T Y N W A L D C O U R T O F F I C I A L R E P O R T

R E C O R T Y S O I K O I L Q U A I Y L T I N V A A L

P R O C E E D I N G S

D A A L T Y N

HANSARD

Douglas, Tuesday, 16th February 2021

All published Official Reports can be found on the website:

www.tynwald.org.im/business/hansard

Supplementary material provided subsequent to a sitting is also published to the website as a Hansard Appendix. Reports, maps and other documents referred to in the course of debates may be consulted on application to the Tynwald Library or the Clerk of Tynwald’s Office.

Volume 138, No. 12

ISSN 1742-2256

Published by the Office of the Clerk of Tynwald, Legislative Buildings, Finch Road, Douglas, , IM1 3PW. © High Court of Tynwald, 2021 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

Present:

The President of Tynwald (Hon. S C Rodan OBE)

In the Council: The Lord Bishop of Sodor and Man (The Rt Rev. P A Eagles), The Attorney General (Mr J L M Quinn QC), Miss T M August-Hanson, Mr P Greenhill, Mr R W Henderson, Mrs K A Lord-Brennan, Mrs M M Maska, Mr R J Mercer, Mrs J P Poole-Wilson and Mrs K Sharpe with Mr J D C King, Deputy Clerk of Tynwald.

In the Keys: The Speaker (Hon. J P Watterson) (); The Chief Minister (Hon. R H Quayle) (); Mr J R Moorhouse and Hon. G D Cregeen (Arbory, Castletown and Malew); Hon. A L Cannan and Hon. T S Baker ( and Michael); Mr C C Thomas and Mrs C A Corlett (); Mrs C L Barber and Mr C R Robertshaw (); Hon. D J Ashford MBE and Mr G R Peake (); Mrs C S B Christian and Mr S P Quine (); Mr M J Perkins and Mrs D H P Caine (); Hon. R K Harmer and Hon. G G Boot ( and Peel); Mr W C Shimmins (Middle); Mr R E Callister and Ms J M Edge (); Hon. A J Allinson and Mr L L Hooper (Ramsey); Hon. L D Skelly (Rushen); with Mr R I S Phillips, Clerk of Tynwald.

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Business transacted

Leave of absence granted ...... 1193 Welcome to His Excellency the Lieutenant Governor ...... 1193 Order Papers Nos. 1 and 2 – Papers laid before the Court ...... 1193 Procedural – Question Paper to be taken on Wednesday morning ...... 1195 Order Paper No. 2 ...... 1196 2. Budget for the year 2021-22 – ‘A Budget of Resilience’ – Debate commenced ...... 1196 The Court adjourned at 12.59 p.m. and resumed its sitting at 2.30 p.m...... 1226 Budget for the year 2021-22 – Debate continued ...... 1227 Bill for signature ...... 1240 Budget for the year 2021-22 – Debate concluded – Motion carried ...... 1240 3. General Revenue and Capital Payments 2021-22 – Expenditure approved ...... 1248 4. Investments and Reserves – Expenditure approved ...... 1251 5. Social Security Act 2000 – Social Security Legislation (Contributions) (Miscellaneous Amendment) Order 2021 approved ...... 1254 6.-11. Social Security Administration Act 1992 – Social Security Benefits Uprating Order 2021 approved; Social Security Contributions and Benefits Act 1992, Social Security Administration Act 1992 and Pensions Act 2014 – Social Security Benefits Uprating Regulations 2021 approved; Social Security Act 2000 – Pension Supplement (Amendment) Order 2021 approved; Pension (Top-up) (Amendment) Order 2021 approved; Social Security Contributions and Benefits Act 1992 – Income Support (General) (Isle of Man) (Amendment) Regulations 2021 approved; Employed Person’s Allowance (General) (Amendment) Regulations 2021 approved ...... 1256 Main Order Paper ...... 1261 3. Tynwald Management Committee – Manx Patriots’ Roll of Honour – Second Report 2020-21 received and recommendation approved ...... 1261 4. Ecclesiastical Committee – Draft Church Property Measure (Isle of Man) – Second Report 2020-21 received and recommendation approved ...... 1264 5. Select Committee of Tynwald on Whistleblowing – Report and recommendations – Debate commenced ...... 1265 The Court adjourned at 5.22 p.m. and resumed its sitting at 5.55 p.m...... 1270 Select Committee of Tynwald on Whistleblowing – Debate concluded – Amended motion carried ...... 1270 Royal Assent – Gas Regulation (Amendment) Act 2021; Church (Miscellaneous Provisions) Measure (Isle of Man) 2021...... 1296 The Court adjourned at 7.51 p.m...... 1297

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Tynwald

The Court met at 10.30 a.m. in the presence of His Excellency the Lieutenant Governor, Sir Richard Gozney

[MR PRESIDENT in the Chair]

The Deputy Clerk: Hon. Members, please rise for the President of Tynwald.

The President: Moghrey mie, good morning, Hon. Members.

5 Members: Moghrey mie, Mr President.

The President: The Lord Bishop will lead us in prayer.

PRAYERS The Lord Bishop

Leave of absence granted

The President: Hon. Members, leave of absence has been granted to the Lord Bishop from four o’clock tomorrow, in the event we should be sitting then.

Welcome to His Excellency the Lieutenant Governor

10 The President: It is my great pleasure on behalf of the Court to welcome His Excellency the Lieutenant Governor who is with us this morning to witness proceedings.

Order Papers Nos. 1 and 2 – Papers laid before the Court

The President: I call on the Clerk to lay Papers.

The Clerk: Ta mee cur roish y Whaiyl ny pabyryn enmyssit ayns ayrn nane jeh’n Chlaare Obbyr. 15 I lay before the Court the papers listed at Item 1 of the Order Paper. Ta mee cur roish y Whaiyl ny pabyryn enmyssit ayns ayrn nane jeh’n Chlaare Obbyr Earroo jees. I lay before the Court the papers listed at Item 1 of Order Paper No. 2.

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Order Paper No. 1 Civil Aviation Act 1982 (of Parliament) Civil Aviation (Charges) Scheme 2021 [SD No 2021/0005] [MEMO]

Highways Act 1986 Highway Diversion (Public Right of Way No.198, Arbory) Order 2020 [SD No 2020/0498] [MEMO]

Customs and Excise Act 1993 Customs (Import Duty Variation) (EU Exit) Regulations 2020 (Application) Order 2021 [SD No 2021/0003] [MEMO]

Social Security Act 2000 Social Security Contributions and Benefits Act 1992 (Application) (Amendment) Order 2021 [SD No 2021/0021] [MEMO]

Reports

Ecclesiastical Committee of Tynwald Second Report for the Session 2020-21: Draft Church Property Measure (Isle of Man) [PP No 2021/0004]

Tynwald Management Committee Second Report for the Session 2020-2021 [PP No 2021/0007]

The remaining items are not the subject of motions or debates on the Order Paper

Items subject to negative resolution

Customs and Excise Duties (General Reliefs) Act 1986 Travellers’ Allowances (Amendment) Order 2021 [SD No 2021/0004] [MEMO]

Taxation (Cross-border) Trade Act 2018 Customs (Import Duty) (Amendment) Regulations 2021 [SD No 2021/0033] [MEMO]

Immigration Act 2014 Nationality (Fees) (Amendment) Regulations 2021 [SD No 2021/0036] [MEMO]

Immigration Act 1971 Statement of Changes in Immigration Rules [SD No 2021/0002] [MEMO]

Documents subject to no procedure

Currency Act 1992 Currency (Alice in Wonderland Collection) 50 Pence Coin Order 2021 [SD No 2021/0023]

Appointed Day Order

European Union and Trade Act 2019 European Union and Trade Act 2019 (Appointed Day) (No.3) Order 2021 [SD No 2020/0031]

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Reports

Council of Ministers Response to the Report of the Select Committee on Whistleblowing [GD No 2021/0007]

Chief Minister Committee on Community and Public Engagement Introductory Report November 2020 [GD No 2020/0008]

Standing Committee of Tynwald on Emoluments: First Report for the Session 2020-21 [PP No 2021/0014]

Report on complaints made against the Office of the Clerk of Tynwald [PP No 2021/0015]

Order Paper No. 2 The Isle of Man Budget 2021-22 [GD No 2021/0004]

Social Security Act 2000 Social Security Legislation (Contributions) (Miscellaneous Amendment) Order 2021 [SD No 2021/0014] [MEMO] Pension Supplement (Amendment) Order 2021 [SD No 2021/0017] [MEMO] Pension (Top-up) (Amendment) Order 2021 [SD No 2021/0018] [MEMO]

Social Security Administration Act 1992 Social Security Benefits Uprating Order 2021 [SD No 2021/0015] [MEMO]

Social Security Contributions and Benefits Act 1992, Social Security Administration Act 1992 and Pensions Act 2014 Social Security Benefits Uprating Regulations 2021 [SD No 2021/0016] [MEMO]

Social Security Contributions and Benefits Act 1992 Income Support (General) (Isle of Man) (Amendment) Regulations 2021 [SD No 2021/0019] [MEMO] Employed Person’s Allowance (General) (Amendment) Regulations 2021 [SD No 2021/0020] [MEMO]

Procedural – Question Paper to be taken on Wednesday morning

20 The President: Hon. Members, it is my intention to take our Question Paper as the first item of business tomorrow morning.

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Order Paper No. 2

2. Budget for the year 2021-22 – ‘A Budget of Resilience’ – Debate commenced

The Minister for the Treasury to move:

That the Budget proposals [GD No 2021/0004] for the year ending 31st March 2022 be received and necessary action be taken to give effect thereto.

The President: So turning to No. 2 Order Paper, Budget for the year 2021-22. I call on the Treasury Minister, Hon. Member for Ayre and Michael, Mr Cannan.

25 The Minister for the Treasury (Mr Cannan): Mr President, in February of last year, I presented what I termed a ‘Budget of Focus’, to grow the economy, deliver essential capital projects, support hard-working families and improve the lives of vulnerable members of our community. That Budget was one of quiet optimism based on a five-year fiscal plan that was consistently delivering beyond our stated objectives and indeed the Budget was further reinforced last year 30 by the delivery of a fair and realistic agreement of the VAT share due to the Island from our calculated economic activity. That Budget moved us closer towards delivering better outcomes for our society based on our Programme for Government and our desire to redress the balance of a harsh decade of wage deflation. It raised Personal Allowances for the fourth consecutive year; it raised Child Benefit for 35 the fourth consecutive year; it built on the additional funding given to pre-school education; it built on the additional support given to low income families with children at university; it added further funding to essential Police and public services; it gave more funding to health and social care; and it further cemented funding in place for critical national infrastructure. These and many other measures including our triple-lock pension commitments have been the 40 bedrock of this Government’s fiscal policies to date. These policies have eased the cost of living for thousands of families, have helped address wage deflation and we have consistently invested money directly into the economy, creating job opportunities and growth that have supported the lowest unemployment figures on this Island for over 20 years. And finally, Mr President, we set out last year to achieve a £12 million surplus as part of our 45 fiscal rebalancing strategy – a Budget of focus for an Island of focus. What I can tell you a year later we have been well and truly focused – but perhaps not in the way that was intended. We have been focused on stabilising our economy. We have been focused on protecting jobs and businesses. We have been focused on protecting public health and the NHS. And we have been focused on structuring our finances to provide both reactive and proactive 50 support to our nation and our people in their hour of need. That focus, that protection, that support means that the £12 million surplus forecast last year is today a forecasted £74 million deficit and is part of a total additional COVID pandemic cost to the Government finances of over £200 million. That focus, that protection, that support has meant that we have reduced our cash balances by £146 million, seen our forecasted income reduce by 55 over £80 million and spend over £100 million in direct financial support to our economy and our people. These figures may cause some to draw breath, but at what price the health of the nation? What price the protection of jobs and businesses? What price the protection of critical national infrastructure? And what price our economic stability for the future?

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60 The actions we have taken and the costs we have incurred have saved lives, have protected this nation, have protected jobs and the economy and indeed have protected public finances. The actions taken and the costs incurred have been responsible and appropriate and left room for manoeuvre. They have left us optimistic that not only can we get through this crisis with our existing financial parameters, but we can also invest to sustain our economy and build for the 65 future. So rather than a Budget of gloom, I bring forward to you today, I would suggest, a Budget of resilience, a Budget that yes reflects the fiscal toll of the past 12 months, but also a Budget that reflects the fundamental structure and strength of our Island nation and its people on all its economic, fiscal and social fronts. 70 This Budget today is one that will continue to stabilise our economy, protect our people, support our public services and exercise responsible financial management whilst also ensuring that we continue to invest in our future. Mr President, you need little reminding that in March last year large parts of our domestic economy were closed down with little warning and businesses had to adapt, with speed, to new 75 challenges including issues with supply chains, remote working adaptations and the knock-on effects of the transmission of the virus in other countries. Initial economic modelling predicted that the downturn from COVID-19 was expected to be harder in the Isle of Man than the 2008 global recession. Our immediate response centred on the preservation of life due to the threat to health that 80 the virus posed, but it was clear that the threat to our Island’s economic future, and society, would have lasting implications if we did not provide clear, proactive and considered support to businesses and individuals who were affected through no fault of their own. Just as we could not ignore the significant health risk posed, we could not ignore the risk that restrictions and lockdown periods posed to our economy and to the financial health of our people. 85 In response, we brought forward a comprehensive package of measures designed to protect jobs, stabilise the economy and lay the groundwork for a solid economic recovery. To date we estimate that 3,200 businesses and self-employed individuals will have received support totalling approximately £14 million through the Coronavirus Business Support Scheme. Around 350 qualifying businesses in the Travel and Tourism sector are estimated to receive up 90 to £11.5 million in support through the Strategic Capacity Scheme and other sector specific schemes. We have protected the Island’s fishing industry with packages of support which could reach up to £1 million by April this year. Government-backed loan schemes have made available £50 million of loans through the 95 disruption loan guarantee and working capital loan schemes and over £30 million of Government taxation payments were deferred, to provide respite for businesses and individuals at a time when they needed it most. The Salary Support Scheme has supported almost 12,500 employees and we estimate will pay out over £61 million. The Manx Earnings Replacement Allowance (MERA) will have paid out approximately £9.5 million in addition to increased revenue welfare spending of 100 £5.5 million. Indeed at the peak of the first lockdown, 14,688 working residents were directly supported by our schemes and support was delivered rapidly, conclusively and equitably. I want to pay tribute to those officers across the Treasury and the Department for Enterprise who worked with urgency and total commitment to design, deliver and administer these schemes, that have proven so vital to so many. 105 Mr President, I have always maintained that our support would not be able to save every job, or account for every loss. But our dashboard of indicators, including current unemployment figures and income tax receipts demonstrates that these measures have positively impacted those sectors and those individuals who were in need. I also want to pay tribute to so many across the private sector who adapted and managed their 110 businesses so successfully, supported their employees and came together to find ways to drive their sectors forward. Your input, commitment and determination is to be applauded – thank you. ______1197 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

Mr President, these economic packages are stabilising influences, but we also needed to consider economic stimulus. That is why in the summer of 2020, I announced a £100 million economic recovery fund to protect jobs, stabilise our economy but also to invest in our future. 115 The newly established Economic Recovery Group is to lead a co-ordinated response to stimulate and regenerate the economy. We are prepared to provide support measures as necessary and are progressing opportunities for reskilling and education for our people, accelerating initiatives that benefit our Island, and creating opportunities to stimulate spending in our domestic economy. Now is also the time to assess our future and the Economic Recovery Group has commissioned 120 a new Strategic Economic Framework to provide the platform to drive forward the Island’s economy over the next five to 10 years. This core piece of economic analysis and assessment will let us truly understand how each part of the Island’s economy functions and interacts with Government and other sectors. The point of this strategy will be to be bold, to look across a wide range of opportunities and identify the opportunities where the Isle of Man can take advantage, 125 or even lead the way on. It will draw on experts across a range of sectors, bringing views and analysis to help the Island find its place for the next five to 10 years and beyond. This framework is being developed so that future administrations can understand the economic levers available to them and make informed decisions on the choice of policy options available, ensuring the Island has good, well-paying jobs that are the bedrock of our economy and 130 finances. There will be proper engagement with a wide range of businesses and individuals, and I expect this process to commence within weeks. The Economic Recovery Group has so far approved funding for a wide variety of projects: £3 million to provide increased opportunities for Manx students to study at university; we have invested £1 million to date developing new training opportunities at UCM, leading to 409 students 135 being supported on additional courses; £500,000 to establish a new medicinal cannabis industry; an additional £1 million for the Town and Village Regeneration Scheme which will improve our environment to create opportunities for local businesses and contractors; £500,000 of grant funding to stage local domestic events driving footfall and economic activity in regions; and £1.4 million to accelerate the National Fibre Broadband rollout providing digital capacity for the 140 Island moving forward. In addition, the Economic Recovery Fund has financed the Manx Restart Scheme with the aim of creating 120 new employment opportunities within the private sector for people who have been unemployed for three months or more, including those who have been in receipt of MERA, or not in receipt of benefits at all. This scheme provides a real opportunity for people who have 145 been out of work for some time to get their foot in the door and demonstrate their potential in a real job – with the aim of securing long-term permanent employment at the end of the placement, either with the employing organisation or elsewhere. This Budget before you today indicates that we expect to spend up to £10 million this year from the Economic Recovery Fund and estimates another £30 million of expenditure next year 150 supporting jobs and our economy. Additional monies remain available but I am sure Hon. Members would agree with me that any money must be spent wisely. I will keep both Tynwald and the public updated and informed of progress. Turning now to more specifics of the Budget before this Hon. Court: the forecast in this Budget is that revenues for the current year are projected to be some £87 million lower than was 155 budgeted for in February 2020. Taking this forecast into account together with the costs of the various support schemes and payments from contingency, for such things as personal protective equipment, we estimate the cost to the public purse of the pandemic response to be over £200 million. So, the impact has been substantial. However, both Government finances and the Island have 160 demonstrated substantial resilience. Indeed our fiscal and economic position is more favourable than we had feared at the commencement of the crisis last year.

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Our reserves, despite the pressure, have stood up particularly well and with market values increasing by 13% since the market crash in March 2020, the market value of our reserves stands at £1.6 billion which is broadly at the same level pre the pandemic. 165 Our income tax receipts are forecast to be around £223 million this year, some £23 million below the Pink Book figure. Hon. Members will, I am sure, appreciate there remains some uncertainty in all of our forecasts this year. National Insurance receipts are stable this year, with the forecast in the Pink Book at only £2.4 million below budget and there is a small chance we may achieve the Budget target. This is a testament to the levels of economic activity and 170 employment opportunities that have been sustained outside of the lockdown periods. In terms of VAT, we still need to work with HM Treasury to calculate the final position for this year to determine the shared VAT revenue. Whilst I am confident that in the circumstances our economic performance will be above our initial expectations, as a prudent measure we have provided for a reduction in this income. 175 In terms of expenditure for this year, the approach to unexpected costs taken through the pandemic was to manage them through contingency without adjusting underlying departmental targets. This is the responsible course of action and has allowed the Treasury to maintain oversight of unexpected cost claims as they arose. Moving now to the year ahead, clearly there are many unknowns facing us over the next 180 12 months and beyond and Hon. Members will recognise that our future projections beyond April 2022 may be subject to significant variation. Nevertheless, we have presented a considered scenario in the Pink Book on the potential position for future years. The key assumption in this scenario projection is that by 2023-24 public sector revenues will broadly recover to the planned level set out in the last budget. 185 The core assumption is that income tax revenues will fall next year, as impact of the pandemic continues to be felt, but will then return to previous expected levels by 2023-24; the basic assumption being there is no permanent scarring to our economy. I do acknowledge there is risk to this forecast. However, the Island’s economy has proven very resilient and the emergence of vaccines indicates that an assumption of a recovery to a previous economic activity level is a 190 reasonable one. Further, this is consistent with the speed of economic recovery experienced last year following the release of lockdown restrictions. The other core element of taxation income is shared indirect taxes collected in accordance with the Customs and Excise Agreement with the UK. Members will recall that the calculation for the current five-year period was agreed in February 2020. Whilst remaining bullish about the 195 opportunity for economic recovery, nevertheless we will take a small provision of 3% against this income as a prudent measure for 2021-22. Mr President, given the continued level of risk and uncertainty, the Budget proposes that we continue the approach taken in the summer Budget Update to carry an increased level of contingency. This Budget therefore includes a higher than normal level in the contingency fund of 200 £12 million, to be topped up by another £10 million. In addition there is £11 million in Treasury’s revenue contingency account to provide a means to manage the increased levels of uncertainty and risk. Talking about uncertainty, there are still major challenges facing public finances around the world, with talk about tax increases being necessary to recoup the huge levels of expenditure 205 required to manage the pandemic. Indeed, I am sure there has been much speculation in many quarters that today I will increase taxes in some way to cover the ongoing costs of the pandemic, either by reducing personal allowances, increasing rates of income tax or by raising revenue through a change to the rules in National Insurance. However, now is not the time for tax rises. Instead, our focus must be on continuing to support 210 our economy and our recovery. No news on tax rises is good news for jobs, investment and economic stability and is a testament to the strength and good management of public finances.

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I should also point Hon. Members again to the increases to personal allowances up until last year which, I would suggest, have helped many cope with the short-term income reductions they may have experienced. 215 Under this administration the £3,750 increase in personal allowances from £10,500 to £14,250 has meant that a single person on this Island pays up to £550 less tax per year and a couple up to £1,100 less tax per year. We have put money back in people’s pockets and helped improve living standards. Hon. Members will recall that last year I stated that I would initiate a review of the National 220 Insurance System. I can confirm that a review has been undertaken and that I intend to bring a report back to this Court for a policy debate in the coming months. (A Member: Hear, hear.) A change to the National Insurance regime that has been in place since the 1940s is not something I intend to do without Members’ input, or indeed without a public consultation. Therefore following the Tynwald debate promised, I will issue a public consultation on the various options 225 for change. It is vital that our system of taxation remains fair and is appropriately designed to meet our commitments. Hon. Members, with regard to our taxation policies and practices, I can confirm that the Isle of Man continues to meet an ever-increasing number of international standards and that they continue to evolve, develop and change. I have said before that keeping up with these 230 international standards is vital to our reputation and our economy and this continues to be the case. The international standard for economic substance, which was introduced in January 2019, continues to widen in scope and I will be bringing an Order to the Court in June to extend the scope to include partnerships. 235 Also Hon. Members will be aware that recently Members of the European Parliament adopted a resolution to change how the European Union’s list of non-co-operative tax jurisdictions is established. Although the vote to adopt the resolution has no legal impact, it will add further political pressure on the European Union Commission and European Union member states. The Assessor is also closely monitoring the ongoing work of the OECD, developing new 240 international standards, such as the work designed to address the challenges arising from the digitalisation of the economy. This concerns new rules to determine taxing rights between jurisdictions for digitally intensive multi-national businesses and introduces the concept of a global minimum effective tax rate. Mr President, these changes to international tax standards are complex and time-consuming. 245 However, I remain confident that the Island will continue to adapt to meet these international challenges. This will also form a core plank of our economic framework assessment. Moving on to allowances and benefits: I have decided to continue to follow the United Kingdom’s ‘triple lock’ uprating of state pensions, for the time being. Therefore, the rates of the Manx state pension up to the full amount and basic rates of State Retirement Pension will increase 250 by 2.5% from the week commencing 12th April. This results in the full rate of the Manx state pension increasing from £191.35 per week to £196.14 per week and the rate of a full basic state retirement pension increasing by £3.35 a week, to £137.60 per week. Rates of the pension top-up are also increasing by 2.5%. Protected amounts of the Manx state pension and the additional state retirement pension – commonly referred to as SERPS – are being 255 increased by 0.5% from the week commencing 12th April, the same as they will be in the United Kingdom. Overall, the cost of these increases in the Island is estimated to be £3.6 million per annum, which will be paid for out of the Manx National Insurance Fund. Once again, Mr President, this is good news for our pensioners on this Island. 260 Aside from state pensions and the Manx Pension Supplement, most National Insurance benefits in the Island will increase by 0.5% from the week commencing 12th April – the same as they will be in the United Kingdom. One notable exception to this is the Nursing Care Contribution,

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the rate of which is being increased by £25 per week, in order that it keeps pace with its equivalent in England. 265 As regards those benefits which are funded out of general revenue, these are usually increased relative to the rate of domestic inflation at the customary reference point. As regards this year’s review, that reference point is September 2020. At September 2020 the Isle of Man Consumer Prices Index was negative, and it has continued to hover around zero since then. I have therefore decided that, generally speaking, the rates of Child Benefit, Attendance 270 Allowance, Disability Living Allowance and the prescribed amounts for each of the income-related benefits are to continue at their current rates and amounts from April. However, there are a few exceptions: a £25.06 per week increase in the maximum allowable towards nursing home fees for Income Support and income-based Jobseeker’s Allowance purposes; a 4.25% increase in the rates of the pensioner premium for Income Support and income-based Jobseeker’s Allowance; a 275 £15,000 increase in the 10% threshold for the Income Support property tariff; and a 0.5% increase in the higher rate of the Disability Living Allowance mobility component. The amounts of the Christmas Bonus, Winter Bonus, Funeral Payment and Maternity Payment will continue at their current levels. Mr President, over the past four budgets, this administration has sought to recognise the value 280 of our hard-working families and we have increased Child Benefit by 15% since the start of this administration. A family with two children qualifying for Child Benefit receives up to £231.40 more per annum than they did four years ago. It is not to be the case that this will rise this year, Mr President, but it is my hope that in future years there will be a strong focus on providing support for families particularly with young children in a modern world. The family unit must be 285 at the heart of our thinking, just as it is at the heart of our communities. I support strong policies to encourage families to responsibly grow and develop, and I hope our previous budget investments in Personal Allowances, Child Benefit and pre-schools have helped in that respect. I would encourage these and other policies to remain central to Government’s thinking in the future. 290 Mr President, on the subject of welfare reform, Treasury has decided that changes to the income support rules for lone parents whose youngest child is aged six or over and changes to the minimum work requirements for employed person’s allowance which were due to come into effect in April this year are to be postponed for a further 12 months. This is to allow time for the local economy to recover and consequently for more job opportunities to be created. Regulations 295 will be laid before this Hon. Court at next month’s sitting to give effect to this, Mr President. Our ethos has been to provide encouragement and support for lone parents to transition back into work, but this is not the time to increase pressure unnecessarily. As I have said, Mr President, this Budget proposed this year is one of resilience and one which carefully balances the need to protect our economy with the need to be prudent with public 300 finances. There is now, more than ever, a real need to live within our means and a rigorous assessment of departmental bids has therefore taken place. I am pleased to say that, despite the pressures on our finances, a total of £23.2 million of bids to the revenue account are included in the budget before this Court today, split into £18.8 million of new revenue funding and £4.4 million of bids to reduce revenue targets, given the anticipated ongoing impact of the 305 pandemic. Hon. Members will of course be well aware that health and care provisions have formed a key element of my previous Budgets. In my speech last year, I commented on the report and recommendations produced by Sir Jonathan Michael on Health and Care Services on the Island that were presented to, and accepted by, this Hon. Court, to deliver a high quality, sustainable 310 and integrated health and care service into the future. I said last year that we had started to implement his recommendations and that we were committed to achieving them all. This Budget demonstrates action to fulfil that commitment: it contains the first budget for Manx Care as a stand-alone entity, separate from the Department of Health and Social Care. So for the first time on this Island, a publicly funded but arm’s-length ______1201 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

315 delivery organisation, responsible to a new board and with experienced health and care leaders, will be responsible for the delivery of all health and care services. Manx Care will be required to deliver the wide range of services required by our people to a standard specified. But also, importantly, they, as we all, need to ensure the best use of taxpayers’ money provided for the delivery of health and care services. We also need to make sure those 320 services are monitored and independently assured, so that we can have confidence and increasing pride in what is being provided to our people. To fully achieve the vision that Sir Jonathan set out for us with his package of recommendations will take many years. His report, you may recall, forecast a need to spend some £150 million more by 2036 to maintain the availability of and range of services, and to improve the performance and 325 delivery of those health and care services which our people use today and, indeed, all of us on this Island will need at some point in the future. There remains a gap between the expected level of budget required into the future and the financial provision included in our projections. This funding gap will require further strategies and policy decisions to address it in the future. Hon. Members, we have embarked upon a significant journey in accepting Sir Jonathan’s 330 recommendations and the establishment of Manx Care and the part that this Budget has to play in it are a crucial step towards the high-quality, sustainable health and care system that we all want to see. Specifically, this Budget includes £11.3 million of funding to fill the DHSC legacy cost gap and to provide appropriate staff resources to properly establish governance and clinical structures within Manx Care and the DHSC. 335 The Budget also includes £1.6 million new funding for complex care packages and £2.3 million for GP contract services, indemnity costs, phlebotomy services and new roles in the primary care environment. There is also just under £200,000 for enhanced dermatology services next year. Importantly, as part of the funding strategy for Health and Care Services, a 1% efficiency target is required to be achieved by Manx Care during 2021-22, with further efficiency targets set each 340 year for the next seven years. The achievement of these targets is crucial in order to ‘bend effectively the future cost curve’ of Health and Care Services highlighted in Sir Jonathan’s report. It is intended that it will encourage innovation, efficiency and drive economies but, critically, to ensure focus on the most important aspect of health and care, the individual – be that patient or service user. 345 Mr President, this is a budget which builds on the £22 million in new revenue bids and £33 million in supplementary votes we have already given over the last four years and protects and invests in Health and Care Services and takes forward the arrangements agreed by this Court. This Government has put health on the top of the priority list and these investments will pay dividends in future years. 350 The proposed Budget today expands our commitment to tackling climate change, with £5 million more for climate change mitigation initiatives and a total of £6.25 million for the climate change adaptation budget in the Department of Infrastructure, including £2.25 million of additional money for flood defence works and scheme designs at various locations around the Island. 355 In the 12 months since the Council of Ministers’ Climate Action Plan was unanimously supported in Tynwald, in January 2020, climate change has become a central tenet of the work of the Isle of Man Government and the public have become increasingly engaged in the issues and opportunities that climate change presents. Much planning work is now required to fully understand the roadmap towards achieving objectives and I expect that future funding 360 requirements will become clearer and more specific. This Budget includes almost £900,000 to establish the Climate Change Transformation team within the Cabinet Office. And there is £500,000 in new money to bolster the Flood and Coastal Protection team recently transferred to the Department of Infrastructure from the MUA. In addition, Mr President, a further £5 million is proposed for the Environmental Protection Fund. 365 There is therefore over £17 million in total committed in this Budget towards delivering our climate change agenda, and as I said, I expect more progress and policy to be developed this year. ______1202 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

The Department of Infrastructure’s income streams have been seriously affected by the pandemic, especially in the Ports and Airports Division. The Budget acknowledges this and consequently includes a bid to reduce revenue targets for the Department next year by 370 £4.4 million; this is some 50% of the maximum amount requested by the Department but, I would suggest, reflects a balance between maintaining budgetary challenge and a realistic expectation over income reductions. The Treasury will continue to monitor the Department’s performance against this Budget over the year, with this risk forming part of the rationale for the increased level of contingency held. 375 We have included £200,000 of new money for technology solutions and change within the Constabulary and money towards an ongoing fire safety project for the Fire and Rescue Service, and almost £500,000 to build the business change capability within the Government. This Budget also includes financial provision for the new Auditor General’s Office at a total of £852,000, £392,000 of which is transferring from the Treasury’s Budget thus providing a net 380 increase of £460,000. I look forward to reading the first reports from the Auditor General and reviewing the various opportunities for delivering public services more efficiently. (The Speaker and another Member: Hear, hear.) Turning to public sector pay, we must recognise the pressure that public funds have come under significant pressure. Therefore the increase in public sector pay budgets this year is set at 385 1% rather than the previously forecast 2%. This, Mr President, I would suggest, protects jobs and is in the long-term interests of the public services. If pay exceeds the 1% target, then monies will have to be found from within departmental budgets and I ask pay bodies to recognise the pressure that public finances are under this year. Mr President, the most vital element of the public services are the people that deliver them 390 (Mr Robertshaw: Hear, hear.) and I want to thank all the public sector staff for their hard work and dedication shown over the past year through what has been the most challenging of times. (Several Members: Hear, hear.) I have witnessed first-hand, as I am sure you, the extraordinary hours, the sleepless nights and the commitment delivered by countless public servants. Thank you for your contribution. (Members: Hear, hear.) 395 Turning now to capital spending, the Budget proposes a full budget of £182 million of expenditure for this year, including some £15 million of cost for new schemes. I will go into more of the detail of this later but Members will of course be aware of the challenges we have faced to fund and deliver our capital programme for some time and, in particular, Government’s ability to successfully manage and deliver complex capital projects. 400 In common with recent budgets our financial planning assumes that we cannot and will not deliver the forecasted Pink Book spend at a level of £182 million. It is, Mr President, I would suggest, untenable to continue to budget on this basis and it is now time to address the fundamental issues of capital planning, delivery and financing. The consistent under-delivery of planned expenditure combined with new scheme approvals 405 has led to a growing wave of unspent approvals being carried forward from one year to the next. This problem is even more acute this year as the pandemic has further delayed the delivery of the capital programme and has resulted in this unachievable £182 million of capital works. This is not a satisfactory position and we cannot allow this situation to continue. Therefore, the Treasury will now lead a Strategic Infrastructure Needs Analysis to form the 410 basis of our medium and long-term capital planning with a target delivery date of the autumn of this year. The objective of this is to enable us to reset our capital programme to fully understand and prioritise our capital investment and maintenance programme over the medium to long term. From this position we can then determine an appropriate strategic financing plan. At present we deliver as much of the capital programme as we can and on average this is a substantial £70 million 415 of investment each year. However, we must improve our understanding of whether this is sufficient or indeed whether we are applying this appropriately. This Budget proposes therefore that, as a first but crucial step, we introduce a new means to finance capital for central Government with the introduction of the Capital Financing Reserve to ______1203 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

replace the existing capital loan charges mechanism. The existing mechanism will remain in place 420 for financing capital schemes outside of the central Government, where monies must be tracked into and out of General Revenue, but for those schemes where the internal Government loans are just a means of accounting for purely internal transactions, the new reserve represents a much needed and overdue simplification of the process. (Mr Robertshaw: Hear, hear.) The Budget proposes a transfer of £25 million in the year from revenue to assist to build the 425 balance on the reserve. The amount of this transfer also helps to reduce the pressure on the revenue account next year. As I have said, this is a first step. If approved it will enable the Treasury to develop simplified, and modernised, capital approvals and reporting processes so that we can all better understand and scrutinise this significant area of public expenditure. Mr President, we are ripping up the 430 credit card and introducing a more transparent and accountable process for future strategic investment spending. (Mr Shimmins: Hear, hear.) The Pink Book outlines the capital spending that is proposed for this year and in particular I would bring to the Court’s attention the ongoing schemes which are being developed, including the Liverpool landing stage, Douglas Promenade works and the new older persons’ residential unit 435 at Summerhill. As a prudent measure and given the level of uncertainty that exists next year, the Budget includes an increased level of funding within the capital contingency budget of £6 million for next year. This allows for timing changes, minor increased costs and, importantly, unexpected emergency works that may arise in the next year. Determining our strategic capital needs is a vital element of our capital changes, but we must 440 also ensure, Mr President, that we have the necessary expertise available to deliver complex capital investment and maintenance. (A Member: Hear, hear.) The Council of Ministers has determined that that a new Major Capital Projects Board and Unit will be created within the Cabinet Office. This function will take responsibility for the oversight and delivery of all major capital projects with expenditure of £3 million or more and will be in place early in the new 445 financial year. In addition, responsibility for the remaining capital investment projects and property maintenance will be centralised within the Department of Infrastructure. The Department, as you know, has a wide range of responsibilities and we will review the capability and capacity of the Department for this delivery requirement. 450 Looking more widely at the use of Government-owned land and property, I am sure Hon. Members will agree that we have to ensure we obtain value for these assets, ensuring that, where appropriate, development is encouraged and facilitated to benefit our Island, addressing amongst other matters the issue of undeveloped sites in our town centres. It is time to move forward with more direction and to that end, the Economic Recovery Group 455 has been working on proposals for an Isle of Man Development Corporation and I intend to bring a motion to this Court in March, setting out the detail of how such a development corporation would operate. (Mr Shimmins: Hear, hear.) Hon. Members, I said in the summer that the Treasury was undertaking an in-depth review of the means by which we fund and account for capital expenditure. I also said that there is a 460 possibility of a sovereign debt issuance as part of a longer term financing strategy. The work to examine alternative means to fund capital and other long-term investment requirements is still underway and will continue to be developed with the forthcoming analysis of our strategic needs. Whilst this year has been one of unusual challenge, we have not allowed it to divert us from continuing to move our agenda forwards. During the year, the implementation of the Dormant 465 Assets Act 2019 has continued and I would like to thank the co-operation of the local banks. It is intended to lay the first annual report before this Court next month, but I can share that we have received payments into the reserve of over £4 million this year, meaning, in accordance with the agreed policy, I expect over £600,000 to be available to release to the Manx Lottery Trust early in the new financial year for onward transmission and distribution for charitable purposes. Another 470 good news story from a good news Treasury. (Several Members: Hear, hear.) (Laughter) ______1204 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

Mr President, this year’s Budget will, I expect, be like no other in modern times, reflecting as it does considerable forecasted losses and expenditure, whilst bringing forward short-term forecasting based on available assumptions. We know this pandemic will bring, and indeed has brought, global economic challenges that will need addressing and we cannot, and must not, be 475 complacent in the management of public finances or indeed in the management of our economy. But in the face of adversity, it is a tribute that this nation can still go forward and advance with a substantial Budget today: £15 million more for health; over £17 million for climate change and its impact; capital projects reformed; an Economic Recovery Group delivering increased training and reskilling opportunities, investing in high-speed fibre and the local economy; a new Manx 480 Development Agency to develop brownfield sites; £30 million of contingency funding and plans to deal with uncertainty; a new economic framework on its way; £600,000 for charitable causes through the Dormant Assets Act; and, Mr President, despite the pressures, no tax increases, bringing stability to household incomes and businesses in equal measure. We are stabilising the economy, we are protecting jobs and we are investing in our future. 485 Mr President, this Budget encapsulates the resilience of our public finances and planning in the midst of a global health and economic crisis. But also, Mr President, this Budget is primarily built upon the ethics of hard work, determination and integrity, demonstrated by the people of this nation in tackling the pandemic. Their actions in fighting the virus, their determination and support of the local and domestic economy and local businesses have given our economy a 490 fighting chance and, indeed, delivered a platform for stability in this Budget today. It is, Mr President, a Budget of Resilience built on the hard work of our society – indeed a Budget of Resilience for a resilient nation and I heartily commend it to this Hon. Court.

