Agatha Christie’s novel ‘Murder on the Orient Express’ translated into Manx by Joan Caine has just been published by Caarjyn ny Gaelgey (Friends of the Manx Language).

The book costs £15 and is available by contacting Joan Caine on 843436 or email joancaine@manx.net

The book launch will take place at the coffee morning on Saturday, February 21, at St John’s School House between 11am and 12pm.

Dunverys er Traen Tappee dy Niar (Murder on the Orient Express) will be available for a price of £13 on that date for people attending the coffee morning.

Two young women will represent the island at a Commonwealth event next month.

Laura Green, 22, from Port St Mary, and Clare Harris, 18, from Colby, will join around 1,000 other young people observing Commonwealth Day in London on Monday, March 9, the theme for which is ’A Young Commonwealth’.

The executive committee of the Isle of Man branch of the Commonwealth Parliamentary Association (CPA) selected them.

The day’s proceedings will include discussions on the Commonwealth and the CPA with UK and visiting parliamentarians, followed by the Observance Day service in Westminster Abbey, traditionally attended by The Queen as head of the Commonwealth, together with all Commonwealth High Commissioners in London.

The day will conclude with a reception hosted by the Commonwealth Secretary-General Kamalesh Sharma at Marlborough House, headquarters of the Commonwealth Secretariat.

As part of the selection process applicants were asked to set out in 100 words what they believed they would gain from the experience and how the Isle of Man would benefit from their attendance.

international

Miss Green, a former Castle Rushen High School student, now studying for a masters degree in international law at The Hague, wrote: ‘As a Manx student I could bring my interest in inter-state relationships, with my international background, to the island’s delegation for the day.

‘Last year I led a European advocacy project of the NGO Geneva Call, liaising with MEPs towards the passing of a recommendation at the parliament which linked humanitarian issues with parliamentary democracy both within Europe and further afield.’

In her application Castle Rushen High School student Miss Harris, who has previously taken part in a sitting of Junior Tynwald, wrote that she would be ‘a positive ambassador for the Isle of Man’.

She continued: ‘Through attending this event I would gain a greater understanding of the Commonwealth’s aims, and the Isle of Man’s role in this.

‘I also hope to develop an appreciation of the diversity and unity of the Commonwealth by interacting with other young people at the event.’

On learning that she had been selected Miss Green said: ‘This will be a great opportunity to meet and share ideas with other students from across the world, to learn about the politics and values of the Commonwealth and the role that it plays globally.’

Miss Harris said: ‘I am delighted to have been chosen to represent the island at the Commonwealth Observance Day. I am sure the event will be both thought-provoking and illuminating and I look forward to interacting with the other representatives.’

CPA Isle of Man branch chairman Juan Watterson MHK said: ‘I am confident that not only will Clare and Laura learn much from their experience but also that, in the longer term, the institution of the Commonwealth will benefit substantially from giving a voice to the young people of the Commonwealth family.’

Victim Support say there’s no sign of demand drying up for a novelty fund-raising tea towel.

The novelty Manx dialect tea towel, bearing the words ‘It’s fer dryin’, yessir’, was launched by the charity in time for Christmas.

The idea came about when the charity spotted a plain Scouse dialect tea towel for sale and wondered if Victim Support could do something similar here.

Administrator Kelly Lean came up with the island design and layout.

Juan McGuinness and Ben Watterson from Winging It Productions agreed to get involved and their pictures now appear on the souvenir tea towel.

Juan and Ben’s tongue-in-cheek video translating Manx dialect into standard English has taken social media by storm.

Victim Support manager Paula Gelling said: ‘We have been thoroughly delighted with the response.

‘At first we were worried about selling 70 of them and we have been amazed and delighted at how popular they have been.

‘To date more than 750 have been sold, raising over £2,000 for the charity.

‘The plan is to continue to sell the tea towels throughout the year to visitors and residents, raising much needed funds and awareness for Victim Support.

‘In 2014 the team at Victim Support saw 212 new clients, a 20 per cent increase on the previous year, plus 164 witnesses.’

Juan and Ben from Winging It Productions said: ‘The ’awl boy Davey Craine put a word on us that Victim Support had a mighty design knocked up and for some reason they thought sticking us on it might help as well.

‘We couldn’t believe it when they told us over 750 households have had their mugs dried by our mugs.’

The tea towels are on sale at Esquires, 88 Strand Street, Douglas, the Ben-My-Chree Steam Packet vessel and at Manx National Heritage shops and at Victim Support’s office in Albert Street.

l What Manx dialect words do you use? Email opinions@newsiom.co.im to tell us your favourites.

Treasury Minister Eddie Teare says the Council of Ministers is ‘saddened’ by shock resignation of Minister for Policy and Reform Chris Robertshaw.

Mr Robertshaw dropped his Budget Week bombshell today, saying he had been frustrated by the pace of change in government and at his former cabinet colleagues’ reluctance to work together.

Formerly Minister for Social Care, he became Minister for Policy and Reform when that new role came into being in April last year.

Mr Teare MHK, who is heading CoMin during the Chief Minister’s absence through illness, said: ‘The Council of Ministers is saddened and disappointed that Mr Robertshaw is stepping down from the Policy and Reform position, but it is his decision and we have to respect that. A new Minister for Policy and Reform will be appointed.

‘Chris is passionate in his convictions and he has worked tirelessly to help put the island’s public services on a sustainable footing for the next generation. Managing change is always a challenge but, as the Budget tomorrow will show, real progress has been made and it will continue.

‘The Council of Ministers remains committed to the Agenda for Change. With our Tynwald colleagues we will work together as a team to ensure that it continues to be delivered.’

Chief Minister Allan Bell is currently off work ill.

{http://www.iomtoday.co.im/news/isle-of-man-news/budget-week-bombshell-as-robertshaw-the-enforcer-quits-council-of-ministers-1-7107809|Click here} to read our story from earlier today.

John Shimmin MHK has been appointed as Minister for Policy and Reform following the resignation of Chris Robertshaw MHK.

The appointment, which takes immediate effect, was announced by Treasury Minister Eddie Teare MHK, who is heading the Council of Ministers during the Chief Minister’s absence through illness.

Mr Teare said the appointment has the full support of the Chief Minister Allan Bell MHK.

It is eight months since {http://www.iomtoday.co.im/news/isle-of-man-news/shimmin-falls-on-his-sword-after-all-1-6684450|Mr Shimmin quit as Minister for Economic Development} in the fall-out over the Sefton loans affair.

He has been an MHK since 1996 and has 12 years’ experience in the Council of Ministers.

Mr Teare said: ‘I would like to thank John for agreeing to take on the position of Minister for Policy and Reform to continue the good progress that has been made in delivering Government’s Agenda for Change. He brings considerable experience to the role and his return to the Council of Ministers is most welcome.’

Mr Shimmin said: ‘The job of Minister for Policy and Reform is a challenging one but the work is essential if we are to secure a sustainable future for our Island. I look forward to collaborating with colleagues in the Council of Ministers and in Tynwald to build upon the foundations that Chris Robertshaw has laid.’

Mr Robertshaw {http://www.iomtoday.co.im/news/isle-of-man-news/budget-week-bombshell-as-robertshaw-the-enforcer-quits-council-of-ministers-1-7107809|announced his resignation earlier today.}

Police are investigating the sudden death of a 16-year-old boy in Port Soderick today.

Detective Sergeant Bobby Syme said inquiries were continuing on behalf of the coroner, and the police could confirm that there did not appear to be any suspicious circumstances.

The printing of Isle of Man variant British passports at a central secure facility in the UK, which was due to start on February 19, has been deferred for two weeks, while software is fully tested, and will now begin on Wednesday, March 4.

During the transition to the new system, applications for standard and five-day express passport services received on Tuesday, March 3, will not be processed until Friday, March 6. The Passport Office will continue to deliver the same-day passport service up until Thursday, March 19.

The Isle of Man Passport Office in Douglas had printed the documents since 1967.

The move to the UK was announced in October 2014 in response to the increased costs of producing modern passports with enhanced security features.

A new design is now being rolled out to Crown Dependencies.

The search is on to retrieve an object that fell from the sky and may have defined the career of a famous Manx artist.

Acclaimed sculptor and artist Bryan Kneale was a 10-year-old schoolboy when a German bomber discarded its remaining ordnance over the island as it flew home from raiding shipyards in Belfast in 1941.

Now 84 years old, Kneale has created many iconic works of sculpture in a career spanning five decades, including the metal three legs statue that stands outside Ronaldsway airport.

On the eve of a major exhibition in London that celebrates Kneale’s artistic achievements, an academic is asking the Manx public to join a treasure hunt to find a fateful piece of shrapnel.

prestigious

Brian Catling, professor of fine art at Oxford University, is a former student of Kneale during his spell of teaching at the prestigious Royal Academy of Arts in London.

He believes that the unusual metal sculptures that became Kneale’s signature style may have been inspired by this chance event during his childhood in the Isle of Man.

He said: ‘‘I had the privilege of being asked to write the catalogue essay [for the exhibition], and it was during this that the Isle of Man’s influence became more and more apparent in our conversations.

