Cuts crisis on the Isle of Man

THE ISLE of Man (IoM) public sector faces massive cuts after the UK government imposed a new UK-IoM value added tax sharing agreement without any prior discussion between the two governments.

Christian Daugherty, Isle of Man

The agreement, which comes into force next April, will result in a loss of £90 million of IoM government revenue in the first tax year, or £1,125 per person. This loss will later increase to £140 million, 24% of government revenue and £1,750 per person.

The public sector currently employs 24% of the island's workforce and the huge loss of revenue will result in big attacks on public services and public sector workers.

Civil service workers in IoM's second biggest union, Prospect, voted in September by 95% to reject a pay freeze. A ballot for industrial action was being prepared, but this was called off after the new VAT agreement.

No specific cuts have been announced yet but the island's MHKs (Member of the House of Keys - IoM's equivalent to MPs) make it clear that there will be major cuts to public services including pay freezes, pay cuts and redundancies. All government departments have been ordered to cut their budgets by 15%.

Some anger at these cuts has been directed in a Manx nationalist, anti-UK direction, a view encouraged by Manx politicians trying to absolve themselves of any responsibility.

With IoM's current status as a tax haven for the rich, the fight to protect the island's public services must be based upon uniting Manx and UK workers and young people.

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