Members: Hear, hear. 495 The President: Hon. Member Mr Quayle, Chief Minister.

The Chief Minister (Mr Quayle): Thank you, Mr President. I am proud to stand to second the motion put before the Court by the Hon. Member, the 500 Treasury Minister. I am sure it goes without saying that this is a year we simply could not have foreseen. The word ‘unprecedented’ has been bandied about a lot over the past 12 months, but for good reason. The challenges faced by this Island, by this parliament and by this Government are like nothing we have ever seen before, and therefore, this Budget must be seen in its context. It reflects the harsh 505 realities of the world that surrounds us, but it also underlines the successes of what we have achieved through times of unparalleled adversity. As my hon. friend from Ayre and Michael has rightly and accurately outlined, this time last year we stood in good stead. The fiscal objectives of this administration were on track. The economy was growing, and we had provided meaningful change for our citizens of this Island who were 510 most in need. Government finances looked strong. Unemployment was low. Plans for major capital projects were progressing, as were those which were already under way. The United Kingdom’s departure from the European Union – and the implications for the Isle of Man – was at the forefront of our minds. The damage that has been done in the interim period must not be underestimated. A 515 £12 million budget surplus would have been a fantastic news story for our Island economy. Instead, we are projecting a £74 million deficit – £108 million of direct support, for the people and businesses we are here to serve, shows the enormity of what we have been through. All things considered, we think COVID-19 has cost the public purse more than £200 million. Many have had their incomes slashed, others have lost their livelihoods altogether and of course we must not 520 forget that some family, friends and loved ones that have fallen to this invisible enemy – 25 of our own are no longer with us.

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Some of the targets of this administration have had to be shelved. In February last year, 45% of the objectives laid out in the Programme for Government had been completed, with a busy legislative programme laid out for the fifth and final year of this administration, we have been 525 forced to realign our expectations. Unemployment peaked last April at more than 1,300 people, with many job casualties of the pandemic. Whilst that figure has improved, the true implications are still not fully known. But, in many ways, we are fortunate. One does not have to look far beyond our shores to see what could have been. Our larger neighbours across the water have spent a significant proportion of the last 530 year living under tight restrictions. Our good friends in the Channel Islands have found themselves in torrid waters as they continue to tackle COVID-19 in their communities. The damage to people, to economies, to relationships and to mental health is still being felt. Meanwhile, for the most part, we have still been able to go to work, go shopping, go to the pub, play sports, and hug our loved ones. As I am sure you have seen, the Island has been in the 535 international media spotlight of late, and you could say we are the envy of people across the world who find themselves in a less fortunate position than we do. That is because we do have a good story to tell. We have implemented a Living Wage for the first time in the Island’s history. We have raised the Personal Allowance threshold on Income Tax from £10,500 to £14,250 since the beginning of 540 this administration in 2016, providing significant financial relief for those amongst us who need it most. Whilst we have not been able to raise that threshold again this year, due to financial constraints on the public purse, that still represents approximately a 36% increase over five years, compared with a 7.5% increase in inflation over the same period. Arguably, the biggest increase over any administration in living memory. 545 From September 2016 to January 2021 we increased Child Benefit by circa 15%, which is a 5.5% increase in real terms when adjusted for inflation over the period. The public sector waiting lists have gone down. In September 2016, 897 people or households were waiting for public sector homes. This compares to 736 households in September 2020. Having peaked at more than 1,300 back in April 2020, unemployment, allowing for the circuit breaker, is back under 1,000, a rate of 550 2.4%, following the successes of our targeted support schemes, the determination of the private sector, and the willingness of our people to adapt, improvise and overcome. Throughout the past 12 months, Mr President, inflation has been kept low, averaging 0.5% over 2020, which has helped to protect household finances from price rises, whilst job vacancies bounced back quickly from the first lockdown. People have been busy improving their homes, 555 with planning applications higher than they have been since the start of this administration, helping the construction industry to recover. Despite inflation being 0.5%, this Budget allows substantial increases for the Nursing Care Contribution Scheme of 15.6%. Pensions are increased by 2.5% and we have also worked towards public sector pension reform, including making progress with secondary legislation as we look to address the shortfall in funding. 560 Our achievement in getting life back to as close as normal has meant that our domestic economy has been able to recover well, with many of the shops on our high street being the best performers in larger chains. With the help of the Economic Recovery Group funding the domestic economy, this has been lifted from what was a dark time in between April and May. The Budget sees an increase of over £15 million for our health and social care. Our commitment 565 to transition the Island’s health and care system is well under way, as the Treasury Minister has already mentioned, with the establishment of Manx Care on schedule and senior key roles are filled. We have committed to tackling climate change – with £17 million committed – with plans to see the Island reach carbon neutrality by 2050, in line with the report from the United Nations’ Intergovernmental Panel on Climate Change and in line with our friends in the UK. The Climate 570 Change Bill will pave the way for massive societal change. The COVID-19 pandemic has also highlighted the crucial importance of protecting and maintaining our essential lifeline to and from the Isle of Man. The actions of this administration prior to COVID-19 by acquiring the Isle of Man Steam Packet Company never proved to be more ______1206 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

vital than when this pandemic took a grip last year, with the need to get building supplies, medical 575 supplies and oxygen supplies to our Island when no one was travelling. Securing the future of the Island’s sea services has already proven to be an enormous success for this administration. It has reinforced the strong, long-term platform which meets the international needs of our Island economy. At the other end of the ferry route, we have demonstrated our commitment to future- proofing key links to the north west of the Island. 580 For getting us to this point, there are a lot of people who deserve our gratitude. It was not so long ago we were standing outside our front doors clapping in appreciation for the incredible people at the front-line of our healthcare system, emergency services, and other essential services for keeping us both safe and moving. I have stood here many times before and thanked those working in public services, including the officers who in some cases were working far and above 585 their normal hours to achieve the impossible, laying the foundations for enormous change. Societal change, economic change, political change, all in reaction to the greatest health crisis we have ever known. For compiling this Budget of Resilience, I must extend my heartfelt thanks to Treasury officers, to my colleagues in the Council of Ministers, to the political Members – Mr Henderson, Mr Peake, 590 Mr Shimmins – and all Tynwald Members. But in fact, each and every one of this Island, every person, deserves our thanks. The Great Manx Public all played their part. The overwhelming majority stuck to the rules, appreciating the seriousness of what is happening around them, and respecting the Council of Ministers’ and Tynwald’s decisions – difficult decisions – which were made to keep our Island safe. 595 Not only is this a Budget of resilience, but given the events of the last 12 months, I feel it should actually be a Budget to be proud of. We should be proud of the hard work, determination and commitment of the people of our Island. Despite what has arguably been the hardest year in living memory, the Isle of Man stands strong and together. In lockdown, I was reminded about the phrase, ‘Ta pobble Vannin unnaneyssit’: the people of 600 Man are united. Never has this been more true. Thank you, Mr President.

The President: Hon. Member for Garff, Mrs Caine.

605 Mrs Caine: Thank you, Mr President. I think the Treasury Minister is a clever conjuror to bring this Budget before us today after the year we have experienced of the health crisis. It is demonstrating resilience indeed to come back from a £200 million cost of the pandemic to deliver such optimism. There are many positives. I welcome particularly the funding allocated to create an Auditor 610 General’s office, which has the potential for future savings – hopefully more than the SAVE Programme achieved. It is a positive also to see £30 million is expected to be drawn down in the next year via the Economic Recovery Fund, to continue to support the economy in the wake of financial consequences of the COVID-19 pandemic. 615 In terms of the impact on the public, there is no change to taxation rates and, while it is welcome, the Treasury Minister resisted temptation to make tax uplifts in this election year. I do question whether the Budget will lead to any significant rebalancing of the generational inequality we see in our society. Pensions are all increasing by 2.5% thanks to the triple lock, and that is welcome; but other uplifts for those of working age through tax, benefits and support for families 620 is much lower. This may have long term negative impacts. With a plummeting birth rate and expensive childcare costs it is an area that needs political focus. Increasing support for our students is another area we should review, and I do note the funding that the Treasury Minister outlined. But nurturing the young people, giving them every opportunity and ensuring housing availability of good quality is what is going to encourage the economic future of this Island.

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625 Another positive, and one which has caused public concern, is around public sector pensions. The Reserve Fund is now forecast to be depleted in 2022-23 and it will need an estimated £41 million in 2023-24. But it is felt there is time to adjust our finances to meet the increased pressure on public finances by then. We must hope that the higher tax receipts do materialise. Moving on to spending, the fact that the Capital Programme will continue to be undertaken by 630 the Department of Infrastructure does not inspire confidence of delivery on time and on budget, given our history. Even the SACIC Committee oversight and the new major projects unit to be established within Cabinet Office does not convince me. Will it include engineering knowledge to ensure quality as well as financial control of our major schemes? That is what is needed. In terms of delivery we still await the science block at the QEII High School; the new Castle 635 Rushen High School; even the flumes to be reinstated at the National Sports Centre; and of course completion of Douglas Promenade. We may see the flumes this summer – what happens with the prom is anyone’s guess – but the schools are still in the design phase. We need this vital investment in our young people, and it should include environmental aspects as standard from now on in any Government building. You can appreciate the public’s cynicism over the 640 Government’s ability to deliver major schemes and I fear that DoI is simply too big and unwieldy to keep on top of all its responsibilities, making it impossible to retain control of our capital programme and our strategic direction. That, along with ensuring efficiencies across the public service, must be the priority for the next administration. (A Member: Hear, hear.) It is seriously concerning that, despite three separate affirmative votes in this Hon. Court and 645 the current Minister’s promise that the Douglas horse trams would be reinstated along the whole length of Douglas Promenade, that the anti-heritage bias of Treasury is evident yet again in the slipping of the remaining heritage rail horse tramway construction budget into the third column, for future approval, requiring yet another vote of this Hon. Court. (A Member: Hear, hear.) And that, even after £750,000 of heritage rail budget was switched into the promenade construction 650 last year. It sometimes seems pretty futile to contribute to policy or capital bids as a backbencher; Treasury ultimately decides solely the spending and our future direction. So £1.2 million to complete the horse tramway, with Treasury’s sleight of hand, is thrown into the third column doubt. But I am sure everyone will welcome Active Travel receiving another guaranteed first 655 column of £1.5 million. In making a better environment for us all, moving away from the car being king, we do have to remember we are custodians of our heritage even while we must shift to better ways of living. Horse trams, at least, do not add huge amounts to our carbon emissions. The worry is with the constant delays and failures over delivering the promenade scheme certain members of Government, of Treasury, are achieving their aim of turning more people against the 660 horse trams. The real focus should be the incompetent delivery of two miles of promenade. Will it in fact be more expensive per mile than HS2 when it is finally finished? The original £21 million budget was to complete the whole scheme, and I am not convinced an additional £1.2 million to complete the horse tram tracks will be the final amount needed to complete the promenade. 665 Temporary landscaping is a waste of time and money, if it is to be dug up; and, according to the latest media comments by the media, it could be dug up only six months later. Double the work is double the cost. If the Minister meant to keep his promise of delivering the whole promenade scheme, if the Department intended to complete the horse trams in line with this Hon. Court’s direction, surely another summer before visitors can return in numbers would be the 670 time to crack on and finish. It seems voting for the additional budget is a way covering up further overspend on the promenade scheme and a deliberate way of redirecting public criticism from all that incompetence, to the horse trams themselves. Why has it been so problematic to deliver? The Island used to be a pioneer of new technology and transport solutions and now it is incapable of 675 rebuilding two miles of shared space on time and on budget. Would it rather bin part of the scheme than accomplish the original vision? ______1208 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

I also worry that far from encouraging greater use of public transport, the reduction in the bus renewal budget to zero will not enable services to be improved and will prevent further investment in hybrid buses. 680 Successive Governments for decades underfunded maintenance on our heritage railways. It seems we are quietly slipping back to that unfortunate position. Previously £4.5 million per year was allocated to recover from 40 years of under-investment. This year it was cut to just over £3 million and next year in the Pink Book it is again reduced. So are we going to fall behind with track renewals and removing local jobs when they are needed? Is this all actually building up to 685 another attack on the Island’s heritage rail network? Encouraging more clamours that it is all just too costly, so shut it down and let’s have another cycle path. I welcome the investment in cycling but it should not be at the cost of heritage transport. In terms of the capital schemes, another question I believe hangs over regional sewage treatment works to be provided in Peel, Laxey and Baldrine, with funding given of £8.1 million. I 690 am not sure that will accomplish whatever schemes are eventually taken forward, and we must anticipate an additional funding bid to ensure the right schemes are pursued. I do welcome the additional £500,000 budget to support the creation of a Flood Division of the DoI in addition to the £500,000 funding transferred from Manx Utilities, with staff, to the Department. I note the £2.25 million capital funding added to the Climate Change Adaptation 695 Budget to support the design of regional flood protection initiatives. This cannot come soon enough for Laxey and other parts of the Island. There has been good work by the Department of Infrastructure in the bringing together of all flood officers, the creating of the FloodHub website and the substantial flood mitigation work undertaken this past year and supervised from Cabinet Office. Let’s hope it will prevent another devastating flood in Laxey village, or indeed anywhere 700 on the Island. In terms of making a better environment people just want to see regular maintenance, along with some major improvement schemes, delivered efficiently. In addition to capital spend we need investment in maintaining good roads and pavements, quicker action on potholes, footpath maintenance. For instance, I note there is no capital funding in for the Raad ny Foillan this year, 705 and yet it is a major asset. Volunteer groups cannot take on the burden of improvements. The fact that the broken Laxey Wheel is not receiving any funding from Government in this Budget is also of concern. The iconic wheel not turning for a year or more will impact the Laxey economy significantly. So much for Manx National Heritage’s plans to develop the site. I was informed by a Treasury Member that no capital bid was made by Manx National Heritage. 710 I wonder if they are so totally disillusioned with the anti-heritage policies of this Government that they thought there was no point in bidding. What a shame it will be for Laxey if substantial repairs to the wheel and shaft are not undertaken in the coming year, when visitors will be reduced. Of course it is not all about the past, we need to have much more emphasis on improvements to benefit our environment. Doubling of the Climate Change Mitigation Initiatives Fund is all very 715 well, but people want to see action; and it is noteworthy that the Environment Department does not seem to be leading on this. Overall it is a resilient and necessarily low-key Budget for the economic times we find ourselves in, but I would hope that more people will see more improvements to their everyday lives in the near future. 720 We need to ensure better housing, better insulation, heating incentives to make a difference to people in the coming months and years. I do not see, yet, the emphasis on the climate emergency either in Government major projects or at community level. What about a 50% up-to- £5,000 funding scheme to incentivise installation on non-fossil fuel boilers – for all? When will insulation and solar panels be affordable for all households? What grants or interest-free loans 725 can be made to make electrical vehicles more affordable and practical to use on the Island? I hope after all the years of consultation and planning on climate change it will dazzle us all by the speed of rollout when it comes.

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All of it will come to nothing if we cannot make the Island attractive to the young, economically active. As the world emerges from the health pandemic, people are re-evaluating their quality of 730 living. We need to support every effort to facilitate a digitally enabled future; a future of home- working across this beautiful Island. We should be top of the list for creatives and innovators to settle here, to bring their ideas from here to the rest of the world. I am pleased to have been involved via the Department for Enterprise and the Locate Team, which is reaching out to make the Island a serious prospect for graduates and innovators and entrepreneurs. It still needs more 735 political support to make it happen. One area that would significantly improve our Island’s attractiveness is connectivity. While the speeding up of the fibre roll-out is welcome, it will be four years before it reaches much of my constituency. There are too many places where mobile phone signals still drop out in Garff. Connectivity is an essential utility and perhaps needs even greater funding and focus to expedite 740 rollout in the coming months. Accessibility and affordability of fibre will be another necessary consideration to enable the Island to truly compete on the world stage. We should be seeing that emphasis and innovation in education also, but no mention of such impact on our schools. I appreciate that efforts are going now into rebuilding the Department’s culture and reviewing exam boards. I do trust the Department will deliver better outcomes for all 745 our children and bid for the necessary funding in the future. The lack of any increase in investment concerns me, along with the delays in delivering the new buildings. I wait with interest for the Department to take appropriate action, in the same way I await with optimism the switch to Manx Care. In this year, when so much focus has been on health, Government has spent wisely and when 750 necessary to support and protect the community. It has been careful and not complacent. I can support the Treasury Minister on the Budget before us. It is not possible to vote for some and not all; and this is a solid Budget to get us through the unknown challenges to come in 2021. I feel Mr Cannan has magicked many positives out of an empty hat: no tax increases; a major review of our economic strategy; the Manx Development Corporation, a £30 million contingency 755 fund. These are quite amazing for the position we find ourselves in. I am sure many jurisdictions would look with envy at what prudence has achieved. But, in being resilient, we need to take some brave policy decisions to take the Island into the next decade, alongside careful stewardship of our reserves and responsible delivery of capital projects. It is described as not a standstill Budget, 760 but I worry in some essential maintenance areas if we are quietly slipping backwards. In summary, we must maintain the best of our past with continued investment, along with more ambition and innovative policies to make the Island a top location for the young, and for all. Plus for the protection of our environment to enable us all to truly celebrate living on our Biosphere into the future. 765 Thank you, Mr President.

The President: Hon. Member for Douglas South, Mrs Christian.

Mrs Christian: Thank you, Mr President. 770 This Budget is as the Minister says: is prudent. It is essentially a holding budget, one that will hopefully be the springboard for the next administration as we transcend out of the COVID pandemic. But what does it mean for self-employed and SMEs who make up to 70% of our economy? Will they agree with this good news Treasury? After all, will they agree that the COVID business support back in April was rapid? I also think he is using clever conjuring wizardry 775 technique, as my fellow Hon. Member for Garff, , has stated. There is no change to the Income Tax Personal Allowance and the higher rate tax threshold. So sole traders or self-employed need to be aware these figures are not changing when they pay their income tax on their year-end earnings. National contributions remain the same, and I recommend to self-employed that those who have not already done so make arrangements to ______1210 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

780 pay their National Insurance Class 2 monthly, in order to protect their ability to claim benefits in further lockdown scenarios. I am pleased to hear that the pension triple lock has been honoured. One of the opportunities of a wealthier, older population means we can see an increase in demand in areas ranging from care services, cleaning, gardening, redevelopment, education, and personal training. Servicing our 785 aging population is a long-term opportunity for multiple market sectors. I am pleased to see the suggestion of a sovereign bond, which I advocated in my first official meeting with the Treasury Minister, if he would remember. To meet expenditure, the Government has two options: to either raise taxes or issue bonds, the first being unpopular and unpalatable in the current economic climate, and the second is a prudent step I welcome to assist 790 foot the bill of £200 million. This is a holding budget, but what I was hoping to see was a few more initiatives to help support SMEs and their employees. Perhaps a similar initiative of an Employment Allowance, which was introduced by the UK government. Members, this allows each business to employ four full-time employees on the National Living Wage without having to pay any employer National 795 contributions over the year. This would boost the opportunity for investment from small businesses that can employ more staff and afford higher wages, putting more money back into the pockets of the people and narrowing the wage gap. I would also like to say at this point we need to keep the pressure on the UK government to maintain the VAT threshold and rates to support SMEs. If the VAT threshold was to drop, that 800 would affect so many businesses, forcing them to register and could have a huge impact on our SME structures. In essence, jobs losses could occur. We have to think about our current and immediate economic environment. More people are being made redundant in the banking and retail sectors. Because this Budget sees minimal increases to the welfare benefits, such as Jobseeker’s Allowance and child welfare benefits, now 805 is the time to support the most vulnerable in our society. The lack of meaningful increase to benefits is essentially a pay cut for those on low incomes or no incomes who are dependent on benefits, because of rising costs, bills, cost of living put pressure on many of my constituents, their families, and I am sure this is Island-wide. To interject here, this is exactly why we need to support the Gas Regulation motion later. We have a responsibility to help elsewhere if we cannot assist in 810 this area, by raising benefits. Furthermore, Mr President, we need to stimulate economic growth, create new jobs, so people are given a route out of the benefit system. This Government needs to demonstrate a greater sense of urgency in delivering an economic strategy. Strengthening our economy will have a positive impact on the well-being of our nation. 815 Thank you, Mr President.

The President: Hon. Member for Ramsey, Mr Hooper.

Mr Hooper: Thank you very much, Mr President. 820 A few weeks ago, before the Budget information had been shared with Members, the set out its stall for the coming year. We called on the Treasury Minister to present a Budget that represented a pause for breath, a Budget that focused on trying to support people in tackling the economic and social effects of coronavirus, whilst undertaking a few specific actions: no coronavirus taxes; an increase in funding to the Health Service to tackle some of the historical 825 deficits; and to enable the service to continue vaccine delivery increases whilst at the same time starting to get us back to healthcare as usual. So this Budget presented today, this Budget of resilience, is a very welcome sight for me. I think it represents that pause for breath, there are no new taxes to recoup the cost of COVID. Equally, though, and equally as welcome, there has no borrowing been announced. That shows me that 830 the Island has weathered the short-term economic impact of COVID quite well, and gives me confidence that we will tackle the long-term implications just as effectively. ______1211 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

Admittedly, there are some things I would have done differently and that I am disappointed did not make it into the Budget. The Treasury Minister has outlined the significant cost to the public purse of dealing with coronavirus: £200 million is a huge number for our small Island. So I 835 fully appreciate the difficult choices that needed to be made. But, like I said, a few things I think are important enough that they deserved specific inclusion in this Budget. I am disappointed that the personal allowance has not been increased further and that most benefits are being frozen. Though I appreciate these increases cost money. I appreciate also that inflation is relatively low right now. But in a year where it is likely we will see little in the way of 840 pay increases, in many parts of the economy it does feel like those families earning at the lower and middle end of the spectrum will see a squeeze as a result. The lowest earners are seeing minimal increases in benefits and the average working family does not seem to benefit from any of the measures to ease this squeeze on their household budget. I think that is a mistake The Treasury Minister said in his remarks that there will be no new taxes and no tax increases, 845 which is a very welcome announcement, but it is not the whole picture. Appendix 9 of the Budget document sets out increases in all sorts of Government fees and charges, and it is those small changes that will have an impact on household finances. It is welcome to see state pensions getting an uplift, but it does raise an important question in my mind. We know from recent household income surveys, and other work, that pensioners on 850 the Island are by and large better off than younger people – and of course this is not true for everybody. But it seems an unusual choice to say that this one area of society should see a 2.5% increase while the rest of the Island is not really shown the same consideration. I appreciate this is driven by previous policies by the triple lock, but this is an exceptional year. Surely directing some of this uplift into support for the most vulnerable would have been acceptable in the 855 circumstances. Like my hon. colleague Mrs Caine, I am concerned about the message this sends about intergenerational fairness. I am disappointed not to see dedicated funding for the all-Island Housing Strategy. Dealing with the housing challenges we face on Island is absolutely essential to improving quality of life, and helping household finances. ‘Housing First’ as a policy is a big shift in thinking, that will need 860 dedicated resources to deliver on the promise of suitable, affordable and sustainable housing on the Isle of Man. Improving the quality and affordability of housing stock on the Island will be a massive contribution to tackling inequalities; and not to mention the impact it will have on our carbon emissions. I am disappointed, then, that funding towards climate action falls short of the estimated 865 £25 million annual cost set out in the IMPACT Report. I appreciate the increase to the fund that has been announced, but so many of the climate actions will provide huge benefits elsewhere – housing, transport, employment, education – that it seems remiss to not be driving forward some of these actions that could have real benefit to our Island community. I eagerly await the climate team coming forward with some action and some delivery using the additional funding that 870 Treasury has set out. Lastly, I am disappointed not to have seen additional dedicated funding for the education service to help mitigate the impact of the coronavirus disruption on students’ education, specifically for those from more disadvantaged backgrounds. I recall last year that the Department of Education put forward a bid for funding for a Manx ‘pupil premium’-style fund, which would be 875 used to lift up the whole education service. It is unfortunate not to see anything in this Budget either. If there is one thing that coronavirus has done, it has massively accelerated a lot of the societal and economic changes and challenges that were happening gradually anyway and we need to ensure our education system can continue to deliver. The work and the schemes coming through economic recovery are a good start, but they are 880 only really able to focus on the here and now. What we also need is the ability to take a longer term view. So, Mr President, whilst I am disappointed not to see these items specifically included, I am not disheartened, and I will explain why: it is because of two changes that are included in this

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Budget. The first is a firm commitment to continue the work of the Economic Recovery Group and to continue the funding for this vital piece of work. 885 I am sure all Hon. Members will have seen the labour market report that shows our official unemployment rate is around 2.4%, just over 1,000 people. The ILO measure is nearly double that, at 4.5%. This is a stark increase over last year, it is around double. But I honestly think this number is lower than we might have expected and I believe this is down to the effective economic response we have seen, combined with the fantastic response from the Manx public. 890 Keeping this funding available will provide ongoing flexibility as we continue to tackle the economic impacts of coronavirus in the year to come. I am extremely proud of the work this group has undertaken and the responsive and iterative way the economic response has been handled – no waiting around for a perfect solution, instead being able to react to circumstances as they arise and evolve the response as more evidence comes forward. 895 The second item that gives me some confidence is the complete reworking of the capital budget. Back in my 2019 Budget speech I highlighted that the capital programme was in urgent need of reform. This was not a surprise back then: the approach of ever increasing the headline number, marred by under-delivery, simply had to change. As Mr Cannan rightly highlighted in his speech, the new approach he is proposing in this Budget 900 will change all of that. It will set out capital projects should be funded based on what is deliverable and achievable, much in the same way that economic development is handled, on a project or programme basis – assign a budget, approve and transfer that, monitor drawdown and progress. Instead of the bizarre Consolidated Loans Fund-approach which charges interest between Government Departments for no apparent benefit. The Treasury Minister’s comments around this 905 new process increasing transparency give me some hope that it might also represent the end of Column 2 in the capital budget, which would be a very welcome change in itself. (The Speaker: Hear, hear.) The reason these two changes give me hope, Mr President, is that they are at their core programme budgeting approaches. They are not based on prior-year spend and inflated up a little 910 bit, they are instead based on what is projected to be needed and what is deliverable. They are not based on existing departmental structures and silos, but instead will put the focus on meaningful outcomes and delivery. The Treasury Minister outlined some of this in his remarks when he talked about the work of the Economic Recovery Group, investing in direct support but also in cross-Government schemes like Manx Restart, educational opportunities and internships. 915 So when we are sitting here discussing other significant programmes of work, like climate change, like housing, like the National Insurance Review, or reforming and building up the education service, what I can envisage happening is budgets being assigned to these work streams in much the same way. So I do not see the climate fund being the total available, in the same way that I do not see no assignment to the housing strategy to be set in stone. What all of this 920 combined says to me is when a case has demonstrated, a programme fund can be established that is not dependent on the budget cycle. Schemes and proposals can be assessed on their merits, on a forward-looking basis on what can be delivered, as opposed to always looking backwards at what has come before. This could be a significant step away from the current budget-setting process, and a real move 925 towards zero-based, across-departmental budgets, with priorities that line up across the whole of Government instead of within our existing silo structures. (Mr Robertshaw: Hear, hear.) This could mean that when we talk about putting the individual at the heart of service delivery, this is backed up by the budget process instead of being hindered by it. If nothing else, this has the potential to be a real game changer and I hope it is setting the 930 direction of travel for the next administration to follow. It definitely shows the auditor in me just how excited I am by this opportunity! (Laughter) (The Speaker: Hear, hear.) The announcement of the Manx Development Corporation is also a welcome one, it has been a deliverable in the Programme for Government for quite some time. The cross-departmental approach that has been taken to this, with Enterprise and Treasury leading, supported by officers ______1213 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

935 from across-Government, is another indicator that we are moving away from the old silos and into a new model of operating. Just before I move away from the capital budget there is one specific question I would like an answer to: out of the whole capital budget there is one item marked with an asterisk – the Liverpool Ferry Terminal. The small print states:

*Expenditure on the IoM Ferry Terminal – Liverpool project is subject to review

940 I do not quite know what this means but it implies there is a big unknown around what this project might now cost. I think if the Treasury Minister or the Infrastructure Minister could provide some more information it would be greatly appreciated. In light of COVID and in light of some of the comments we have heard today from the Chief Minister about securing our transport links and how vital that is, I would have thought we would get a bit more certainty around this particular 945 project. Usually at this point in my Budget speech I would talk about departmental spending, cost control; where is the Save Programme? And my usual annual exasperation at the lack of an Auditor General, that is obviously going to be tackled. But because, I think, of the COVID focus of this Budget – the pause for breath – I do not see much in this area that I think it is necessary to 950 highlight. Most of the issues are nothing new and have been well recorded, but I think some of these systemic and structural issues are really now problems for the next budget cycle, not things we need to tackle in a year of recovery. Having said this, there are a few points I think that are worth highlighting. The Treasury Minister mentioned about the Auditor General funding in his speech, but I do not actually see a 955 reference to it inside the Budget documents. There is a reference to a Tynwald Commissioner – I suspect this is erroneous, and would just appreciate confirmation. The new Manx Care set-up makes for a very interesting DHSC budget. The one thing I do not see is a dedicated budget for the independent regulatory function. I have queried this with Treasury who have very helpfully advised that most of the work will be undertaken from within 960 the Transformation Fund, that is great, which is going to allow a proper revenue budget proposal to come forward. But I think I would appreciate confirmation from one or other of the Ministers here that this independent regulatory function will be in place as soon as is practically possible. Independent inspection of healthcare services will be key to the success of Manx Care. Before I move on from DHSC, I would like to thank the Treasury Minister for finally coming 965 around to my point of view. If Hon. Members cast their memories back to 2018, they might remember where I undertook a very rough, back-of-the-envelope calculation on the structural deficit that existed within DHSC. I came out with a figure of around £8.7 million and called on Treasury to properly plug this structural funding gap, because it was evident even at that time that there was a structural funding gap that needed plugging. It was not a temporary overspend that 970 was going to be resolved through cost-cutting or efficiencies. At the time the suggestion was mocked by Treasury who argued that they did not know how they were going pay for this; and the Health Minister ridiculed me, describing my comments on this as ‘a party political broadcast by the Leader of the Opposition’. Now, whilst I welcome Mr Ashford’s acknowledgement of mine and my party’s role in this Hon. 975 Court (Laughter) here we are three years later with the Treasury Minister announcing an £8 million uplift in his own Budget documents ‘to address a longstanding structural deficit in the payroll budget’ – an increase coming in a Budget year with forecast decreases in income and, importantly, with no additional taxes being raised to provide this funding. It is clear that this issue has not arisen overnight and whilst it is really great to actually see this 980 issue finally acknowledged, it is disappointing that it could have been resolved and it should have been resolved years ago, which might have given the Health Department some more headroom to try and properly tackle some of the more longer-term issues that it faces.

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One challenge I laid down to the Health Minister back in 2018 was that if he was not going to acknowledge this deficit he would have a harder job trying to tackle some of the overspending 985 that his Department regularly sees, and here I think the Minister and his team do deserve some credit. The comparison of what the Department’s out-turn would probably be compared to the actual budget for the year, is only £4 million over where they thought they would be at the start of the year. I think that is significantly less than we have seen as an overspend in recent years, and is a very 990 welcome surprise seeing the impact we know coronavirus has had on our health service. So that is a good result I think for the Minister and his team inside the Health Department. Moving away from DHSC, and touching back on some of those small increases in fees and charges that are laid out in Appendix 9, one thing that is noticeable by its absence is there is no reference at all to vehicle duty. The tables in Appendix 9 have been brought in by Treasury to 995 Tynwald and provide some transparency around these future fee and charge increases, so instead of being surprised at various point throughout the year with charges and cost increases, we have some indication of where the Government might be going over the next year. It is a good idea from Treasury that has been poorly executed, I think, by some Departments. And, like I say, vehicle duty is missing, it is obvious by the fact that it is not there. 1000 So it cannot be that the fees are under review, because a number of fees in the schedule are marked as ‘under review’, but these fees are not even mentioned, which raises some concern with me. I would be very grateful if we could get some commentary perhaps from Infrastructure or Treasury on why they were left out and where he proposes to go with this over the next 12 months. 1005 Hon. Members, it would be wrong of me not to acknowledge that there has been a lot of good work over the last few years, and I would like to commend not only Treasury but all public organisations in terms of their work trying to deliver public services more efficiently. It is clear that even though coronavirus has driven a coach and horses through the Treasury Minister’s rebalancing plans, it does say a lot that despite the structural deficit for the year being £100 million 1010 over budget, the forecasts show this will hopefully be resolved by 2024-25, which seems to me to be in line with his original plan from four years ago. That must be a good measure of success, a forecast that all things being equal the Island’s economy will recover relatively quickly. The Treasury Minister in his remarks said that the £12 million surplus would have been a good news story for the Island. I would say to the Chief Minister that actually the operating deficit being 1015 only £74 million is also in its own way a good news story – it could have been far, far worse. (Mr Thomas: Hear, hear.) The fact that it is not, is largely down to the response of the Manx community and the dedication of everybody on the Island to protecting our community. I also think it is worth acknowledging the revenue hit due to pension costs has been pushed two years further out and is £17 million lower than initially forecast. I am not sure what the longer- 1020 term implications are for the pension black hole, but at least in the short term it is good news. Mr President, I would like to finish by very briefly looking at the year this Budget sets out. It says to me that this will be a year of reflection; of work setting the Island up for the long recovery out of COVID; of work redesigning the Health Service; of redesigning our National Insurance and security systems; of protecting jobs and encouraging businesses to invest and grow; and 1025 redesigning our economic strategy, as has been announced today – all laying the groundwork for the next five years and beyond. The Treasury Minister outlined in his remarks a range of work that has been going on and that continues to go on, and that work is largely about enhancing the Island’s resilience and supporting the Island as we see changes brought about by the coronavirus crisis. And that is the right 1030 approach. I would not expect seismic changes to happen in this Budget, nor would I expect Government to take its foot off the pedal. Despite some of my earlier disappointment in those few things that I probably would have done differently, I think this Budget is being pitched in about the right place, with all those indications towards a new programme and budgeting approach

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being very welcome, providing flexibility and leaving the door open for responsive and proactive 1035 policy development and implementation. The borders are still largely closed, and this will need unravelling; our finances are broadly looking healthy but will need strengthening; our economy will need help to recover as we start to come out the other side of this crisis – and the core of this is to get back on track so we can focus our efforts again on reducing income inequality and improving our quality of life. 1040 Coming out of this global emergency, I think focusing on these two issues is now more in focus than ever. I think this Budget does put us in a good place to face up to these challenges. Thank you, Mr President.