‘Bryan’s memory is keen and profound, and some of the stories he tells show a deep longing for the things that influenced his imaginative mind. l

He continued: ‘One incident became a seed or a kernel to his love of working steel.

‘When he was 10 years old a great explosion was heard near his home and his father dashed out to see what had happened, returning later with a fragment of steel from a bomb jettisoned by a German pilot.

‘It became the boy’s prized possession. He proudly took it to school in Douglas to show his classmates. A short time later it vanished and was never seen again. Bryan still remembers this enigmatic object and would greatly like to see and hold it again.’

Hoping that the fragment may still exist, Professor Catling is asking the people of the Isle of Man to search through any keepsakes that have survived since the war.

It’s described as being a shard of metal about a foot long and two and a half inches wide. As a fragment of one of the only German bombs to land in the island during the war, it may have been put away for safe keeping.

‘I know it’s a long shot, but treasure hunts are strange things and you never know what might appear from unexpected places,’ Professor Catling said. ‘It might be sitting on a shelf, or in a shoebox in a garage somewhere.

‘It would do a wonderful service for someone who has done a great deal for the Isle of Man.’

Professor Catling is also keen to hear of other Manx influences on Kneale’s work. Contact him by emailing brian.catling@rsa.ox.ac.uk

The exhibition’Bryan Kneale: Five Decades’ will open at Pangolin sculpture gallery in King’s Place, London, on Wednesday, March 25, and run until May 2.

Douglas carnival and the Peel Viking longboat races will both go ahead on the same day this year.

Both events are scheduled to take place on July 18 but organisers say they are confident the clash will cause no negative impact on either.

The date is obviously a prime time in the summer calendar as St Mark’s fair also takes place on the same afternoon.

Councillor John Skinner said: ‘Having the carnival and longboat races on the same day can only benefit both events. We have been working closely with the longoat races’ organisers and they, like us, see only positives in holding the two events on the same day.’

The Viking longboat races run from 11am to 4pm in Peel and Douglas carnival will kick off in the early evening, at 7pm, meaning anyone who wishes can enjoy both.

Nigel Rawlinson of the longboat races organising committee said he too was comfortable with the shared date. ‘Our dates, of course, are governed by the tides and should bad weather mean we can’t hold the races on July 18, our reserve dates is some two weeks later so that would not affect the carnival if it had to be postponed to its reserve date of Sunday July 19,’ he said.

‘The races are traditionally a fantastic crowd puller so we are confident people will be in Peel party mood and keen to carry on having a great time in the evening in Douglas at the carnival.’

The Douglas Fun Day, involving stalls and attractions in Noble’s Park, will be on August 1.

The Manx government will not officially respond to Labour leader Ed Miliband’s ultimatum on beneficial ownership.

Mr Miliband has threatened to place on an international blacklist any Crown Dependency or British Overseas Territory that fails to produce a public register of company beneficial ownership within six months of Labour coming to power.

His letter was received last Wednesday, confirmed Treasury Minister Eddie Teare.

But he said it had been decided not to respond directly or by way of any international briefing.

Mr Teare explained that those jurisdictions who had responded - including Bermuda, Guernsey and Gibraltar - had found themselves labelled ‘tax havens’ in press headlines. ‘Those that put their heads above the parapet were criticised for responding,’ he said.

In the letter sent to each of the British offshore jurisdictions, Mr Miliband warned: ‘I am writing to put you on notice a Labour government will not allow this situation of delay and secrecy to continue. Labour will act on tax avoidance where the Tories will not – ending protection from international scrutiny and requesting OECD blacklisting.’

Treasury Minister Eddie Teare says this week’s Budget will be setting ‘a clear path’ through to the next general election.

Ahead of presenting his fourth annual Budget to Tynwald today (Tuesday), he said this was all about building on the work done by government so far and planning for the rest of this administration.

This year, 2014-15, sees the completion of the rebalancing programme for the revenue budget following the government’s loss of £200m income following the UK’s revision of the VAT revenue sharing agreement.

That programme is on target, Mr Teare said, both in timing and in the amount of reserves that needed to be drawn down.

With the revenue budget rebalanced, it was now time to reduce or eliminate altogether the reliance on reserves, with plans to address the much depleted capital fund but also other reserves, he explained.

Mr Teare accepted that many in the community have been bruised by extra charges and taxes that are hitting those on lower incomes hardest.

The government’s own figures show that one in four households, the island’s poorest, don’t on average have enough income to cover their cost of living.

Mr Teare said 1.5 per cent had been taken out of national income in 2012-13, 0.75 per cent the following year and 0.5 per cent last year.

He said: ‘We’ve had a difficult balancing act to maintain confidence while cutting expenditure. We’ve now got close to the point where we can’t take out any more without impacting on confidence.’

He said he would be commenting on the figures about one in four households struggling to make ends meet in his Budget speech.

He said he fully accepted those figures and government had adopted measures to protect and help the vulnerable but there was ‘more work to be done’.

Part of that would be reform of the welfare system and the need to target resources more effectively to those most in need.

The Treasury Minister said that after the Budget, he would hosting a series of public meetings on options to reform that welfare system and the state pension.

A report by consultants Ci65 says the island’s welfare system is ‘out of date and broken’. It recommends a phased increase in the retirement age to ensure the National Insurance Fund is sustainable in the long-term.

A key focus of welfare reform should be the principle that people should not be better off on benefits than they are in work, said Mr Teare.

Turning to tax, he stressed that the zero/10 policy was here to stay.

He said: ‘Zero/10 is the cornerstone, the foundation, of our economy. I would be very ill advised to give out any message that we would ever consider reviewing that. We must remain competitive.’

There has been a lot of debate in recent weeks over the effectiveness of the £120,000 a year tax cap for super-rich.

Mr Teare insisted the policy generated hundreds of jobs and a considerable amount of income. He pointed out the cap was significantly higher than our competitors including the UK.

He said in his Budget speech will be addressing claims that a number of tax cappers have left the island following the new rules introduced to prevent potential abuse of the system - insisting those claims are incorrect.

As far as future VAT revenues are concerned, the Treasury Minister said he was still awaiting a response from the UK government but with the general election looming there, the issue has gone into ‘suspended animation’.

But he said Westminster appeared ‘reasonably comfortable’ with the figures that the island had supplied and he was ‘not expecting any serious shocks’ when a decision is made about our VAT share.

Turning to capital schemes, Mr Teare said the government’s estate, including road, schools and hospitals, was worth about £1.2bn and it needed a programme of regular maintenance.

‘It’s a Steady Eddie Budget in which we will be planning for the rest of this administration taking us through to the next general election,’ he concluded.

So will he be standing again in 2016? He replied: ‘I’m not sure at the moment. It would wrong to make a decision until much closer to the time. I need to concentrate on the issues at hand.’

A fishing industry spokesman has issued a statement after the Steam Packet blamed fishing tackle for its problems on Thursday.

This week’s Isle of Man Examiner has more on the story inside.

The paper leads with the appointment of John Shimmin as Chris Robertshaw’s replacement in the Council of Ministers.

The main picture on page 1 is of a polo match on Ballaugh beach at the weekend. There’s more on what happened inside.

Also this week:

Plans for a bail hostel in Tromode

Preview of this week’s Budget

An MHK’s frustration at lack of progress on development at the Marine Laboratory in Port Erin

Why a court case involving the estate of JRR Tolkein was heard in the Isle of Man

A police U-turn on cycling on Douglas promenade

£1m development plans for the cathedral

A plan to put a camp site on a football field.

The paper also has all the regular features, including 12 pages of business news, all the weekend sports action, two pages of letters, the social diary and the latest from the courts.

The island’s favourite newspaper is on sale now.

The Manx health service has warned people in the island about a measles outbreak in America.

In the USA cases of measles have been reported in 17 states and Washington DC. There have also been two outbreaks of measles in Canada and an outbreak in Brazil.

Measles is a highly infectious disease. Anyone who is not immune is at risk.

The measles, mumps and rubella (MMR) vaccine offers a high degree of protection.

Health chiefs say that if you are travelling to Canada, the USA or Brazil ensure any child over six months has had at least one dose of MMR and older children have appropriate boosters. Any adult who has not received MMR in the past should contact their GP to seek advice.

Check your vaccination status to ensure that your children are seen by the practice nurse well ahead of the planned travel.

Depending on your travel destination your GP/practice nurse will also be able to advise you on the need for other vaccines/medication.

There are plans to turn St Mark’s old schoolroom into a sanctuary and retreat centre.

And to make this happen, an appeal has been made on a ‘crowdfunding’ website to raise £3,000.

The former school room, which dates back to the 1820s has recently been renamed Thie Sheaynt noo Mark, was closed temporarily in August 2013 and that closure threatened to become permanent.

But a year later, when Reverend James McGowan joined the parish last August, its status was reviewed.

‘There was a lot of misunderstanding in the parish and village – people thought it was being sold or closed down, that it was no longer viable and structurally unsafe,’ said Rev McGowan. ‘But when we had the survey done, the problems were not there.’

He added: ‘The church is selling off property left, right and centre – we are quite keen we have exhausted all the possibilities [at St Mark’s] before we do that. Once it’s gone, it’s gone.’

