announcement.

Our members are grateful to Government for understanding the unprecedented and serious financial crisis that so many businesses, and the whole community, face right now. In recent weeks, feedback received from employers and employees has made it clear that there are widespread concerns about the winter ahead, especially because of the rising costs of energy. Chamber has been lobbying Government for more support, so we are pleased with this latest package.

Below is a detailed summary of Chamber’s view on the latest announcement.

The cap on electricity prices
This deals with a key concern of businesses, their employees and the wider community where many individuals and families are struggling because they don’t qualify for any welfare benefits. We also acknowledge and welcome the fact that the MUA has worked to protect domestic and business customers over the past 12 to 18 months. In the face of unrelenting increases at supply level, MUA are currently maintaining tariffs that are among the lowest when compared to UK providers. For example, we are aware that the average domestic tariff in England at the moment is around 28p kWh, but here on the Island it is 22p kWh, and that will now be held until March 2023.

There’s no doubt that this requires a hefty investment (the Government says that ‘subject to approval at the September sitting of Tynwald, the price cap will be funded with a Government loan to Manx Utilities to be repaid over a 20 year period’ and that the total loan may be ‘up to £26million’. But it’s necessary and very beneficial to big users of electricity such as large food retailers, and tech and data storage firms. We welcome anything that supports the price of food for everyone on the island, especially with food freight costs rising so rapidly due to the fuel surcharge.

Concerns about small businesses
The electricity price cap is not so beneficial for the many smaller businesses that contribute greatly to the vibrancy and vitality of the local economy and its communities – but it does at least help them to plan ahead and budget for the next six months.

Next steps
While Chamber welcomes the Government’s latest response to the impact of rising costs, we and our members are fully aware that this is going to be a very tough winter for most businesses on the Island – so we will continue to be proactive to help protect firms in all sectors of the economy, especially small businesses. Last week Chamber’s CEO had a meeting with Manx Gas and Claire Christian MHK to discuss the possibility of introducing a small business tariff for the winter. As a member-led organisation this is one of many options we will continue to pursue that are all in the best interests of our members, their employees and families, customers and all the communities around the Island.