The President: Hon. Member for Douglas South, Mr Quine. 1045 Mr Quine: Thank you, Mr President. I rise in support of this Budget, delivered in a period unprecedented in any of our lifetimes. Mr President, I should imagine that no one in this Hon. Court was under any illusion that there have not been numerous requirements to steady the ship during the course of the last year, as 1050 we sailed through the turbulent waters of COVID-19, and the Minister has demonstrated commendable prudence in this undertaking. Achieving such an outcome as this has required the Treasury to walk the thinnest of tightropes, and I for one congratulate the Minister and those in his Department for the diligence to the task which they have undoubtedly exercised. But given the headwinds which ourselves and our 1055 neighbours continue to face, and with the continued uncertainty of this world, no one can say for certain what lies ahead of us and so the resilience highlighted by the Minister is something which we must continue to nurture. Our economy remains robust but flexible, and whilst the recent news concerning our current unemployment figures, aided and abetted by the closure of several of our most recognised high 1060 street shops – for now, part of a saddening trend, unwelcome, no doubt, by all of us – I earnestly hope that robustness, which I have just mentioned, quickly creates other opportunities for those affected to regain gainful employment. So the statement from the Minister not to raise direct taxation is to be most welcomed, and I fully share his sentiment that no tax rises is good for jobs. Allied to this is his commitment to fund – 1065 adequately for now, in my opinion, given the current circumstances – the ongoing issue of climate change, something which will, I am sure, go on to create numerous new jobs. Mr President, whilst the underlying rate of inflation continues to be at or around an average of 0.5%, as highlighted by the Chief Minister, I particularly welcome the news, thanks to the policy of the triple lock, and the announcement that it is to remain in place, that our old age pensioners 1070 will be receiving a 2.5% increase, therefore well above the rate of inflation. In summary, Mr President, I feel that when this Budget is assessed against those of similar sized or even larger jurisdictions, then the general good husbanding of our Island during the course of this present unpleasantness will be gauged for what it has allowed us to maintain. Whilst I agree with the Chief Minister that our Island is currently seen as a beacon of light in 1075 the darkness of coronavirus, we must be mindful that pride can so often come before a fall, and the flexibility of our economy, creating the ability to attract new business and investment to our Island, must remain an integral cornerstone of our fiscal policy. So in order to sustain such, I wholeheartedly welcome the Chief Minister’s words regarding how vital it has been for our economy to secure our sea services, and it would be nice to think that such astute confidence is 1080 also directed toward the long term securing of our equally vital air services, linking our Island to the world and attracting vibrant new business. Mr President, as all Members of this Hon. Court will no doubt attest, the Manx people are extremely astute and will share the Minister’s optimism and the continuation to invest in our future. Initial worries concerning the outcome of our Island post-pandemic centred around the 1085 potential decimation of our way of life, our livelihoods and economy, with levels of unemployment ______1216 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

numbering in the thousands. Therefore, Mr President, in view of these very real concerns, which sat like a spectre above all of us, I would like to think that when history comes to judge this present time, and the legacy from it, this will be referred to as the COVID Budget, and I am sure it will be generally concluded that we will be thankful that such a steady hand was on the tiller. 1090 Thank you, Mr President.

The President: Hon. Member for Glenfaba and Peel, Mr Boot.

The Minister for Environment, Food and Agriculture (Mr Boot): Thank you, Mr President. 1095 I rise to support the Budget put forward by my hon. colleague the Treasury Minister. The past year has been one that could not have been predicted and the changing priorities from a global pandemic have seen impacts across a number of areas of Government. Within my Department we refocused resources and priorities to introduce new support grants, to reduce rents and were impacted by a reduced income. I am immensely proud that the Department, the public service 1100 and of the efforts that have been provided in fighting the virus and keeping our Island safe. This was complemented by the fantastic community effort of our population as a whole. Incredibly, amongst this, there has been a huge amount of work that has taken place within the Department to ensure the Island has been left in a positive position without a negative impact on our trade into Europe as a result of Brexit and post-transition. 1105 My thanks go to officers, the Cabinet Office, colleagues in the UK, and also my Hon. Members for supporting legislative changes required that have led us to be in this favourable position. The efforts that have gone into adapting working practice in preparing for new operations post- transition have been crucial. The development and implementation of a monitoring and surveillance scheme to ensure that the Island can demonstrate compliance with regulation 1110 required to allow the continued export of agricultural food goods to the UK and the EU has been necessary and work continues. I am delighted at the position we are in today and mindful of the increased workload and cost that the new post-transition work brings to the Department. We continue to support the local fishing industry post-EU exit to safeguard existing European markets for Manx fishery products 1115 and identify potential new market opportunities. The regulatory controls required to maintain trade links with the UK/EU have a direct impact upon existing resources and departmental priorities, with additional resources required for testing, sampling and inspections necessary to meet the standards set down in the Official Controls which regulate trade expectations and obligations. As such, a bid has been made to the Brexit fund to cover the added cost of extra 1120 staffing and resources. Focusing on the budget provided to the Department this year, it is promising to see that the Agriculture and Forestry Fund will be provided with an extra £1 million per annum for the agri- environment Scheme. This new Scheme is being introduced in April this year, has an increased emphasis on ensuring that the sector contributes to the environmental priorities and the wider 1125 public good. The requirement to maintain a meat plant is fundamental to the long-term stability of the whole livestock sector and we are pleased to see the operation and cost of the Meat Plant are being managed effectively, and it is meeting industry needs. The Department is currently dealing with unprecedented levels of Dutch elm disease. We have identified 204 diseased trees, of which 98 have undergone sanitation felling so far this year. There 1130 are also a significant number of diseased and dying ash trees on the DEFA estate. Many of these are adjacent to roads and buildings within popular recreation areas or otherwise represent a risk to public or assets. The Department welcomes the additional funding of a programme of tree disease and safety management that will see these issues addressed. We welcome capital funding to reduce the erosion of silt from our uplands, which feeds into 1135 Peel Marina, and to enable the associated issues around Kionslieu Reservoir in Foxdale. The Department is also pleased to see additional funding for the Cornaa Hatchery, an operation brought in-house last year following the lack of private sector interest in managing the site. The ______1217 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

Department has taken over operations and is confident savings can be made and that it is able to secure the angling licence revenue to the Department of circa £65,000 this year. The value of 1140 fishing, and in turn the value to the Government of this hatchery, is currently being assessed with an economic impact report on recreational fishing under way and I look forward to seeing and sharing these results with you in coming months. Over recent weeks, we have debated the Climate Change Bill in the . It is evident that climate change remains high on the agenda for delivery for this administration and the next, 1145 and indeed those beyond. I am pleased to see the money available to the Cabinet Office for a permanent team and extra money being placed in both capital and revenue funds, which provide circa-£17 million to support this important work. My Department has been pleased to support the Cabinet Office over the last six months in commencing a wide range of climate change initiatives and to bring through the Climate Change 1150 Bill. This new Bill will importantly create a clear strategy to achieve net zero emissions by 2050 and provide a range of suitable powers to enable actions to achieve this target. Recent work within the climate change programme has included the undertaking of a PIN on onshore renewable energy generation, the outcome of which has provided a great range of approaches and informed and broadened our thinking significantly. A project is now under way to map out how we achieve 1155 sustainable electricity generation, and I look forward to this report later this spring. We envisage this report, plus a perspective from the PIN, will inform a future tender as we start that journey to renewables in earnest. I am proud to see the wider Government response to the Climate Change Action Plan and the efforts in other Departments to move us towards net zero. To name a few, there are initiatives 1160 being planned across the Government estate, for example, Ballakermeen sports hall is likely to have solar panels fitted on the roof and the ground source heating system at Bemahague School is likely to be the first of many. It is wonderful to see the Government fleet now contains several hybrid buses and electric cars as the technology starts to be adopted. Progress is also being made on sequestration, with the Chief Minister’s forest being planted, a 1165 peatland restoration scheme being agreed, and a new woodland grant scheme under consultation. Our UNESCO Biosphere status of course contributes also to this work and it encompasses everything that makes our Island so special. In a competitive and rapidly changing world, maintaining our Island as a beautiful place to live and work and do business has never been so important. I am pleased that the Budget continues to recognise this and look forward to 1170 launching the forthcoming strategy. The Budget also allows us to continue to deliver progress across the Department’s wide range of functions. For example, this year will see the introduction of a food hygiene rating scheme, bathing water standards scheme, single use plastic regulations and the registration of important historic buildings on our Island. I am pleased to recommend this Budget to the Hon. Court. 1175 Thank you very much, Mr President.

The President: Hon. Member for Douglas East, Mr Robertshaw.

Mr Robertshaw: Thank you, Mr President. 1180 I very much welcome the Budget as presented by the Treasury Minister and commend him for its robust and sound nature. It reflects really the performance of his Department in this extraordinary period of crisis and that performance has earned my absolute respect. There were times during the early part of the crisis that were, well, frankly frightening and the robust way the Treasury went about their work and the outcomes that have been produced enjoy my very highest 1185 regard. So congratulations to all concerned. Standing up here brings me back to standing up here the same time last year, when I dared to suggest that black swans might occur, and that caused a deal of comment which was directed towards me. And yet a few weeks later, whatever it is that hits the fan hit the fan. It made me reflect on how I wanted to contribute to today’s debate in the sense that when I came into politics ______1218 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

1190 10 years previous, we had just gone through the Lehmans’ crash, the consequence of which was a world financial crisis. So I am beginning to wonder, is it my fault? Because when I – (The Speaker: Hear, hear.) (Laughter) When I came into politics, it hit the fan and just as I am about to depart it did again. But the point is that rather than therefore address particular issues of detailed policy, I thought that I would like my contribution to focus on a set of principles that I think should help us 1195 through these crises as and when they occur. To do that, I would go absolutely back to first principles. I think those first principles are that we all of us, each in our own way, are trying to achieve the highest quality public services that it is possible to achieve for the people who sent us here. On the other hand, we know, absolutely, that whilst trying to do that for the Isle of Man’s sake, we 1200 have got to maintain a competitive tax jurisdiction and therein lies the challenge; the way of reacting to that that will carry us through good years and bad years, and we know we have had a few of those. I noted them down, and with your agreement, Mr President, I would just go through them. I am going to use different language on this occasion, but you will know what I am saying. First, 1205 we must have a slimmer, more efficient Government – there are other ways of saying that. But that is absolutely essential. The truth is that despite all the good work, Government is still growing, against the backdrop of a population where we are seeing it stall, birth rates drop. I caution Hon. Members that there is an imbalance in that process that needs to be carefully thought through. Second, driving more funds to front-line services, and some of these things you will have heard 1210 me say again and again, so forgive me for repetition. I link that with the Treasury Minister’s comment about the control of 1% pay rise. My argument all the way through my time in this Hon. Court has been to ask for greater efficiency in the structure and organisation of Government, such that we can drive more funds to those front-line services, like nurses and teachers, whatever. I think we absolutely must cling on to that principle. We should be able to control the 1% increase, 1215 as described by the Treasury Minister, but make sure that front-line services get a damn sight more than 1%. That means that in other areas greater efficiencies have got to be achieved. That brings me on to the third principle, really, which is the accelerating pace needed in technological change. I think there is an awful lot of good stuff going on around Government that suggests we are trying, but my instinct in this is that we are not going fast enough and we are not 1220 spending enough money on it. The particular issue that I would draw to attention here is my fear that I have for the incredibly good work that is going on with regard to Manx Care, but that Manx Care is being constructed on the basis of the organisation itself within which technology later on will be plugged in, when, in reality, it should be the reverse. The service of Manx Care should be built around modern 1225 technology, as has occurred in other jurisdictions. Yet we are a long way behind where we need to get to there, and I fear for the future of Manx Care if we do not grasp that principle and spend more money, more quickly to get to the point where Manx Care is built around the quality and sophistication of its technology, thus that it really does deliver personalised service to the patient and the electorate. I worry about that. It always seems to me that everything is filtered through 1230 GTS. I do not think GTS can cope with this. I think there is a lot of good operational work GTS has got to do and is doing. It is not a criticism of GTS. It is a criticism of us as to whether we have got the priorities right in regard to the speed with which technological change must occur, that will in turn also reduce the cost of bureaucracy and administration. Which brings me on to the next point: that technological change has got to drive down the size 1235 and cost of administration so the funds are there to deliver to the front-line services, as I described earlier on. The next principle is seeing much more acceleration in development or creation of arm’s- length bodies. The Treasury Minister again describes the way Manx Care is an arm’s-length organisation, but outside of that we are not doing well enough. Just one little example: the vehicle 1240 testing centre. We are spending a lot of money on a vehicle testing centre, but it should not be in the public sector. We have got a whole range of certain first-class auto-mechanical services in the ______1219 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

private sector. Why did we, what was in our minds, when we decided that we would keep that facility inside the public sector? If by now we transferred that out into the private sector, during the last lockdown we could have carried on. 1245 I will not be taking any interventions at this stage, if that is the intention. I do not think it is the appropriate time. So if by now we had vehicle testing in the private sector, we could have carried on providing that service right through the lockdown, because the garage services were there. But why are we actually even thinking at the present time in keeping that in the public sector? What is wrong with 1250 our mindset that allows us to even think that that is acceptable? I do not get it. My next point is de-conglomeration of Departments. Good work has started. The lead provided by the Treasury Minister to ensure that we had Sir Jonathan Michael’s Review, excellent start. Excellent step forward again when we at last recognised that we needed a fundamental review of the Department of Education, and I am encouraged by the progress currently being made. I have 1255 got my fingers crossed about that and I am sure we all hope for the best. But behind that there are significant reviews to do on the other Departments. I do not know how many times I have made comment about DoI, but suffice to say that it is the next one that needs, in the next House, a fundamental review, and it needs to come out of that review a completely different organisation than it is at the present time. That is not to criticise 1260 Ministers, on this occasion, or the senior officers or the staff of DoI. We have placed DoI in an impossible position and it has got to become a much more simplified operational Department delivering specific services. As I have mentioned earlier, arm’s-length organisations have to be removed from it. The other work it does in capital works we already know is going to go elsewhere, but DoI must be simplified beyond recognition. 1265 Coming on to DEFA, I am very worried about DEFA – really concerned. I think we are – and it brings me on to another point – in the wrong place at the moment when it comes to making sure that regulatory authorities sit outside the executive Departments. That is an absolutely essential thing that must happen. Hiding and lurking around in DEFA and losing their identity and independence is not a healthy situation. So I would suggest those of you who are back in the next 1270 House put DEFA as the next body to be reviewed after DoI and that, as a consequence of that, you seriously create a regulatory hub which sits outside all Government Departments. That is absolutely essential. I think there is work to do as well with regard to ensuring that the budgetary process follows political priorities. Now, this administration did lots of good work in trying to get the concept of a 1275 Government programme up and running. But, and I have said this before as well, it was a complex myriad of detail when in fact, in political terms, the next House needs to come in with its top 10 priorities. Now, you will not condense nine or 10 top political priorities out of a process of concerning yourself with a myriad of detail. At the present time, it is not possible for the political process in its early days of a new administration to do this, unless there is an external resource, 1280 which is a pretty sophisticated strategic mind to assist in that process to help new politicians and returning politicians to create that programme. So I put that down as another area so that politicians, the executive, parliament all understand what the key, leading factors are that that administration wants to achieve. Well done for producing the Government programme, but far too complex and lost in a myriad of interactions – 1285 in a number of areas – between Departments and their continuing silos, and that has got to be broken down. But I also, and my final point is that that process has, I believe, at some stage in the next administration, got to result in cross-departmental initiatives and priorities sitting within this Court, with Members leading the cross-departmental budget in that area. There are, particularly 1290 in the social side, important issues that sit cross-departmentally, should sit cross-departmentally, should sit with their own budget and should sit with their own lead – not necessarily a Minister. I think that ultimately, all of that, leads to the conclusion that this would better happen if the Isle of Man Government was a single legal entity. It is not to deconstruct the ministerial system or the ______1220 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

departmental structure; it is to modernise us so that we can do the things that I have described 1295 here as the first principles, that will ensure that in the future, the next time we get a black swan event, the Isle of Man Government is efficient, it is focused on its citizens, it is cost-effective, and it is a shining light to other jurisdictions struggling in their own way with their own problems. So with that, Mr President, I am delighted to support the Budget before us. Thank you.

1300 The President: Hon. Member for Douglas North, Mr Ashford.

The Minister for Health and Social Care (Mr Ashford): Thank you, Mr President. This Budget has been badged as a Budget of Resilience, and I think that just about sums up nicely the last 12 months. Who could possibly have predicted the true scale of events of the last 1305 year when we all sat here 12 months ago? As we look around the world, we see not just a health emergency caused by the pandemic, but also an economic crisis, as country after country has had to shut down swathes of their economies in order to try and prevent a health-care catastrophe. In the first nine months of the last financial year, the UK alone borrowed £270.8 billion. To put it into context, that is the equivalent, based on population, of us going out and borrowing 1310 £350 million, and it took the UK’s public sector net debt, after those first nine months, to the £2.13 trillion mark. The world has seen the biggest peace time borrowing by governments around the world since records began. Even though the pandemic will come to an end, generations to come around the world will be paying for this debt for a substantial time to come. The economic and monetary cost of COVID-19 will be felt long after the pandemic is consigned 1315 to history. It is against this backdrop that the Treasury Minister and his team have presented this Budget today. While sometimes it can be easy for us to be insular and think purely about our Island, it is important that we do not forget the wider world context to the Budget that has come forward today. So while we may argue why this or that is not included, we have to recognise the constraints to which we operate and put it into context. To quote AA Latimer, a budget is ‘a 1320 mathematical confirmation of your suspicions’. It has been due to the way that our Island has responded to the COVID-19 pandemic that the Treasury Minister is able to present this Budget today. Mr President, Hon. Members should make no mistake that things could have been very different for us economically if we had not dealt with the pandemic the way we have as a community. We have not only prevented a health catastrophe, 1325 but in my view an economic one as well. We have used our reserves wisely via support schemes to help our economy through the more difficult phases. It is true we have not been able to help everyone, but we have managed to give much-needed support to many sectors of our economy. Before I was a Member of this Hon. Court, Mr President, when I frequently used to watch proceedings from the Public Gallery, I constantly heard it being said that the reserves were there 1330 for a rainy day. Well, the rainy day came, Mr President. In fact, to use a well-trodden Met Office phrase, which seems to get used more and more these days, it was a full-blown weather warning. And that prudence and resilience built up over many years has helped our Island navigate this storm that we now find ourselves in. While many – in fact, most – countries are looking to how they will repay this ever-increasing 1335 historic debt that has been built up, here in our Island the Treasury Minister has been able to present a Budget that continues to invest in our public services, including not just maintaining what we already have but also investing in the future. The fact that even after the last 12 months we can bring forward a Budget that provides £15 million in additional capital expenditure, with revenue bids of £23.2 million approved, and providing for a five-year capital programme of 1340 £438 million shows that the title A ‘Budget of Resilience’ is more than just a strapline. It would have been very easy with this Budget for the Treasury Minister and his team to focus on simply consolidating what we already have, battening down the hatches and waiting for the storm to pass. Instead they have been bold and decided that we need to continue to move forward as an economy and continue the investment in the future of our Island that this administration 1345 has been committed to over the last, now approaching, four and a half years. ______1221 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

It will probably not be a surprise to Hon. Members, Mr President, that I am a strong supporter of this Budget. The Health and Social Care services have seen an investment of £15.5 million, for which I am exceptionally grateful to the Treasury Minister and his team. After all that has been spent on Health and Social Care in order to fight this dreadful pandemic over the last 12 months, 1350 it would have probably been easy for Treasury to believe Health and Social Care has already had substantial support and prioritise elsewhere. But they have not done that. They have listened and taken on board the issues that the Department has been facing for several years now and have been committed to addressing those and proving the financial help and support in order to do that. 1355 Unsurprisingly, Health and Social Care is a staff-intensive service. Therefore, as a Department, we can be very exposed to wage increases and personnel staff pressures. The Treasury team has recognised that and as part of the £15.5 million has provided the Department with the £8 million required to close the gap that has built up over time in that regard. This investment means we can commence Manx Care and our journey of healthcare transformation on a much sounder footing 1360 than we would otherwise have been able to. This additional funding will also allow us to invest in our primary care services, creating new roles to assist the delivery of the ‘primary care at scale’ model that is so vital to ensuring we have a robust and sustainable primary care service. There is £450,000 included to provide additional funding for our GPs; £850,000 to address a longstanding issue around GP indemnity. All things that will strengthen the front end community 1365 services upon which so many people rely and depend upon. There also additional funding for both the dermatology and phlebotomy services of £154,635 and £68,714 respectively. That will allow for those crucial services to enhance their provisions with ongoing financial support being provided to support those support services in future years. Turning to the remarks by the Hon. Leader of the Opposition, or the Hon. Member for Ramsey, 1370 Mr Hooper, (Laughter) in terms of independent regulation, Mr Hooper already knows, Mr President, I fully agree that independent regulation is essential. We had hoped by the point of bringing Manx Care forward and into being that we would have the inspection regime set up with the majority of it managed by CQC. Unfortunately, with the pandemic, CQC needs to be on Island to do most of the work, and it is not us that is blocking that. CQC themselves have actually imposed 1375 travel restrictions on their inspectors. So they have not been able to undertake that work. In terms of the funding in the Budget Book which Mr Hooper is referring to, the reason he will not see that there yet is the baseline programme comes under the Healthcare Transformation Programme and so it is within the Healthcare Transformation Fund that that initial investment will come. But independent inspection is coming, is much overdue – as I have said in this Hon. Court 1380 time after time – and it will be led independently. So turning back to my remarks, Mr President, I would like to thank the Treasury Minister and his team for the support they have given to Health and Social Care. It is now for the Department and Manx Care to use those additional funds wisely to deliver improved services for the people of our Island. 1385 As with all things in life, Mr President, budgets by their very nature cannot be all things to all people. There will always be people who are disappointed, feel things do not go far enough or could have been prioritised in other areas. But to those who may be pessimistic and look at things with the old metaphor of the glass being half-empty or half-full, I would say this to them, Mr President. After the year our global community has experienced, we should be thankful simply 1390 to still have the glass, (Laughter) as for many countries and communities, they are more concerned with saving the receptacle than worrying about the contents. So I commend the Treasury Minister and his team on this Budget of Resilience and I would urge this Hon. Court to give it the support that it rightly deserves. With the 12 months we have all just experienced, I want to leave Hon. Members of this Court 1395 with this thought, Mr President. In a gents’ toilet in a central London bar, there is a sign which says, ‘Due to recent budget cuts, the light at the end of the tunnel has been turned off.’ With this Budget, we should be assured that for our Island community the light is still burning brightly and ______1222 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

we are continuing to invest for the future of our wonderful Island community that has shown such resilience in the face of adversity, Mr President. 1400 Before I close, I would like to put on record again my thanks to all of the staff in all of the front-line services, not just DHSC, who have worked absolutely amazingly over the last 12 months and I know will continue to do over the next 12 months in order to deliver the services that we all rely on. Thank you Mr President. 1405 A Member: Hear, hear.

The President: Mr Speaker.

1410 The Speaker: Gura mie eu, Eaghtyrane. This has not been an easy year to be the Treasury Minister, or indeed an officer in his Department, and I commend him and his team for their professionalism in the face of this crisis. He, like I, will have been watching the economic analysis at home and abroad, but in reality, putting this Budget together, I suspect that a bottle of scotch and a Ouija board might have been 1415 far more useful to him, because there is no consensus about what is going to happen over the next few years. Whilst the unemployment level created by COVID was comparable to the financial crisis post- 2008, of which he have heard from others, there has been a far greater need to get money into the pockets of real people, whose daily livelihoods have vanished before their eyes when our 1420 people had to lockdown. In this, the Government did really well and our people did phenomenally. I doubt in March our most positive forecast brought us out of lockdown so quickly, with the positive benefits to economic, physical and mental health that followed. However, notwithstanding that, 2020 was an alarming year for suicides on our Island. COVID was not the only factor, and it still seems that we have a Mental Health Service that is lagging 1425 behind the curve, and £1 million underspend in that Division will not be helping. This is concerning. It is just one metric in many that we need to look at in terms of transforming our health service. The 2016-17 Budget, the budget for Health was £198 million. It is now £233 million, and that is without taking into account the service movements in and out of the Department in intervening years. The increase has been dramatic, but have the business-as-usual gains in efficiency and 1430 productivity been put on hold in the name of the transformation programme? It seems so, and the evidence of efficiencies seems to have dried up. I support the Treasury Minister’s move away from the wooden dollars mechanism of capital financing. There is a danger though that the increasing calls for revenue funding will mean it becomes harder to ring fence capital money in a way that is easier understand and easier to 1435 achieve under the current arrangement. But that is surely surmountable. Another area of concern, and I know it will concern the Treasury Minister as well, as much as every other Member of this Hon. Court, is the ongoing drawdown from the Public Sector Employee Pension Reserve. This is a significant part of the ongoing structural deficit. The drawdowns have been a third lower than anticipated in 2017, and I am keen to ask the Treasury Minister why this 1440 is. New terms and conditions do not seem to explain it, in that gross pension costs have fallen from an estimated £128 million for the current year to just £112 million. On the face of it, this is a really good news story, but we should not forget that the pot runs dry in 2022-23, and new sources of income or real tangible savings need to be identified. Thus far, both have been elusive. The intention to burn through an additional £200 million of reserves over the next five years 1445 should be a matter of enormous concern. The inclusion of a surplus in the National Insurance account to provide part of that budget surplus should be doubly concerning to us, especially when the last published actuarial review of the National Insurance Fund said that it would be empty by 2054, and that was before we took over £70 million out of it to pay for COVID salary support. It is

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also worth noting that the printed Pink Book underestimates the cost of National Insurance 1450 payments over the next four years by some £24.5 million. The ongoing support for the elderly in our population is particularly welcome, as the greater than inflation increase should help to reduce the number of pensioners living in poverty. The lack of uplift for many groups will require further looking into, and have been alluded to already in Budget speech contributions. But as we all know, individual circumstances vary. 1455 Inflation is low, and was measured at –1.3% in September. Looking at where lower income families spend their money, the cost of food, energy, transport and communications all fell. However, rents went up by 4.4% and rates went up 1.1% and whilst oil dropped by a third, solid fuel costs rose. This goes to show amongst many things the need to reduce the number of households reliant on solid fuels, which ties neatly into our green agenda. Likewise, looking at 1460 housing, the increases in the private sector will have been masked by the low rent increases in the public sector and the Treasury Minister I am sure will be wary of this, and that the gap between public and private sector housing has the potential to exacerbate underlying issues. I mentioned earlier the financial crisis in 2008 that precipitated the arbitrary reduction in our VAT receipts. That created a structural deficit which, over a decade on, we have still not really 1465 recovered from. We have, in effect, been spending more than we have been bringing in since that date and this is not sustainable. Our finances are not currently sustainable. To return to a familiar theme that Hon. Members will have heard me talk about before, I doubt we can really fix our finances until we get the budget system right. It is a relic of a colonial age, when we vested executive power in the Governor. As our democratic institutions took hold, more 1470 Government policy moved from the Governor to the service delivery Boards and Departments of Government. The Governor, though, resolutely held on to the purse strings, delivering the Budget in this Hon. Court until as recently as 1976. In 1985, with the advent of the ministerial system of government, the Treasury Act took these powers, designed for a totalitarian dictator, and handed them to the Treasury. 1475 Hon. Members, we can say all we like today about the good or ill of the Budget. The truth is we have had very little to do with it. The Treasury has even dropped the pretence of its consultation with Members’ exercise which it has toyed with over recent years. The unnecessary culture of secrecy still pervades this system without any good explanation. Worse, the document before us, the product of Treasury and approved by Council of Ministers cannot be amended. 1480 What Treasury wants, it funds; what it does not want gets pushed down the national priority list without reference to Hon. Members. When, for example, have we had a debate in this Court about the relative priority for a replacement Castle Rushen High School or a QEII STEM block? Yet the latter appears to quietly have overtaken the former in the shadows of Treasury, not on the floor of this Chamber. That is 1485 just one example of some £73 million of capital spending that we will vote on today, along with this Budget, and which is subject to no further parliamentary approval. Not to mention the already mentioned £19.9 million for the Liverpool Ferry Terminal which is ‘under review’. I presume it will be up to the next administration to explain whether the costs have doubled, or tripled. The Budget is not truly scrutinised. We were provided with this document two weeks ago, 1490 marked strictly confidential. We cannot take advice from others outside of this Chamber, no matter what our level of proficiency with finances. I am thankful to all those Members in this Court who supported the Tynwald Auditor General, which appears in the Budget as ‘Tynwald Administrator’ on page 91. I presume this is not deliberate. However, we are yet to learn from Treasury whether Members will be able to approach the Tynwald Auditor General for advice on 1495 the Budget prior to budget day going forward. There is nothing in the Act that requires Treasury to share this document with the Auditor General on the same basis as Members. Hon. Members, we do not debate the national financial priorities except once a year, when it is too late to change them. We cannot take evidence on the contents of the Budget, as we must vote on it today. All other Tynwald documents are released to the public two weeks beforehand. 1500 Issues are raised, errors are corrected, matters of policy and priority are brought to the fore. There ______1224 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

is no such opportunity to do this public scrutiny work regarding arguably one of the most important decisions of the year, the spending of over a billion pounds of taxpayers’ money. Hon. Members, the only thing that matters in here is your vote. That is why for the last few years I have voted against the Budget as a protest against the system, and until this system is 1505 closer to what I expect in a modern democracy, I will continue to do so. Thank you, Mr President.

The President: Hon. Member for Arbory, Castletown and Malew, Mr Moorhouse.

1510 Mr Moorhouse: Thank you, Mr President. We are in a really good place and that did not happen by chance. Thank you. However, I do have concerns. We have a big, expensive public sector that has not been looked at – it must. One of the largest investments on our Island this century is the construction of 282 new homes in Ballasalla – much-needed housing. The by-pass has the potential to be completed this year, but 1515 where is the Government contribution, the roundabout? This could well become the road to nowhere, or worse. That must not happen. I presume the Community Infrastructure Levy could assist at some point, but that will not pay out in retrospect. What will happen there? From my perspective, the largest omission must be the new school at Castle Rushen. Today, there must be a large number of disappointed residents in the south of the Island – I am one. We 1520 really expected something. I worry about the future of this much-needed project. The £6 million increase in the capital contingency is a potential concern, from the perspective will it simply allow the Promenade to be completed? More money, more good will, more staff. Moorhouse is worried about the environmental crusade. We have moved forward with this, but too many ordinary people need to see the basics, such as money for home insulation. That would 1525 benefit the people and the environment. Today, an electric car is as real an option as a rocket for many Island residents. We need to keep things real and the people onside. Finally, we are in a really good place, and for that we should be really grateful. Thank you, Mr President.

1530 The President: Hon. Member for Rushen, Mr Skelly.

The Minister for Enterprise (Mr Skelly): Gura mie eu, Eaghtyrane. I would like to congratulate the Treasury Minister and the Treasury team for delivering a Budget of Resilience. So, defining resilience: ‘the capacity to recover quickly from difficulties’. It 1535 certainly has been a difficult year. But that is the Manx ethos. Look up at those screens, those three legs and the Latin, Quocunque Jeceris Stabit – ‘whichever way thrown always stand’. We have been thrown this year, but we are not the only ones to be thrown this year. Global economies around this world have been struggling. Governments around this world have been struggling. They continue to struggle. The challenge is immense. But I think the Chief 1540 Minister has coined that phrase, hasn’t he? ‘Manx solutions for Manx problems’. We have dealt with this and I think this Budget of Resilience demonstrates that. I think the Health Minister mentioned it there, and the Treasury Minister stated a £200 million impact. Huge, massive. But the Health Minister mentioned there what those early indications were, where we were staring down the barrel of this. What the cost of this was going to be to 1545 human life on this Island and our economy, because they do go hand in hand. We were focused on preserving life, protecting life, but we needed to preserve and protect our economy because without a positive economy there are no taxes. That is what that Budget is today. How do we spend those taxes? And for the large part we have protected that. The point with regard to front-line services is really important. We put a lot of effort, a lot of 1550 resource, a lot of funding in that area, and we continue to do so, and that Budget here demonstrates that.

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One of the points that we have is our ability to be fleet of foot. When it came to the economy we established the Economic Recovery Group: Treasury, Department for Enterprise working with the Cabinet Office to understand the impact. How do we deal with the immediate issue? Stimulus, 1555 retraining of our people. That is a really important point, because it has been touched on by other Members already. Unemployment: prior to COVID arriving on our shores we were on a 15-year low with regard to unemployment. Within weeks or months we are on a 20-year high. So we knew we had to react very quickly to that, and we have given resource in that particular area, especially working with 1560 our colleagues in Education. There are nearly 20 initiatives that have been decided through that particular organisation, the Economic Recovery Group. I would like to put on record my thanks to the great Manx public for what they have done in spending in our local economy, because that is the area that has been hit the most. We know tourism has been hit and we know tourism continues to be hit but we have seen innovation, 1565 staycations, air bridges; and that will continue. The reserves have held up which is a fantastic achievement without a doubt; and again the Health Minister said … and I have to thank past Governments here for what they have done in putting that money away, because that was put away for that rainy day. And it sure has been raining! 1570 But in this Budget there have also been really important other commitments: climate change, £17 million; the Department of Health and Social Care continues to be funded to an extra £15 million. But I would also like to pay homage actually to the wider economy here. Digital and Finance continued to perform right the way through lockdowns and they continued to pay our taxes, and what we have got right here today with regard to the Budget. But our wider economy 1575 has shown innovation, which has been really important. When we look back, and I think we talk about a Budget of Resilience, we also should consider reflecting on these last four years. We have managed to increase personal allowance; we have managed to increase child benefit; we have given extra funding for pre-school education; and we have maintained the triple lock, which is very important to our elderly generations. 1580 But I do accept what other Members have stated there with regard to intergenerational inequalities that have spun up, and it is something we do need to be conscious of, going forward. The Treasury Minister talked about last year’s Budget, which was a Budget of Focus. He talked about a surplus we were hoping to have of £12 million, and it has turned out £200,000-odd. Do you know what? As a Government and past Government, they have legislated to ensure we do 1585 have a surplus. What other nations around this world do you think are going to have a surplus in their budget? So that is fantastic. I will leave you with this last point. The Treasury Minister was thinking about that £12 million, which would have been the champagne corks popping. In Manx terms, that would have been ‘Spuds aplenty and herrin’ enough’. We can survive. So whilst it may not be that way, we have 1590 survived it. We have been resilient. We have a resilient economy. We have a resilient community. The last point I would make is: where did we start this Programme for Government? ‘Our Island, a special place to live and work.’ And it still is that way. Gura mie eu.

1595 A Member: Hear, hear.

The President: Thank you, Hon. Members. I think that would be an appropriate point to conclude the morning’s proceedings. The Court will now stand adjourned until 2.30 p.m.

The Court adjourned at 12.59 p.m. and resumed its sitting at 2.30 p.m.

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Budget for the year 2021-22 – Debate continued

The President: Fastyr mie, Hon. Members. 1600 Members: Fastyr mie, Mr President.