The church and village community have raised the funds to ensure the building is structurally sound. Planning permission to allow residential use has been obtained. The first target is to raise £3,000 –which will be matched by the church parish – for central heating, hot water, a shower and to repair window frames.

In addition to enhancing facilities for groups already using the room, such as the WI, this will allow them to offer simple shelter and bunkhouse camping.

Rev McGowan is in discussion with the Island Spirituality Network about it being used as a retreat centre, plus groups such as the Christian Bikers’ Network.

Once the building has an income stream it will fund the next phase of the development which could even include a second floor. Growth will be organic, he explanined, adding: ‘The ethos [of what it is used for] will develop with the building. I hope it will be the beginning of something.

‘The local community have rallied around and begun the task of finding a new way of letting this building become a living place of personal development once more. The last child left the school in the 1960s, having been taught the staple skills of reading, writing and arithmetic. In a new generation, the skills we want to see develop are ones of self reflection and discovery.’

For information, call Rev McGowan on 822469.

New Scouting troups, VIP visitors and a range of exciting activities should all help to make 2015 one of the most exciting years yet for the island Scouting Association according to island commissioner Guy Thompson,

The year will see the re-establishment of the 3rd Castletown Scout group, which is opening its doors again to new members after being dormant for 17 years. It will be open to cubs (aged eight to 10-and-a-half years) and Scouts (aged 10-and-a-half to 14), with beavers, aged six to eight to follow in due course.

There’s also more excitement for the south of the island as Rushen explorers (aged 14 to 18) starts up in Port Erin, forming a completely new unit. Northern explorers will also be restarting this year after being dormant for several years.

‘These groups and the existing groups that are all experienceing growth will account for over 100 new young people that will be joining the scouting adventure,’ Mr Thompson said.

The Scouts’ annual St George’s Day parade takes place in April and is happening this year in Port Erin.

‘St George’s Day is one of the two most important events in the scouting calendar and some 500 scouts and their parents are usually in attendance,’ Mr Thompson said.

He added this year the island’s Scouts will be welcoming a special guest in the form of Wayne Bulpitt who is the UK chief commissioner of Scouting, who will be in the island for a one-day visit to meet the Scouts and present a special award for distinguished service to some of the scout leaders.

He said that association members will be looking forward to spring approaching and the start of the year’s outdoor activity programme. Activities planned include camping, hiking, climbing and kayaking. The association also has its own camp site in Malew where the scouts can complete river walks and blindfold trails, abseiling and cooking on an open fire. Adult volunteers are always welcome and the commitment is flexible. For more information contact www.manxscouts.com

Today is probably the most important day in the Manx political year.

It’s Budget day, the day when the Treasury Minister announces how, or if, he’s going to balance the nation’s books.

Eddie Teare has this morning delivered his speech to Tynwald.

We previewed the speech {http://www.iomtoday.co.im/news/isle-of-man-news/budget-to-plan-through-to-next-election-says-teare-1-7109382|earlier today, here.}

We reproduce his speech here:

Introduction

Madam President,

I will start by saying that my budget today is based on four very important principles.

It honours the promise of this Government to balance the books.

It continues to focus on fairness.

It maintains funding for vital services for the Island’s community, and particularly those who are vulnerable.

It starts us on the path of building systems, finances and services for the next generation and not just for the next general election.

Four years ago I laid out this Government’s plan to rebalance our budget by 2015-16. This has been a challenging but necessary task. This budget demonstrates that Government will succeed in achieving that core objective.

The restructuring of Government Departments in 2014, combined with departments’ delivery of savings initiatives, including the shared service efficiencies, has resulted in a Government that is now leaner and better equipped to meet the needs of our people. The salary budget has been reduced by some £50 million in real terms, achieved through combining back office functions, outsourcing or even stopping some services, and through continuous improvement.

This budget is now more targeted to deliver our core services. Whilst maintaining funding levels for Government’s priority services, it provides an additional £2 million funding for Health development initiatives through the Health Inspection Fund. The publication of the Ci65 report signalled that the review of the social security system has begun, and we are committed to encouraging more people to look for and to return to work, which will build a culture less reliant on state support. We are going back to the original principles of the Beveridge Report. The invaluable work of carers in our community is being recognised, with additional resources being made available in this area to reward their role in our society.

The capital programme is designed to protect, maintain and where appropriate enhance the Island’s infrastructure assets, valued at £1.2 billion. We will continue with an ambitious construction programme the details of which I shall outline later in my speech. The future security of the capital programme is also protected as interest on loan charges is reinstated so Departments can once again make contributions back into the Capital Fund for its replenishment and to invest for the benefit of future generations.

Government has built the foundations for the future delivery of public services within a system of sound and balanced public finances. This has been recognised by our rating agency. It is now up to us to ensure that this can be done in an affordable and sustainable manner that continues to grow the economy, whilst also protecting the most vulnerable. To achieve a rebalanced current account budget was always going to be Phase 1 of the restructuring of Government finances. Phase 2 requires some major longer term changes which cannot be rushed. Keeping focused on our approach to healthcare, welfare and pensions, we must bring Government’s reserves and internal funds onto a more sustainable position in the longer term, for the benefit of our children and grandchildren. We owe it to them!

Looking ahead we need to focus on the rising cost of welfare, and contemplate wide ranging reforms to better target public funds towards the most vulnerable in our society. More fairness is necessary, and the change will be unpopular for some. We must develop a strategy for making the public sector pension schemes more affordable for the taxpayer, and secure the long term sustainability and security of the schemes for their members. We must also review the terms and conditions of Government employees to bring the cost of public sector employment more into line with the private sector, yet at the same time continue to offer market rates to be able to recruit, retain and motivate the workforce required for effective service delivery.

I am now looking for a fair transition to a new Financial Management Strategy. Through taxation and welfare reform, whilst at the same time suppressing Government spending levels and achieving less reliance upon reserves, we will achieve greater fairness in our society. Having achieved our short term budgetary aim, I believe we are now in a position to strike a fair balance between the need to grow the economy and to protect the truly vulnerable.

Madam President, I will now turn to our economic performance.

Economic Performance and Outlook

The global economy continues to struggle to rebound from the debts incurred in the banking crisis of 2008-9. In the Eurozone in particular it appears all we have to look forward to is a long period of low growth and high unemployment.

That said, in the United Kingdom and the United States growth prospects are better, and this is also true for many of the global markets that we now compete in.

On the Isle of Man we recorded our 30th year of consecutive growth in 2012-13. I expect growth to improve from the 3.2% recorded in that year to around 4% in each of the following three years namely 2013-14, 2014-15 and 2015-16.

We are seeing big falls in unemployment, which is down around 189 (or 16%) since the time of my last budget. The nature of employment is changing, with more job growth at lower pay levels. The result is that the fiscal benefits of this increasing employment in terms of income tax and National Insurance are not as great as we would have hoped.

This increasing employment at lower salary levels has also had an effect on existing workers. We have seen a drop in salaries in real terms (after inflation) of around 10% over the last five years, which is only now beginning to reverse itself.

It has done so due to salary growth increasing to around 2% at the same time as inflation has fallen to around 1%. I expect inflation to stay low, helped by the considerable drop in oil prices that has occurred in recent months. It is estimated that the recent fall in oil prices will on average reduce household bills by a very welcome £200 per annum.

So overall I believe that with low inflation and increasing earnings, families will start seeing real increases in their incomes, and this will support spending in the local economy and provide some boost to those in the retail or catering sectors who have found it particularly difficult in recent years. The planned income tax changes for 2016/17, which I will announce later, will also undoubtedly help.

It is also clear that interest rates will stay low, for longer than previously imagined. This will continue to hurt savers whilst benefitting borrowers. Our housing market has gone through a period of adjustment, with price falls in recent years. I believe this is more to do with migratory patterns than any underlying lack of confidence. Other statistics indicate that, whilst still positive, net immigration is lower than has been the case in recent years. I expect this to revert to historic norms with a recovery in the domestic economy, and as a result house prices should stabilise and then grow slowly once again. The decreasing size of the average household will probably also create demand.

A number of significant pieces of work that assist in our understanding of our economy have been completed in the last year. The Household Income and Expenditure Survey showed the extent to which Isle of Man residents have higher disposable incomes, and in some cases higher costs, than seen elsewhere. It also highlighted the levels of spending being incurred away from the Island. This information has already been used by my colleague in DEFA to develop his food strategy, given it shows a considerable proportion of our population being willing to spend more for quality local produce.

This work also fed into the VAT negotiations alongside surveys of our business community which really assisted us in our understanding of the local economy. I would like to thank all those who helped us in this work.

When I look at the Manx economy today, what is most striking is the way that it has, in recent years re-invented itself once more. The reason why we have continued to grow, when others have been through recession, is primarily the growth of our e-gaming and ICT sectors. These now rival financial services as the main engine of growth in our economy.

As a result we are more diversified, and stronger in economic terms than we have been possibly at any time in our history. I expect the benefits of this economic growth to start being felt more widely in the years ahead, which will be good for all parts of our community.

Local Economy

Overall comments

The main highlights and indicators of our local economic performance show that:

National income has grown by an annual average of nearly 3.5% compared with the average of 1.6% across advanced economies and is on a par with the global average.

Productivity improved by 3.5% between 2011 and 2013, measured by GDP per hour worked. In the UK it increased by 1.5% over the same period.

Employment has been maintained. At 973, the total number of people registered unemployed at the end of January 2015 was the lowest January figure for 4 years, indicating that the Department of Economic Development’s increased support for export-generating sectors is paying off.

Average earnings have fallen 2.4% in real terms, which is in line with trends across the developed world. Government has acted to assist, with an increase to the minimum wage of 3.9% effective from 1st October 2014, which is above the rate of inflation. Over time we would encourage employers to move from the minimum wage to a living wage to share the benefits of a dynamic economy.

Vision2020

Vision2020 which was launched in January 2014 set out a compelling vision for a successful economic future for the Isle of Man and we have been busy delivering the plan since then.

For example Vision2020 forecast that our fast growing sector, e-Business, would represent 23% of the economy by 2020. The 2012/13 National Income statistics released by Economic Affairs showed that e-Business was already 20% of the economy due to a growth factor of over 40% in that year.

Financial and Professional Services

Financial and professional services have faced an unprecedented level of regulatory reform including automatic exchange of information driven by the US FATCA legislation, the Independent Commission on Banking in the UK to separate retail and investment banking (the Vickers Report). To these are added European legislation such as Solvency II affecting insurance and the Alternative Investment Funds Management Directive affecting the fund management sector.

Increased marketing activity has focused on developing stronger ties with the UK regions and further developing relationships with China and the Middle East.

Ties with the North West Region were strengthened through our participation in the successful International Festival for Business in Liverpool last summer, in partnership with over 50 local businesses. We signed formal Memorandums of Understanding with Liverpool Vision and Northern Ireland’s Department of Enterprise, Trade and Investment.

Banks are concerned about regulatory changes, but the Isle of Man’s banking sector remains healthy, with deposits holding steady for a year at just over 40 billion pounds. The Life Assurance sector continues to show positive growth with good business levels resulting in local businesses taking on further staff.

The Captive Insurance sector has had a successful year. Feedback indicates a steady line of potential business opportunities and this will be bolstered with the launch of new products such as Index-Linked Securities later this year

Indications from the pension sector remain generally positive as does the outlook for the fiduciary sector.

The strategy of attracting High Net worth Individuals to the Isle of Man has been vital in creating jobs and generating Government income. There has been comment in some quarters that the number has fallen as a result of the changes which I announced last year, but I am of the opinion that those fears are not justified with currently more interest than we have seen for some time in our scheme. Only one person has left following the changes to the scheme and as far as we can tell there was no connection between the changes and the decision to relocate. These High Net Worth individuals make valuable contributions to our economy. For example, vital work for local construction firms has been created through the building of residential properties for such individuals.

Registries

The world class service and value for money continuing to be offered by our Ship and Aircraft Registers is helping to support 600 jobs in the local maritime sector and 80 jobs in our aviation services sector.

The Ship register has maintained its Gross Registered Tonnage at around 16 million tonnes and the Aircraft registry continues to register around 100 high quality corporate jets per year, well ahead of its competitors.

Emerging Sectors - E-BUSINESS

E-Business is the fastest growing part of the economy, generating 300 new jobs since 2011: and it now accounts for 20% of National Income.

To ensure its continued success, protect against market changes and develop new opportunities we are working closely with the gaming industry and related organisations on the Island, including the Manx e-Gaming Association, the Chamber of Commerce ICT Committee and the e-Gaming Strategic Advisory Board.

We have modernised our intellectual property laws to bring them in line with the latest international standards and to keep the Island competitive in this area.

IT and business skills remain a key constraint. Therefore Government has worked with the private sector on a wide range of actions, which will aid growth and offer exciting new job opportunities.

In November 2014 Tynwald voted in favour of selling the Nunnery site to the International Centre for Technology Ltd for the purposes of developing it as a major training centre for IT. We are pleased to see this project progressing and look forward to their success in developing the Centre for the future growth of the industry.

In June 2014, the Isle of Man announced plans for a regulatory framework for digital currencies. The Island hosted the inaugural Crypto Valley Summit in September 2014, attended by over 170 Bitcoin entrepreneurs, enthusiasts and government representatives, and at the close of the year we now have more than 25 crypto currency businesses based on the Island.

Our approach has created a clustering effect, attracting both industry participants and their supporting technical systems. This will further enhance the digital diversity of the Island, with businesses creating products and services and providing test-bed capabilities.

Emerging Sectors – ENERGY

Offshore energy offers great potential for economic benefit. In autumn 2014 the Government announced preferred partners for the development of offshore wind and tidal projects which we anticipate will bring in more than £5 million of income by 2023 and generate around 50 onshore jobs.

We are also working with interested parties to undertake 3D seismic studies in the Isle of Man’s territorial waters in order to provide further data on potential reserves of hydrocarbons, predominantly natural gas. This is in advance of a hydrocarbon licence round which we will be conducting to allow oil & gas companies to prospect for hydrocarbon reserves.

Established Sectors – MANUFACTURING

Manufacturing is important to the Isle of Man. Virtually everything we make here is exported off-Island which helps create further economic benefit. The 23 members of the Isle of Man Aerospace Cluster - now employ nearly 900 skilled engineers and support staff, which is 6% up on the figure of April 2013 and 38% more than in 2006 when the Cluster was created.

The Cluster is an integral part of the UK supply chain for the aerospace industry and supplies components for every major civilian and defence aerospace project in the world.

One of the challenges facing the precision manufacturing sector is the availability of suitably skilled labour, and this is compounded by an ageing workforce. The Department of Education’s £1 million investment into a new Advanced Manufacturing Training Centre in September 2014 will provide significant help to local industry in terms of overcoming this challenge. This initiative represents a tripling of the number of engineering apprentices.

Established Sectors – VISITOR ECONOMY

The Visitor Economy is a vital sector for the Isle of Man as it supports a significant number of local jobs and provides the infrastructure for our tourism, hospitality, retail and leisure services. The current tourism strategy has focussed on encouraging development of high value niches and new markets, especially those that exploit the natural beauty of the IOM. A new strategy is currently being developed for launch in summer 2015 which will provide a clear way forward for the industry’s efforts in promoting our Visitor Economy.

This support and greater focus is helping instil confidence among those seeking to invest in the sector and the total number of bed spaces in the Isle of Man has increased 14% over the past 3 years with 60% of bed spaces now of 4* and 5* quality in line with customer expectations.

A 2013 study by the Treasury revealed that almost 40,000 visitors attended the 2013 TT Races, a 27% increase on the 2010 figure. The total spending of TT visitors in 2013 had been £26.2 million compared with £19 million in 2010. The economic contribution of this figure generated an exchequer benefit of some £3.5 million. The new TV contract and media exposure brought the TT Races to a worldwide TV audience of 30 million.

Honourable Members will already have heard about the plans for a TT World Series at a briefing last month which could bring exciting opportunities for economic benefit and overall promotion of the Isle of Man.

Domestic Economy

A new Retail Strategy was launched in December 2013 by the industry with Government support. The sector has faced very challenging times in recent years but the worst appears to be behind it and 14 months on from the launch of the strategy the feedback from industry has been encouraging.

Government has also provided structured support and training for independent retailers to help ensure excellence in service delivery. To date nearly 300 staff from independent retailers have undertaken customer service skills training courses provided at no charge to the sector.

Work Permits

The modernised Control of Employment Act has received Royal Assent and will ensure that our work permit system protects Isle of Man workers while ensuring that employers are able to attract the skilled workers they require in a timely manner. The provisional implementation date for the Bill and Regulations to come into force is 1st August 2015.

Assistance for the Unemployed

As at the end of November 2014 it was clear that we have made great strides in this area with overall, unemployment having fallen by 25% since December 2013, Long-term unemployed having fallen for the eighth consecutive month by 50, and the number of under 25’s claiming jobseekers’ allowance has also fallen by 81 (or nearly 20%) since that date.

This shows that Government’s policies to aid the unemployed – and particularly the two key groups of the Long Term Unemployed and young unemployed – are working, and working well. In the last 2 years Government has also invested an additional £500,000 to assist individuals who are unemployed to find suitable work: including additional work placements, training and other initiatives with the local private and third sector. It is estimated that over 200 individuals have been helped into employment as a result of this additional funding. This is a good example of Government policy which is helping us to grow the economy and protect the vulnerable and balance Government’s budget through savings to benefits. It also offers significant health benefits for those returning to the workplace.

A Work Placement Programme now offers 12 weeks of paid experience with an employer. To date this programme has provided 260 opportunities to participate in a work placement with an average of 13 placements running each month. Of these 101 (39%) have entered employment as a direct result. The Programme has an impressive retention rate of 55%.

International outlook

Madam President, as an international business centre, the Isle of Man must always keep a weather eye on developments in global standards and on discussions which might affect our trading environment in the future.

I said last year that the FATCA model of automatic exchange of tax information was to become the next international standard. There remains an enormous energy and enthusiasm in the G20 and other organisations to bear down on tax evasion in a variety of ways, and tax cooperation is still at the forefront. We are rapidly entering a phase where automatic exchange of information based on a common reporting standard will be the norm. Although this causes teething problems for business, and I will not hide away from the fact that they are burdensome; ultimately, I believe that a common approach will make compliance more straightforward, as single systems will only need to be implemented.