The President: Please be seated. We resume our Budget debate and I call the Hon. Member for Peel and Glenfaba, Mr Harmer. 1605 The Minister for Policy and Reform (Mr Harmer): Thank you, Mr President. I wish to add my congratulations to the Treasury and the team for a well-executed Budget, in these immensely difficult times, and it is a testament to the wonderful way the whole of the Island community has come together. 1610 COVID has brought devastation to many economies, and for most it is the choice of either large-scale borrowing and taxes later, or the immediate pain of cuts and large-scale tax rises. The fact that we have done neither is a huge testament to the resilience of the people of the Isle of Man and the Isle of Man economy. The public sector, the private sector and the third sectors have all come together. I have seen the absolute effort and resilience across all of Government, 1615 including those that I have been involved with in Infrastructure and within the Cabinet Office, where people had been pulled away from day to day and from projects to tackle COVID. The change cannot be underestimated. To those where they see negativity in the Budget, and I am sure the Infrastructure Minister will cover some of these, but as less money has been needed for Heritage Rail, then less money is 1620 needed to be spent. That does not mean a diminished commitment to that in the future. And the vehicle test centre move is to support new employment and new opportunities there. But I do remark on the definition of what resilience is: it is not just about what we think it is. It is about the ability of us, an object or whatever, to spring back into shape. In other words, it is the ability to adapt, to change, and being open and flexible and willing to adapt is absolutely critical. That is 1625 what this Budget does. We cannot avoid problems, but we can change. I would just remark about the Speaker’s comments about not supporting the Budget. I just would urge him to break with that tradition in essence of the massive step forward with the Auditor General and how this is a Budget of change. If we always wait for perfection before we can commit, I do not think any of us would ever vote for anything. It is not just about the perfection 1630 of here and now. It is about the change and it is about the movement forward. On that basis of change, despite this, we have introduced and maintained a living wage and low inflation. As well as this, reform continues in a reforming administration. The Manx Care transformation will bring our healthcare forward. The Climate Change transformation will now have a firm footing and the finances to make a real change and provide the support for those that 1635 the Hon. Member from Arbory, Castletown and Malew highlighted, such as with insulation and with adapting to the change towards electric cars. Both of these are being cross-Department and this will need to be the way forward, as both the Hon. Member for Ramsey, Mr Hooper and the Member for Douglas East have outlined, Mr Robertshaw. Not one single Department would deliver all the actions on health and climate, and I am delighted that active travel, which both 1640 supports health and climate, is supported in this Budget. Critically, it is important to fix both the symptoms and the cause. This is true with this Budget, increases funding around flooding and climate adaptation. Equally, with Peel silt as regard the dredging and the problems behind it, such as a solution around Kionslieu Reservoir. In my Programme for Government speech, I highlighted health, environment, economy and 1645 housing. I am delighted that we are looking both to the now and forwards within the Economic Recovery Group, and towards an economic strategy, which the Member for Douglas South alluded to, and the vehicles of change, such as a development agency. Being able to make a quick decision ______1227 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

in supporting employment, and such as the fishing industry, is absolutely vital during the dark days of lockdown, but it is important that we do not just fix on the here and now, but also the future. 1650 Housing will need the same focus, and while we now have project administration resource, this will need cross-departmental support. But I agree that the old fixed lines need the flexibility, and this has been shown in what the Hon. Member for Ramsey identified. Within the Cabinet Office, I am delighted at the new funding for business change, and this is absolutely critical. This was the point that Mr Robertshaw from Douglas East highlighted, because 1655 the issue around IT for IT’s sake. This is quite a hidden bit in the Budget, but absolutely critical, where we need to be focused on changing the organisation and organisational change, rather than simply the instrument or the IT around it – absolutely fundamental. Change management for the Government and our Island is critical if we wish to continue to thrive. The improvement of project capital management and control is critical as well, and I 1660 welcome the change to capital management. I welcome the commitment that has been made previously by the Education Minister finally moved forward with the design for the QEII STEM block. I am pleased that the funding for the regional sewage remains fully funded, but it is now time to deliver. In short, the Budget is one of resilience, but it is of change and reform and tackling the 1665 problems of now, as well as supporting the solutions to those problems, and that is absolutely fundamental. For that reason, I commend the Budget to the Court.

The President: Hon. Member for Middle, Mr Shimmins.

1670 Mr Shimmins: Thank you, Mr President. The Treasury has provided clear, proactive support during this crisis to the community, to deliver timely help. In short, the Treasury has laid the foundations for economic recovery and this Budget of Resilience builds on that. The Treasury and the Department for Enterprise, in the form of the Economic Recovery Group, have commissioned a new economic strategy and framework. 1675 This is absolutely essential, Hon. Members. The world is changing rapidly around us. Our economic strategy needs to be reviewed and we need to ensure that economic prosperity continues in the years to come. That is what pays for all of our public services, Hon. Members, it is absolutely essential. So I am delighted that we are reviewing strategy. I am also pleased to advise that the Manx Restart Scheme is well under way and is already 1680 helping the long-term unemployed people – people who have really been impacted by the changes that we have seen through this crisis. And we are helping them get back on their feet and back into employment. The Budget contains substantial additional funding for the Health Service. There is a great deal of work to be done to transform our Health Service. Treasury is doing its bit. This money needs to 1685 be spent wisely and efficiently to deliver the more responsive care to patients that we all want. Treasury is providing £17 million to address the climate change emergency. Treasury is doing its bit to address this emergency. If this money is used wisely it will help the people of this Island with energy costs, help reduce their day-to-day bills for their heating, and it will provide many economic opportunities and jobs for the future economy. Hon. Members in DEFA, and elsewhere, 1690 this money needs to be spent wisely for the many, not just the privileged few. I would like to turn to capital and it is really good that the strategic infrastructure needs analysis is going to be undertaken. That will in turn drive a new financing plan for the capital investment. The Capital Financing Reserve replacing the Consolidated Loan Fund will be much more transparent. The old wooden dollar system was overly complex and it just did not drive prudence 1695 in some Departments. The system did not encourage good housekeeping, in my view. We are moving to a better place on the capital financing model. I also very much welcome the Major Capital Projects Board and the Major Capital Projects Unit. I have been very concerned, Hon. Members, over the last few years about the collective failure of Isle of Man Government to deliver capital projects on time and within budget. I have raised this ______1228 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

1700 over the last two Budgets and urged Hon. Members to take responsibility, to take action from the delivery of these projects. Quite simply, the public must have greater confidence in Government’s competence on capital projects. I believe that the Major Capital Projects Unit will change the approach that has been taken and provide that additional professionalism, that additional rigour, to regain the public’s confidence in our ability to deliver these projects. 1705 Mr President, I do need to address Mrs Caine’s suggestion that Treasury is ‘anti-heritage’. (A Member: Hear, hear.) This is complete nonsense. Absolute nonsense, Hon. Members. Mrs Caine is also a trustee of the Douglas Bay Tramway Trust, of course, which may potentially influence her views in this matter. But the facts are clear: Treasury has provided Manx National Heritage organisations over £23 million of taxpayers’ funds over the last five years. Another 1710 £4.6 million has been allocated this year to the Manx National Heritage organisation. There has been no cut. We have maintained the funding despite the incredible crisis that we face. The budget continues. On the heritage railways budget, more than £26 million has been spent on capital expenditure over the last five years. This capital expenditure of £26 million excludes the additional expenditure 1715 on the promenade for the laying of the horse-tram tracks. So, many more millions in addition for the horse trams. These are taxpayers’ funds. These are not enthusiasts’ funds. These are hard- earned taxpayers’ money. The heritage railways also run at an annual revenue shortfall. In the last five years that shortfall has now exceeded £16 million. I would put it to you, Hon. Members, that Treasury has been 1720 incredibly supportive of heritage railways. To suggest otherwise is complete nonsense. In a time of national crisis Mrs Caine’s expectations are simply unrealistic. The Treasury Minister wants to cut up the credit card. Mrs Caine wants a blank cheque for the horse trams. In contrast, I welcome Mr Robertshaw’s comments, and he recognises the challenges that we face but also the opportunities that are clearly there to deliver Government services more 1725 effectively. He covered the scope of Government and he talked about the greater use of technology. I agree with your comments. Another important announcement in this Budget is the Manx Development Corporation. This organisation will be the catalyst for positive regeneration of brownfield sites. It will be transformational. 1730 Another announcement was the exploration of sovereign debt opportunities. Should we issue debt? There will be different views, probably, within this Hon. Court and around the Island. Now is a very good time to issue debt; interest rates are at all-time lows. We should not be afraid of investing in the future of our Island, Hon. Members, (Two Members: Hear, hear.) but we need to do it carefully. We need to consider all the options and we need to progress with all diligence in 1735 this matter. But we should not be afraid of investment. I am also aware that charities and other third-sector organisations have struggled due to our lack of funds during this crisis. Many fundraising initiatives have been impacted, so I particularly welcome the fact that the Dormant Assets Fund is now delivering. I can tell you, Hon. Members, a lot of work was put into getting that Act through, to putting that framework in place. I am 1740 personally delighted with the support that the banks have provided, and that will now mean in excess of £600,000 to be distributed by the Manx Lottery Trust to worthy causes across the Island, with a further £4 million to come. I envisage further very substantial sums to follow after that. So I am personally delighted to see that come to fruition. Hon. Members, we must be wary of hubris. This is a Budget of Resilience. Yes, we have some 1745 challenges, but we can overcome these if we use these Budget funds wisely. There is much more work to be done. We must focus on the future, Hon. Members, not the past. Thank you.

The President: Hon. Member for Ramsey, Dr Allinson. 1750 The Minister for Education, Sport and Culture (Dr Allinson): Thank you, Mr President. ______1229 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

I rise to add my support for Treasury and the way they have not only dealt with the health and economic challenges of the last year, but also managed to mirror the resilience of our Island community with this Budget. 1755 At times of uncertainty and crisis we must work together as a nation. An austerity budget would have divided us. The Budget proposals before us act to reassure and support. But this Budget also signals a clearer direction for our future. The strategic infrastructure needs analysis is essential for prioritising where investment in public services should be directed in the short and medium term. 1760 I would like to add my thanks and gratitude to all those who have allowed us to weather the storm brought to our shores by a coronavirus. But especially to the teachers, lecturers, support workers and all school staff who have kept education going for the young people on our Island. The education service will be working with our infrastructure partners to complete updated condition surveys on all our schools so that investment is directed according to need and 1765 replacement buildings are planned according to a clear strategy. The move to establish a capital financing reserve will make the funding of projects clearer and hopefully instil confidence both in the public and the construction industry. Investing in essential infrastructure, improving the learning environment in our schools and University College, and valuing the achievements of our education service will all be essential as we plan the recovery 1770 from the global pandemic. I welcome the commitment in the capital programme for the completion of the extensive work currently under way to build new playing fields for Castle Rushen High School. Once completed, these will free the existing site for a new school to meet the challenges of a post-COVID world. I also welcome the commitment to the new science and technology block at QEII. This is another 1775 significant investment in education for our Island and hopefully will be led by the Major Capital Projects Board. All these important developments, linking strategic need, finance and professional delivery of capital projects, will allow this administration and those in the future to deliver on the decisions of this Hon. Court for the good of our nation. 1780 Looking back over the last year, I would like to thank the Treasury Minister and all those members and officers behind the Economic Recovery Group for their help and advice during very dark times for our Island. They have actively supported education, training and reskilling, quickly, with extra resources and a new collegiate way of thinking. Mr President, we are still in the middle of a global health emergency and at the start of a longer 1785 economic recession. Politicians will need to rise to the challenges ahead of us. The spectre of nationalism and misinformation will lead some astray, but I am convinced that the investment in education and commitment to clearer finance and infrastructure programmes will allow us to come out of this crisis stronger, and together. Thank you. 1790 The President: Hon. Member for Douglas Central, Mr Thomas.

Mr Thomas: Thank you, Mr President. I rise to speak as an optimistic person with glass half-full, but I am here neither to boost the 1795 knockers, nor to knock the boosters in respect of this Budget. I am going to try and say a few things like I have said before, using that phrase. We are all people, we are all colleagues, but I think it is important to say what needs to be said, alongside congratulating Treasury and ourselves for the Budget before us, because ultimately, as Mr Speaker has said, in a way, each of our votes individually is unimportant. I am sure I will end 1800 up voting for the Budget, especially when I am sitting next to a dictatorial tyrant with a sword right in front of him, (Laughter) but I hope some people would expect me to make some serious points, and I have divided those serious points into three: the local issues about Douglas and the centre

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of Douglas; about some institutions that I have worked with or I am still working with; and also some national matters that have not as yet been covered. 1805 So I want to associate myself with lots and lots of what has already been said. I am not going to repeat any of that. You will have to guess what I am associating myself with, but I will actually be making some comments about some additional things. In terms of local matters, I welcome the inclusion of Scoill Yn Jubilee in the capital programme, a couple of years hence, and I think this might be an excellent candidate project for the Manx 1810 Development Corporation, because that is about some school sites which could become residential, according to the Area Plan for the East, and about the Park Road site, which would be perfectly located for an active travel primary school. It has got all the challenges that need to be met, can be met dealing with that issue. Likewise, with the nursing home, the tennis and bowls court, the old schools that were cleared, in one case nine years ago, and nothing has happened. 1815 That would be another perfect candidate site for the Manx Development Corporation, because I think the failure to deal with some of those sites shows the challenges that we have had. I am also interested, sticking with the education theme, to learn more about, if it is still possible today, the Nunnery relocation and University College of the Isle of Man’s plans for lifelong learning, because I see some items to do with that in the long-run schedule for the Budget. They 1820 are quite major items that need to be out there in the open earlier, rather than later, given the history of that site. I also note a local issue that there is absolutely no mention whatsoever of any expenditure, that I can see, on the TT access road, which obviously was needed by 2022, according to the Area Plan for the East inspector and by 2024, according to the commitments that Government made in 1825 the context of the Area Plan for the East. So I can only assume that Ballafletcher sites and all those ones are safe because the development contract is conditional on things like the TT access road. Finally, in terms of infrastructure locally, I am sure with other Douglas constituency representatives, we are passionate to make sure that the projects that appeared at the top of the list of the flooding projects, Lake Road, Douglas Harbour, are the ones that get funding equally to 1830 those further away from the centre of Douglas. And also, in terms of the sewerage, we have got masses to do still to deal with the western sewerage issue and to deal with what is going to happen to all of the Central Valley flood, and we need to ensure that the investment goes to the places according to (Mr Robertshaw: Hear, hear.) actual national need. 1835 Moving on then from local issues to some public body issues. The first point I want to make is that I believe the Public Sector Pensions Authority has played a blinder for the last four or five years working with the Treasury, and I do believe that, as people have been suggesting, we have actually come a long way in taking forward managing the legacy and also dealing with the future. I do not think there is any conjuring in that. I think genuinely, through having increased 1840 contributions, reduced benefits and agreed, in principle, the mechanisms for cost-sharing, the Public Sector Pensions Authority actually is one of those bodies that has achieved a great deal and can be trusted with a lot more in the future as the need for similar projects to these. So, for instance, we have not made any progress on defined contribution schemes and modernising frameworks, not for want of trying from the PSPA. 1845 We have also got some two ticking time bombs in terms of pensions which are still there, and we need to address those. The election is a good time to address those. The first is that the reason the public sector employees’ reserve fund is depleting is because of inadequate contributions by employers. In other words, the decision of a 15% cap that was taken at the beginning of this administration favours those who earn more and it favours employers who have more people 1850 who earn more. It is not the poorer people who work for the public service who are depleting the Public Sector Pensions Reserve. It is actually the richer people. That is why I put down my question about Tynwald Members, because we have a massive gap between the 15% employer’s contribution cap and the amount that we should be paying in the light of what we are paying individually into our pensions and that is repeated across the public sector in terms of pensions. ______1231 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

1855 So that is something that we need to look at. Also, the cost-sharing measures will actually need to be reviewed before they are first used in 2023, and that is on the table now. Another institution, an organisation/public sector body with which I have been associated and had the privilege to work is the Post Office and I note in the Pink Book that we have got the retail development strategy and the parcel delivery improvements now budgeted. So we can see real 1860 progress in the next couple of years. On top of turning the organisation around and dealing with pensions issues, we have got some now real projects to show really how modern postal services can operate. There are some other difficult organisations round the Isle of Man Public Service; the Meat Plant, for instance. Perhaps there could be a lock, stock and barrel transfer of the Post Office board and management over to deal with some of those other troubling organisations that have 1865 appeared around the public sector and so on, and so on. Culture Vannin is an organisation I want to just mention as the Chair, which is that Culture Vannin lives in the world between charities that are really struggling to get by on charitable income and the public service, and the terms and conditions of public servants. That has been a very difficult issue for us to manage. But I just want to celebrate what we have done in that. We 1870 have not ever diminished the terms and conditions of the people engaged. We have tried still to keep money available for grants. But it is very tricky on a budget that has been fixed for seven or eight years to actually keep the cultural identity, the music, the language all financed. We have got ever greater expectations of us and it is trickier and trickier. It must be even harder for the other charities around us that rely on us. 1875 Along those lines, I just wanted to join in with the people who celebrated the Manx Lottery Trust. I welcome the news that more money is going to the Manx Lottery Trust, and I did ask a question back in October about why it was that things like that the Town Centre Regeneration Fund and things like that did not go to bodies like the Manx Lottery Trust, having said that the purpose of that is not to diminish the terms and conditions of the people. It is actually to 1880 encourage focus and application. So let’s move on now to the national issues that have not as yet been covered. There has been a lot of celebration of the Economic Recovery Fund and the Economic Recovery Group. I wish it well. I hope it is successful. But what we have got as yet is just a start and I just wanted to state some things that occur to me after the start. 1885 The first one is that in some senses, sometimes when I look at it, I see something like the Town and Village Centre Regeneration Fund 10 years ago. So the Town and Village Centre Regeneration Fund 10 years ago ended up being hijacked to pay for pavements around the towns and villages. When I look at the first items that have been funded, it looks remarkably like the sorts of things that in five years’ time might be seen to be revenue items for Enterprise and revenue items for 1890 the Department of Education. So I want to make sure that we are actually getting as quickly as possible to the situation where we are actually funding housing first projects, and climate change projects, and real projects to do with transforming it. There has been a lot of talk of the Manx Restart fund, but the Manx Restart fund looks remarkably like NEETs and all of that which was around seven or eight years ago. So we have got to make sure that we actually move as quickly as 1895 possible to avoid being accused of just being a conjuror with sleight of hand and magic, to a real economic strategy for the future. That leads me on to a few comments about the economic strategy. My first thought is, eventually. I seem to remember five years ago we were talking about putting together an economic strategy. Vision 2020 has got ‘2020’ in the title and that just expired. I seem to 1900 remember the Enterprise Agencies were going to come up with published strategies for each of the sectors, which I have never seen published. I know of them from the National Strategy Group work. But anyhow, my first reaction to the economic strategy is eventually, and I cannot help but notice that it is going to be commissioned, not developed, and I do worry about that. There is 1905 always a risk when you bring in consultants, however good they are, that you have to spend six months actually correcting the fact that they did not actually just copy something that worked ______1232 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

elsewhere. You have got to make sure you localise it. So in the same sense that in Cabinet Office eventually we need to follow Jersey and rely on ourselves for external relations, I am absolutely sure that through time the economic strategy would be developed locally, rather than by hired 1910 hands who have been hired elsewhere the month before. One thing about the economic strategy is, as a person who moved for tax policy changes six years ago and for useful growth six years ago, because I could not help but notice Mr Shimmins citing the old Labour mantra of ‘For the many, not the few’, so I am very much looking forward to this economic strategy, because definitely this Budget is in a different mould from the ones for 1915 the last four years. There is less talk of hard-working families and more talk of for the many, not the few, it seems to me. So I am very excited, like Mr Hooper stated, in terms of those economic strategies. To build credibility for this economic strategy, I think a missing piece needs to be put back into the jigsaw straightaway. I am encouraged that this might happen, given what the Chief Minister 1920 wrote to us last week about the Council of Ministers meeting extracts from proceedings. So basically he said it was an administrative task saying what had been decided in the Council of Ministers in 2020, and that administrative task had got behind and it would now be rescued. At the moment, we are missing 2020’s official statistics. We have not had a Council of Ministers’ quarterly economics and statistics report published since March 2020. The specially selected 1925 statistics in the coronavirus dashboard will not be seen in the future, and are not now, as a substitute for independent, official statistics, and we need to rescue that as soon as possible. To move on then to the third issue of national policy, that has not as yet been commented, is that I could not help but notice that the Treasury Minister described the triple lock as the bedrock of National Insurance, which was there for the time being. I see the National Insurance Operating 1930 Account and Fund itself as being the bedrock. I welcome the review of National Insurance, but we have to accept that in the last year two or three things have already happened in respect of National Insurance that we will now need to review as things that have happened, rather than something about which there was consultation and about which there was a Tynwald decision. So for instance, and Mrs Christian hinted at this, basically, because we had one of those black swan 1935 events, as Mr Robertshaw would describe it, we had to react quickly and people benefited from the National Insurance system differently from what they would have done through what they contributed over years and years. So that decision was already taken and from that we have got to actually make sure that people understand that, we learn from it and we change the attitudes towards the National (A Member: Hear, hear.) Insurance. 1940 The second point is I think the Treasury Minister might have put to bed an issue that has been going on for 20 to 25 years, and I just wanted him to confirm this, if he could, in his summing up, but there has always been a political issue, especially in west Douglas, because of the people involved, about when the National Insurance Fund is going to be paid back for the hospital development. I think, as part of the creation of this new capital fund, we have actually put that 1945 issue to bed, because we are moving into a new world and we are moving on from that issue. But it would be good to have a clear statement about that. I also noticed that on one page of the Pink Book, there is mention of the National Insurance Fund surplus going to the Healthcare Transformation Fund. Apparently, the habit has built up of it always going to healthcare, and it is just this time it is going to the Healthcare Transformation 1950 Fund rather than to healthcare more generally. But to me, that is another decision that has already been taken that now needs to be reviewed because the National Insurance Fund was set up 120 years ago and then 70 years ago with a specific purpose to do with insurance and health, and it is changing. All of these things that have happened need to be reviewed. Moving on, coming back in fact to intergenerational issues, I do think that we are eventually 1955 going to have to remind ourselves that the Isle of Man is one of the best places in the world to live for older people, but it is not quite one of the best places in the world to live for younger people and fundamental challenges remain. For instance, how to make housing affordable for younger

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people. For instance, how to actually pay for some of the issues that older people consume resources in a more fundamental way. 1960 I go right back to how Sir Miles Walker put it back in 1987, launching probably the first Programme for Government in modern times, the development of policy, right back at the beginning of the Council of Ministers era. He put it:

Responsible Government involves detailed analysis and the co-ordination of policies which have been considered, taking account of all factors … The population projections reveal the importance of immigration to the Isle of Man. Without migration there will be a significant fall in population between now and the year 2000 and the structure [of our population] will alter significantly.

So in a way, we are back to where we were at the beginning of the ‘Prosperous and Caring Society’ era, and we need to reinvigorate responsible Government. 1965 The next point I wanted to say, in terms of national issues, is that was right. Basically, back in March 2019, when we were being given the once over by the Economic Policy Review Committee, Chris Robertshaw accused the Chief Minister and myself of having produced a Programme for Government that was:

very much an operational document rather than a strategic one. … when you look at the strategic element of it, it is … flimsy and aspirational in very broad terms …

I defended it strongly. I basically said:

You have got three clear … objectives and Government, and I assume Tynwald, thought long and hard about the six macro indicators to arrive at those three strategic objectives.

1970 We talked then about the structural deficit and we talked about increasing earnings, and I categorically asserted that the Programme for Government was not flimsy and was not operational but was actually strategic and the actual macro indicators and national indicators were very important and they were driving everything that was going on. But the sad reality is that there has been absolutely no mention today of the macro indicators 1975 or the national indicators in respect of what it was we were trying to do with the Programme for Government, which started off completely aligned with the Budget. In fact, if you go to gov.im/performance, you cannot even see the national indicators and the macro indicators calculated and published. They have just gone, they have just vanished. And then I was not going to mention this, and then I was, and then when the Chief Minister said that, he described the 1980 actions of which 45% are complete as being objectives, that is what he said, I thought to myself, I have got to mention it, I have got mention it. I know somebody will say it is all my fault and all of that sort of stuff, (Laughter) (A Member: Hear, hear.) but the reality is outcomes matter. We all said at the beginning. We thought long and hard in some places about how we describe the outcomes and they just vanished. They are just not even published anymore, and that is quite 1985 serious. I hope the next administration learns from that, and I hope Treasury and Cabinet Office and the rest of us work together as closely as we did for those first couple of years, when we really did think long and hard about the macro indicators and the national indicators, and then it just became something else after that. In closing then, very briefly: bonds, a good idea. But, the old question is still there: are we 1990 looking for century bonds with a low interest rate from foreign institutional investors or are we looking for five-year savings products for rich people, especially those up north? (Laughter) It has been the perennial problem for bonds inside the Isle of Man, and with all my debates that I had with Mr Teare in 2014 and 2015 and 2016. In terms of HR, we have all celebrated public servants, but nobody has actually said that we 1995 should really thank them for having worked with us, with Government putting together, for most people, a three-year pay deal which expires at the end of this March, which was a really brilliant thing in three ways.

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Firstly, it provided some stability to help us put together a good Budget which Treasury has used, Government has used, we have all used to help us bring some stability to the Isle of Man’s 2000 public finances and Public Service. Secondly, in the first year we had a lump sum which meant that if you were low paid, you got a fortune in terms of percentage uplift and if you were higher paid, you did not get very much in terms of percentage terms. Thirdly, it linked it to CPI. So it took inflation out of the system, which we have seen is very 2005 successful given inflation is now negative, just as the theory would say it would do, because the most important part of earnings in the Isle of Man are public sector earnings and inflation seems to have vanished. I am sure that sort of pay deal with a link to CPI for the third year helped. Then finally, just as Mr Robertshaw is converted to an efficient, slimmer Government as an objective, I just wanted to declare that all along I have been a secret admirer of simpler structures, 2010 which is I think what we are going to get, and we can have I hope a good General Debate now on the Single Legal Entity/One Public Service/New Public Service report, which I think has been agreed, coming up. Secondly, I hope the Digital Strategy debate will allow us to focus on smarter service delivery and, finally, clearly we need to make sure that the administration is smaller, and it is hard to see 2015 that. I could not help but notice that the Public Services Commission did not publish this year a few of the tables it normally publishes and I am going to be asking about that in coming weeks, but we need to make sure that with the establishment of all these transformation teams and all of these new activities inside the public sector that we are not actually missing something in terms of reforming the Public Service. 2020 So just as Mr Robertshaw has converted to an efficient, slimmer public servant, I hereby declare I am a simpler, smarter, smaller administration (Interjection by Mr Robertshaw) Government man. With that, Mr President, I am almost certain I will be voting for all of the Budget and perhaps just one item in the extra votes might get a small vote against from my side. Thank you very much. 2025 The President: Hon. Member for Garff, Mr Perkins.

Mr Perkins: Thank you, Mr President. I will be brief and try not to repeat any of the valid points made by previous speakers; but I do 2030 have a couple of points I wish to make. COVID has shown us that, with a concerted goal, all Departments can work quickly together to achieve some quite remarkable things. For example, Hon. Members, you may recall that we were unable to find a supply of hand sanitiser. The DfE, OFT and the Government Laboratory all worked together with the private sector to produce and certify – if I remember correctly, within 10 days – 2035 something we would have never envisaged before COVID: an amount of hand cleaner that was able to get the Health Service and other critical areas back up and running again. By stripping away red tape and bureaucracy, things can be achieved very quickly. I appreciate the Treasury’s investment in the Government Auditor General and Manx Care, although I do have a slight reservation. We do have to be careful we are not putting in another 2040 layer of bureaucracy, i.e. another spanner in the works; or 10 more reasons why something cannot be done, rather than one good reason of getting on with it. Time will tell. I really do hope it succeeds. But I think we should be wary of this. Government does need to be leaner and more responsive to the public’s needs. Hon. Members, that is why we are here. The Member for Douglas East, Mr Robertshaw touched 2045 on it. Technology outstrips legislation. We must get leaner and be an adopter of technology to deliver the right things to reduce costs and improve services. I think this Budget is going part way to focusing us in looking in that direction.

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Regeneration of brownfield sites: who can argue with that? I fully endorse that. Let’s get on with it, let’s get some first-time buyers houses put up and let’s move forward. (A Member: Hear, 2050 hear.) I am concerned that COVID has caused considerable disruption to treatment of patients with certain medical conditions; for example, ME, MS, chronic fatigue syndrome and, worryingly, the effects of long COVID. All necessitate resources to attend and treat the patients at home. Meanwhile, waiting lists for other treatments have greatly increased. It is important that Manx 2055 Care focuses on this and gets it under control. I hope that the Treasury contribution is greatly focused in that direction. One item I believe that also needs to be urgently addressed is the situation regarding nursing home care. How can it be fair that a person who has scrimped and saved all their working life has to pay around £3,800 a month for their care – when, in the bed opposite, a person who has not 2060 put aside a penny, the taxpayer pays for everything? With an ageing population and increasing cost of care, this disparity needs to be resolved. Rather than just pouring money in, the root of the problem needs to be addressed. This situation should be made more equitable so that each individual contributes according to their means throughout their working life. I welcome the fact that this Budget means there are no tax increases. But there is one thing 2065 that has particularly niggled me for some time regarding Income Tax regulations, and it is: if one partner of a married couple dies, the remaining partner is taxed as a single person for that whole year. If this occurs late in the year, the tax that person pays can be an extra £600. Although this affects a small number of people, it is quite a burden at a time of grief when the bereaved also faces a funeral cost. This, I believe, needs to be addressed in regulation. 2070 I have mentioned the ageing population, many of which are asset rich but cash poor. Their main asset is their house, and they do not wish to move home but would like to release some equity. Can we encourage companies offering equity release to come to the Island and offer their services? Our excellent ‘Live at Home’ organisation works for many people. In addition, their clients often employ an extra carer which in fact is a big saving on the Health Service. 2075 In last year’s Budget the Minister pledged to assist the roll-out of high-speed fibre broadband to 99% of the Island. This is indeed gathering momentum. But rural residents still feel they are reliant on stone-age standards of mobile and internet connectivity. COVID and home-working have underlined how vitally important connectivity actually is and we must get this in place if the Island is going to compete on an international stage in future. 2080 Climate change and the Curran Report leave us in no doubt that future flash-flooding will affect us all. We must use finances to afford the best possible protection for householders and that the money allocated is used in the best and most effective way possible. Also assisting in trying to get insurance cover for the unfortunate victims. Now the controversial bit, Hon. Members. I do feel that the Health Service front-line workers 2085 deserve to be made a special case when it comes to their pay. They put themselves and their families on the front line. I would welcome, as I am sure the public would, that they are made a special case with regard to the public sector pay cap. Surely their dedication and commitment deserves more than 1%? Finally, I note with interest that my colleague from Garff, Mrs Caine, likened the Treasury 2090 Minister to a clever conjurer. Hon. Members, I would not disagree with that at all, but I would remind her that exactly 100 years ago last month in the Finsbury Park Empire, about the time when the horse trams were running in full swing along the prom, the first recorded trick of sawing a lady in half was performed by magician Percy Selbit. I do not know if Mr Cannan is any relation, but I certainly hope that Mr Shimmins is not! (Laughter) 2095 It has been said before, but I thank the Treasury team for their fiscal prudence leading up to the COVID crisis. Had they not been so prudent all along, we would have been in a very different situation. In this turbulent time in which we live I believe it is a reasoned, stable and sensible Budget and I will be giving it my full support. Thank you, Mr President. ______1236 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

2100 The President: Hon. Member for Douglas North, Mr Peake.

Mr Peake: Thank you, Mr President. I will just try and have a break away from the manifestos. I will just return back to the Budget. (Laughter) 2105 I welcome the Budget, obviously, they have been working on it very hard. I do welcome the comments made by the Treasury Minister where he talks about the £5 million offered to the climate change, and when he talks there about a ‘roadmap of understanding’, and how we are actually going to deliver and communicate all the action plans that are being worked on. I have got political responsibility for Social Security, as Members know, and I am interested to 2110 hear Mrs Christian’s comments about how you look to the UK to perhaps understand some of their social security directions. I must admit I am very proud to represent Social Security here in the Isle of Man, and knowing how hard and the severity of some of the conditionality in the UK, I think most people in the Isle of Man are grateful that they are working with the Isle of Man Social Security. 2115 The Restart Programme is a great opportunity because not only is it just actually working with individuals, it is trying to help get new careers for them as well. So it is actually having work- focused conversations that actually could get them back into new employment or into new jobs. Just picking up on Mr Thomas’s comment there about the Manx Restart, and I know it is focused on Government, but it is a private and public partnership, so we have got a private sector 2120 HR company actually doing all those interviews and actually aligning them with the employers, to get the right employees with the right employers. So, yes, I will keep those comments to those few comments, Mr President. Thank you very much for listening.

2125 The President: Pleasure. (Laughter) Hon. Member for Onchan, Ms Edge.

Ms Edge: Thank you, Mr President. I, too, will try not to repeat anything that any colleagues have said. 2130 We have had a Budget of Substance; we have had a Budget of Confidence; we have had a Budget of Focus; and this, the Budget of Resilience. I am going to start with a few things which I have brought up in past Budgets that I feel are still very unfair in this Budget before us today. The first one I will start on is the Carer’s Allowance. I do feel this is still not sufficient for all of the families that care for their individuals at home, 2135 which is the best place for them. The figure for providing 37 hours of care is approximately £3 29 per hour. It is not even the minimum hourly rate, which is £8.25, and that would be approximately £300 per week. And it is definitely not the living wage, at over £10 an hour. Is this Government driving our elderly into the more expensive care system by ill-thought-out policy? Pensions is good news, but it does not go far enough to help support our pensioners who have 2140 increases in costs, and to name a couple: rents and rates. I feel we are leading our pensioners in a downward spiral towards an income that will only lead towards poverty. Not all of our pensioners have a gold-plated public sector pension to top up their state pension. They struggle, but continue to manage, and they do this quietly. It is disappointing that the Treasury Minister has not been able to introduce an assisted deposit 2145 scheme to support individuals into owning their own homes. We have had conversations about this and I would like to see schemes and grants come forward that make housing accessible for individuals. But they do need support to get on that first rung. I am disappointed that we do not seem to have made much progress with regard to mental health services and the funding. I hope that this will be a focus going forward and will be 2150 appropriately funded. I will also keep a watchful eye on the funding that is directed to reducing waiting lists to ensure that we are supporting people with their health issues early and that they ______1237 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

are not left so that the health issue deteriorates, possibly costing more. Or, in some cases, the ultimate cost: their life. I am going to focus now on the public sector pay. Page 10 states:

Responsible Financial Management  Maintaining strong control of employee costs

2155 We then look at the table on page 11, Employee costs, and see an increase of over £10 million. This is not being responsible and maintaining strong control of employee costs. I could accept if it was addressing the ever-increasing erosion of pay to our front line workers, the ones who we see face-to-face providing the public services. Unless, as a Government, we address the pay of the key workers and services on the lower pay levels, we will continue to see individuals leave our Island; 2160 or, more importantly, not wishing to come to our Island. The Treasury Minister stated a 1% cap on pay, and that any differences would have to be found from elsewhere within the Budget. I ask the Treasury Minister: how does he think this will happen? We will not see restructuring within Departments, ensuring adequate resources at the heart of the function for the delivery of services to the public; or the employees who are on the front line 2165 during pandemics or services which keep our Island functioning and safe. We will not see that money focused down at that level. The escalating payroll costs of Isle of Man Government in the Budget is a cost to our population, which was estimated at £84,517 by the Economic Affairs Division in September 2020, and shows that the Budget breakdown today is costing every individual on the Island £13,740. The 2170 basic payroll cost is £4,400 for every individual on this Island, and that does not include the pension cost of £1,325. So the actual cost of the Government payroll to every individual on the Isle of Man is £5,725. Is this why services to the public are reducing? I welcome the changes to the capital schemes. We cannot but look at the failures on the delivery of projects. This administration has seen not just the flumes. The Minister for 2175 Infrastructure this morning on Manx Radio was trying to convince us all that Pulrose Bridge is essential. I ask the Minister: how many times has it flooded since it was built? I have asked individuals that know the history of the bridge and its infrastructure that lies within it and beneath, and the majority’s concern is that the maintenance of our rivers and the dredging, keeping them clear, was the responsibility of a small team and was very successful. But the funding within this 2180 budget for this maintenance is not increasing. We seem to fail at maintenance because we have had successive Governments and Ministers that like schemes so that they can get their name on a plaque on a wall. Well, the way to keep what you have that is good, is to invest in maintaining it. I am not sure anyone will want their name on a plaque on the promenade, but I do believe it 2185 needs to be finished. It is a failure and we keep hearing of further delays. I appreciate we have had a pandemic. We have had scientists develop a vaccine against the biggest pandemic any Government could face, but we do not seem to be able to finish the two-mile stretch of roadway and blame the pandemic for the delays. We have hope now there is a vaccine, but we will not have a finished promenade. 2190 We may not have a ferry terminal for the visitors to embark on the journey we all want to come to the Isle of Man. We need a ferry terminal for the visitors to disembark and arrive on the Island. Construction within the UK continued during the pandemic, not like the Isle of Man. An increase of £6 million on unexpected emergency works. Every project usually has a contingency built into it, so what has gone wrong? This is £6 million that could have been given out in different ways. 2195 The Meat Plant had an agreed budget in 2019 of £1 million top-up for three years. Last year that was reported as £1 million, as agreed the previous year, and £700,000 for operation. This year, that figure is reported as £2 million on page 41. So I ask the Treasury Minister: is that £1 million for operation and the £1 million agreed in the 2019 Budget? Or has there been an increase, so the actual operational costs are now £1 million?