Even as these momentous changes are bedding in, new initiatives are appearing. One in particular is worth mentioning today, and this is a project known as BEPS – which in technical jargon is base erosion and profit shifting. In the words of the OECD:

“BEPS refers to tax planning strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations where there is little or no economic activity, resulting in little or no overall corporate tax being paid. BEPS is of major significance for developing countries due to their heavy reliance on corporate income tax, particularly from multinational enterprises.”

At the heart of this project is the same theme as I mentioned just now: harmonisation around multilateral, common rules and approaches. It aims to have a concrete plan signed off by the G20 this year, and already we are seeing moves in the EU to have a directive covering the same ground and more.

Honourable Members will also recall that Prime Minister Cameron was very energetic last year in pushing the international community to improve transparency in financial services, in particular information about the “beneficial ownership” of companies. He said that the best way to achieve this would be through having a public register of such information. The leader of the opposition also recently spoke in favour of a public register. However, as things stand now, public registers of beneficial ownership information cannot, by any measure, be called an international standard.

I must make clear that the Isle of Man has a legal regime which meets the international standard on beneficial ownership information: ensuring that the ownership of companies is known, verified and available to the authorities.

The Isle of Man is a forward-looking country, which takes careful notice of international best practice and has a long-established policy of complying with international standards. With this in mind, and in line with our G8 Action Plan, we conducted a consultation to gather views on our current regime and on whether the introduction of a centralised registry of beneficial ownership information would improve transparency. The responses to the consultation are being reviewed, and we are also considering additional information which has emerged from the EU and G20 since our consultation finished. I will give a further update when the picture is clearer.

Whilst we need to have Isle of Man policies in respect of the potential initiatives outlined earlier, we must ensure that our approach is not insular and takes account of the wider changes happening in the world today. We are used to adapting and reinventing ourselves, and I am sure that we will continue to do so. But it is important that Members of Tynwald Court are aware that our economy on this small island sits in a network of economies around the world, both small and large, and we can never be complacent. We must be constantly planning our next moves and adaptations.

Madam President, I will close this section of my presentation by mentioning a profoundly important review which we will undergo next year. The assessment of our standards and effectiveness in the areas of countering money laundering and the financing of terrorism will be carried out next year by an organisation called MONEYVAL. Our last review, which was reported by the IMF in 2009, was a good one, and confirmed that investors and partner countries can rely on the quality of our business and regulatory environments.

In advance of the main review, the Government has commenced a national risk assessment exercise in conjunction with the World Bank, which will assist us in determining whether any changes are necessary to keep us in good standing internationally. Businesses are assisting us fully with this exercise, and I want to record my thanks that in addition to making money – which is always what a Treasury Minister wishes to see – and dealing with changes in our regulatory and taxation regimes, so many of them are also prepared to assist the Government, and in so many ways, to prepare confidently for the future. It was greatly appreciated.

I will now turn to our financial performance.

Financial Performance AND FORECAST

We are broadly on target to achieve our budget as planned for the current year. We have had to reduce our income expectations by nearly £3 million, largely due to withdrawals from reserves and reductions in investment income, as well as the reduction in hydrocarbon oil duties. Expenditure levels are however, projected to be £2m less than budgeted, and so overall we are within £1 million of the original estimate, which will be absorbed within the operating balance of the revenue account. The required transfer from reserves remains at £11 million. Negotiations over the revenue sharing agreement with the UK are ongoing. Should negotiations be successful and previous years’ provisional settlements provide any favourable adjustment in favour of the Island, then we would seek to top up internal reserves to support the new fiscal strategy going forward. Government remains on target to drive down the administrative cost of running our services by £10 million each year for the duration of the next phase of our rebalancing strategy. Government will continue to make savings through efficiency programmes and improved procurement practices, with a target of £16 million over the next three years.

Honourable Members will have seen in the Pink Book a reduction in the Department of Health and Social Care’s budget of some £3.4 million. This reduction has resulted from utilising the structural surplus budget held over from the former Department of Social Care in respect of the local authorities’ housing deficiency payments, which is no longer required at historical levels.  This change has been achieved without any impact upon the routine spending requirements for health or social care services.

Health spending, therefore, has not been reduced, and I ask the Court to take note, that subject to the approval of this budget, a further £2 million cash injection into the Health Inspection Fund is to be made in the coming year. This will build on the £2.1 million already paid into this fund at the end of last year in order to finance improvement programmes at Nobles Hospital.

Another feature of the budget proposals is the creation of an £8 million Central Government Contingency in 2015/16. This will allow some flexibility for the financing of unbudgeted inflationary costs and other unforeseeable items, where the departments affected cannot contain these costs within their existing target. This move adds a measure of prudence to the budget, and will help sustain the reserves position going forward and support the new Financial Management Strategy.

The proposed budget for 2015-16 shows gross expenditure £945 million. The proposed net expenditure, at £545 million represents an increase of £1.6 million, which is just 0.3%. This, Honourable Members, allows not only for the creation of the new Central Government Contingency Fund, but also the reintroduction of capital loan interest payments by Departments. As part of the 2010 to 2015 rebalancing plan, temporary measures to reduce spending had included waiving interest on advances from the Consolidated Loans Fund. The proposed budget also sees the inclusion of a £1 million Storm Damage and Capital Programme Risk contingency, recognising the need for prudence in finance provision for dealing with project variations and exceptional circumstances, such as the extreme snow experienced two years ago, and also the flood and storm damage experienced last winter.

The Manx Utilities Authority is already achieving synergies and cost savings and is ahead of its long term financial plan approved by Tynwald in January 2014. The blueprint provides for the £260 million bonds to be repaid in 2030 and 2034, and the Treasury grant for sewerage operations will be reduced to £nil by 2017-18, leaving just an annual contribution towards flood alleviation measures of £0.5 million per annum. Increases in electricity tariffs for the average consumer will be broadly in line with the January’s inflation index, and contained, should natural gas prices remain at current levels. Taken together with an approximate 2.2% increase in the water rates, the lowest increase in over 16 years, which I hope Honourable Members will agree is welcome news for all.

On 10 November 2014 I announced that the Insurance and Pensions Authority and the Financial Supervision Commission are working towards a merger in 2015. However it seems appropriate for Tynwald to have first reviewed and approved the legislation transferring the existing functions to a new statutory board. It is therefore planned that draft legislation establishing the new, unified regulator will be submitted to Tynwald in March; with the actual date for the merger to be set a little later once the new body has been formally agreed and the recruitment of a new chief executive completed.

Capital Programme

We have reviewed and updated the Capital Programme for 2015-16. In particular we have again sought to focus the budget on construction activity, and I am able to announce a 6% rise in the overall value of construction and engineering activity next year, which is a rise of over £3 million to £60 million.

The largest scheme for next year will be the regional sewerage treatment programme, costing some £12 million. I am pleased to report that capital costs have fallen substantially below previous estimates of the development and modernisation of this programme, which will help to alleviate the burden on both ratepayers and taxpayers alike. In addition, Tynwald approved the new £9 million Henry Bloom Noble Primary School at its December 2014 sitting, with £6 million of this budgeted for 2015-16.

Investment in healthcare, housing and infrastructure all feature prominently in 2015-16, including proposals for new Adult Psychiatric in-patient facilities meeting one of the key aims of protecting the vulnerable.

I mentioned last year that it was essential to rebuild our capital fund. I am pleased to announce that with the introduction of interest on loan charges, at a rate of 1% in 2015/16; 1.5% in 2016/17; and, 2% in future years, the capital fund will grow steadily over the next five years: whilst continuing to fund a substantial investment and maintenance programme.

The Local Authority Housing programme will provide a mix of refurbishment and new build housing for general and elderly demand; the essential refurbishment of the Willaston estate alone accounts for an investment of more than £38 million over the next 10 years. Madam President, my budget today also proposes a £3 million transfer into the Town and Village Centre Regeneration Fund in order to provide finances for regeneration scheme expenditure commitments for projects across the Island, including in Castletown, Douglas, Laxey, Peel and Ramsey.

RESERVES PERFORMANCE

Our reserves have increased by £7 million in spite of transfers out of the reserves in the same period of over £100 million: with key transfers relating to budget rebalancing (£31 million), Government pensions (£24 million) and social security payments (£12 million). 

We are currently investigating how to support the growth of our economy better by providing financial support to new businesses in new or growing sectors. This review of the potential for some kind of National Investment Fund builds upon a proposal moved by the Honourable Member for Middle in this place.

I would like to thank my Treasury colleague and Council Member Mr Braidwood for his oversight of our Invested Funds.

TAX AND NATIONAL INSURANCE

The Tax Strategy, unanimously approved by Tynwald in 2013, provides a clear set of principles from which the initiatives announced in this and my previous Budgets have been developed. This ensures that we have a stable tax regime which is essential to ensure continued economic growth by giving confidence to our business leaders who invest in their businesses creating jobs and opportunities for our young people. Our system of taxation must remain fair but competitive as well as being easy to comply with and efficient to administer. We must recognise the competitive pressures from our near neighbours and further afield. I do recognise that there has been comment from some quarters, recently, that taxation should be increased. This will not solve our problems and would merely put off the point at which we must better control our expenditure. In effect we would be dealing with the symptoms whilst ignoring with the underlying cause, and once again putting off difficult decisions.

However, now that Social Security has been a part of Treasury for almost a year, I believe there is another important principle – our taxation system must work in conjunction with our benefits system. We must remove cliff edges and improve incentives to work. Nobody should be better off on benefits than they would by engaging in full time employment.

One of my aims is to remove as many of the low paid as possible from income tax and to remove aspects of benefits from the tax system to better target resources for the most vulnerable. I believe that the way to do this is through the benefit system. In my opinion somebody working full time on the minimum wage should not pay income tax.

We also need to eliminate unnecessary bureaucracy by removing the requirement for as many individuals as possible to file an annual income tax return. These are ambitious but achievable aims and represent the biggest change in the Income Tax system for individuals in a decade or possibly much longer. Turning to my first aim, the boundary between tax and benefits is overly complicated and the two systems do not always work together to make it financially attractive to be in work. This must change and change it will.

From April 2016 I intend to abolish the 10% rate band for individuals and increase the personal allowance to over £14,000. We will therefore have a single tax rate of 20% after the personal allowance. I will announce the level of the personal allowance for 2016/17 in my Budget speech next year but my aim is to ensure that as a consequence of this change as many people as possible on low incomes benefit and I hope revenues will permit me to also ensure that nobody will be worse off. It will mean that over 10,000 low paid people will no-longer have a tax liability. It will also significantly simplify the income tax system and reduce the instances where income tax acts as a disincentive to paid employment. This will also enable us to divert resources to ensure that those who should pay do pay.

As this is such a significant change to our system I am allowing a year for consultation and preparation. In the meantime, for this year, there will be no changes in the personal allowance, the rates of personal income tax or the 10% band.

Last year I indicated my desire to align the income tax allowances for all ages and therefore reduced the age allowance for those aged 65 or over. I remain convinced that this is the correct course of action and will remove the age allowance at the same time as the planned significant increase in the personal allowance in 2016/17. My second aim, to remove aspects of benefits from the tax system, such as personal allowance credits, is stated in the tax strategy. This cannot however be at the expense of the vulnerable. The Personal Allowance Credit or PAC, although refined in recent years, still acts as a potential disincentive to paid employment. It cannot be right that an individual working full time on the minimum wage does not qualify for a PAC but a working age individual with equivalent social security benefit income does.

The PAC was frozen last year at £500 for those with taxable income of £9,300 or less. For 2015/16 the PAC will be reduced to £400 and will only be paid to the elderly and disabled with taxable income of £9,500 or less. My ultimate aim remains that this will be one of the benefits eventually replaced in a new benefits system. All benefits need to be paid via the benefits system to ensure that we are making payments to those who really need the support. I will ask the Assessor of Income Tax to work with the Director of Social Security to put this in place for 2016/17 so that 2015/16 can be the last year of the PAC. For people who previously benefited from the PAC the Income Tax Division will endeavour to ensure that they claim any benefits to which they are entitled.

My final aim for personal taxation is to reduce bureaucracy for both the taxpayer and the Income Tax Division. Nobody likes filling in their tax return and today I am asking the Assessor to commence work on a system that dispenses with the need to file a tax return where the Division holds sufficient information to issue an assessment straight to an individual. It is estimated up to 20,000 individuals fall into this category. The individual tax regime has been with us for many years and is now becoming outdated. I hope that the Assessor can begin a consultation exercise on this subject shortly and that any new updated tax system for individuals will last as long as our current system.

I remain convinced that we need to maintain an attractive tax regime which includes a Tax Cap aimed at encouraging High Net Worth individuals to take up residence and support business development on the Island. We already have 59 five year Tax Cap elections - this equates to revenue of £35.4m over five years without factoring in any of the considerable direct and indirect economic benefits these individuals bring to the Island. For 2014/15 it is estimated that these 59 individuals have secured over 1,400 jobs on the Island resulting in £17.8m income tax and National Insurance receipts per annum. When you add in their personal income tax payments this makes a direct economic benefit of almost £25m per annum, or some £125m over the five years. The total economic benefit will be much greater in that additional jobs will be created and supported elsewhere in the wider economy. The construction industry is a good example of this, a number of high value private construction projects are under consideration generating the potential for significant construction demand.

This is a long way from when this cap was first introduced; at that point only 11 individuals and 3 jointly assessed couples would have had sufficient income to claim the cap.

I hope Honourable Members will feel that the five year election for the Tax Cap is serving its purpose and agree that it is appropriate to increase the annual Tax Cap amount by £5,000 to £125,000 per year. Finally on personal tax, the Homestay concession was introduced in April 1999 to assist with the accommodation for TT visitors. The monetary limit for the concession was last increased in April 2007 and I therefore propose increasing it by 20% to £1,800 for 2015/16.

I shall now turn to National Insurance.

Honourable Members are aware of the recommendations of our consultants, in the Ci65 report, to ensure that benefits are properly targeted and financed in a way that ensure the long-term viability of our benefits system. These recommendations need to be consulted on and discussed and I therefore propose only limited changes to National Insurance this year.

In 2012 I introduced the National Insurance Holiday Scheme to encourage the creation of new jobs on the Island. In the first year, there were 585 new jobs to which the holiday applied, from 272 different employers. This year the figures have been just as impressive with 448 new jobs from 225 different employers up to the end of January 2015. Overall since the introduction of the scheme, 666 employers have saved £2.2 million in National Insurance contributions and help create 1,685 new jobs.

The National Insurance Holiday Scheme has served the Island well. However, it is important that we help long-term unemployed people back to work. I am therefore introducing a new National Insurance Holiday for employers who employ a person who has been long-term unemployed or long-term sick. This new scheme will, at the request of the Minister for Home Affairs, also be extended to those recently released from prison to help them back into employment. This will provide additional support to our long-term unemployed and sick to help them get back into work, and also aid in the rehabilitation of those recently released from prison.

Ci65 recommended that those over state retirement age should continue to pay employees Class 1 National Insurance Contributions if they are still working, and this is something I completely agree with. I see no reason why anybody should effectively get a pay rise courtesy of the National Insurance Fund when they reach state retirement age. This is another significant change and therefore again this is a measure that will not be introduced immediately but will be considered over the next twelve months.

Madam President, the rates of Class 1 National Insurance Contributions in the Isle of Man for 2015/16 will remain at the current levels of 11% for employees and 12.8% for employers, and the employees’ additional rate will remain at 1%; the rates in the UK are 1% higher in both cases. The Lower Earnings Limit will increase from £111 per week to £112 per week from April 2015 in line with the increase announced in the UK. This is the point at which an individual starts to build up rights to such benefits as Jobseekers Allowance and Basic State pension. The employee threshold will remain at £120 per week and the employer threshold will remain at £117 per week. The Upper Earnings Limit will remain at the current level of £784 per week.

I have long felt that the Class 2 contribution does not properly reflect the value of the benefits it provides; for example, an individual would only have to claim two weeks’ incapacity benefit to receive more than the annual Class 2 contribution. I am therefore proposing to double the weekly rate of Class 2 to £5.40 per week from 6th April 2015; however, the rates of Class 4 contributions charged on profits from self-employment will remain unchanged. Finally, the rate of Class 3 contributions will rise from £13.90 to £14.10 per week.

Madam President, I would now like to turn to company taxation.

The zero ten regime of taxation for companies is the corner stone of our economy and it is vital that it continues. The evidence is clear that our zero per cent company rate is a key factor in attracting new business to the Island and in assisting existing businesses to expand. We tinker with it at our peril!

The Island committed to the principle of fair tax competition when Tynwald agreed to abide by the European Union Code of Conduct for Business Taxation in 2000. I am sure Honourable Members will agree that as a reputable international business centre the Island must have a fair and transparent tax system for business taxation. We have seen in recent months the damage that can be done to the reputation of a country when allegations of secret deals are made. Fair tax competition means we cannot treat a company owned by a non-resident any more favourably than a company owned by a resident. We cannot simply increase the rate of company tax for locally owned companies or otherwise discriminate using our tax system.

The 10% rate on income from banking businesses reflects the importance of this sector to the Island’s economy and the 10% rate for large retailers balances their importance as the providers of goods and employment against the inevitable consequences of such large enterprises trading on a small island and the demands on our infrastructure. This leaves the 10% rate on income from local land and property, where I have found no evidence that it is has a wider economic benefit. In fact, the differential with the 20% rate for individuals makes tax planning rather tempting. I am therefore increasing the rate on income from local land and property for companies to 20%. Jersey and Guernsey already do this. This will raise approximately £3m per annum.

However, I would like to make it clear to our industry and any businesses looking to move to the Island that the zero rate for companies is here to stay. Madam President, I will now turn to our indirect taxation and provide an update on the VAT sharing mechanism with the UK.

VAT Sharing Mechanism (TBMM)

In order to plan with certainty we need to conclude our discussions with the UK about the new revenue sharing arrangements under the Customs and Excise Agreement. By way of an update I can report that the data collection work, which covers both household and business surveys, is concluded and the preliminary results of the analysis have been shared with UK.