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2200 I am pleased to see that the budget for caretaking and cleaning has been placed back with Education, as services are always better managed where they take place, not at a building in the distance. Treasury have agreed to continue with the Academic Business Planning Fund. I am pleased that this has been extended on a permanent basis. The Head of Treasury, when I discussed this with 2205 her, understood the difficulties that Education faced with the budget process not aligning to the academic year. I think this indicates that Treasury are willing to listen and find ways to support a different approach where it is needed. What happened to the zero-based budget project that was set up within Education? Has that failed? I notice within the Education budget that there has been a 2% increase for the cost of a 2210 school meal. I am sure this will lead to tipping a few people, who are just about managing, into possibly having to ask for free school meals. I worry that the impact on families with two or three children requiring meals has not been considered. I am pleased to see a financial commitment to tackle the issues reported in the Independent Education Review carried out by Beamans. I hope that we can get the balance right with 2215 committing the funds within Education in the right direction to the front line where the services are delivered and ensure we become an Island that continues to invest in our education, our children, our future. We need to support and remunerate our teachers and support workers appropriately. I agree with my colleague from Garff on delays to investing in our schools, infrastructure and 2220 buildings, and I am really disappointed to see that there is no forward allocation within the Budget for a new primary school in Onchan. It is much needed, when one of our schools’ main structures, without the Vic Hallam extensions, was built in 1876. Education is not the buildings, it is about investing in our educators to enable the young people of our Island to be our future. To finish, Mr President, I want to thank the Treasury Minister and its Members for supporting 2225 the Isle of Man Post Office and its aim and endeavours to return it back to profit. The responsibility of the board is within the legislation within the Postal Act. That is our legal obligation and without Treasury’s support to remove the requirement for a levy we would not be in as strong a position as we are today. I hope that future Treasury Ministers will ensure that the modernisation of the trusted brand 2230 we all love – the Isle of Man Post Office – allows the board to continue on its transformation journey. Where the board have shown success is in pension changes, we have closed the scheme to new employees. No one else in Government has been able to achieve this. We have made the tough, sometimes very unpopular, decisions to enable Isle of Man Post Office to survive into the future in a digital world, and retain our much-loved postal workers who are in our communities 2235 every day. Let’s not continuously debate a successful Statutory Board that has tackled the tough challenges, made savings, and not come back to Tynwald asking for more! Mr Speaker does not seem to agree with me. The Meat Plant came back and asked for more. I believe we have got a board that can be proud of the hard-working employees that will help the organisation return to 2240 profit, which would not have been possible without the support of Treasury. I support the Treasury Minister today but there will be challenges ahead and one of the biggest challenges I believe is ensuring a public service of the right size, fit for purpose, delivering the services the people of the Isle of Man deserve in a cost-effective, efficient manner whilst steering our economy with wise investment and creating opportunities for the future of the Island. 2245 Thank you, Mr President.

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Bill for signature

The President: Hon. Members, I have to announce that the Gas Regulation (Amendment) Bill 2020 is ready for signature. With the consent of the Court I shall circulate this Bill for signing while we deal with other business. (A Member: Hurray!) Are we agreed? (Members: Agreed.) (Interjections)

Budget for the year 2021-22 – Debate concluded – Motion carried

2250 The President: One name left on the list before I would hope then to call the Minister to reply. Mr Baker.

The Minister for Infrastructure (Mr Baker): Thank you very much, Mr President. I would like to congratulate the Hon. Treasury Minister on this year’s ‘Budget of Resilience’ and 2255 to make it clear that I will be supporting him in seeking the approval of this Hon. Court. I believe this is a Budget that has balanced the need to safeguard our economy whilst protecting the Government reserves that have provided the vital resilience to steer us through these most challenging of times. As the Treasury Minister advised earlier there is a need to be prudent, but it would be a mistake for Government to stop investing. It is more important than ever as this 2260 expenditure helps supports the social and economic wellbeing of the Isle of Man. The year since the Treasury Minister stood before us and delivered his ‘Budget of Focus’ has arguably been one of the most challenging the Island has faced. The Island’s residents have needed to be resilient and to adapt to a new normal. In the face of these challenges the Department of Infrastructure has demonstrated its ability to adapt, in order to ensure that the 2265 services it provides across the Island continued, despite the impact of the pandemic. In addition to this the Department prepared the Island’s Hospital for COVID admissions, assisted in the storage and distribution of vital PPE, and administered the process to repatriate Manx residents. During the recent circuit breaker lockdown, colleagues across the Department delivered the vaccination hub at the Isle of Man Airport and subsequently completed the hub at 2270 Chester Street in Douglas. Mr President, DoI remains the largest spender of capital funds in Government and this year, more than any other, has been of utmost importance. Government spending has played its part in driving the recovery of the economy since the summer of 2020, and in the enviable position the Island now finds itself. The challenges resulting from the first lockdown in 2020 and the recent 2275 circuit breaker has meant that the Department will not spend all its allotted capital. It is anticipated that around 60% of the capital will be spent, of which over £43.5 million has been spent locally. In the Budget before you, the Department will be able to deliver capital schemes worth £99.2 million, which equates to just over half of Government’s total capital expenditure for the 2280 year. This will support our Island’s economy, keeping residents in work, and contribute to public finances. The Treasury Minister has highlighted the ultimate aim of returning funds to the Island’s reserves that have supported so many through the last 12 months. We all know that the Island’s community relies upon us to meet our capital expenditure commitments and the Department will continue to prioritise capital with this in mind. 2285 Hon. Members will see that this Budget includes additional funding to allow the Department to invest in waste management in our Airport, in our harbours and on flood defences. I am grateful to the Treasury Minister and to his team, and to the Council of Ministers for this continued investment in the Island’s infrastructure. ______1240 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

Regarding the services that we provide with revenue funding, the Treasury Minister has 2290 recognised that my Department’s income streams have been seriously affected by the pandemic, especially within the Ports, Airports and Transport Services Divisions. I appreciate that this has been recognised with a reduction in Department’s income target of over £4 million; however, uncertainty over our borders and global travel may further impact the Department’s income, resulting in some difficult decisions about service provision. 2295 I would also like to offer my thanks for the money provided for the recently formed Flood and Coastal Protection Division, which transferred to the Department from the Manx Utilities Authority in November 2020. It is hoped that this funding, together with the £2.25 million of additional capital funding for flood defences, will go some way towards realising the recommendations of the ARUP Report. 2300 Mr President, a number of comments have been made with reference to the Department during this debate, and I am just going to take the opportunity to try and respond to those points that have been made. I would like to make it clear that there is no additional funding for the promenade scheme in this Budget. There is £1.2 million, as Mrs Caine highlighted this morning, in Column 3 in respect of 2305 the horse tram single-track extension to the Sea Terminal. That effectively is a transfer from the heritage rail budget and matches the principle that was agreed and recognised in the Purple Book in July, when it was made clear that the horse tram extension was taken out of the main scheme, was going be delivered separately and was going to be funded out of the Department’s existing resources. What has happened here is the money has been transferred and made specific and 2310 reflected in Column 3. In terms of timing, Mrs Caine seemed confused as to when the prom would be finished, and Ms Edge seemed to be equally concerned. There is no change other than reflecting the impact of the latest circuit breaker lockdown in moving the date from the end of June to the end of July. That is going to be this summer. That is the date that the contractor who is delivering the scheme 2315 has committed to. That is a contractual date. I cannot make it any clearer than that. That is the date it is going to be completed. Mrs Caine advocated for additional funding for highways and for heritage transport. I am not going to say that the additional funding for those areas would not be welcome, but the reality of the situation that we are in as an Island now and the experience we have lived through over this 2320 last 12 months means that the budget we have got is an appropriate budget. Mr Hooper raised the question of the Liverpool Ferry Terminal and the asterisk which is placed in the Budget document against that. The Treasury Minister may want to clarify the rationale for the asterisk, but I can quite clearly say to this Hon. Court today that that project located in the heart of the North-West of the UK, unsurprisingly, has been significantly affected by COVID. As 2325 Ms Edge clearly commented earlier, construction sites in the UK did continue to work to a greater extent than in the Isle of Man, but there has been a huge impact on construction productivity as a result of social distancing on site and the way in which site development has to be managed and organised. Figures of 35% to 40% productivity impact are common across the UK construction sector. 2330 Hon. Members, our ferry terminal in Liverpool is not immune from that. So it is likely that there will be a significant cost impact from that. We cannot incur these delays and then not have a financial impact. This is an ongoing issue. COVID has not gone away. Yes, the UK may be in improving territory, but it is a reality. It is going to be an ongoing reality for a significant period of time. So it is not possible to be definitive about the financial impact other than to acknowledge it. 2335 That may well have been the purpose of highlighting it in the Budget document. Mr Hooper also asked about the vehicle duty element. He is quite right: it is not explicitly referenced on the table of changes in the Budget document. However, what is in there is a 2% uplift in the Budget that is expected from vehicle duty. Hon. Members, there are over 80 different vehicle duty rates, and actually what matters to people is what is the increase in cost 2340 that they personally pay. That would not be the appropriate thing to include and clutter the ______1241 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

Budget document with. But it is something that will be coming in front of this Hon. Court next month with a Vehicle Duty Order and some associated other changes, in addition to uprating the vehicle rates. I hope that brings some clarity for Mr Hooper, and a little forward glance towards the March business in this Hon. Court. 2345 Mr Robertshaw believed that the Department needed to undergo a fundamental review in the coming time. I would just like to tell Mr Robertshaw that actually there have been a number of reviews that have taken place already in the Department – and if I can find my email here, which I am struggling to do, I could clarify for him the extent of those. So in this administration, in 2018, the Bus Division was reviewed as part of the SAVE work by 2350 the TAS Partnership. In 2018, as part of SAVE, SYSTRA also performed an independent review on the Rail Division. The Airport in 2019 was reviewed by York Aviation on behalf of the SAVE project and recommended an arm’s-length solution, not to reduce costs but potentially to limit the cost increase or, to borrow Sir Jonathan’s vernacular, to maybe ‘bend the curve’. In 2020 the Highways Division of DoI was reviewed as part of the SAVE project by WSP, who 2355 concluded that some savings might be possible but must be reinvested. Much progress had been made, and it endorsed the current model. In 2020, ARUP of course undertook the full review of flooding, which is now within the Department of Infrastructure. In the harbours area in 2018 and 2019 Royal Haskoning, and ABPmer and Marina Services Ltd undertook major reviews connected to our harbours. That is not 2360 even touching on the Tolson Review of Housing back in 2011. So the DoI has been reviewed extensively. That is not to say that further reviews should not be done. (A Member: Good!) We should always be prepared to look and to challenge and to see if we can do things in a better way. However, it does not necessarily automatically follow that arm’s- length organisations are going to be cheaper or better, and we have no evidence actually yet on 2365 the Isle of Man of either of those things. We hope that it is certainly going to be better. It may be cheaper, we do not know. It does not mean they are not appropriate, but they are not a panacea. Mr Robertshaw also talked about Government becoming ‘efficient, focused on its citizens, and a shining light for other jurisdictions’. I think that was his aspiration for Government. I put it to you, Hon. Members, that anybody looking at the way the Isle of Man public service operated 2370 through coronavirus would say it was efficient, it was focused on its citizens and was a shining light that any other jurisdiction would be very grateful to have servicing their needs. So we have a great public service. Can we make it better? Can we embed some of those things? Sure we can, absolutely. Should we try to do so? Yes, we should. But it is not just about structure: it is about culture, it is about leadership, it is about direction and it is about funding. 2375 Just turning to a couple of other questions that were made. Mr Thomas highlighted flood prevention for Douglas. The Pulrose Bridge is a key part of that methodology to address in a sequence of initiatives the flood risk which does apply to Douglas. If anybody needs any reminders of that, one only needs to look back a week or two to the recent heavy rainfall when Pulrose Bridge came within six centimetres of being breached – six centimetres, Hon. Members. It is a 2380 significant part of the Isle of Man’s infrastructure (A Member: Hear, hear.) that cannot be allowed to be put in jeopardy. Ms Edge, Pulrose Bridge was built in 1931. It has gone past its design life; it is not about maintenance, it is about replacement. I have got to say you flipped your logic on your head when you then said that Onchan School was built in 1880-something and therefore needed 2385 replacement. Maybe it just needs some good maintenance, Ms Edge, I do not know. You also talked about the promenade being a failure. It has been a challenged project, but I have got to say it is going to be a project to be proud of. When it is all completed, this summer, it is going to be fantastic. You seemed to think there was £6 million contingency. I would like to sit down with you to understand where you got that from. There is no more money in this Budget 2390 for the promenade, okay? So the Hansard needs to recognise –

Ms Edge: Can the Member give way? ______1242 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

Mr Baker: No, let me carry on, please. The £6 million is nothing to do with the prom. 2395 You are quite right, construction in the UK did not go into lockdown in the same way as it did in the Isle of Man. I am not sure many of us would say the UK was the model we wanted to emulate in terms of managing coronavirus. (Interjection) I think the people of the Isle of Man are very grateful that the Isle of Man has dealt with it in the way that it has. I am going to resist the incitement from both Ms Edge and Mr Thomas to take the bait in terms 2400 of the Meat Plant, or to accept the kind offer from the Post Office board to come and take over the Meat Plant. No, I just will not be accepting that ... (Laughter) (A Member: Aah, go on!) (A Member: Hear, hear.) But I would point out to over a 30% reduction in cost per unit productivity in the Meat Plant over the last three years; and 30% more value for the subvention that is provided; and a level of subvention that has been flat for the last two years. 2405 So, Mr President, in closing I would like to reiterate my thanks to the Treasury Minister and the Council of Ministers for their ongoing support for the important work undertaken by the Department of Infrastructure and the Meat Plant, and confirm that I am fully committed to supporting the Treasury Minister in achieving his Budget of Resilience.

2410 The President: Before I call the mover – Mr Henderson.

Mr Henderson: Gura mie eu, Eaghtyrane. I would just like to add a few overview points to the Budget debate, Eaghtyrane. I would just like to say for a small Island of 85,000 people, ostensibly in the Atlantic Ocean, to find itself pitted 2415 against the risks we did last March, an unknown quantity, an unknown enemy, and the way that we responded to that from a standing start, from not knowing the unknowns or anything like it, Eaghtyrane, so actually progressing and managing our way through it in a stable and pragmatic way, to today, where we have the National Budget presented by our Treasury Minister and the financial status that we find ourselves in, and having taken a possible £200 million-plus hit in broad 2420 terms to the public purse in general, and still be able to deliver a Budget of this nature is quite extraordinary. It just shows that the motto of the Isle of Man, which was quoted earlier, is something we should dearly hang on to, and work as a team and progress into the future as a team, both as Team Tynwald, Team IOMG, and Team Isle of Man Community. That is what has really won us 2425 through, as far as I am concerned. The other thing I would like to say, Eaghtyrane, as a note, other Hon. Members have said it, but I feel duty-bound to thank all the staff involved, in preparation of the Budget, because I know the hundreds of hours that have gone into it; Government staff in general for their sterling service to the community; and to the community at large, businesses small and large, employers, 2430 employees, who have been stalwart themselves through the past 12 months and to this point in time now. I hope our Budget of Resilience will certainly give us a road forward, support our economic recovery and put confidence into our community going forward, Eaghtyrane.

The President: I call on the mover to reply, Mr Cannan. 2435 The Minister for the Treasury: Thank you, Mr President. I would like just to start with a technicality, if I may, please. Just for the avoidance of doubt I would like to ask the Court to acknowledge, please, the comments made by the Speaker this morning in which he rightly pointed out the initial draft of the Pink Book that was circulated to 2440 Hon. Members did have an error in it and that in fact now that Members are indeed satisfied that they have seen the version that was circulated to all Members at 9.40 this morning by the Chief Financial Officer, and that they are happy that this is the version that they are currently voting on. I will ask for a detailed reconciliation to be provided to Hon. Members following this Budget.

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The President: Yes. Thank you, Hon. Member. In effect, this is a correction notice from the 2445 floor itself. Are Members content?

The Speaker: Just to ask, Mr President, (The President: Yes.) is the only difference that £24.5 million difference in the National Insurance over the four years? Is there anything else other than that that is in there changed? No? Great. 2450 The Minister: No, Mr President. It is all directly connected with that. I think there are one or two minor typographical errors, but broadly speaking, that is the item that is up for correction.

The Speaker: Okay, great. 2455 The President: Thank you. As long as Hon. Members are clear on what they are being asked to agree. Is the Court in agreement? (Members: Agreed.) Agreed. Thank you very much. Minister.

2460 The Minister: Thank you, Mr President. Just before I get into the meat of my response, and I will try and keep brevity as the core of the response, I do want to just for a moment pay tribute to a couple of people. There is, as I have said before in these speeches, an ‘I’ in ‘Island’ and an ‘I’ in ‘Minister’, but there is not in ‘Treasury’, and I would like to thank my political colleagues, Messrs Shimmins, Peake and Henderson for their 2465 significant support and assistance over the last few years, but particularly this year of all years. They have made a valuable contribution to making a number of reforms, both in terms of the presentation of the Budget, but in terms of also ensuring that we have achieved as much value as possible from our financial delivery. I am extremely grateful. Mr President, I would also like to thank the Chief Financial Officer, Mr Randall, and in fact the 2470 whole executive team for their input over the last 12 months in particular. It has been an incredibly difficult and at times challenging and possibly stressful period, and it has certainly been a fraught period putting this Budget together with all the uncertainty. I would like to extend my heartfelt thanks to him and the team. (Several Members: Hear, hear.) Mr President, this Budget is about stabilising the economy, protecting jobs, investing in the 2475 future, and I am not going to be, to use a word of the moment, discombobulated by horse trams. (Laughter) And, unfortunately for the Hon. Member sat next to me, Mr Thomas, neither am I going to knock the boosters or boost the knockers. I am going to boost the boosters and knock the knockers, (Laughter) because I think that I have heard a lot today from Hon. Members, some incredibly useful contributions I must say, but also a number where there has been a lot of called- 2480 for spending commitments, which I acknowledge, but I have also heard very little in the way of actual suggestions as to where the revenue for those is going to be raised from, or indeed found through either efficiencies or indeed reductions in services. That is always the perennial problem, Mr President, with budgets, is that everybody wants everything but does not actually know quite where to find it from when you are looking at the 2485 resources. I would point to Hon. Members, we have got a very finely balanced Budget this year, in all seriousness. Effectively a £200,000 surplus, which I believe we have budgeted for extremely prudently, taking all the factors into account. But if we met some of the suggested spending commitments today, that would look a very different figure. So Hon. Members really do need to, when they are talking about boosting services or boosting expenditure into certain areas also need 2490 to consider the ongoing impact of that on a very delicately balanced Budget, but prudently forecast Budget, moving forward. I would like to thank the Ministers for their support. I would like to thank the Chief Minister for his speech, his opening remarks this afternoon in response to my speech. I think it is important just to acknowledge that amongst the economics and the money there has been a serious impact 2495 on people’s health on this Island, albeit a very small proportion of individuals, and of course ______1244 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

deaths. My heart certainly goes out to people who have been impacted directly in that way as a result of the virus. But nevertheless, Mr President, I think it is true to say, as a result of the actions, again as I highlighted this morning, we can and we should acknowledge that we have been able to produce today the right Budget for the right circumstances to take the Island forward. 2500 I was particularly taken with a couple of speeches. My good friend for Douglas East, on his farewell Budget speech, allegedly – at least that is what he is telling us, who knows (Laughter) – and his eight-point plan to put things right into the future; and also my good friend from Ramsey, Mr Hooper, who also raised some interesting points. It is a good job the Liberal Vannin Party set the Budget policy and vision at an early stage, otherwise we really would have been lost without 2505 them. (Laughter) That statement, which could have been stating the bleeding obvious really, (Laughter) two weeks out from the Budget. But I think the interesting points were, from both of them, perhaps a vision of a different way to do things. I think the truth of it is that we have all potentially learnt from the pandemic that there are potentially better ways in which Government can co-operate and work and put things 2510 together, and move things forward in a potentially more cohesive way – certainly in a quicker way – and can apply itself to getting action and implications debated with a relatively short pace of speed. It was certainly my pleasure at the beginning of this pandemic to work with both DfE and Treasury in cross-departmental meetings for almost a two- or three-day period to resolve what we needed to do. I think that was a very good, clear demonstration to me. But also we can 2515 see that now with the Climate Change Transformation team. And this idea that actually we have now seen with the Economic Recovery Group that a budget can be allocated, and that group can pretty much get out there and start to determine how to spend that money in a very proactive way as part of a bigger budgeting process, is something that certainly should be considered. I share the views that some of this really does need to be built on. I think some of that was really 2520 what both Members actually in their own way were saying and trying to get across. So there is actually some positivity here that can be built upon. I think it was certainly mentioned today that now is the time for stability, rather than significant changes. But moving forward, for the next administration there is a real opportunity to consider how to do things and how to restructure, so that policy and delivery come to the fore and that people come to the fore, 2525 rather than potentially just thinking about the silo and the Department. If we can build on those opportunities, perhaps through things like the Climate Change Transformation team, which will work across Government, through an Economic Recovery Group – well, I hope that we will be recovering – but maybe moving forward that we can build by interlinking work with the Manx Development Agency that, for example, as another external 2530 agency board, then we can really start to perhaps change things and move things forward without this potential conflict that we have found, or perhaps this potential silo-thinking. So thank you to both of you for potentially recognising, I think, the opportunities that may have been presented both with this Budget and the policy directions that we are pursuing. Also I think a number of you have welcomed the capital projects change. Like everybody else, I want to get 2535 on now, get the structure finalised, get some of the terms of reference and the procedural reforms right around this, but we want to get this delivered in the next few months. So I very much look forward to getting that on board; and indeed probably getting back to this Hon. Court and updating you. I will just move now to a couple of other matters. I think obviously the Hon. Member for Garff, 2540 Mrs Caine, did spend a lot of time talking about heritage railways. I endorse the comments that have come from my colleague Mr Shimmins. We have spent many millions on heritage railways and heritage. There is no significant cut to budgets or anything like that. They have all received their money. We have spent, I think, on average £5 million a year in terms of capital over the last five or so years on heritage railways; and of course we have the revenue deficit as well on top of 2545 that. In fact, one of the things that I think we need to think about into the future, and we talk about how things could work, is how we can actually pull out and identify this expenditure in a more transparent and clear way, and actually what perhaps needs to be done to ensure the right ______1245 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

funding is brought forward so that these valuable items can continue. But to call the Treasury anti- heritage is not correct. 2550 Our focus is on priorities, our focus really is on delivering in line with the Programme for Government, and in this time and on this particular occasion, our Budget really is about the economy, it is about our people, it is about our future, and it is about infrastructure reform. We have not chosen to go any further than that. Some of those reforms will now be coming as Treasury works to reassess the capital programme, looks at the strategic priorities going forward. 2555 All these measures will both help identify better value, I hope, for our capital spending, but will also give Tynwald – and this is the critical point – more understanding and oversight and say, dare I add, on what they regard the priorities of capital spending are going forward; because all these millions of pounds, whether it is £5 million per annum on heritage railways or whatever it is, will I think be directly more visible because they will be future spending. It is not past spending. We 2560 are ripping up the credit card. We are now looking at the future spend, where it fits into the strategic profile, and we will be able to ask questions about the appropriateness both of the expenditure and of course where and how the funds are being delivered. So there is lots of opportunity. It is not negative, this is opportunity for the future. It is opportunity indeed to protect things like our heritage railways, but make sure that they are 2565 strategically aligned with our overall priorities and strategically aligned with value for money in terms of public spending. Just moving on, I think one of the points … Mrs Christian continues to focus on SMEs and small businesses. I did not mention in my speech, but we are carrying on with the National Insurance holiday for any new people coming to the Island. Indeed, that will be on the motions that I am 2570 about to bring forward to you. But look, we have spent many millions of pounds in terms of supporting small businesses, SMEs, across the Island this year. The Economic Recovery Group is well aware of the economic situation. We continue to track the dashboards and, as I said, we have up to £30 million to drive investment into our local economy, and the key critical thing is that we need to boost the economic conditions rather than 2575 boosting businesses directly. We need to drive footfall into our streets, into the high street. That is why things like the events fund, for example, is going to be a positive step forward. Let people actually themselves recognise how they can increase their economic activity in the local area. Also, the training opportunities that we are investing in with UCM and doubtless many more innovations that will be coming forward from both within the Group itself, but also from the 2580 Department for Enterprise. I know they are working on a number of initiatives and I look forward to working with the Group as we identify what else we need to do to make sure our economy is both sustainable, but we maximise the opportunities that we have over the next 12 months from our domestic population. But I should also point out, Mr President, again to Hon. Members that actually, given where 2585 we expected to be to where we are, we are in a much healthier place, and I particularly point to the sort of indicators pre- this last pandemic lockdown in terms of the unemployment level, which we had got back to below that 800 mark. It has risen again, we have got to get it back down and we are going to continue, as I say, to find those opportunities to boost that economic activity in the local area. 2590 I know I have been asked a couple of questions, Mr President, and I will look to get back to Hon. Members with some of their specific questions, partly because I cannot read my own handwriting, (Laughter) and partly because I have actually probably lost the chain of where those questions came. I know Mr Hooper did ask me a question. I think it was the Liverpool landing stage, it was indeed, and I think my hon. friend, the Minister for Infrastructure, did seek to respond 2595 to that. I think, particularly going back to Mr Robertshaw’s eight points, I am sure his constituents are going to miss his little black book or green book or whatever little book he is producing. (Two Members: Green.) Green book, was it? But there was a lot in that valedictory speech that he gave, if that is the right phrase, that I think we are all working towards. I think the Council of ______1246 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

2600 Ministers, even the Chief Secretary and others recognise now that there is an opportunity for a better public service, almost for one public service to be built and delivered, and I am sure we will hear more from that in the coming months. And you never know, some of his wishes could come true, possibly whilst he is still here or maybe after he has gone; who knows? I would like to thank Mr Ashford, Minister for Health, who has done a tremendous job in very 2605 difficult circumstances. But of course, interesting to hear his analogy that he felt that we could be at £350 million in terms of expenditure at this stage if we had been similar to the UK. I actually probably think it might be worse than that, but it was interesting nevertheless just to get that view. I thank Mr Speaker, obviously, for assisting Treasury this morning by last night identifying a 2610 small error in the initial version, but nevertheless that has been corrected, and he continues his theme of not voting for budgets, because he thinks they need reform. I would say to him, actually, there has been a lot of reform gone into the budgeting process. I still do not know how 24 Members of the House of Keys poring over every detail is going to solve the issues, but there may be opportunities now for committee structures to potentially take chunks of funding and 2615 then be applying that in terms of priorities moving forward, for example, or identifying where those spending priorities are, potentially before coming back to Tynwald to outline their plan. So who knows? Who knows? There could be opportunities there indeed for the future. I would like to thank the other Members for their contributions, Mr President, and I will just move on to my good friend beside me, the former Minister for Policy and Reform. Maybe he 2620 should be termed as the ‘Minister for Political Amnesia’, (Laughter) because he is a bit like Jason Bourne: he always knows where he is going but he has completely forgotten where he has been, you see. (Laughter) When he starts lecturing about the PSPA and how Tynwald pensions are not up to scratch, he was the man who was reforming them, for God’s sake! It is amazing really. But to be fair, his glass is half full, which is pleasing to hear, and there is only one little element of 2625 the Budget that he is thinking of doing. But always good to hear from him. (Laughter) Mr Perkins, thank you very much. He has talked about me sawing people in half, or he talked about someone sawing people in half. I know there are a few people I would like to saw in half today. (Laughter) But, Mr President, I just want to finish by thanking Hon. Members for their contributions today. But this is a very serious time for everybody. It is a serious time for our 2630 finances; it will be a challenging 12 months. I have absolutely no doubt about that. This pandemic doubtless will have a few more cards to throw yet and there is no room for complacency and, frankly, there is very little room for electioneering or thoughts of September and everything else that goes with it. Our focus must be on delivering now and making sure that we are on top of our game when it comes to supporting our people. 2635 Yes, our public finances have come through a pretty tumultuous 12 months in reasonable shape, and that is in no small part due to the actions that have been undertaken and the way that the people on this Island have responded to that and also responded to the need to support local businesses and spend in the economy. Obviously I thank them for that this morning. But essentially, Mr President, this Budget is about stabilising the economy, which I believe we 2640 are doing through the actions that we are taking with the contingency, the extra money that we are giving to Health. It is about protecting jobs, and we are doing that through investing through the Economic Recovery Group. And it is about investing in our future, and we are doing that through the money that we are putting forward for climate change, the money we have put forward through to Health, and the stability that we are bringing broadly to public services and 2645 the delivery of public services this year. I beg to move.

The President: Hon. Members, I put to the Court the motion in the name of the Treasury Minister that the Budget proposals for the year ending 31st March 2022 be received and necessary 2650 action be taken to give effect thereto. Those in favour, please say aye; against, no. The ayes –

______1247 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

A division was called for and electronic voting resulted as follows:

In the Keys – Ayes 23, Noes 1

FOR AGAINST Dr Allinson Mr Speaker Mr Ashford Mr Baker Mrs Barber Mr Boot Mrs Caine Mr Callister Mr Cannan Mrs Christian Mrs Corlett Mr Cregeen Ms Edge Mr Harmer Mr Hooper Mr Moorhouse Mr Peake Mr Perkins Mr Quayle Mr Quine Mr Robertshaw Mr Shimmins Mr Skelly Mr Thomas

The Speaker: Mr President, in the House of Keys, 23 votes for, 1 against.

In the Council – Ayes 9, Noes 0

FOR AGAINST Miss August-Hanson None Mr Greenhill Mr Henderson The Lord Bishop Mrs Lord-Brennan Mrs Maska Mr Mercer Mrs Poole-Wilson Mrs Sharpe

The President: And in the Council, 9 for, none against. The motion therefore carries.

3. General Revenue and Capital Payments 2021-22 – Expenditure approved

The Minister for the Treasury to move:

(1) That the Treasury be authorised to expend during the year ending 31st March 2022 sums not exceeding those set out in the column headed ‘Net Expenditure’ of Table 12 on page 23 of the Isle of Man Budget, being the amounts required by the Revenue Funded Government Departments and Other Bodies after deduction of the receipts of the said Government Departments and Other Bodies (estimated at the sums set out opposite their names in the

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column headed ‘Gross Income’ totalling £1,117,725,000 to enable those Departments and Other Bodies to expend sums not exceeding £1,117,506,000 (being the estimated ‘Gross Expenditure’, net of drawdown from the Public Service Employees Pension Reserve) for the purpose of carrying into effect the services approved by Tynwald.

(2) That the Treasury be authorised during the year ending 31st March 2022 to expend sums not exceeding £10,996,000 from its own revenue contingency funds (labelled 'Government Contingency' in Table 49 on page 76) by way of transfer to Government Departments and Other Bodies for the purpose only of financing their additional budgetary costs that cannot, to the satisfaction of Treasury, be otherwise funded from within any such Government Departments and Other Bodies own approved estimates with the exception of any transfers from the Government Contingency Budget to Treasury itself save where any such transfer has received the approval of the Council of Ministers.

(3) That the Treasury be authorised to expend during the year ending 31st March 2022, from the Capital Transactions Account, sums not exceeding those set out in Column C1 to C4 of the Capital Estimates of Government Departments and Other Bodies on Table 19 on page 37 of the Isle of Man Budget, totalling £107,330,000 in C1 (being expenditure on projects already approved by Tynwald), the expenditure detailed in Column C2 of sums not exceeding £72,883,000 (being expenditure to be approved by Tynwald as part of the Budget), those set out in Column C3, totalling £2,169,000 (being those that will be presented to Tynwald during 2021-22) and those set out in Column C4 totalling £17,221,000 such borrowings to be repaid within the appropriate period as set out in Column C5.

(4) That Tynwald authorises the Treasury to settle, from within the Consolidated Loans Fund, capital scheme loan advances for Central Government entities (excluding the Manx Utilities Authority and the Manx Museum and National Trust) outstanding as at 31st March 2021.

(5) That the Treasury be authorised to – (a) create a reserve to be called the Capital Financing Reserve, for the purpose of financing Capital expenditure from the Capital Transactions Account; and (b) to transfer into the Capital Financing Reserve: (i) the balance of funds from the Hospital Estates Development Fund; and (ii) any monies in the Consolidated Loans Fund that relate to repaid or settled loans.

(6) That the Treasury be permitted to authorise expenditure up to a maximum of £500,000 in excess of the approved capital budget per capital scheme in any financial year where the Treasury is satisfied that such expenditure does not constitute a project overspend but is rather a variation in the timing of the profiled expenditure and the scheme remains within the overall Tynwald approved funds contained within prior or future years in the capital programme. This will be funded through the Capital Contingency Reserve.

(7) That Tynwald permits Treasury to approve in-year budget transfers between Departments and Other Bodies subject to a maximum net transfer of £1,000,000 and no change to the approved overall net position of the Isle of Man Government Budget.

The President: We turn to the associated financial resolutions, Item 3 on the Order Paper, 2655 General Revenue and Capital Payments. Minister for the Treasury to move.

The Minister for the Treasury (Mr Cannan): Mr President, I would like your permission to move parts (1), (2), (3), (4), (5), (6) and (7) of this resolution and vote on them together.

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The President: Is that agreed, Hon. Members? (Members: Agreed.) Thank you. 2660 The Minister: Mr President, part (1) approves the revenue spending of each Department in 2021-22, including a transfer to the new Capital Financing Reserve, as outlined on Table 12 on page 23 of the Isle of Man Budget Pink Book. Part (2) refers to the use of Government Contingency included within Treasury’s Budget in 2665 recognition of the levels of increased risk and uncertainty to public finances at this time. This motion authorises the Treasury to transfer monies from the Government Contingency to Departments and Other Bodies in order that they can meet additional budgetary costs which cannot be met from their approved estimates. Such transfers will be subject to Treasury approval, except in the case where Treasury itself seeks such funding, which will be subject to the Council 2670 of Ministers’ approval. Part (3) approves the capital spending of each Department in 2021-22, as shown in Table 19 on pages 33 to 37 of the Isle of Man Budget. Part (4) seeks Tynwald approval for the Treasury to settle outstanding capital scheme loan advances for central Government entities as at 31st March 2021, excluding those in respect of the 2675 Manx Utilities Authority and the Manx Museum and National Trust. Part (5) seeks approval to create a new reserve called the Capital Financing Reserve for the purpose of financing capital expenditure; and seeks approval to establish that reserve by means of a transfer of the balance of funds within the Hospital Estates Development Fund, and any monies within the Consolidated Loans Fund that relate to repaid or settled loans. 2680 Part (6) seeks Treasury approval to Treasury expending up to £500,000 in excess of the approved capital budget per capital scheme in any financial year where the Treasury is satisfied that the expenditure does not constitute a project overspend but arises due to a timing issue. Part (7) seeks Tynwald approval to Treasury approving in-year budget transfers between Departments and Other Bodies subject to a maximum net transfer of £1 million and no change to 2685 the overall net position of the Isle of Man Budget. I beg to move.

The President: Hon. Member, Mr Shimmins.

2690 Mr Shimmins: Thank you. I beg to second and reserve my remarks.

The President: Mr Thomas.

2695 Mr Thomas: Thank you very much, Mr President. Obviously, the Treasury Minister has had an hour or so at lunch to reflect on this. Can a clear explanation about the Hospital Estates Development Fund and the connection to the loan for the National Insurance Fund be laid down for the benefit of Hansard, just so we could have it categorically asserted exactly how this relates and what has happened? 2700 Secondly, it would be helpful as well to understand how the much-lauded, much-praised change in terms of capital expenditure is different from just having 0% interest on the Consolidated Loan Fund, as happened when we had financial difficulties, and we had another £200 million vanish from the Budget. I just wanted to see ... Obviously we have heard it asserted as being about programme budgeting for the future, and 2705 the end of Departments and all of that, but it could be seen at first light as just a way of changing the interest rate and covering up for the revenue deficits and all of that sort of stuff.

The President: I call on the Minister to reply.