We are in discussions with the UK Government but it is not clear how long this will last, especially in view of the forthcoming UK General Election in May. We have, however, agreed a further provisional VAT and other duty share for the Isle of Man for 2015/16; which sees our share of the common duties rise by 3% to £286 million. I hope to have agreed the details of the new sharing arrangements by the time of my next budget. The range of Online VAT Services has continued to expand, as has their use. More than three out of every five businesses are now enrolled to use this service which in turn has meant that almost three quarters of all VAT returns and European Sales List lines are now filed electronically.

Hydrocarbon Oil Duty

Whilst the Island’s Hydrocarbon Oil Duty rates for road fuel are to remain frozen for the second year, as in the UK, the reducing consumption of road fuel combined with last year’s cut of one penny per litre means that revenue will continue to fall from £32.5 million in 2012/13 to £30 million in 2015/16. Whilst this freezing of the duty rate is good news for the Island’s motorists it adds pressure to government’s revenue and balancing the budget. As VAT is also levied on fuel for road use the falling price at the pumps will also reduce our indirect tax receipts.

Air Passenger Duty

I am able to announce today that with effect from 1st May this year I am introducing an exemption from Air Passenger Duty for children younger than 12 years of age. I will be extending this exemption to children under 16 from 1 of March 2016. These measures will reduce the cost of air travel for families flying from the Island on larger commercial aircraft and are in line with equivalent exemptions being introduced in the UK. The estimated loss to revenue in 2015-16 is £150K; rising to £300K from 2016-17.

Gambling Duty

An agreement reached with the UK new e-gaming licensing rules means that Isle of Man operators will not have to appoint a fiscal representative in the UK, thereby saving them substantial costs. We have responded to the new UK rules by allowing Isle of Man e-gaming operators to claim double duty relief up to a monetary maximum equivalent to the amount of gambling duty which would have been paid to the Isle of Man Treasury on the same activity. We recognise the burden that the new UK tax will place on our businesses and have responded.

Honourable Members, I will now turn to the Welfare Benefits System.

Social Security and Welfare Reform

The recent reviews of the Island’s Social Security system have shown that we simply cannot afford our current arrangements in the long term. As regards state pensions, we must seriously consider a simple, flat-rate pension, paid at a reasonable rate, with entitlement accrued over a longer period, which is viable in the longer-term and which would not place unreasonable demands on workers and employers. People may need to be encouraged to build up supplementary provision through workplace or other private pension arrangements. The State Pension was never meant to be income replacement in retirement.

We will start a full consultation exercise on the future of our social security system next month. The Ci65 report – an assessment of the viability and future sustainability of our benefits and state pension system - was published on the Government web-site on 5th November, and we will follow this with briefings for Members of Tynwald, public meetings and a consultation document. The issues at hand are of the greatest national importance and it is vital that we hear what the public thinks. How to reform will be one of the most important decisions to be made since the introduction of the welfare state. I would however reassure Honourable Members that I will be guided by the founding principles.

Annual review of social security benefit rates – benefits paid from NI Fund

Madam President, I turn now to the annual review of the rates of social security benefits and allowances payable in the Island. As Honourable Members are aware, these can be divided into two groups: those which are funded out of National Insurance contributions and those which are funded out of general revenue.

As regards those benefits which are funded from NI contributions, the rates of benefits and allowances will be increased from the week commencing 6th April 2015 by the same amounts as in the UK. In particular, this means that under the so-called triple lock guarantee, basic state pensions will rise by 2.5% - double the rate of inflation at the customary reference point in September– whilst the Additional State Pension, bereavement allowances and incapacity benefit will rise by 1.2%, in line with UK CPI at the September reference point.

I remind Honourable Members that the Manx CPI for January 2015 was minus 0.2% - the first time this inflation index has been negative since it was established in 2008 – and I am therefore confident that this increase is both fair and affordable.

The Retirement Pension Premium will increase by 1.2% - the same as for Additional State Pension, whilst the Nursing Care Contribution is to increase by 1.0%, in line with the Isle of Man CPI.

In the light of recent reports from both the UK Government Actuary and Mercers, and given that the Manx Pension Supplement already costs over £36 million a year, I believe it would be inappropriate to increase the rates of the Pension Supplement at this time. However, as I have just stated, pensioners will benefit from a 2.5% increase in basic state pensions as well as 1.2% more in Additional State Pension for those who qualify. I am sure that Honourable Members will agree that this is welcome news.

Special Increase in Carer’s Allowance

I have for some time now been deeply concerned that people who give up or have to refrain from work in order to provide full-time care to a severely disabled person are offered very little from our social security scheme. In fact, the current weekly rate of Carer’s Allowance is just £61.35. Carers have an incredibly important role to play in our society and are often the difference between a person being able to live in their own home and having to go into care. Recognising the invaluable contribution they make, I am delighted to be able to announce that from 6th April 2015 Carer’s Allowance is to be brought up to the same level as the Nursing Care contribution: that is to £112.10 per week - an increase of some 82.7%. This will be of enormous benefit to around 320 carers who currently receive Carer’s Allowance. The additional expenditure of around £850,000 per annum is to be financed from savings through the reduction and more focussed targeting of the Personal Allowance Credit which I mentioned earlier.

Annual review of social security benefit rates – benefits paid from general revenue

I turn now to those benefits which are funded out of general revenue. Again, these can be divided into two groups – universal and income-related. Honourable Members will recall that through the Welfare Reform and Wellbeing chapter of the Agenda for Change this Honourable Court agreed to be realistic about what we can afford and to ensure scarce public resources are targeted to those most in need.

For many years it was the norm to automatically increase means-tested benefits in line with domestic inflation, though more recently increases have been linked to increases in earnings. However, the cost of our social security scheme is rising rapidly and we cannot afford to keep adding to those costs. Therefore, I have decided that the rates of child benefit, attendance allowance, disability living allowance – with one exception, which I shall explain in a moment - and each of the prescribed amounts for income support, income-based jobseeker’s allowance and employed person’s allowance will not be increased from this April.

The exception is the higher-rate mobility component of Disability Living Allowance. Entitlement to this component is a pre-requisite to leasing a vehicle through the Motability scheme. In order to ensure the continued availability of this scheme to disabled people in the Island, I shall be increasing the higher-rate mobility component by 1.3 per cent from April, so that the difference between UK and Isle of Man rates is maintained at its current level. However, simply freezing the rates of these revenue-funded benefits alone does not contribute enough to balancing the budget. We must significantly reduce the cost of our social security scheme going forward. To achieve this, I intend to take a number of measures which I shall now explain.

Child Benefit

As Honourable Members are aware, from last April we started to means-test entitlement to child benefit. Currently, families whose incomes are less than £60,000 a year are eligible for the maximum amount of child benefit; families whose incomes are between £60,000 and £90,000 receive a reduced amount of child benefit and families with incomes above £90,000 a year are not entitled to any child benefit. I have to announce that from this April each of the income thresholds will be reduced by £10,000, in order to reduce expenditure by around £1 million annually. So, from 6th April 2015, families with annual incomes of less than £50,000 – a little under twice the amount of median earnings in the Island - will continue to be entitled to the full amount of child benefit; families with incomes of between £50,000 and £80,000 will receive reduced amounts of child benefit, whilst families with incomes above £80,000 will no longer be entitled to child benefit.

Free TV licences for over 75s

Since the beginning of 2002, everyone aged 75 or over has been eligible to receive a free TV licence, irrespective of their means, under similar arrangements which exist in the UK. The cost of this provision is borne by the Manx taxpayer and currently amounts to around £700,000 a year. Madam President, as I alluded to earlier, this Honourable Court has resolved to be realistic about what we can afford going forward. Our much reduced revenue resources must be focussed on those who need them most. Free TV licences for the over 75s on a universal basis are no longer affordable and cannot be justified. Free TV licences for the over 75s are provided in UK regulations, which are been extended to the Island. Therefore, we shall shortly be asking the UK Government to amend the relevant regulations in order to exclude the Isle of Man from the earliest possible date.

However, pensioners on low incomes will be protected from this measure. There is already in place a scheme which enables pensioners who receive income support to receive a payment from Social Security for the full cost of their licence. For others, the BBC offers direct debit options to spread the cost of a licence over periods of up to a year. Net of additional payments for those who receive income support, this measure is expected to save around £600,000 in a full year.

Jobseeker’s Allowance

The Isle of Man continues to enjoy economic growth, yet both long-term unemployment and youth unemployment remain stubbornly high. Just under 200 jobseekers - a fifth of the total unemployed register - have been registered as unemployed for over a year. This number has barely changed over the last two years, despite Government initiatives specifically targeted at reducing the number.

Over a third of the total number of unemployed people is under the age of 25, and a third of them have never worked. The rates of income-based jobseeker’s allowance payable on the Island are significantly higher than in the UK and the amount of earnings from part-time work which can be ignored for jobseeker’s allowance purposes here is also significantly greater than in the UK. It is a fundamental principle of the 1942 Beveridge Report that people must always be better off in work than on benefits. Yet, it may be that our relatively generous approach is dissuading some jobseekers from leaving benefit to take-up a job.

I believe there would be merit in reducing the current rates of allowance – either across the board, or on a targeted basis - and my officers will report to me before the end of March, on measures aimed at cutting expenditure by up to £400,000 a year.