2710 The Minister: Thank you, Mr President. ______1250 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

Just firstly, in terms of the changes to the capital financing, this is a change basically I think that just makes simple, logical sense. This removes this historical build-up of uncompleted and unfinished projects and simply gets us into a position whereby Tynwald should be voting for project delivery in the forthcoming 12-month period, and with that comes the clear explanation 2715 of the project but also where that fits within the overall strategic review and progress of our capital infrastructure. So this is an opportunity for reform. It is as simple as that. Yes, in many ways, the timing helps the balancing of our Budget. I think we have been perfectly clear. But now is the time to make the reform and it will just remove what is effectively in the future I hope this ludicrous £182 million, 2720 as it stands, figure that is appearing in the Book for capital projects that just simply will not be delivered. So that is, I hope, the explanation – and a clear explanation – for the Hon. Member. Now, in terms of the Hospital Estates Development Fund, bear in mind that we are talking about a fund that was set up over 25 years ago. It was set up as a revenue fund for the purpose of offsetting loan charges for hospitals. By setting up and funding the new Capital Financing 2725 Reserve, as I said, we are setting out a new means to finance capital. The loans against which loan charges are made are being repaid. The moneys in the HEDF are enabling that purpose by part- funding the new reverse of the £35 million. The intention of the HEDF was to offset the cost of loan charges for hospitals from the DHSC’s revenue account. The changes proposed in this Budget allow us to completely remove all loan 2730 charges – as was the intention of the HEDF – replacing them with the new capital financing structure which will finance spending for DHSC, including hospitals, in the future. So just to be clear, the HEDF was set up 25 years ago with £44 million originally transferred from the NI account. It has since been topped up by a further £12 million from general revenue. The current balance on the HEDF is insufficient to pay the outstanding CLF loan for the Hospital 2735 and hence, if we decided to keep things as they are, DHSC’s revenue account would suffer the loan charges. But essentially, Mr President, there is no repayment back to the NI Fund from this fund that was set up. In any case, Mr President, 25 years further on I would suggest now that reforming the HEDF, reforming the way that the capital will work in the future is the appropriate measure. 2740 If any Hon. Members want further information on this, because it is not always that easy to understand, Mr President, I am entirely happy to give them as much information as I can; and in fact send them a copy of these notes that I have about the HEDF for the purposes of clarity into the future.

2745 The President: Hon. Members, I put to the Court the motion at Item 3. Those in favour, say aye; against, no. The ayes have it. The ayes have it.

4. Investments and Reserves – Expenditure approved

The Minister for the Treasury to move:

(1) That Tynwald approves the transfers to and from the General Revenue Operating Account to the External and Internal Funds of the amounts set out in column 2 of Table 22 on page 43 of the Isle of Man Budget totalling £59,679,000 (not including the Academic Business Planning Fund and the Contingency Fund).

(2) That Tynwald approves the transfer to the General Revenue Operating Account, the Capital Account and Internal Funds and Other Expenses set out in the columns 5 and 6 totalling £145,971,000 and £3,603,000 respectively of the Projected Income and Expenditure of Reserves ______1251 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

for 2020-21, on Table 22 page 43 of the Isle of Man Budget (not including the Contingency Fund).

(3) That Tynwald approves the transfers from the General Revenue Operating Account to the External and Internal Funds of the amounts set out in column 2 of Table 23 page 44 of the Isle of Man Budget totalling £15,250,000 (not including the Academic Business Planning Fund).

(4) That Tynwald approves the transfer to the General Revenue Operating Account, the Capital Account and Internal Funds and Other Expenses set out in the columns 5 and 6 totalling £134,961,000 and £3,149,000 respectively of the Projected Income and Expenditure of Reserves for 2021-22, on Table 23 page 44 of the Isle of Man Budget.

(5) That the Treasury be authorised to expend from the General Revenue Account and Capital Transactions Account the amounts transferred into those accounts as set out in paragraphs 4(1) and 4(2).

(6) That Tynwald authorises the Treasury to replenish internal or external reserves from the General Revenue Operating Account by an overall amount not exceeding £5,000,000 in any one year, and to expend such sums arising from those transfers.

(7) That Tynwald authorises the Treasury to transfer funding between reserves (whether internal or external, other than transfers out of the Reserve Fund) by an overall amount not exceeding £5,000,000 in any one year, and to expend such sums arising from those transfers.

The President: Item 4, Investments and Reserves. Minister. 2750 The Minister for the Treasury (Mr Cannan): Mr President, again with your permission, I would like to move (1), (2), (3), (4), (5), (6) and (7) parts of this motion and vote on them together.

The President: Agreed? (Members: Agreed.) Minister. 2755 The Minister: Part (1) approves the transfer from the General Revenue Operating Account of £59,679,000 to the Internal and External Funds in 2020 and 2021. Hon. Members will note that this figure excludes transfers to and from the Contingency Fund, as a vote to authorise such transfers was approved as part of the July 2020 Purple Book. 2760 Part (2) seeks approval to transfers to the General Revenue Account, the Capital Account, Internal Funds and Other Expenses set out in Columns 5 and 6 of Table 22 on page 43 of the Isle of Man Budget, excluding transfers to and from the Contingency Fund on the same basis as part (1) of this motion. Part (3) refers to Table 23 on page 44 of the Isle of Man Budget, which approves transfers to 2765 and from the General Revenue Operating Account and External and Internal Funds as set out in Column 2. Part 4 seeks approval to transfers to the General Revenue Account, the Capital Account, Internal Funds and Other Expenses as set out in Columns 5 and 6 of Table 23 on page 44 of the Isle of Man Budget. 2770 Page 5 authorises Treasury to expend the amounts transferred into the General Revenue Account and Capital Accounts as set out in paragraphs (1) and (2). Part 6 seeks Tynwald approval to continuing to grant Treasury the authority to replenish internal and external reserves from the General Revenue Operating Account by an amount not exceeding £5 million in any one year, and to expend such sums arising from those transfers.

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2775 Part (7) seeks Tynwald approval to Treasury transferring funding between reserves, other than the Reserve Fund, by an amount not exceeding £5 million in any one year and to expend such sums arising from those transfers. I beg to move.

2780 The President: Mr Shimmins.

Mr Shimmins: Thank you, Mr President. I beg to second and reserve my remarks.

2785 The President: Mr Hooper.

Mr Hooper: Thank you very much, Mr President. Really, it is just picking up on that last point that the Treasury Minister talked about in relation to the Hospital Estate Development Fund. I am reasonably sure I heard him say that the money 2790 went into that fund out of the NI Fund in order to build the Hospital some time ago. I think we all appreciate that happened. But then he concluded by saying that that money is not going back into the National Insurance Fund. I would just appreciate some clarity from the Minister as to why the money that was taken from the Fund some 20 or so years ago is not now being put back in the National Insurance Fund, 2795 seeing as it is no longer needed because of his capital reforms?

The President: Minister to reply.

The Minister: Because, Mr President, my understanding was it was always a revenue fund that 2800 was there to cover the future loan charges and costs and revenue costs associated with the hospital or hospitals build, both that existing Hospital and any future builds coming forward into the future. So it is effectively because we are going to get rid of those charges, so that money will effectively assist us in terms of forming part of the DHSC and others’ capital infrastructure moving forward. 2805 So it was not a repayable amount that went into the revenue funding.

The President: That fund was certainly very politically controversial 25 years ago, and the utilisation of the NI Fund – I probably should not have said that! (Two Members: No!) (Laughter) Mr Shimmins. 2810 Mr Shimmins: I was going to say, Mr President, would the Minister agree with me that actually, as the loan is longer there, the funds which are held to repay the loan, is it appropriate it should be transferred? (Interjections)

2815 The President: The Minister to reply.

The Minister: Thank you. I agree with that last statement.

The President: Hon. Members, I put to the Court Item 4. Those in favour, say aye; against, no. 2820 The ayes –

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A division was called for and electronic voting resulted as follows:

In the Keys – Ayes 22, Noes 1

FOR AGAINST Dr Allinson Mr Thomas Mr Ashford Mr Baker Mrs Barber Mr Boot Mrs Caine Mr Callister Mr Cannan Mrs Christian Mrs Corlett Mr Cregeen Ms Edge Mr Harmer Mr Hooper Mr Moorhouse Mr Peake Mr Perkins Mr Quine Mr Robertshaw Mr Shimmins Mr Skelly Mr Speaker

The Speaker: Mr President, in the House of Keys, 22 votes for, 1 against.

In the Council – Ayes 8, Noes 0

FOR AGAINST Mr Greenhill None Mr Henderson The Lord Bishop Mrs Lord-Brennan Mrs Maska Mr Mercer Mrs Poole-Wilson Mrs Sharpe

The President: In the Council, 8 for, none against. The motion carries.

5. Social Security Act 2000 – Social Security Legislation (Contributions) (Miscellaneous Amendment) Order 2021 approved

The Minister for the Treasury to move:

That the Social Security Legislation (Contributions) (Miscellaneous Amendment) Order 2021 [SD No 2021/0014] [MEMO] be approved.

The President: Item 5, Treasury Minister.

______1254 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

The Minister for the Treasury (Mr Cannan): Mr President, two years ago, in the 2019 Budget, 2825 I announced the introduction of a National Insurance Holiday Scheme. It commenced on 6th April 2019 and allows for a one-off refund of Class 1 National Insurance contributions. The scheme applies to anyone who takes up residence in the Island on or after 6th April 2019 and who has not been resident on the Island for tax purposes at any time in the previous five years from the date they take up residence. 2830 The scheme also applies to any Isle of Man student who on or after 6th April 2019 successfully completes a full-time course of education outside of the Island for a university first degree, a higher national diploma or a similar course or a postgraduate course and who, after completing that course, returns to the Island to live and work. In order for a person to benefit from the scheme, they must commence permanent 2835 employment in the Island within 12 months of arriving here, or in the case of a student within five years of successfully completing their course. Any contributions refunded under the scheme continue to be treated as paid for by the employee for all other purposes, which means that any future entitlement to contributory benefit is not affected. The maximum amount that can be refunded to an individual is £4,000. 2840 Treasury are aware of some individuals who, as a result of the COVID-19 pandemic, do not meet the conditions, primarily 12 consecutive months or the minimum salary of £21,000. This has been due to individuals having either been awarded MERA or their employers claiming Salary Support and paying them a reduced salary. In order that these individuals are not adversely affected, this Order amends section 6B of the Social Security Contributions and Benefits Act 1992, 2845 as applied to the Island, to: treat the salary and working hours of an individual who received a reduced salary by way of a Salary Support, as if they had received their full salary and worked their full hours – the refund will be based on the total actual amount paid, not the amount treated as paid; and remove the 12 consecutive month requirement for individuals who received MERA, replacing it with 12 months of employment provided the individual was in receipt of MERA during 2850 any gap in employment. In addition, the time period for application has been extended for individuals who have been awarded MERA or received a reduced salary from their employer who claimed Salary Support. This is to ensure that any person who did not meet the conditions and therefore did not apply can now submit an application providing the amendment means they would now satisfy the 2855 conditions. I beg to move.

The President: Mr Shimmins.

2860 Mr Shimmins: Thank you, Mr President. I beg to second and reserve my remarks.

The President: Mr Hooper.

2865 Mr Hooper: Thank you very much, Mr President. It is quite a welcome move from the Treasury Minister. He has very specifically referred to those who were in receipt of Salary Support or MERA as an employment break during the pandemic. He will be aware, as I am, of a number of people that were not eligible for those schemes and instead defaulted to the standard Jobseeker’s benefit arrangements, and I just want 2870 to double-check that actually the people who were not able to claim MERA or Salary Support and instead went through the Jobseeker’s route are also not going to be disadvantaged and make sure that they are covered as well. I just wanted some clarity on that. I would assume they are already covered by existing legislation, but just to double check.

2875 The President: Minister to reply. ______1255 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

The Minister: I will just check, Mr President. The purpose of this is to cover those who were employed or came back for employment and were subsequently disadvantaged by either Salary Support being paid, which reduced their threshold, or similarly with MERA being paid, which actually temporarily suspended their 2880 employment opportunity. I take the Hon. Member’s comments on board. As that stands, my understanding is that we have designed this purely for the MERA and the Salary Support Scheme being the two applicable schemes at the time, but the Jobseeker’s Allowance potentially meant that their employment had ceased. But I will check that factor and I will come back to him with a proper and considered 2885 response as to whether, in fact, this Scheme should also include JSA. If so, I would seek to make the appropriate amendment.

The President: Hon. Members, I put to the Court the Order at Item 5. Those in favour, say aye; against, no. The ayes have it. The ayes have it.

6.-11. Social Security Administration Act 1992 – Social Security Benefits Uprating Order 2021 approved; Social Security Contributions and Benefits Act 1992, Social Security Administration Act 1992 and Pensions Act 2014 – Social Security Benefits Uprating Regulations 2021 approved; Social Security Act 2000 – Pension Supplement (Amendment) Order 2021 approved; Pension (Top-up) (Amendment) Order 2021 approved; Social Security Contributions and Benefits Act 1992 – Income Support (General) (Isle of Man) (Amendment) Regulations 2021 approved; Employed Person’s Allowance (General) (Amendment) Regulations 2021 approved

A Member of the Treasury (Mr Peake) to move:

6. That the Social Security Benefits Uprating Order 2021 [SD No 2021/0015] [MEMO] be approved. 7. That the Social Security Benefits Uprating Regulations 2021 [SD No 2021/0016] [MEMO] be approved. 8. That the Pension Supplement (Amendment) Order 2021 [SD No 2021/0017] [MEMO] be approved. 9. That the Pension (Top-up) (Amendment) Order 2021 [SD No 2021/0018] [MEMO] be approved. 10. That the Income Support (General) (Isle of Man) (Amendment) Regulations 2021 [SD No 2021/0019] [MEMO] be approved. 11. That the Employed Person’s Allowance (General) (Amendment) Regulations 2021 [SD No 2021/0020] [MEMO] be approved.

2890 The President: The Member moving Items 6 to 11 would like to move these together, but have them voted on separately. Is the Court content? (Members: Agreed.) Thank you. In that case I call Hon. Member, Mr Peake, to move.

A Member of the Treasury (Mr Peake): Thank you, Mr President. 2895 The first of these Items increases from the week commencing 12th April 2021 the rates of state pensions and various Social Security benefits and other allowances payable in the Island.

______1256 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

As the Treasury Minister mentioned this morning in his Budget speech, the rates of basic state pension and the Manx state pension up to the full amount will be increased by 2.5%. The additional state pension and protected amounts of the Manx state pension will go up by 0.5%. 2900 Most National Insurance funded benefits, including Incapacity Benefit, Carer’s Allowance, bereavement benefits and contribution-based Jobseeker’s will be increased by 0.5%, as will be the case in the UK. The rate of the Nursing Care Contribution is being increased by £25 a week in order that it keeps pace with its equivalent in England. The rates of Child Benefit and the thresholds and tapers used for the Child Benefit income test 2905 are not being changed from April; neither are the rates of Attendance Allowance or Disability Allowance, with the exception of the higher-rate mobility component, which is being increased by 0.5% in order that it continues to be aligned with the UK rate and agreements with Motability Finance can continue to operate effectively. Generally speaking, the prescribed amounts for each of the Island’s income-related benefits 2910 are not changing from April. However, the maximum allowable towards nursing home fees for Income Support and income-based Jobseeker’s Allowance purposes is being increased by just over £25 a week to ensure that a person living in a nursing home who receives either of these benefits, or whose partner does so, is able to fully benefit from the increase in the rate of the Nursing Care Contribution I have just mentioned. 2915 The amounts of the pensioner premium are being increased by 4.25% to ensure that pensioners getting Income Support can fully benefit from the amount of increase in a 100% basic state retirement pension from the week commencing 12th April 2021. Mr President, the second Item currently before Hon. Members provides that where a question has arisen about the effect of the 2021 Uprating Order on a benefit already in payment, the new 2920 rates will not apply until that question is determined by an adjudication officer, the Social Security Appeals Tribunal, or the Social Security Commissioner. It also limits the application of the 2021 Uprating Order in certain cases where the beneficiary is not ordinarily resident in the Island. Regulations such as these are made each year to ensure the appropriate application of the Benefits Uprating Order. 2925 The third Item currently before Hon. Members maintains the rates of the Manx Pension Supplement for existing recipients at their current levels. It is necessary to make this Order to avoid an automatic uplift in the rates of pension supplement payable with basic state retirement pension and legacy bereavement benefits, consequent on the increase in the rates of those benefits from 12th April. 2930 The fourth Item, Mr President, increases the rates of ‘pension top-up’ in payment by 2.5% from 12th April, in line with the rate of increase in the basic state pension. The fifth Item increases by £15,000 the point at which the value of the former home of a person claiming Income Support, who is now living in a care home, is taken into account as income at the rate of 10%. Those affected may receive up to £750 a year additional Income Support as a result 2935 of the measure. The sixth Item removes an illogicality in the prescribed amounts for Employed Person’s Allowance. It should be noted that no one claiming EPA will be any better or worse off as a result of this measure. Mr President, the rates of all the Social Security benefits and allowances payable on the Isle of 2940 Man, both now and from the week commencing 12th April 2021, are set out in the appendix which Members have received earlier. Mr President, I beg to move Items numbered 6 to 11 on the Order Paper.

The President: Mr Cannan. 2945 The Minister for the Treasury (Mr Cannan): I beg to second and reserve my remarks.

The President: Hon. Member, Mr Thomas. ______1257 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

Mr Thomas: Thank you, Mr President. 2950 The Treasury Minister avoided a response to this in his summing-up speech, so unfortunately it comes to the departmental Member to answer. But I just wanted clarification about what the Treasury Minister might have meant when he said that the triple lock was secure ‘for the time being’. That is what the words were. So I just wanted a bit more of a context about what sort of review of the triple lock was actually going on. 2955 The second point is: is my understanding correct that of the benefits uprating of £3.623 million, nearly 80% of that is for pensions, and pretty much everything from it is from the National Insurance Fund rather than from the general fund? Moving on to some more difficult questions. The first one is that Attendance Allowance and Disability Living Allowance, in particular, were harmed in the Isle of Man in 2012 relative to across, 2960 and that is quite clearly laid out in the Budget; and then through compounding, through time, that situation has got worse and this Budget does not actually address that. In fact, it makes it worse, which makes me uncomfortable. I would like the vote to be recorded in respect of this motion differently from last time. I have got three questions building on that point. Has any testing of any of these Social Security 2965 rates or pension rates been undertaken relative to the minimum income standards that are now clearly laid out in the Living Wage – which should be called ‘living income standards calculations’? I know that has been an aspiration of the Hon. Treasury Member and of people in Treasury for some time. I just wonder if, eventually, anything like that has happened. We have got the recent Household Income and Expenditure Survey which could be used to carry out that work. I think the 2970 data set is rich enough, large enough, and it would be helpful to know if any work has been undertaken this year. The second point is: as we are moving towards this commissioned economic strategy I would hope that there could be some analysis of the propensity to consume, and the benefit to the Island’s economy of helping poorer people rather than less poor people, which is something that 2975 I moved for in 2014, with the talk about ‘youthful growth’ and actually focusing it that way round – trickling up rather than trickling down. Finally, given that the Treasury Minister has accepted the challenge in respect of public sector pensions, there are quite a few unfinished items which were in Treasury’s hands for public sector pensions. So, for instance, once we had the legacy funding gap recommendations Treasury was 2980 going to look at the inflation-indexing of pensions. So what we have here at the moment is state pensions going up by 2.5% because of the triple lock. We have public sector pensions – they were called SERPS, but they are public sector pensions – going up by 0.5%, and benefits for quite a large number of people going up by 0%. So we do need to perhaps go back to that piece of work, which was unfinished work from the pensions review. 2985 Likewise, in terms of defined contributions and defined benefits – because again that was in the hands of Treasury largely, and that was supposed to be coming back by December 2020. I know it was not very popular at the time and I know only two of us actually raised this issue back when the cost-sharing was going through, but it is an open question in respect of the future of pensions to do with the resolution that this Tynwald Court passed in 2019. There are open 2990 questions that do need to be addressed, as we look at benefits versus pensions versus the incomes for the whole of the Island, as we move to a new economic strategy.

The President: Mr Speaker.

2995 The Speaker: Thank you. If I can perhaps just offer some words of assistance about the last point there which was raised, about SERPS, which is not about public sector pensions. (Interjection by Mr Thomas) It was the follow-on from the Graduated Retirement Pension and it was the precursor to the state second pension that is about higher earnings getting a bigger pension. But it is not a public sector pension.

______1258 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

3000 I just want to take one element of what actually Mr Thomas raised as a query and focus in on it, around Attendance Allowance. There is about a 7% difference between the Isle of Man and the UK in both the lower and higher rate of Attendance Allowance. I want to know what the policy reason is that people in the Isle of Man only deserve 7% less Attendance Allowance than those in the United Kingdom. 3005 I do not think the argument is going to be that disability is cheaper in the Isle of Man.

The President: Mr Hooper.

Mr Hooper: Thank you very much, Mr President. 3010 Really I am rising to echo those concerns around DLA and Attendance Allowance. Hon. Members will see I have got a motion down a bit later on the Order Paper in respect of Attendance Allowance. It is about that disparity between the Isle of Man and the UK, and also the way that those two particular allowances link into passported benefits elsewhere – or in most cases actually do not passport into benefits elsewhere as they do in the UK. I think that is 3015 something that really does need looking at, and I would appreciate some commitment from Treasury that they will go away and have a look at this in a broader context than simply the context of the motion later on today. The other reason I rise is again to echo the concerns raised by Mr Thomas around the minimum income standards. Hon. Members will know for quite a while I have been very keen to make sure 3020 that our benefits system is linked in some way to an objective measure of what it actually costs to live on the Isle of Man. The Living Wage Report was a very good step in the right direction highlighting some of that information and drawing out some of that information, but it has been over a year since then and we have not really seen a move in our benefits system towards those minimum income standards, and using them as a benchmark for the benefits system. 3025 Interestingly, the Living Wage Report was used as a form of benchmark by the Economic Recovery Group in terms of Salary Support and MERA and I think the principle is well established now that actually it is a sensible measure to use. So it would be very good to see Treasury apply that across the board and at least consider applying it more swiftly. The third question I have for the hon. mover is in relation to the last Item, the changes around 3030 EPA and Child Benefit support that ties into it. The measure says that nobody will be worse off as a result of this change. I think that is probably accurate whilst the family is still together and children are living at home. But because you are moving the EPA, that £35, from the parent’s EPA allowance to the child’s element of the allowance, the moment that child leaves home actually the parent is now £35 a week extra worse off than they would have been. So at the point when 3035 the child is living with them and they are supported under the same measure, you are right, there is no impact on the family; but the moment that child moves out, instead of just losing £30 a week, they are now going to be losing £65 a week. I wonder if that has been considered by Treasury, the potential impact of that. The other thing it is worth highlighting, I think, is that this benefit law is an absolute mess, to 3040 be honest. It is difficult to find anything because we are amending amendments on amendments, but the original Order that sets out these schedules and these fees is from 2011. When you look at the original numbers in 2011, a lone parent or member of a couple who is a non-disabled worker in 2011 would have been entitled to £261.50 in support. That is the figure. The figure proposed by Treasury today is £262.90. That is £1.40 more than the same person would have been entitled 3045 to back in 2011, 10 years ago. So I would just like some clarity from the Hon. Member. I appreciate they want to simplify this system and they want to move this element of support to better align it I think with childcare needs, and currently that makes a lot of sense. But have they considered the potential impact of what is going to happen to these people who are reliant on EPA support when the child leaves home and they lose that additional element of EPA, and 3050 they are back down to a benefit level that is barely £1.40 more than it would have been 10 years ago? ______1259 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

Have the Treasury considered that potential impact and do they think that is a reasonable position to be leaving people in, in this day and age? Thank you, Mr President. 3055 The President: Mr Cannan.

The Minister: Thank you, Mr President. The hon. mover might agree with me, just for clarification, that in terms of the total 3060 expenditure of around £3.673 million, £3.671 million of that will be coming from the National Insurance Fund, whilst just £2,000 will come from general revenue. State pensions uprating will account for approximately £3 million of this figure. So I think the Hon. Member who is moving may just seek to acknowledge that. The Speaker asks what the policy was around why there has been a difference in the 3065 Attendance Allowance and Disability Living Allowance. Just before I answer that, Hon. Members will recognise of course that we have actually, during the course of this administration, sought to correct some anomalies within our welfare and benefits system, and almost year-on-year we have sought to correct some and take them back up to a benchmark figure in the UK. I think the point about reviewing against income levels, income standards, is valid. I think there does need to be a 3070 review. The problem with that, if I look at the Disability Living Allowance, which the Speaker has asked in terms of what this policy is, it was done when he was a Minister in April 2012 and was part of a rebalancing I think at the time. It was put to Tynwald that this was a necessary cost- saving measure following the redrawing of the VAT revenue sharing agreement with the UK. So at the time that was obviously a Council of Ministers’ policy and the difference has subsequently 3075 widened. The issue that we have got at the moment is that the cost of changing that would be around £1 million, which would be paid out of general revenue. I think this would have to be taken, to answer the Hon. Member’s question, in the broader context of an overall review potentially of some of the policy-making around the welfare system. But also, Mr President, I think much of this 3080 is also probably interconnected with a review of our National Insurance system – I will be interested to hear, when I present that report to Hon. Members. I think that will also be a time for some views in terms of how that system might be structured moving forward. Clearly if setting benchmarks is applicable, one has to balance that out obviously with the overall cost of such and what that means in terms of the revenue that has been supplied into things like the National 3085 Insurance Fund. So there is quite a lot of work to do around that and I am hoping the policy papers that we bring forward, and the report, will help to solve that issue. I trust the mover will agree with me on that. I think the other thing he might choose to agree, in terms of the reconfiguration of Employed 3090 Person’s Allowance, is that the reason for the significantly lower allowance being made for the first child or young person in a family, than that made for a second or subsequent child, is just historic, essentially. I could not necessarily pinpoint why that is. The Hon. Member for Ramsey is clearly supporting the principles, but is querying a matter of detail and again I think that is possibly something that we may have to look into from a Treasury 3095 perspective. But thank you, Mr President.

The President: Mr Peake, to reply.

Mr Peake: Thank you very much, Mr President; and thank you very much Hon. Members for 3100 your interesting questions, and for my hon. friend Mr Thomas. There is no actual link between the rate of the benefits and the minimum wage, etc. That has never been the case and it is not the case with this year’s Budget. We do agree actually on trying to put people first. I know deep down that is something that we both agree on and try to work on. ______1260 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

But just on your third point, about Attendance Allowance, we did actually circulate some 3105 questions and answers that we thought would be quite helpful before that. So it does say here why the Isle of Man rates of Attendance Allowance and Disability Living Allowance are lower than those payable in the UK. In April 2012, the Island did not operate its rates of Attendance Allowance or Disability Allowance, while the UK government increased the rates there by 5.2%. This was a number of necessary cost-saving measures approved by Tynwald following the redrawing of the 3110 VAT-sharing agreement with the UK. So the differences between the Isle of Man rates and the UK rates subsequently widened due to the effects of annual uprating. So we just tried to predict some of these questions and tried to give some helpful answers. Mr Hooper, talking about the EPA and the child. We have not actually put any of these up; and it has not been an easy decision, Mr Hooper. We have tried to really focus on just one or two 3115 things that we could do, and really tried to add comfort that we are not actually going to reduce any of the benefits. But just taking your point there about EPA: once children actually leave home, then it is unlikely that the parent or parents would qualify for EPA, if the child leaves home or becomes of an age to leave home. So it is only then they would qualify for it, without children, if they were perhaps disabled at the time. So that is really the point there. 3120 I do thank Mr Speaker as well for helping Mr Thomas to understand one of his questions. Thank you very much, Mr President. I beg to move.

The President: Hon. Members, I put first the Order at Item 6. Those in favour, say aye; against, no. The ayes have it. The ayes have it. 3125 Item 7. Those in favour, say aye; against, no. The ayes have it. The ayes have it. The Order at Item 8. Those in favour, say aye; against, no. The ayes have it. The ayes have it. The Order at Item 9. Those in favour, say aye; against, no. The ayes have it. The ayes have it. The Regulations at Item 10. Those in favour, say aye; against, no. The ayes have it. The ayes have it. 3130 And, finally, the Regulations at Item 11. Those in favour, say aye; against, no. The ayes have it. The ayes have it. Thank you, Hon. Members, that completes Order Paper No. 2, the Budget Order Paper.

Main Order Paper

3. Tynwald Management Committee – Manx Patriots’ Roll of Honour – Second Report 2020-21 received and recommendation approved

Mr Speaker to move:

That the Tynwald Management Committee Second Report for the Session 2020-2021 [PP No 2021/0007] be received and the following recommendation be approved –

That Tynwald approves Hector Duff OBE MM BEM TH for inclusion in the Manx Patriots’ Roll of Honour.

The President: We turn now to our Main Order Paper, and we find ourselves at Item 3. On behalf of the Tynwald Management Committee, Mr Speaker to move. 3135 The Speaker: Gura mie eu, Eaghtyrane.

______1261 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

Hon. Members will be aware that the Manx Patriots’ Roll of Honour is for deceased persons who have made, during their lifetime, a significant contribution to some area of Manx life. The Committee would like to propose someone for addition to the Roll of Honour. 3140 In the Report before you, we propose a person who dedicated his life to public service right to the very end and was known to you all: World War II veteran Mr Hector Duff OBE MM BEM Tynwald Honour. Mr Duff sadly passed away last year at the age of 101. Following a nomination from an Hon. Member – in fact from Hon. Members Mr Baker and Mrs Corlett – the Tynwald Management 3145 Committee agreed to put forward Mr Duff for addition to the Roll of Honour to recognise his significant life-long public service and his commitment in educating and promoting understanding of the reasons behind, and the realities of, world war. Mr Duff was already the recipient of the highest award that the Island can bestow, the Tynwald Honour, which was awarded to him by the Tynwald Honours Committee and this Court in 2014. 3150 The Tynwald Management Committee has now taken the exceptional decision to propose that Mr Duff also be added to the Manx Patriots’ Roll of Honour. More information on Mr Duff’s career and significant contribution to the Island can be found in the Report before you. Hon. Members, I am sure you will agree that Hector Duff would be a most worthy addition to the Manx Patriots’ Roll of Honour. 3155 Mr President, I beg to move the motion standing in my name.

Several Members: Hear, hear.

The President: Hon. Member, Mrs Corlett. 3160 Mrs Corlett: Mr President, I am honoured to second the recommendation that Tynwald approves Hector Duff OBE MM BEM TH for inclusion in the Manx Patriots’ Roll of Honour. Before the name of any person is recommended for inclusion in the Manx Patriots’ Roll of Honour, that person must have shown ‘to have disinterestedly or self-sacrificially exerted himself or herself to 3165 promote the well-being of the Isle of Man’. Hector Duff meets this criteria many times over. Hector was honoured many times during his life, not only for his war efforts, but also for his contribution to the Isle of Man community. He was awarded the Military Medal for his action in North Africa, given the British Empire Medal for his work in schools, became an OBE last year, and he is one of only a handful of people to have been given the Isle of Man highest honour, the 3170 Tynwald Honour. Hector had an amazing ability to connect and engage across the generations. A natural affinity with people, old and young, and all those in between. He always made use of his ability to do this in a truly selfless way. Hector believed that the hopes for future peace lie in the hands of our children and young 3175 people and he worked tirelessly to make sure that the horrors of war are not forgotten. He recognised that when war is no longer in living memory it becomes easier to glorify it. Hector always spoke movingly of the sadness of war, and he said that while there would be victors, there could be no winners. His hope was that our young people, our future leaders, will discover better ways to settle disputes without recourse to war. 3180 This is such an important message because it translates into everyday life. By encouraging children and young people to find ways to negotiate their way through the personal conflicts that will almost certainly arise as they go through their lives, and to understand that violence is never the answer. He was giving our young people a positive and important life lesson. I feel, like so many others, privileged to have known Hector personally. (A Member: Hear, 3185 hear.) To bear witness to his straight-talking, no nonsense approach to life, (Laughter) and to never being prepared to take no for an answer. The inclusion of Hector Duff in the Manx Patriots’ Roll of Honour allows our Island to express our gratitude, appreciation, respect and admiration for a person who deserves the public recognition that he has received. It is our way, our nation’s ______1262 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

way of saying: thank you, Hector Duff, for a job well done, for a life well-lived, providing inspiration 3190 and not only setting an example, but leading by example. The role model that encourages us all to strive towards that well-lived life, the thing we all aspire to. Hector Duff: a true gentleman. A Manninagh dooie: a true Manxman. Thank you.

3195 Members: Hear, hear.

The President: Does any Member wish to add anything to what has been said? Mrs Caine.

3200 Mrs Caine: Thank you, Mr President. I just wish to say this is a really welcome and a really worthy addition for inclusion on the Manx Patriots’ Roll of Honour. Everyone who knew Hector was aware of the huge input he had into community life and in fact, only a couple of days, a few days before his death, Hector was attending the War Memorials 3205 Preservation Committee and his input was as feisty as ever, (Laughter) and he was calling for certain actions to be taken and rousing everybody to take action. I am very pleased that he was actually able to see, from a presentation from Manx National Heritage, Jude Dicken, the new website and way the recording of all our war memorials will be presented in the near future. I will say that the trouble was we all thought Hector would go on forever, and it came as a huge 3210 shock that at 101 years of age he suddenly was no more, and Hector kept on working to the end. He was the inspiration for the War Memorials Preservation Committee. It was his initial work that generated all the information that led to the establishment of that Committee. He was the founder member, he was the backbone of it and he will inspire us to continue. All he did throughout his post-war years was to ensure that all the fallen comrades of his were honoured, 3215 and that work will go on, and we will remember them; and, most of all, we will remember the amazing human, compassionate man that was Hector Duff. Thank you, Mr President.

Several Members: Hear, hear. 3220 The Speaker: Hon. Member, Mr Callister.

Mr Callister: Thank you, Mr President. I also would just want to echo the comments that my colleague from Garff has just said. I also 3225 want to thank the Committee for putting forward this recommendation. I do not think there is a more fitting tribute in my lifetime. I was very proud to know Hector and to actually share his 100th birthday at Onchan School, which he was very surprised when the students asked him to come down. We had cake and we celebrated his birthday – it was a really good afternoon. It is something that I am always going to 3230 remember, as part of my role as being an MHK. I do not think there is anything more I can add that Mrs Corlett from Douglas Central has not already said. I think this is a very fitting tribute for an excellent man and a legend of our lifetime. Thank you, Mr President.

3235 Several Members: Hear, hear.

The President: Hon. Member, Ms Edge.

Ms Edge: Thank you, Mr President.

______1263 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

3240 I just really want to give some reflection to the work that Hector, who I think we all loved, did within the education setting. Obviously I have known him a long time, I know his family, but certainly my experience when he was in an education setting talking to children will always live with me. But the one area that I think he touched – and he certainly was a guest of honour at the prize day at Ballakermeen High School one year. I can honestly say in my near-20 years working in 3245 that school and going to numerous prize days, I had never seen the Royal Hall so quiet, listening to Hector. I think that just tells you what effect he has on individuals in front of him, but also on the young. My own granddaughter, when he passed away, said, ‘Isn’t it really sad we’ve lost Mr Duff?’, and I thought, ‘This is a 10-year-old.’ So I think most children, certainly from school age, all know 3250 who Hector was and I think it is a great honour that Tynwald is respecting him in this way. And my hon. friend for Garff, in saying what he has done on the War Memorials Committee, we need that to continue. We need somebody else to come along that has got that tenacity and the twinkle in the eye that Hector had. Thank you, Mr President. 3255 The President: Mr Speaker, to reply.

The Speaker: Thank you, Mr President. I need do no more than associate myself with all of those heart-warming and supportive 3260 tributes and comments from all quarters of this Court, and I commend the motion to the Court.

The President: It is with great pleasure that I put to the Court that Tynwald approves Hector Duff OBE MM BEM TH for inclusion in the Manx Patriots’ Roll of Honour. Those in favour, say aye; against, no. The ayes have it. The ayes have it.

4. Ecclesiastical Committee – Draft Church Property Measure (Isle of Man) – Second Report 2020-21 received and recommendation approved

The Chairman of the Ecclesiastical Committee of Tynwald (Mr Cannan) to move:

That the Second Report for the Session 2020-2021 – Draft Church Property Measure (Isle of Man) [PP No 2021/0004] be received and the following recommendation be approved:

That the Draft Church Property Measure (Isle of Man) [PP No 2021/0004A] in the form laid before Tynwald be presented to Her Majesty for Her Royal Assent, as required by Schedule 1 to the Church Legislation Procedure Act 1993.

3265 The President: We turn now to Item 4, Ecclesiastical Committee. I call on the Chairman to move, Mr Cannan, please.

The Chairman of the Ecclesiastical Committee of Tynwald (Mr Cannan): Thank you, Mr President. 3270 Hon. Members, the Members of the Ecclesiastical Committee of Tynwald are Mrs Barber, Mrs Maska and myself. We met virtually on 15th January 2021 with a member of the Legislative Committee of the Sodor and Man Diocesan Synod, and a representative from the Attorney General’s Chambers, to consider the Draft Church Property Measure (Isle of Man) before you. The main objective of the Draft Church Property Measure (Isle of Man) is to remove 3275 unnecessary restrictions on the holding of land and trust property by incumbents and ______1264 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

churchwardens and by parochial church councils. A full explanatory memorandum about the Draft Measure can be found at Appendix 2 in the Report before you. Your Committee have considered the Draft Measure and recommend that it should be given Tynwald approval today and then presented to Her Majesty the Queen in the same manner as a Bill, and have the force and effect 3280 of an Act of Tynwald that requires Royal Assent. Mr President, I beg to move the motion standing in my name.

The President: Mrs Maska.

3285 Mrs Maska: I beg to second.

The President: I put the motion at Item 4. Those in favour, say aye; against, no. The ayes have it. The ayes have it.

5. Select Committee of Tynwald on Whistleblowing – Report and recommendations – Debate commenced

The Chairman of the Select Committee of Tynwald on Whistleblowing (Ms Edge) to move:

That the Report of the Select Committee of Tynwald on Whistleblowing [PP No 2020/0199] be received and the following recommendations be approved:

Recommendation 1 The Manx legislation regarding protected disclosures should be amended to include a public interest test and vicarious liability for employers.

Recommendation 2 The Isle of Man Government Whistleblowing policy and guidance should be re-written to encourage reporting of concerns, make it clear and accessible to the lay person and remove duplication.

Recommendation 3 The Isle of Man Government Whistleblowing policy training must be compulsory with a refresher session completed every five years.

Recommendation 4 That the Council of Ministers report to Tynwald by May 2021 with plans to establish an independent Isle of Man Government Concerns at Work service by January 2022 to oversee the management of all public concerns raised in Isle of Man Government, and to review all non- disclosure agreements, to ensure that any concerns raised have been addressed and to report annually to Tynwald.

Recommendation 5 That legislation for an all-encompassing statutory framework, to encourage the raising of public interest concerns, the provision of monitoring and support, protection for whistleblowers and penalties for non-compliance, is included in the Isle of Man Government 2021-22 legislative programme; and the independent Isle of Man Government Concerns at Work service expanded to provide the required oversight for the whole Island.

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[GD No 2021/0007] is relevant to this item.

The President: We turn now to the Select Committee of Tynwald on Whistleblowing. I call on 3290 the mover, Ms Edge, to move the Report.

The Chairman of the Select Committee of Tynwald on Whistleblowing (Ms Edge): Thank you, Mr President. I will take Members back to the original debate on 20th March 2018 and why I brought the 3295 motion to Tynwald:

That a Committee of three Members be appointed to review the effectiveness of the Government's current whistleblowing policy and any relevant legislation, and to report.

I thank Members for supporting the creation of the Committee, which I was subsequently elected to chair. I had also been raising numerous questions with regard to whistleblowing since 2016, when I was elected. Mr President, if there is one thing this administration needs to get right for the people of the 3300 Isle of Man, it is whistleblowing policy and legislation. It is the fundamental cornerstone to ensure all aspects of good governance and compliance with all our policies and principles and ethical conduct, whether that is the public or private sector. We must recognise the need to ensure the people of our Island have confidence in those processes; that they are in place and are able to report their concerns without any chance of detriment or retribution. We must not facilitate an 3305 autocratic environment where people are afraid to raise concerns. We can do this through a strong, independent process to deal with any concerns that are reported. What is whistleblowing? It is someone exposing wrongdoing, health and safety issues, perceived corruption. It should not, as is often the case, turn into a witch hunt. However, based on evidence that the Committee received or heard, all too often this is how it is viewed and 3310 progressed in both the public and private sectors. Whistleblowing is legally described as a ‘protected disclosure’, and when an employee makes such a disclosure they are protected from suffering any detriment in their workplace by the provisions in the Employment Act 2006. However, based on the evidence the Committee heard, this protection does not appear adequate to protect people before the damage is done. 3315 Mr President, I was contacted personally by numerous people following the original debate and was subsequently invited to speak at the Cambridge International Symposium on Economic Crime at Jesus College in Cambridge in September 2019. There were delegates from all over the world, and it was the first time that the event had included workshops on the topic of whistleblowing. 3320 Mr President, I would like to clarify that I funded this myself, due to wanting to better understand the issues that whistleblowers experienced. I sat on a panel that included the HS2 whistleblower; and I am sure most Members will be aware of this project. Hon. Members, it was particularly moving to hear the devastation whistleblowing had caused an individual and after nearly losing everything due to wanting to do 3325 the right thing, they at one point thought of taking their own life. This is the true, real-life effect of being a whistleblower, standing up for what is right and the life-changing consequences owing to the treatment of being a whistleblower. Everyone I had the pleasure of meeting all had the same aim, to protect the whistleblower, and all agreed these people should be viewed as a valuable asset to any organisation in order to 3330 protect the environment, staff and public safety, protect against corruption and, in the case of the public sector, the public purse. I met many top supreme judges and one that particularly stands out in my mind was from East Africa. She showed a particular interest in how the Isle of Man dealt with those who stand up for what is right within the finance sector. Do we, as a parliament of the Isle of Man, want our people

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3335 to have to go through such life-changing, devastating circumstances, all for trying to do the right thing, whether in the public or private sector? I certainly do not, and many Members in this hon. place will certainly agree with me on this point. As we know, people have suffered like this on the Isle of Man. We heard many examples of where employees have spoken out, have suffered significant detriment and the perpetrators on 3340 most occasions have faced no consequences, remaining in their roles, fully protected, and in many cases promoted for supporting wrongdoing with no follow-up action to address the concerns raised. We found there was a significant inequality of arms for the person raising the concern of public interest – very concerning. We found very little in the way of consistency to the approach or even 3345 understanding of whistleblowing across organisations and virtually no evidence of consistent reporting of concerns raised within the public sector. In fact, I would go as far as saying the culture is: if it is not recorded, it is not a problem. This is not good enough. Clear and accurate reporting is in keeping with the basic fundamentals of good governance. In fact, the senior officers within Government who gave evidence had different views and understanding of the policy and 3350 contradictory comments. This made it clear to me that there is a clear lack of understanding in the upper levels of the Isle of Man Government. Where this is the case, understanding the value and importance of listening to whistleblowers is not going to filter down through the organisation. And even if it did, it would not be a consistent approach to reporting of concerns at work. We must not facilitate an 3355 autocratic environment through ignorance and misunderstanding of responsibilities fundamentally at senior levels, creating a culture of fear of speaking out. As a previous civil servant, when I joined the service there were excellent induction programmes on reporting of concerns, financial regulations and many other excellent induction programmes. But it was clear that this culture is no longer there. I would also question the policies 3360 of Government particularly, as to say ‘There is no data’ seems to be the stock answer and should not be an excuse for failing to implement policy correctly, or at all; and in some cases, an excuse for being complicit in wrongdoing. From the evidence the Committee has heard, there should not be an absence of data in terms of confidential reporting within the Isle of Man Government. You only have to look at tribunal and 3365 court cases to see evidence of lost paperwork, failure to accurately record meetings, and organisations and Departments defending the indefensible. Unfortunately, Mr President, we appear to have lost a lot of knowledgeable, experienced and highly qualified individuals where they have raised concerns and have then, due to a badly managed process and by mistreatment by management, suffered detriment. There is also a clear 3370 and fundamental detriment to the Manx public and the public purse. If we get this right, staff can be confident that their action will be taken, reducing not only the personal cost to health and well-being, but reducing overall costs and pay-outs of non-disclosure agreements, which is far more effective financially than expensive, lengthy battles at tribunals and courts. We should not get to the stage of public inquiries, such as we have had to have in Health 3375 and Education, before people are listened to. Some examples of cases in the UK courts: a mental health worker speaks out over poor patient care; a finance worker speaks up over fake charges to clients’ accounts; food supplier fails to comply with food hygiene regulations; fraud in a charity was stopped; doctors reporting clinical negligence, and others reporting infection control issues. Hon. Members, you would all want 3380 concerns such as these to be investigated and, if issues were found, for corrective action to be taken as soon as possible. We can only imagine what a different situation the whole world may be in today had the local authorities in Wuhan, China listened to that doctor who reported an infection, and had they taken action instead of attempting to discredit him. Whistleblowing is simply someone raising a concern. During our work as a Committee, we 3385 found this is rarely done for personal gain. Workers who care enough to want to make things better and ensure all actions in the workplace are carried out appropriately are surely people we ______1267 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

would all want to work with, and in my experience they are the ones with the corporate expertise and knowledge. And yet the lived experience of being a whistleblower is of inaction accompanied by retaliation, and organisations take a ‘deny, delay and defend’ approach. 3390 For reasons of confidentiality, the examples of cases and treatment of individuals I have just given are examples from UK reports. The Island is no different. The people we spoke to describe serious issues and protracted inquiries, which appeared to be focused on finding someone to blame and focus on covering up the concern raised. Often the individual was made to feel like a troublemaker and they felt like they were being managed out. Resolution at the earliest 3395 opportunity was secondary to the issue, if it was considered at all. In ensuring we received all relevant information to enable appropriate reporting on whistleblowing cases I, as Chair of the Committee, had to issue precepts to Departments for the release of documentation, so that as a Committee we could identify where the problems lay with the reporting of whistleblowing cases and the handling of the complaint and the treatment of the 3400 individual. I believe precepts are a last resort and normally not required for information to be released to a Committee. I will leave that thought with Hon. Members as to why a Department would not be forthcoming with papers that a Committee requests. We found that whistleblowing and the subsequent action or inaction has had a devastating effect on many people’s lives. Only one person, in all the cases we heard, had remained in the 3405 same employment. No one said they would raise a concern again. I personally find that alarming. One witness said: ‘I just wish, after a few months when I realised how bad it was, instead of ploughing on, trying to do something, trying to raise concerns, trying to be the good person, I wish I had just left. Because the effect it has had on my life has been catastrophic.’ Catastrophic, Hon. Members. How awful for somebody to feel like that. 3410 This is the real experience for these people. No one should feel like this about their workplace. Currently, this is the reality for someone who decides to highlight issues and do exactly what the Employment Act 2006 seeks to prevent. It is clear that those provisions do not go far enough in preventing the persecution of whistleblowers. But those provisions in the Employment Act are designed to protect those who have suffered detriment as a result of making a ‘protected 3415 disclosure’, the legal term for whistleblowing. Yet we saw few Employment and Equality Tribunal cases. Mr Rob Sutton, who made a claim against a private sector employer, was good enough to share his experience of the tribunal process. Mr Sutton described the personal and financial cost of his case. He told us that he was fortunate that he has no dependants and he owned his house because 3420 he had to sign that over to his lawyer as collateral in relation to their fees. Most whistleblowers state it is not about the money, it is about the wrongdoing and malpractice; and only thanks to their sheer determination to continue with the issues, do we know of any concerns raised. Most people cannot do what Mr Sutton did in order to afford the same legal representation as any corporate entity. The Employment and Equality Tribunal was intended to be a low-cost 3425 dispute resolution, it is an excellent free service available to all people on the Isle of Man and plays a vital part in the protection of whistleblowers. Mr Sutton described the personal and financial cost of his case, but in practice it is not a level playing field. This is in no way a criticism of our tribunal system but, as in Mr Sutton’s case, with companies and corporate bodies with unlimited resources, these issues often revert to the High Court with huge legal expenses. 3430 Hon. Members, our Report is very thorough, and you will be pleased to hear that I do not plan to go through it all in detail. You will see from their response that Government fundamentally agrees that change is needed. So I will just focus on the recommendations that you are being asked to vote on today. Recommendation 2, about rewriting the Isle of Man Government Whistleblowing Policy to improve both the clarity and tone, and recommendation 3, that training 3435 be made compulsory and be renewed every five years, have both been accepted as drafted. Recommendation 1 proposes an addition to the current legislation of the Employment Act 2006 of a public interest test for protected disclosures and a vicarious liability responsibility for employers. A public interest test, which is taken to mean that the employee reasonably ______1268 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

believes the concern they are raising is not a solely personal matter, is not currently a requirement 3440 in Manx legislation. The test is subjective, but it is intended to exclude personal matters which would commonly be dealt with under processes such as disciplinary, grievance or fairness at work. Government agrees that the public interest and vicarious liability should be included. The addition of a vicarious liability clause would make an employer responsible if one of its employees is subject to detriment by a co-worker as a result of making a disclosure. The expectation is that the 3445 employer should address the cause of the detriment. Government are proposing an amendment to our recommendation, proposing that this addition should be put out to consultation, and the Committee will support that. In recommendation 4, the Committee has proposed that an Isle of Man Government Concerns at Work service is established to provide an independent oversight of the handling of protected 3450 disclosures. We are really pleased that Government is proposing an amendment which moves this idea on to an operational footing almost immediately, and that is to make this service an interim responsibility of the new Tynwald Auditor General. We are happy to support this, subject to two points. The first is very straightforward and is that the Tynwald Auditor General should be provided 3455 with sufficient additional resources to ensure they are able to do this work for the interim period. The second needs a little bit more explanation. Our recommendation suggested that the oversight body should ‘review all non-disclosure agreements, to ensure that any concerns raised have been addressed’. To be clear, what this means is not that the oversight body should have any input to or veto over any such agreements, just that they should be able to check that the 3460 original concern raised has been addressed. The ‘deny, delay and defend’ approach I mentioned earlier was something we saw in local cases. We saw examples of two parties who could not agree and the working relationship broke down. In these circumstances, it can be better emotionally and financially for both parties if a settlement is reached. But what we do not accept is that the original concern can then be 3465 forgotten about, because we have settled. The oversight process is about making sure concerns have been addressed. We think that proposing the Tynwald Auditor General to undertake this oversight on an interim measure is an efficient solution, as a cross-Government remit already exists and the service will be expected to contract specialist expertise as required. The Committee will support the proposed 3470 amendment if the resource and non-disclosure point are now included as part of any amendment. Finally, recommendation 5. This proposes a more fundamental review of the statutory framework for whistleblowing legislation and consideration of whether Concerns at Work should be an all-Island oversight body in a similar way to, say, the Information Commissioner. There is a Public Interest Disclosure (Protection) Bill which has reached Second Reading stage in the House 3475 of Commons. In our view, it is an acceptable statutory model and we can see that for companies based in both jurisdictions, it would be helpful if the legislation is in step. The current provision does not provide enough protection and we must do better. Government are proposing a consultation in 2021/22 on an all-encompassing statutory framework for whistleblowing. Consultation is a normal part of any major legislative change and we would be 3480 pleased to support an amendment in these terms. Before finishing, I would like to publicly thank all those who have contributed to the work of the Committee and my colleagues who worked alongside me up in the Legislative Council, Mrs Poole-Wilson and Mrs Kerry Sharpe. Officials were forthcoming and worked with us to provide positive ideas for change and often quite substantial evidence files. However, 3485 Hon. Members, I would like to take this opportunity to pay a special tribute to the courage of those individuals who came and talked to us to tell us about the often very distressing circumstances they had found themselves in, usually because they were simply trying to do the right thing. I hope their courage and ethical principles will not be in vain and that you will reward the courage they have shown by supporting all of the recommendations today. 3490 Thank you, Mr President. ______1269 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

The President: Hon. Members, I think now is an appropriate time to take a break. The Court will reconvene at five minutes to six.

The Court adjourned at 5.22 p.m. and resumed its sitting at 5.55 p.m.

Select Committee of Tynwald on Whistleblowing – Debate concluded – Amended motion carried

The President: Hon. Members, we resume Item 5 and I call on Hon. Member Mrs Poole-Wilson.

3495 Mrs Poole-Wilson: Thank you, Mr President. I beg to second and reserve my remarks.

The President: Hon. Member, Mr Harmer.

The Minister for Policy and Reform (Mr Harmer): Thank you, Mr President. 3500 Can I start by welcoming the Report from the Select Committee on Whistleblowing and the amount of detailed analysis that they have undertaken in producing this Report? I would like, Mr President, to go through each of the recommendations in turn, and Hon. Members will see from the response document I do have some amendments to move, so hopefully they are in train. 3505 Addressing first, the Report in general terms, the Council of Ministers has noted the Committee has produced a substantial report, taking evidence from a wide range of people both inside and outside of Government, and looking at developments in other jurisdictions on the subject of whistleblowing. The Committee has reviewed and provided commentary on a number of cases of whistleblowing reported within Government within recent years and has undertaken a thorough 3510 review of Government’s whistleblowing policy. It is fair to say the Committee has pulled no punches, and I thank them for that. Whilst they admit in their Report that, and I quote, ‘the Isle of Man Government Policy is not particularly out of step with policies elsewhere’, if it ain’t working, well, it ain’t working. In order to address the shortcomings identified, the Committee make five recommendations. 3515 The Council of Ministers is broadly supportive of all of the recommendations. However, as shown in our response document, Council is unable to support all aspects of the Committee’s recommendations as drafted. Instead, Council offers some modest adjustments to the wording which, more than anything else, reflect the practical actions required by Government to take matters forward and address some of the issues on which we felt greater clarity was required. 3520 I think an important thing to say from the outset is that the amendments proposed have just not come from the Office of Human Resources, they have been discussed thoroughly and drawn up with officers from the Chief Secretary’s Office, HM Attorney General’s Chambers, Treasury Audit Advisory, Department for Enterprise and the Manx Industrial Relations Service. It has been a really good example of Departments working together, which Hon. Members will recall is one 3525 of the guiding principles of the New Public Service project, or the ‘sunny uplands’ report, as one Hon. Member described it to me recently. Starting with recommendation 1, the proposal to require a public interest test seems eminently sensible, as this will reduce the potential that employees would use the whistleblowing legislation to deal with personal issues, rather than issues which are generally in the public interest. As 3530 indicated in our response, however, the vicarious liability proposal is likely to be more controversial than the introduction of the public interest test and for that reason, whilst it is the standard approach when developing legislation, we believe it is important to specify in the ______1270 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

recommendations that these matters will be consulted upon before their introduction, and that additionally the consultation considers whether there needs to be good faith attached to a 3535 protected disclosure. That deals with the amendment on recommendation 1, which basically deletes all the words after ‘the public interest test’ and replaces with:

The Department for Enterprise will consult on whether the Manx legislation should also be amended to include vicarious liability for employers and whether there need be good faith attaching to a disclosure

Turning to recommendations 2 and 3, these require that the Isle of Man Government Whistleblowing policy and guidance ‘be rewritten’ and that whistleblowing policy training ‘must be compulsory with a refresher session completed every five years.’ The Council of Ministers fully 3540 supports recommendation 2 and is grateful to the Committee for its analysis of the existing policy, as shown in Annex 6 of their Report. We agree on the need for a policy to be easier to follow, less intimidating and provide for the appropriate reporting mechanisms and independence. It is also important that the development of the new policy is a collaborative effort involving all parts of Government and, crucially, that we actively engage the trade unions in the process. In many cases, 3545 it has been their members who have suffered at the hands of the existing policy, as evidenced in the Select Committee’s finding. To that end, I can confirm that discussions around shaping the nature of the new policy will be on the agenda for the Industrial Relations Forum when it meets early next month. The proposal at recommendation 3 for whistleblowing training to be mandatory and be repeated five years, as I stated, is fully accepted. Work on implementing both those 3550 recommendations is now under way. Recommendation 4 poses more of a challenge to us. First it is envisaged that the establishing of a new quango, a Concerns at Work Service, initially with only a remit to consider whistle- blowing within the Government. As with all the other recommendations, we have no objections to this in principle, but with the best will in the world it is hard to envisage this service being 3555 legislated for and in place by January 2022. Instead, we considered whether any existing body could take on this role, pending a more substantial legislative change, and it seemed to us that the Auditor General Act 2011 already provides for ready-made governance framework for the independent investigation of public service matters that are in the public interest, with all of the required key whistleblowing components. 3560 Pursuing this route should enable public interest concerns at work to be independently monitored and where necessary investigated a good deal sooner than would be the case if we were to set up a new quango. This does not mean we rule out an independent Concerns at Work Service in future, but it requires the time for a service to be properly scoped, consulted on and legislated for. In the meantime, as an interim measure, we propose that the Tynwald Auditor 3565 General be mandated by what I hope will be this resolution of Tynwald, to oversee the management of concerns raised by public sector employees and workers stationed within Departments, Boards and Offices of Government to ensure that any concerns raised have been addressed, and to report annually to Tynwald. I was grateful to the Select Committee for meeting with me and officers last week to talk 3570 through our proposed amendment, and I note they were comfortable with this proposal, but they wished for our amendment to be strengthened to give assurance that the office of the Auditor General be adequately resourced to take on this responsibility. The Auditor General is not yet in place, but has been allocated a substantial budget that may well be sufficient to cover not only the value for money work we debated in this place in November, but also any whistleblowing work 3575 that falls beyond the original scope. We have not therefore modified the amendment further on this point, but we are open to debate on this subject. One part of my amendment to recommendation 4 is altered compared to our formal response, arising with our discussions with the Committee last week. We talked at length about that part of the Committee’s recommendation which would see the Concerns at Work Service or an Auditor 3580 General having powers to review all non-disclosure agreements. To cut a long story short, we

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concluded that examining the circumstances behind whistleblowing cases, which result in settlement agreements with a confidentiality clause, may not actually assist the Auditor General to review relevant cases. While in most whistleblowing cases examined by the Committee the employment relationship came to an end; from records held by HR only a minority involved 3585 settlement agreements. Therefore, it is better for the Auditor General to look at cases with a whistleblowing element where there has been a cessation of employment or engagement for whatever reason. That could be resignation, redundancy, discipline, capability or other substantial reasons, for which in the majority of cases, there has been no settlement agreement. That being so, as part of the leaver process, subject to any obligations imposed by data 3590 protection legislation, the Office of Human Resources will put systems in place to enable this aspect of the work of the Auditor General to be operationalised. This will include maintaining an adequate record of whistleblowing cases via the policy’s future reporting requirements. That so, I move that the amendment to recommendation 4, which deletes all the words after ‘that’ and replaces:

Tynwald is of the opinion that as an interim measure the Tynwald Auditor General shall oversee the management of concerns raised by public sector employees and workers stationed within Departments, Boards and Offices of Government to ensure that any concerns … have been addressed; to review the reasons for any cessation of employment or engagement with a whistleblowing element, to ensure that the original public interest concerns have been addressed; and to report [crucially] annually to Tynwald.

3595 Finally, I turn to recommendation 5. While not explicitly stated, the Committee seems to propose that Manx legislation be reformed on similar lines to the model in the UK Public Interest Disclosure (Protection) Bill and that a Concerns at Work Service is established as an oversight body equivalent to the proposed ‘Whistleblowing Commission’. Whilst the UK Bill has received its Second Reading, it is by no means certain that it will become law. The model therefore seems 3600 untested and the Isle of Man would be unable to rely on a ready-made framework to import. Determining how a Manx Concerns at Work Service carries out a similar function in a way that improves the current situation may take some time. Nonetheless, the Council of Ministers does support the need to strengthen Manx legislation regarding whistleblowing and supports in principle the objectives contained within the UK Bill. 3605 Therefore, the Council supports the Cabinet Office and Department for Enterprise in conducting a joint consultation exercise during 2021-22 legislative year on proposals that a Bill would provide an all-encompassing framework. Therefore, with my third amendment on recommendation 5, it deletes all the words after ‘That’ and replaces them with:

the Cabinet Office and the Department for Enterprise should jointly consult during 2021/22 on an all-encompassing statutory framework for Whistleblowing to cover: (a) encouraging the raising of public interest concerns, (b) the provision of monitoring and support, (c) protection for whistleblowers and penalties for non-compliance, and (d) the possible creation of an Isle of Man Concerns at Work service to provide oversight for the whole Island

Mr President, in conclusion, I would like to reiterate that the Council of Ministers supports the 3610 gist of the Select Committee’s findings and recommendations, but believes with some modest adjustment the recommendations can be made to work more effectively. With that, Mr President, I beg to move the three amendments standing in my name:

Amendment to recommendation 1 Delete all words after ‘public interest test’ and replace with ‘The Department for Enterprise will consult on whether the Manx legislation should also be amended to include vicarious liability for employers and whether there need be good faith attaching to a disclosure’.

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Amendment to recommendation 4 Delete all words after ‘that’ and replace ‘Tynwald is of the opinion that as an interim measure the Tynwald Auditor General shall oversee the management of concerns raised by public sector employees and workers stationed within Departments, Boards and Offices of Government to ensure that any concerns raised have been addressed; to review the reasons for any cessation of employment or engagement with a whistleblowing element, to ensure that the original public interest concerns have been addressed; and to report annually to Tynwald’.

Amendments to recommendation 5 Delete all words after ‘that’ and replace with ‘the Cabinet Office and the Department for Enterprise should jointly consult during 2021/22 on an all-encompassing statutory framework for Whistleblowing to cover: (a) encouraging the raising of public interest concerns, (b) the provision of monitoring and support, (c) protection for whistleblowers and penalties for non-compliance, and (d) the possible creation of an Isle of Man Concerns at Work service to provide oversight for the whole Island’

The President: Mr Harmer. I am sorry, Mr Hooper.

3615 Mr Hooper: Thank you very much, Mr President. I am rising to second the amendments that have been moved by Mr Harmer. There are two amendments I believe, Mr Harmer, just to double check.

Several Members: Three! 3620 The President: Three amendments. (Interjections) Recommendation 1, recommendation 4 and recommendation 5.

A Member: There is one missing here. 3625 Mr Hooper: I am rising to second all of the amendments. (Laughter)

The President: All three!

3630 The Speaker: All three!

Mr Hooper: I do not really have too much to add to this debate. I think the hon. mover covered a lot of the issues very well. I think Minister Harmer did sum up the Government’s position quite extensively as well. 3635 There are a few aspects for me that I think I would appreciate some clarity from the hon. mover or from the Committee. During the moving of the recommendations, the hon. mover asserted that the current Employment Act does not go far enough in terms of providing protections. I am not convinced that that assertion itself is particularly well supported by the Report. What the Report shows to me is that the whole framework is not working. It does not necessarily pin down 3640 any particular legislative aspect within the Employment Act that is not quite fit for purpose. I think for me the key part of the Report actually is not in any of the recommendations, which I found quite surprising. Paragraphs 92 and 93 of the Report talked about equality of arms, and it states quite clearly that:

Legal aid is not available for Employment and Equality Tribunal cases.

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It goes on to say that:

While the law provides a way for a whistle-blower to seek compensation for lost earnings due to detriment, through the Employment and Equality Tribunal, this is self-funded. There is no charge for the tribunal itself but a claimant, who cannot afford legal representation, would be representing themselves. This would usually place them at a disadvantage where the respondent could afford legal representation.

3645 So the Report states that and then leaves it hanging, almost as if to say, ’This is a problem’, but does not go so far as to say ‘We need to solve it, actually.’ So the Report recommends that we replace and review the whole framework around whistleblowing, which I think makes a lot of sense. It does not specifically address that issue of equality of arms. Not in respect of the existing process, an interim process or any future legislative 3650 process. I think everybody would agree that equality of arms is important and has to be essential and underpin any process that comes out of this, especially if we are talking about legislative reform. But the Committee does not really address what that might look like and I think that, for me, this issue stretches much further than just whistleblowing. It stretches to all the other types of Equality and Employment Tribunal cases that we see; this is not just about whistleblowing. I 3655 would very much myself appreciate some information from the new Minister for Justice as to what work is being undertaken in this space to ensure we are improving the situation in respect of equality of arms in front of courts and tribunals. The other area of the Report that did concern me a little bit was, as Mr Harmer has highlighted already, the discussion around this future legislative framework. The Report seemed to discuss 3660 this almost entirely in the context of a Private Member’s Bill that is making its way through the UK parliament right now, something which has not been implemented, is not tried, is not tested. We do not know what it might look like. Now, I am all for importing UK solutions where they work for us on the Isle of Man, but I am sure the Chair of the Committee would agree that what we need are Manx solutions for Manx problems; and where things in the UK maybe are not quite right, we 3665 need to change them to make sure they work for us. It is difficult to do that with something that has not yet been implemented in the UK. I noted that during the Second Reading debate on that Bill, it was stated by the parliamentary under-secretary of state for Business, Energy and Industrial Strategy that from the UK government’s perspective, there were ‘a number of issues’ that they were ‘going to have 3670 difficulties with’ with that Bill, but as was admitted and discussed during that debate, this is a starting point for them for that discussion around how they should reform their whistleblowing frameworks. So for me, absolutely supportive of the amendments, supportive of what the Committee is trying to achieve. But I just wanted to sound a note of caution, really, that basing any decision on 3675 something that even the UK at the moment are acknowledging is the start of a long process of discussion and consultation and engagement, I think that might be quite risky. So maybe it is worth us taking a step back really from what the UK are doing and saying, actually, what might work for us in our context, as opposed to latching on perhaps too tightly to proposals in the UK. With that, Mr President, I am happy to second the three amendments. 3680 The President: Hon. Member, Mr Henderson.

Mr Henderson: Gura mie eu, Eaghtyrane. I rise too also to move a very small amendment, but something which will add value to the 3685 recommendations of the Committee, which I have to say I strongly support – absolutely no problem with that at all, and they have done a sterling job in amassing the information and pulling together the recommendations that they have. One thing that struck me, Eaghtyrane, whilst reading the Report, though, there is not clear guidance of reference in the main body of the text pointing to some sort of formal consultative 3690 process or some sort of formal contact with staff sides and trade unions. They did contribute to ______1274 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

the evidence-gathering process in private, but in the general text we have got no real mention of the very useful operation of the staff sides, which I would see as invaluable to the success of the recommendations of the Report and in special reference to how it works at the coalface or where staff are actually working. 3695 We can organise and approve policies here, Eaghtyrane, as we have done and as I have seen over the years. But it is the operational side of that policy, actually at the coal face, wherever those staff or employees may be working. That is where it matters and that is where the whole thing will either be a success or a failure. I have gone on at some length about that in previous debates, Eaghtyrane, and in special reference to looked-after children in the past, where the Everall Report 3700 from 2000-and-odd pointed out systematic failings within the social care services. It was quite obvious the failings, or a lot of the points that he made, were at the coalface – at the staff, client, patient, looked-after child point of contact – and that is where a lot of the failings were. I worry with regard to this in the same instance. My amendment is quite simple. It just adds on at the end of recommendation 5 ‘and that as 3705 part of the development of a new statutory framework, the Government should consult staff sides’. That is an addition. It does not change the Report in any way. It is not a negative, I believe it is a positive. I do not know if Hon. Members have had my amendment circulated but … Right, that acknowledgement is fine, otherwise I would ask for it to be done now, Eaghtyrane. So you can see it is a small but very important amendment. 3710 One of the main reasons I stand to move the amendment is my involvement with staff sides and previous involvement as a nurse representative for the Transport and General Workers’ Union, and my work with that, with Bernie Moffatt, and the union is now called Unite. Many times I have helped represent staff in very uneasy situations, including what we are discussing here today: bullying, bad practice, serious clinical negligence as well, which was proven, and it is hugely 3715 difficult for somebody to muster up the energy and resolve to actually go somewhere and say, ‘Look, there’s a serious problem here.’ How on earth would a care assistant at Noble’s Hospital, for instance, a healthcare assistant, know what to do in an instance where they know there is bad practice going on? We can say what we like here and that there will be a disclosure champion or whatever we have called it, but how 3720 do they know that? How do they know there is a website that says, blah, blah, blah, blah? Would they even know about it? Now, the point I am making is that the staff sides have many hundreds, thousands of members between them all and they will be able to communicate to their members with the assistance of this policy or procedure, so that staff do know where to go or where to get a little bit of help on to progress their concerns – which, as I say, has happened to me many times 3725 in the past. In fact, some concerns have been dealt with at a more local level through a grievance procedure or otherwise and I have assisted people with a complaints procedure so that issues have been picked up and in fact fairly successfully, in some instances, where behaviours or whatever have been addressed and others have had to be answerable for their actions – it did not need to escalate this far. 3730 My other concern is we freely talk about the Industrial Relations Service, which I have got no problem with – highest admiration – and the industrial tribunal. I do not know if anyone has been to an industrial tribunal here, Eaghtyrane, in our Hon. Court, but it is like a mini-courtroom, basically. You have an independent panel who sit and listen to the case presented for, possibly, unfair dismissal due to pointing out poor practice in an area. Invariably, the employer is 3735 represented by a practising legal professional. The staff side, however, or the person involved, usually, 99% of the time, cannot afford legal representation at £300 or £400 an hour. So that puts them on the immediate back foot. In the cases we have heard about, I would say they are the exceptional cases we have heard. Many times staff will walk away from their job and you will not hear any more, or they will lose the case at industrial tribunal because they have not had sufficient 3740 help and support. Now, I have been to these tribunals, and even for me it is quite daunting, and I have had to face off trained solicitors who are specialists in employment law and ramp up a pseudo- ______1275 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

professional case myself and participate in what is, effectively, cross-examination and all the rest of it. And that is no mean feat. Luckily for me, the occasions that I have done it I had sufficiently 3745 prepared up to win our cases, but by the by, the stress that was caused to my members was unbelievable to the point of almost total … what is the word I am looking for?… freezing. Not even able to enter the room because they did not know what to expect and when they got in there, the legal questioning that was going on was just unbelievable and quite unfair. So back to this, Eaghtyrane. I just wish to draw the Court’s attention to that, because the 3750 system still is tipped in favour of the employer in such instances. But when we look at this in particular, I think it is fair to say that we need the full involvement of the staff sides and that they should be consulted upon and they should be able to assist the process, and in a proper, professional manner, if I can put it like that, so they can then advise their own members accordingly. It is just one more arrow to the quiver, as it were, in making this a success. 3755 As I say, very difficult for staff on the coalface to actually approach anyone, they will not even know who to approach, in all honesty, Eaghtyrane, and I feel it is very important that we have staff side buy-in to this at the coalface as well. Very important also for HR and, indeed, when this is rolled out, that staff are aware that they actually can join a union and they actually will not be sacked for being a member of a union. That is a strongly held myth still out there in the workforce, 3760 not just Government, but generally speaking. The amount of queries I have had over the years about ‘Can I join a union or I’ll be sacked’ is quite unbelievable and staggering. So I think we need to get a consultative straw to this and it will improve the process. So, Eaghtyrane, as I say, it does not do anything other than bolster what we are trying to do here and I hope somebody will be able to second me.

Amendment to recommendation 5 To add at the end of recommendation 5 – ‘; and that as part of the development of a new statutory framework, the Government should consult staff sides’.

3765 The President: Hon. Member, Mrs Barber.

Mr Quine: Thank you, Mr President –

The President: Mrs Barber, please. (Laughter) 3770 Mr Quine: Oh, sorry. (Laughter)

The President: Mrs Barber, please. (Interjection by Mr Quine) Mrs Barber, the floor is yours. I am calling you. 3775 Mrs Barber: I rise to thank the Committee for their Report on whistleblowing and sadly I am not seconding actually, but I was going to talk to your amendment because I am going to put another amendment. I cannot second and move, so ….

3780 The Speaker: You will have to come back and talk to it later.

Mrs Barber: Okay, we are where we are. The financial costs to whistleblowing are great, but to me the human costs are even greater. Ow! Apologies, my knee is not in a good place today. 3785 I personally have only met a few true whistleblowers, but every single one has been a shadow of their former selves, a person who stood up for the greater good, but has been overpowered by the machine that seems to have mobilised against them. There are often elements of grievance, fairness at work and capability all intertwined within them, and there can be confusion over when ______1276 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

whistleblowing is even really whistleblowing. The Committee’s recommendations seek to clarify 3790 the whistleblowing process and ensure that those making a protected disclosure can do so to a person who is recognised within the regulation as affording them the relevant protection. This also ties in with the desperate and pressing need to separate Government operation from regulation. At present, a whistleblower can disclose to a senior staff member in their organisation or, if that is not deemed appropriate or possible by them, they can approach the regulator. But 3795 far too often within Government, the operator is the regulator, leading to an understandable nervousness. This simply is not good enough. They might approach a politician, but this does not qualify as a protected disclosure, despite giving them a feeling that they have raised it to the highest echelons of this Island. The policy simply must be accessible and understandable, as well as making the process 3800 clearer, defining the roles and responsibilities and providing the clarity that it is a whistleblowing disclosure. To this end, it is eminently sensible to have mandatory core and refresher training for all staff. As my colleague from Council … Oh, wait a minute, I am jumping on to the bit about Mr Henderson’s amendment! 3805 I recognise that as an interim measure the Tynwald Auditor General office can be used as a resource for the overseeing of disclosures that pertain to whistleblowing, and I would add a number of caveats to that. We must get the Auditor General in post in an expedient manner. (The Speaker: Hear, hear.) We must ensure governance structures in all relevant Departments, Boards and Offices of Government are sufficient to ensure that protected disclosures are both 3810 recognised as such and referred to the Auditor General function if we go down this route. Finally, the Auditor General simply cannot become a Christmas tree to hang all of the leftover baubles from. (Laughter) Dusty baubles, much valued, much needed, but left in the cupboard for many years. And so I am proposing a small amendment to make clear that the Tynwald Auditor General must be adequately resourced to do this. 3815 If the amendment to the amendment is not successful, I would urge Members to vote the Government amendment down and stick with the substantive recommendation 4 within the Report. I beg to move this amendment standing in my name. Thank you.