Incapacity Benefits

Approximately 2,000 people have been receiving incapacity benefits for over a year. The new Personal Capability Assessment piloted by the Department of Social Care in 2012-13 showed that a proportion of those claiming incapacity benefits are actually capable of performing some form of work. With the help of a new provider, over the next three years the majority of recipients of long-term incapacity benefits will have their work capability formally assessed. If people are capable of some form of work, even if it is not in the same role they previously occupied, they will be encouraged into the workplace. But this is not just about making cost savings - it is a genuine attempt to help people escape the benefits trap and realise their full potential.

We have a duty to ensure people are receiving the support that is right for their circumstances and that Government’s resources are focused in the most appropriate manner. There is a body of evidence which demonstrates that people are better off in work than out of work, not only financially but in terms of their health and wellbeing, their self-esteem and the future prospects for themselves and their families. People who are long-term unemployed or who have never worked are up to three times more likely to be in poor health than those in work. We have inadvertently built up a dependency culture when medical and nursing evidence shows that work empowers, energises and makes someone feel worthwhile, useful and builds their confidence and self-esteem

Capping allowances in means-tested benefits for public sector rents

When assessing entitlement to means-tested benefits, such as income support or employed person’s allowance, allowances are made for certain housing costs which the claimant or their partner are liable to pay in respect of the property they occupy as their home. Under the current rules, people renting properties from the Department of Health and Social Care or a local housing authority get allowance for the full amount of rent and rates for which they are liable in the assessment. However, for those renting in the private sector the amount that can be allowed is capped. The broad intention of the cap is to ensure that the taxpayer is not paying for accommodation which is of a greater size than the claimant and their family, if they have one, actually need. I believe that the same principle should apply to tenants of DHSC and local authority properties.

Therefore, subject to limited transition protection for the handful of cases who would otherwise be affected immediately, the same limits as already apply to claimants renting in the private sector will also apply to claimants renting in the public sector, from the beginning of April.

CONCLUSION

Madam President,

So far so good! We have come a long way to arrive at a balanced budget. The journey has had its challenges, but I always had confidence that we would succeed. The budget for 2015-16 represents the culmination of these efforts over the last four years, and what is now presented is a balanced and more prudent budget. This is a budget that better targets those areas requiring additional support, in particular Health through the Health Inspection Fund. A vote in favour of this budget is therefore a vote for Health.

It also recognises the special importance to the community of those that care for others through the very substantial increase to the Carers Allowance. Reviews of the taxation and social security systems have begun. Consultation on changes to the personal allowance and 10% band will commence in the coming year with a view to further simplification and removal of a significant number of people from the tax net.

We are finding ways of using measures to grow the economy whilst at the same time reducing dependence upon the state where people can be better off through work. We are developing greater fairness and greater sustainability through the prioritisation of resources to those areas where needs are greatest. The transition will be challenging for some of those affected, but decisions have to be made which seek to protect the longer term sustainability of our resources for the benefit of our wider society and economy, whilst at the same time continuing to protect the truly vulnerable.

This is a budget that firmly puts in place the structures to help us achieve long term affordability and sustainability in the public finances. We must continue to support the economy and more effectively deliver our services at no extra cost. We need a smaller, smarter government which gives the taxpayer better value for money. We will seek reform to drive down our long term liabilities, not least in terms of pension and welfare costs. Only then can we claim to be truly living within our means. I am confident that given what we have achieved so far, with closer working together, we will succeed.

Before closing I would like to thank the Treasury Members – Mr Downie, Mr Braidwood and Mr Henderson - who have each in their own way with their different perspectives helped me with their advice and counsel in the production of this budget. Thanks also need to go to my colleagues in the Council of Ministers who have worked hard through some long budget sessions to arrive at this point.

I will repeat by saying that my budget today is based on the following four principles.

It honours the promise of this Government to balance the books.

It continues to focus on fairness.

It maintains funding for vital services for the island’s community, and particularly those who are vulnerable.

It starts us on the path of building systems, finances and services for the next generation and not just for the next general election.

With its prudent and focussed approach, this budget represents sound and balanced stewardship. It is a positive budget reflecting the positive achievements of this Government. I call on you to join me in working together for the future benefit of this Island, and I commend this budget to the Honourable Court.

Backbencher Alfred Cannan accused the Treasury Minister of misleading the public over the rebalancing of public finances.

During the Budget debate today, Michael MHK Mr Cannan argued that £281m net of reserves have been used to support government spending since 2011 and spending from reserves is projected to reach £77m next year.

He said: ‘On the current spending trajectory with a projected £624m in the pot from April 1 2016, the island will have used its reserves with the exception of the National Insurance Fund in about seven years’ time.

‘Rebalancing is a myth. How can we be balanced if our reserves are falling by another £77m this forthcoming financial year? I am appalled to listen to the message of rebalancing that is being dispatched to the public. It is misleading. it is untruthful, it is unhelpful and it is going to land this government and the island in severe trouble.’

Mr Cannan claimed the real deficit was closer to £100m. He called for clear identification of the requirement to raise revenue, a further £30m of government cuts and a further £20m of savings from public sector pensions.

Anglers can now buy fishing licences over the counter at the Welcome Centre at the Sea Terminal, Douglas, as well as online at www.gov.im/onlineservices.

The reservoir fishing season starts on March 10 and the river fishing season on April 1. All anglers must have a valid licence.

There is no increase in the price of freshwater fishing in 2015, with reservoir licences for adults costing £206 for a season, £73 for a week and £16 for a day, and river licences costing £69 for a season, £27 for a week and £11 for a day.

There are concessions for anglers under the age of 19, while children aged 13 and under can obtain licences free of charge.

The reservoir season concessionary licence, available to people over 65 years old or those registered as disabled, is not available online as proof of eligibility is required to be shown when purchased. This type of licence is available at post offices, at the department’s headquarters in St John’s and at the Welcome Centre.

The Welcome Centre is open Monday to Saturday (including bank holidays) between 8am and 6pm.

More information, including the ‘Isle of Man Angling Guide’, is available on the freshwater fishing page of the fovernment website www.gov.im – click on Department of Environment, Food and Agriculture and then Fisheries Directorate – or by contacting the department on 685857.

Peel Commissioners are concerned at the number of potholes around the town and have decided to feature a ‘Pothole of the Week’ on the town’s website, peelonline.net

Speaking at the last board meeting, commissioner Ian Davison came up with the idea which went down well with the board.

Mr Davison said he thought the move might ‘shame the Department of Infrastructure into doing something about the potholes’.

The first ‘Pothole of the Week’ is in Rheast Lane, pictured.

If you would like to nominate a pothole, forward a photo to the commissioners via peelonline.net

Email a photo and details of the location to photos@peelonline.net

The Milntown Estate has opened its gardens to the public for the 2015 season with new technology very much to the fore.

This year The Milntown Estate, near Ramsey, is leading the way by installing QR Codes throughout its grounds to give visitors a more interactive experience as they enjoy this historic estate.

The codes can be used with Smartphones or tablets in the gardens where free Wi-Fi means visitors can access photographs, videos and lots of information about the house and grounds.

Milntown is extremely grateful to Douglas company Ramsey Crookall for sponsoring the provision of Wi-Fi in the cafe and grounds and to Red Lyon for installing the mast.

Joanna Crookall, chief executive officer of stockbrokers and investment managers Ramsey Crookall, said: ‘Ramsey Crookall is the oldest established stockbroking company in the Isle of Man and we are passionate supporters of the island’s heritage and attractions.

‘Milntown is one of the island’s most historic locations and we believe that the introduction of this new technology will help to promote interest in the estate and enhance the visitor experience for future generations.’

insight

There are nine codes in the grounds and accessing them gives visitors an insight into some of the key areas and attractions of the estate including the vegetable garden, where unusual and colourful vegetables are grown, the mill with its wheel and machinery, and the mill pond where the ducks and their ducklings are always a star attraction.

The Milntown Estate was left in trust by its last owner, Sir Clive Edwards, for the benefit of the Manx people and the trustees hope that this new resource will encourage more visitors, particularly school groups, to come and explore the grounds in a whole new way.

One of the estate’s trustees, Charles Guard, said: ‘Commercial partners are vital to the long term future of Milntown and our ability to offer an experience that the people of the Isle of Man can enjoy.

‘We are very grateful for the support of these two prestigious companies who have enabled us to offer this exciting technology to our visitors.’

There are two codes at each location - one for adults and one for children.

The children’s code includes explorer tasks which takes them on an informative and enjoyable journey round the gardens.

School groups are always welcome at Milntown and a group of from Jurby School and Bunscoill Rhumsaa have visited to test out the new technology. While playing in the gardens they also learnt about mini beasts, the vegetables grown on the estate and the history of how Milntown has evolved over the last 600 years.

If you have a Smartphone or tablet but have never used QR codes before - don’t worry, you can pick up a leaflet in the café which explains how to get started.

Quick Response or QR Codes are the small barcode-like symbols that can be used to access web pages for information about particular areas of interest or historical relevance. There’s also a map showing the locations all of the codes throughout the grounds. If you have a school group you would like to bring to Milntown contact the estate office on 812321.