Amendment to Mr Harmer’s amendment to recommendation 4 To add at the end of Minister Harmer’s amendment to recommendation 4 the words – ‘and that the Tynwald Auditor General will be adequately resourced to do this.’

The President: Hon. Member, Mr Quine. 3820 Mr Quine: Thank you, Mr President. I rise to second the amendment as put forward by my hon. friend the Member for Douglas East, Mrs Barber. Mr President, I come from an industry where safety is everything, and so what may be referred 3825 to in other circles as ‘whistleblowing’, in aviation is very much seen as doing the right thing, because the safety of us all may ultimately depend on it. This is not something which occurred overnight. Sadly, it required several tragedies, often involving fatalities, until people turned to the elephant in the room and addressed the cultural inadequacy which ultimately led to an incident, what is referred to in aviation as the error chain. That chain has the potential to be created in all 3830 manner of workplaces. In aviation, there is no machine the kind of which my hon. friend the Member for Douglas East, Mrs Barber, just alluded to. Disclosures can be made without fear of repercussion. These shortcomings, as I previously alluded to, had to be addressed. A cultural change was needed and some had to be dragged, kicking and screaming, into a new age of openness. It did not work

______1277 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

3835 entirely, but through natural wastage and a firm disciplinary procedure, this cultural change was achieved. One thing was how we went about reporting. A blame culture was superseded by an out-and- out safety culture, allowing people to do the right thing, sometimes in a discretionary way, but which nevertheless were equally acted upon. So looking from the outside into the Civil Service, it 3840 must be seen that the culture is one of looking to address concerns, not simply doing what many say they were told to do on day one, namely, keeping your head down, keeping your mouth shut and thinking about your pension. Ministers need to grab the bull by the horns over this and I would like to see more speedy movement on the issue than the Hon. Member for Peel and Glenfaba, the Minister for Policy and Reform, earlier alluded to. Ministers in charge of Departments need to 3845 ensure that adequate training needs have to be offered to departmental managers and that as part of any promotion, or remote application, a thorough understanding needs to be part of any ability to perform the said person’s task. On balance, Mr President, I shall support the amendments, however, as I feel the bigger goal is worth such. Ultimately, their approach to their job will only improve. Constructive criticism 3850 should always be welcomed. Mr President, no employee should be seen as a sneak, a troublemaker or a snake in the grass. They should be seen as someone who cares for their workplace and their colleagues, who stands up and does the right thing with the full support and backing of those with whom they work, even the support of those who may be being reported. As I said, a new culture needs to be adopted and championed by all concerned. Only then can this 3855 issue and the open support of it be seen as being addressed. Thank you, Mr President.

Two Members: Hear, hear.

3860 The President: Hon. Member, Mrs Sharpe.

Mrs Sharpe: Thank you, Mr President. As a member of the Whistleblowing Committee, I had never seen anyone who was literally grey with worry until I saw the people who came before us to give evidence. I had read the phrase 3865 in novels, but I had never actually looked into the face of someone who has turned grey with ongoing stress, anxiety and depression.

The Speaker: Look around you! (Laughter)

3870 Mrs Sharpe: These were people, some of them who had worked for Government for decades in their chosen professions, who were too scared to come through the front door on Finch Road and who had to be sneaked in the back way, because they were scared someone would see them and guess they were giving evidence to the Whistleblowing Committee. As one of our interviewees stated, ‘My experience of whistleblowing is that the messenger gets shot. ‘ 3875 We asked all our interviewees, ‘Knowing what you know now, would you have embarked on the whistleblowing process?’ Mr President, not one of them said yes. It is not whistleblowing per se which has ruined their lives, it is the whistleblowing policy itself, which is complicated, misunderstood and misused. It is the process which is played out in a culture which regards whistleblowing as nothing more than a great big headache. And crucially, it is the fact that no one 3880 person has oversight of this process to make sure that the concern really is a whistleblowing case, that the whistleblower is treated properly, that the original problem has been dealt with and learnt from, and that all cases have been logged. How can you run any organisation effectively if you do not listen to the people on the ground; if you do not deal with their concerns; if you do not fix the problems? How can you ever improve 3885 services if you do not know, on a day-to-day basis, how many whistleblowing concerns have been reported and why? This has been very well articulated by the Hon. Member for Douglas South, ______1278 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

Mr Quine, who has seen close up in the airline industry the value of whistleblowing when it becomes an everyday occurrence. That is why the Committee has recommended a Concerns at Work Service, but accepts that, in the short term, as the Council of Ministers has suggested, the 3890 Tynwald Auditor General could fulfil this oversight role. It should not be costly. According to Manx Industrial Relations, there are approximately 10 cases which come before them in a year and not every case would need extra resource. Perhaps from time to time the Tynwald Auditor General might need to pay a professional in a certain area to carry out an inspection or to give advice, but it should not break the bank. We see 3895 this process in Northern Ireland, where the Audit Office carries out this role and it works very well. The Westminster All-Party Parliamentary Group for Whistleblowing and the UK Whistleblowing Bill concluded that independent advice is ultimately the way forward for the UK; and, as stated, the Council of Ministers are happy that independent oversight by the Auditor General be put in place. However, what they are not prepared to set out in black and white is that the Tynwald 3900 Auditor General should be given the resources needed to carry out this role. I do sympathise with the Council of Ministers here. Finances are tight; we understand that. But I do believe that in this case, making sure the Tynwald Auditor General has the resources needed to carry out this role will not just provide much-needed oversight, it will save money further down the line. There has been a whistleblowing tribunal case in the Isle of Man press recently, of a 3905 Government employee versus one of the Departments. So far, this case has cost the taxpayer over £600,000; and that is just one case. That does not include the cost to Government of a whistleblower who is on long-term sick leave, the cost of their medication, whistleblowers who can no longer pay the mortgage who end up homeless, on benefits, and the knock-on effects and costs on their partners and their children. 3910 So I would urge Hon. Members to support Mrs Barber’s amendment here to make sure we can provide a service which is going to support whistleblowers, identify public concerns, make sure they are fixed, ultimately save money, and make sure no Committee in the future is going to have to sit and listen to the painful, drawn-out stories of these people who just wanted to do the right thing. 3915 Before I finish, Mr President, I would like to thank my fellow colleagues on the Committee: the Hon. Member for Onchan, the Chair, Ms Edge; the Hon. Member of Council, Mrs Poole-Wilson; and our Clerk, Mrs Jo Corkish – who have each brought their valuable skills and experience to bear on this Report. Thank you, Mr President. 3920 The President: Hon. Member, Mrs Lord-Brennan.

Mrs Lord-Brennan: Thank you, Mr President. It strikes me that the serious issues exposed by the Committee’s work shows us that some of 3925 the things that are going on are just fundamentally at odds with the seven principles of public life, and those are the principles – hopefully they are the principles – that people buy into and believe in when they join the Public Service in the first place. The comments from the Hon. Member for Douglas South, Mr Quine, also made me think of something else though. I mean, really, what about greater accountability for the Public Service 3930 and, actually, what is the role of the Public Services Commission in this? It is the remit of that Commission to look at performance management, corporate governance, values and standards, and I just wonder whether there are issues that are perhaps not being dealt with to do with that greater accountability in the Public Service at higher and indeed lower levels. I agree with the hon. mover that we cannot have good governance, or indeed good 3935 Government, without such improvements as identified by the Committee, and the examples in the Report and the evidence, and doubtless elsewhere but not heard, are just simply the system protecting itself. That, and the associated stress and expense, is what the Committee is aiming to combat and I thank them for that and their thorough and important work on this. I also ______1279 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

acknowledge that the Council of Ministers have also responded to that in their amendments. In 3940 my view, Hon. Members, this Report is for the people who dared to speak out, but also for the people who couldn’t. Thank you, Mr President.

Mr Callister: Hear, hear. 3945 The President: Hon. Member, Mr Thomas.

Mr Thomas: Thank you, Mr President. Just for Hansard, I think it is worth putting down what I have just been discussing with the 3950 Clerk, which is that the amendments that Minister Harmer moved are slightly different from those in the Government response document. So they have already been negotiated, but it is very important that we get the right amendments out on the table, to make sure we do not mix things up later on. I wanted to thank Ms Edge for the original motion and for the Committee’s excellent Report. 3955 I wanted to join with the people who have already thanked those who have done the right thing in their organisations and also in talking to the Committee. It was very brave, but also very valuable from a public interest perspective, and that is what all this is about. I also wanted to invite Mrs Poole-Wilson to actually explain some of the things just asked for by Mrs Lord-Brennan, because I know the Public Services Commission has done a great deal in 3960 terms of putting together a taxonomy, at least of what is going on around the Public Service, and extended the way that this issue, this challenge even is responded to, even managed a bit better. I think we also ought to put on record that it is actually difficult on the other side. I know whistleblowers will hate me for even saying this, but the whole process that the Public Services Commission has had to deal with around all of this has been very traumatic for so many people. It 3965 is not pleasant, but the public interest is incredibly important and I think we should thank everybody involved in trying to make this process better. In terms of the Government amendments, I absolutely welcome the fifth one, number 5. It seems to me that is a small delay brought up, but it is a very worthwhile one. But I have got queries myself about the amendments from Government for recommendation 1 and recommendation 4. 3970 I was hoping that my queries or my concerns can be dealt with by commitments from Government in respect of recommendations 1 and 4. In terms of the first one, which is putting in the Department for Enterprise as being the people who will launch the consultation regarding this, I just have two requests. The first one is that there can be a clear commitment that this consultation will be launched soon, because I know the 3975 Department for Enterprise has got a lot on. I know it has had to announce that it is going to delay looking again at other parts of employment law until after the election. I would hate it if accidentally this got caught up in that, because I would think it is disrespectful in a way to the Committee and to the people who have given evidence not to launch this consultation sooner rather than later. So I hope that there can be a clear commitment. 3980 I know the Department for Enterprise, like myself, has always worried about a perception of conflict of interest between the Department for Enterprise that represents the enterprises, the employer, and also tries to represent the employed, the employees. So I think a way to deal with that would be for all of the consultation responses when received to be published with permission as we are going on, because that way it will encourage the learning from this overall process. That 3985 is the way that the consultation can easily be structured. It also saves time for consultees/respondents because they can refer to previous submissions and I think that would be quite helpful. I am also a bit concerned about the amendment by Government to recommendation 4. Already the risk of the budget has been dealt with, with Mrs Barber’s amendment. I am open-minded 3990 about the amendment really, because it is a bit … I mean, what exactly does ‘adequately ______1280 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

resourced’ to do this mean? Does it mean Tynwald has got to find budget from elsewhere inside its budget, or does it mean that the Budget we have just approved this morning gets extended by an additional amount? It is ambiguous about what it means. But the point I really wanted to ask is, I think I know the answer to this, but it would be helpful 3995 if somebody can put it on the record for me, which is why have we chosen the Tynwald Auditor General, rather than the Tynwald Commissioner for Administration, for instance? I think there are differences in the law to do with the ability to do investigations and to hire outside people and so on. Is that the reason? The skill set might seem closer to the Tynwald Commissioner for Administration rather than Tynwald Auditor General. 4000 I know that eventually they will all be in a super-duper body of independent agents operating together, but I would quite like to understand why it is that the Auditor General has been chosen for this; because there is a risk with the Auditor General. The Tynwald Commissioner for Administration has been through its teething difficulties over the last three years. The Tynwald Auditor General has got a budget now, but it is still subject to appointment and it is still subject to 4005 launch and all of that. So I would hate to lose something from this really valuable work by creating that extra risk. Finally, in this context, it was drilled home to me over and over again, particularly by Mr Speaker, and I have got to put that on credit, that we need to make sure that we do not pollute the Tynwald Commissioner for Administration process with all these Ministers hanging around in 4010 the Tynwald Office. And there are those risks also with this whistleblowing process. We have to think where the office for this is going to be, how the budget is kept pure and I know those issues were very important for you, Mr Speaker, and we need to make sure that we address that, because when we get to whistleblowing/public interest disclosure, it is even more pronounced than just doing a complaint about a public service. 4015 In closing, I just wanted to make three very brief points, two of them building on what other people have said. The first one is I fully support Mr Henderson’s aspiration to engage staff side people, as he calls them.

The President: Now, Mr Henderson’s amendment has not as yet been seconded. 4020 Mr Thomas: Okay. Well, the last I heard it had been seconded, but I would be delighted to second Mr Henderson’s amendment.

The President: You are seconding? Thank you very much. 4025 Mr Thomas: Delighted to second Mr Henderson’s amendment, to support it. I might have even used a stronger word, because the word in the amendment that I am seconding is ‘consult’ and I would like to think that they would be more fully engaged in the whole process, rather than just consulted. 4030 I would also like to think that one of the really valuable things that can come out of today’s focus on public interest disclosure, is actually putting public interest disclosure into the realm of things that probably go below it in the hierarchy of things, or alongside it, or perhaps in some people’s view above it. What I mean is there is fairness at work, and that as an issue – bullying. There is grievance and disciplinary; that is the second thing. And then, thirdly, there is public 4035 interest disclosure and whistleblowing. I think it is really vital that employers work with employees, and trade unions are part of this as staff side, to actually develop understanding, because so many people who whistle-blow have not actually whistle-blown and so many employers get confused about these sorts of things. I am sure there has even been the odd trade unionist who has gone into a meeting slightly confused. I do think this should be a very valuable 4040 learning experience for us all. The second point is to build on Mr Hooper’s idea, and I think it came up elsewhere, in terms of equality of arms. Mr Hooper tried to pass that back to the Minister for Justice, but I am aware of ______1281 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

a tribunals review that is going on between Cabinet Office and Registry already. There is a memorandum of understanding, and that was started as a fallout from the Committees process. 4045 It was launched about five years ago by the Appointments Commission who had some proposals for the way that tribunals recruited, the way that they tried to use general factors between the tribunals, given that some of them do not really meet very often. They had all sorts of great ideas, and I would hate it for there to be a second review when one has already been going on for a long time. Costs are really important. Representation is really important. Proper use of conciliation and 4050 all of that is really important. But I would hate there to be a duplicating, second review of tribunals, given how long it has taken to conclude the first one, which the Appointments Commission stimulated me to agree to four or five years ago. Then, finally, the third point is I do not think we can see this whole issue of public interest disclosure completely separated from the way that Government treats scientists and 4055 environmental health officers and people in the Path Lab, and the respect for the power of science and intellectual argument, and just presenting evidence. I have had the privilege of meeting quite a few public interest disclosure people, and quite often it started from a passionately held belief that something in science was being denied by an evil civil servant and so on, and so on; and so therefore we do need to see this whole process in terms of the separation out of those sorts of 4060 functions and also the respect to those sorts of functions. The coronavirus episode has taught us that sometimes the science needs to be overruled by the political, social, economic interest, but it is a clear process of overruling it. I have seen so many episodes where people, very clever people, ended up thinking that science was being overruled by bureaucrats, and there is nothing more angry-making to a scientist than the process of a 4065 bureaucrat overruling a scientist, and so on. So when I see things like, ‘There’s no chance of publishing any advice from the Government scientist, Environmental Health or waste management officers in the context of an answer’, I can see to myself … that was a sort of test I put out there to see whether any of these sorts of things could be true. To me, we need to publish this sort of advice, even if it has been overruled later on, 4070 whether it be problematic waste or whether it be at the Path Lab or whether it be anywhere else in the Public Service. Thank you, Mr President.

The President: The Hon. Member, Mr Cregeen. 4075 The Minister for Justice and Home Affairs (Mr Cregeen): Thank you, Mr President. Just following on from friend and colleague Mr Hooper from Ramsey on the tribunals. I think this is one of the areas that should actually come under the Legal Aid Review regarding equality of arms, and it is one of those things that he had mentioned before and I had given an undertaking 4080 to have a look at it. Mr President, there was a comment early on from the mover of this that they had had to serve a precept on Departments because they had not forwarded the information. I know from my time on scrutiny committees that sometimes Departments required that to indemnify them about the information that they were releasing. I do not know whether the Clerk would be kind enough to 4085 clarify that point, because there was an inference that Departments were not willing to deal with it.

The President: I invite the Clerk to address the Court.

4090 The Clerk: Well, what Mr Cregeen has said is indeed true, that in my experience about half the precepts I have drafted have been on request of a witness in order to show that they are doing whatever you are asking them to do because they are told to, rather than because they want to. So on KSF, for example, the auditors who took over KSF asked for a precept. So that is quite familiar territory. I am not going to impute motives of the people having to have a precept or not, but it ______1282 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

4095 can be either way. It could because they are refusing or it could be because they just want to make the legal position very clear.

The President: Thank you. Mr Cregeen. 4100 Mr Cregeen: Thank you, Mr President. I just wanted that clarity out there that it is not always that the Departments were unwilling to do that. I think it may have come across that some of the Departments, I do not know which ones they were that the Hon. Member was referring to, but some of the cases there is not always a 4105 case of they were not willing. Thank you, Mr President.

The President: Hon. Member, Mr Cannan.

4110 The Minister for the Treasury (Mr Cannan): Thank you, Mr President. I am just rising to my feet in response to the amended motion from Mrs Barber. I would urge the Court not to get too distracted. I think at the end of the day the Minister for Policy and Reform has moved an amendment, which really most of the Court appear to be moving towards supporting it. It is just this element that Tynwald Auditor General will be adequately resourced to 4115 do this. Well, the poor lady or gentleman is not even in their role yet, and I think it is probably, this one line, is not a wise move for Tynwald at this precise moment. I think my understanding is that there are a small handful of these cases to look at on an annual basis, and one assumes that an Auditor General will have to come back to this Court and report on how they are getting on as per the requirement here for an annual report, and as would be expected anyway. 4120 So I would urge the Court just to stick with the original amendment from the Minister for Policy and Reform and not get into a position where we may be looking to resource something that is not actually, at the moment, needed for further resource.

The President: Hon. Member, Mr Robertshaw. 4125 Mr Robertshaw: Thank you, Mr President. I congratulate the Committee on their considerable and extended work. But I rise to my feet, Mr President, because I am troubled by recommendation 4, the amendment proposed by Mr Harmer, and then as a consequence of that by Mrs Barber’s 4130 subsequent amendment. Maybe it is me and perhaps somebody can help me understand better this recommendation. Recommendation 4 itself talks about establishing:

an independent Isle of Man Government Concerns at Work service … to oversee the management of all public concerns …

I think I need to understand what the definition of ‘all public concerns raised’ is, because I just do not know. I know what a whistleblower is, but I do not know what ‘all public concerns raised’ are. 4135 So I am troubled by that, and then you look at the amendment in the name of Mr Harmer, the Minister for Policy and Reform, and the wording changes. It then changes to ‘any concerns raised have been addressed; to review …’ – it is all very loose and this is a big step we are taking here. Let’s just go through this. There are stages and processes that should happen and that because they have not been happening, because there is not an end game that everybody knows is there, 4140 there has maybe been failures in the line management that should have taken place and did not, but need to, and then there is the process that OHR should have done their job! And maybe they did not. I get the feeling here that that is, ‘Okay, we can’t do that, let’s go for this’, and as it stands

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it could be a very expensive process with a very broad remit attached to somebody, in Mr Harmer’s amendment, that has not actually, as the Treasury Minister has said, come into being 4145 yet. And then we are saying in Mrs Barber’s amendment, ‘Well, let’s fund it properly, whatever it is that we are creating’! Whoa! In my speech this morning, I stood up and I said Government is getting too big, and here we are, flopping around, full of good intention, but lack of clarity. Unless I am convinced otherwise, I am voting against recommendation 4, and the amendments of course by definition. Much more 4150 clarity is needed here. Line management’s duty has to be defined before it goes to OHR; OHR’s job is going to be defined before it goes to a service here – as it stands, I cannot see that that is the case. Also, as far as funding is concerned, this appears to be taking away a list of duties that OHR should be doing anyway but are not. So the way to fund it is to reduce the size of OHR and pass that funding across to whatever service you decide to go for, which is either the Concerns at 4155 Work service or something in the Auditor General’s office. But it is too sloppy for me to support anything at the moment, unless I have misunderstood all this and unless I am going to be guided to greater knowledge. Thank you, Mr President.

4160 The President: Mr Speaker.

The Speaker: Thank you, Mr President. Just to say so far I am supportive of all the amendments. And, just to gently push back on the Treasury Minister’s stance on Mrs Barber’s amendment, if the numbers are low, and the numbers 4165 that are indicated thus far by the Committee in terms of their evidence do appear to suggest that these numbers will be manageable, and that no additional budget should be required on day one for the Auditor General. However, I do see Mrs Barber’s amendment as an important safeguard if demand increases: that Tynwald has said that this is a service that is important. Whilst I do not see that there is an immediate need for this, there should be that safeguard; 4170 and we have seen this mission creep to a certain extent with the Tynwald Commissioner for Administration, as that role expanded to take on local authorities. Now, that was perfectly reasonably handled between the Cabinet Office, the Treasury and the Tynwald Commissioner themselves, which was to everyone’s credit, and that has been managed carefully, and that has been managed well so that everyone knows what they are getting into. 4175 But I think that this is an important stopgap to make sure that this person, when they take office on day one, is not having their core functions dissipated by an increase in demand in one area when we have actually set them a legislative task over here to do something else. So that is the only point I wanted to make, Mr President. So that is why I will be supporting Mrs Barber’s amendment. 4180 The President: Hon. Member of Council, Mrs Poole-Wilson.

Mrs Poole-Wilson: Thank you, Mr President, and thank you to all the contributors thus far to what I think has been a very interesting and helpful debate. 4185 The mover in her opening remarks obviously highlighted eloquently why this matters and why the implementation of our recommendations is so very important. The Committee absolutely welcomes Government’s support for the Report and also supports all of the amendments tabled so far. I will now try and pick up on some of the other points that have been raised, because I think there have been some interesting questions, and particularly to try and provide some clarity 4190 where it has been requested. Hon. Members, our Report should leave no one in doubt how important it is to ensure the Public Service develops and maintains an open culture, where the ability to ask questions, constructively challenge and raise concerns is supported and welcomed. Why? Because it is how we become aware of problems and risks that need attention, and the Hon. Member for Douglas ______1284 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

4195 South, Mr Quine, in his excellent contribution this evening has made clear just how significant that is in different industry sectors. It is also, Hon. Members, how we empower and encourage public servants to seek to improve how we do things, and in doing so develop an ethos of constructive improvement, rather than blame. In the context of whistleblowing, without a positive, open culture, the detrimental impact 4200 is considerable and you have heard from fellow Members of the Committee the impact we have had just by listening to those who frankly were fearful, some of them, to even come and give evidence in private. This is at the human level. It does bear repeating the stress, strain, poor treatment, ill-health, risk of losing your job, financial impact: these are life changing and highly damaging for the people 4205 involved. At a corporate level, there is clear and sometimes major risk in not properly and promptly addressing concerns that people raise, and there is the huge cost of litigation, not just the legal fees which have been referenced already this evening in one case, but the hundreds of hours of officer time for all involved. The knock-on impact on overall morale and the distraction from high performance of delivery of actions across Government that we know are important to 4210 progress. We have talked today about slimmer, leaner, more efficient Government. Hon. Members, individuals who are charged with delivering serious reform will not do that effectively if their performance and their morale is undermined by the culture in which they work. (A Member: Hear, hear.) The cost of not doing this well is immense, and while there is welcome support today in this 4215 Hon. Court for change, we must ensure there is strong leadership on this and that support is provided to officers charged with the delivery of this much-needed change. The importance of addressing this should not also be seen in terms of the volume of cases. As we know, the number of true public interest whistleblowing cases are not vast, thankfully, from year to year. But it is about recognising the impact of each case and making sure we promote in 4220 all areas of the Public Service and more widely a positive, open culture, where individuals who have a public interest concern are able to raise it and have it taken seriously without fear of reprisals or other detriment. Turning to some of the points that have been raised on the particular recommendations, I will start with recommendation 1, which is the Committee’s recommendation that we do make 4225 changes now to our underlying legislation to introduce a public interest test and to introduce vicarious liability. It was clear – and it has been alluded to by contributors today – to the Committee, that there is a lack of understanding about what whistleblowing is and how the background law and internal process operates in practice. The background law is not the most straightforward for people to navigate, which is one of the 4230 reasons why we have advocated for a wider review which is picked up in recommendation 5. However, we did feel there are a couple of aspects that merited remedying more quickly and hence our recommendation 1. Taking the public interest test first, it is important we are clear about the difference between whistleblowing concerns and other concerns. A change was made to the equivalent UK legislation 4235 in 2013 to make clear that to come within the whistleblowing protection, the concern should involve an element of public interest. This will help everyone – staff, managers, everyone involved – keep clear the difference between concerns staff may have which are about their personal situation at work, and so should be raised either as a grievance, or where concern is about bullying and harassment, under the Government’s Fairness at Work policy, and other 4240 concerns that do have a public interest element and therefore should be brought under the Whistleblowing Policy. From the evidence we heard, we are clear that individuals have experienced treatment that is unacceptable and would give rise to a grievance or fairness at work complaint consequent on raising a public interest issue. This is the type of detriment that the background law seeks to 4245 prevent by giving employees a right to bring a claim if they experience it when they raise whistleblowing concerns. As a Committee, we do not want to see any worker who is raising a ______1285 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

concern then experience detrimental treatment by managers or co-workers. Better first and foremost to have a positive culture than one where such treatment is experienced by even one person, with their only recourse to find the money and personal strength to sue. 4250 Our recommendation to include vicarious liability is one of the ways the Committee seeks to promote a more positive culture. Vicarious liability simply means the employer will be held responsible for the actions of its workers should they treat a member of staff detrimentally. The employer, though, has a defence, which is to show that it took all reasonably practicable steps to prevent such detrimental treatment, thus there is an incentive for employers to train staff and for 4255 leaders and managers to role-model suitable behaviour, and take responsibility for addressing poor behaviour from those they supervise. (A Member: Hear, hear.) We had anticipated that any legislative changes like this would involve consultation, and so we are able to support the Government’s amendment. The Hon. Member for Douglas Central, Mr Thomas helpfully pointed out and asked that the consultation on these changes happen soon, 4260 and the Committee would concur. We would like to see these changes progressed ahead of the wider statutory framework review covered by recommendation 5. I would also like to concur with the Hon. Member for Douglas Central’s issue about perception: perception for conflict when the Department for Enterprise is driving forward legislative change in the employment area. I think given we want the first recommendation looked at speedily, we 4265 accept that the right place is for the Department for Enterprise to take that forward. We are pleased though that the broader statutory review in recommendation 5 will be undertaken jointly by Cabinet Office and the Department for Enterprise. Turning to recommendations 2 and 3, which are agreed without amendment, the policy rewrite, as others have alluded to, is vital. Annex 6 to our Report provides the Committee’s 4270 commentary and we urge that the chance is now taken to take on board the Committee’s feedback and produce a policy which is clear and straightforward, with practical examples and clear flow charts and timelines. In revisiting the policy, however, there is also opportunity to consider best practice from elsewhere and matters suggested to us in evidence, as well as some of the contributions made by 4275 Hon. Members today. One of these is how best to support those involved when whistleblowing issues are raised, both the employee raising the concern and any individual who may be under investigation as a consequence of that. We heard from witnesses who felt that they had received good support from Staff Welfare and many commented positively on the advice provided by the Manx Industrial Relations Service. 4280 Evidence regarding OHR’s role was not on a par, with many regarding OHR as taking the employer’s side. Thus it seems how OHR operates in this policy area and, by extension, how the structure and delivery of OHR services can support an open and transparent culture, merits further consideration. I think the Hon. Member for Douglas East, Mr Robertshaw was right to flag that this, looking at how OHR delivers its services, is a fundamental part of delivering the overall 4285 cultural change we are seeking. There are also practical matters that need to be looked at that may help with the question of recognition and tracking of protected disclosures. So, for example, we quote in our report the Employment and Equality Tribunal in the case of Manx Utilities and Jones. They offered advice that all protected disclosures should always be in writing. The Committee has suggested that 4290 perhaps a way of achieving this, without limiting the ways in which people can raise their concerns in practice, might be for a policy to involve the person receiving the report to write that down, so at least there is an audit trail. Audit and risk committees, where they exist for public and other bodies, can play an active part in looking at what works for them. This is not necessarily an area where there is a one-size-fits-all, which is why the Committee 4295 has not made a specific recommendation on it. But ultimately training – and this is why recommendation 3 is so important – is vital to really help people, staff, managers, supervisors, people at all levels really understand what might be a public interest concern and then the practicalities of how to address it. We must deliver excellent training in this space. ______1286 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

The issue of anonymity and confidential reporting is also one that arose. The Committee 4300 recognises the challenges that can arise with this. They were highlighted to us by several witnesses. Further, the Committee believes that if the appropriate open culture is created, as Mr Quine, the Hon. Member for Douglas South alluded to, individuals would perhaps not fear raising concerns. Nonetheless, given that we are not there currently, this is an area that does merit consideration as part of the overarching policy approach, and we did hear evidence that OHR has 4305 undertaken some preliminary steps to look at a central portal for concerns. Hon. Members, central capture of all public interest concerns is vital, as a risk management tool for Government and also, to tie in with recommendation 4, to allow that oversight function of how Government overall is tackling these concerns. Perhaps if I could pick up on the Hon. Member for Douglas East, Mr Robertshaw’s question in this space, recommendation 4, the 4310 Committee’s main concern was because we felt there was no independence and there was no overarching oversight of what was going on with public interest disclosure matters. That is why we did not advocate that OHR alone supervise this, because we recognise there is a perception, as things stand, that OHR supports the employer side, and we do need to do work in that space. The Committee’s idea was a separate Concerns at Work function to provide that oversight that 4315 what was being flagged as a public interest concern was being followed up and properly addressed, and that people were dealing with genuine concerns properly and positively. We do support the Government’s proposed amendment, because we can see that as an interim measure – particularly as the consultation on appointment of an Auditor General is now under way and a budget has been approved – that office is a way of starting to provide that oversight 4320 more quickly than might be involved if we do have to set up a separate public Concerns at Work body.

Mr Robertshaw: Would the Hon. Member give way for a moment, please?

4325 Mrs Poole-Wilson: Yes.

Mr Robertshaw: Because my question revolves around Government’s amendment that refers to ‘any concerns raised’. Are we allowed to interpret that as being specifically public concerns as defined, and will that be properly articulated? 4330 Mrs Poole-Wilson: Can I suggest that, yes, because the rest of the amendment talks clearly about public interest concerns at the end. So the Committee’s view is that we are interested in the public interest concerns, not every concern under the sun –

4335 Mr Robertshaw: But that is what it says.

Mrs Poole-Wilson: I would read that interpreting the last line, it picks up that public concern interests have been addressed. That is the scope of the monitoring function. What I would say in answer to the Hon. Member, my hon. colleague from Council, 4340 Mrs Lord-Brennan, who asked about the Public Services Commission, and the Hon. Member for Douglas Central Mr Thomas alluded to this, that there is a real, really important role for the Commission in looking more widely. Looking more widely at how well Government is doing with grievances, Fairness at Work cases, disciplinary, capability; things that are not strictly whistleblowing, but which absolutely matter. I do not think I am telling tales out of school to say 4345 that the Public Services Commission is actively engaged in looking at how it can operate much more as a scrutiny body to capture data and monitor the position across Government, to constructively challenge chief officers, OHR, in how we address these things. So I think there is a very important role for the Public Services Commission, and it is in that wider sphere of ‘other’ concerns and how staff are managed and treated. I would make that clear 4350 distinction. (Mr Robertshaw: Thank you.) ______1287 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

The Committee does agree that Mrs Barber’s amendment should be supported, and I think Mr Speaker has eloquently described why. This may not be a vast number of cases every year – we do not think it is – but I also think Mrs Barber was absolutely right. The remit and the budget has been set for the Auditor General on the assumption that we will see a return on the value for 4355 money work. If we start to hang, as Mrs Barber put it, every dusty bauble on the Christmas tree, on this role, we are going to set it up to fail. If we recognise it can provide an additional service and we do not think it is going to be vast, but we want to make sure that it does not detract from the value for money work that we absolutely want the Auditor General to deliver, we must agree that any additional resourcing be provided. So the Committee does support Mrs Barber’s 4360 amendment. Finally, recommendation 5 is forward thinking to address some of the challenges we recognise in our Report that require further exploration and consultation beyond our immediate remit. Again, we can support the Government’s amendment. I would just like to pick up on the Hon. Member for Ramsey, Mr Hooper’s questions around 4365 the equality of arms issue and also the approach the UK are taking through a Private Member’s Bill, or may take. The Committee was very alive to the fact that this is not a problem unique to the Isle of Man. It is a challenge that many jurisdictions wrestle with. In the UK that Private Member’s Bill is looking for a completely different approach. It is looking to step away from the situation where the individual who is trying to do the right thing but then suffers, is left with no option 4370 other than to try and bring legal proceedings. It is trying to move to a situation where an independent body takes on looking at how the organisation responds. Now, the Committee was alive to the fact that this is untested ground and that there are many employers in the Isle of Man, and potential future employers, who might not be willing to see that radical change in approach happen as a testing ground here; but who also, because they are 4375 employers in other jurisdictions, many in the UK, might come to the point where they are already adapting to that type of framework and therefore a framework that works for the Isle of Man, adapted appropriately, might be more palatable. So that was part of the Committee’s thinking in not immediately trying to bring forward anything that moved the entirety of the approach to whistleblowing as radically far as the present Private Member’s Bill. 4380 If in due course, when we look at the statutory framework here through the consultation, the view is that we are going to retain the current mechanism – i.e. the protection is around the worker and their safety net is only to sue their employer – then I would agree with the Hon. Member for Ramsey, Mr Hooper. There is an inequality of arms; there is a problem with costs awards at the tribunal level; there is a problem in the inability to award aggravated damages 4385 where it is clearly demonstrated that the employer has behaved poorly, vexatiously. These things will need to be addressed, but my comment at this stage is recommendation 5, with the wide- ranging review in due course, is the place ultimately to come up with our future robust statutory framework, addressing matters of funding and appropriate awards of damages where employers are found to have behaved badly and employees have deeply suffered. 4390 In the meanwhile, it is telling that witnesses who spoke to us invariably said they would never whistle-blow again. Hon. Members, we need to create an environment where public interest concerns can be raised without fear and such devastating personal impact as we have heard. The consultation will be important going forward, so we take steps to create and maintain a robust framework that delivers desired behaviour and responses from workers, from human resources, 4395 from managers, supervisors and leaders, both within and without the Public Service. Thank you, Mr President.

Two Members: Hear, hear.

4400 The President: Mr Harmer, to speak on Mrs Barber’s (Mr Harmer: And – ) amendment, and Mr Henderson’s amendment if you wish.

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Mr Harmer: Thank you, Mr President; absolutely. Just to speak on both of those amendments and really just to frame both of those amendments, because they get to the heart of actually the Government’s response, which 4405 absolutely supports the work, and I would like to reassure the Member from Douglas East that we take this absolutely seriously and that we want to get this moving as quickly as possible, which is why we have suggested the Auditor General. In terms of resourcing and being able to manage with the peaks and troughs, that as an interim measure is by far the best approach, and in terms of making sure it is adequately resourced. That is, in our opinion, absolutely the right thing to do. 4410 I know there are some concerns being raised, but really just to say that I am supportive of both amendments. In terms of consultation, it is the theme that we have talked about before. We have talked about industrial relations, but we also talked I know in terms of consultation and some concerns that the Hon. Member for Douglas Central talked about, consultation with DfE. Absolutely that will be part of that within recommendation 1. 4415 So really on that theme of saying, from a Government point of view, that actually to thank the Committee for the work that they have done really. The amendments are very much in the spirit of getting this going and getting this moving. So thank you, Mr President.

4420 The President: Mrs Lord-Brennan, to speak to Mr Henderson’s amendment.

Mrs Lord-Brennan: To Mr Harmer’s amendment. No? Mr Henderson’s amendment.

The President: No, I am sorry. That was moved and seconded before you spoke originally. 4425 Mrs Lord-Brennan: Oh, yes, Mr Henderson’s amendment. Yes, I would like to speak to Mr Henderson’s amendment. (Laughter)

The President: Mr Henderson’s amendment. 4430 Mrs Lord-Brennan: Thank you. Okay. Mr Henderson’s amendment was adding an extra bit to amendment … (A Member: Five.) 5! Perfect. Okay. So that is good, because when we are looking at these things, we need to think about how they are fitting together. So I am trying to think of the overall picture that the amendments, as they have come, including Mr Henderson’s 4435 amendment, are fitting together. There is something that I have noticed that I am thinking, maybe this is the issue. So first of all, the Committee’s original recommendation 4 was then amended by Mr Harmer, and these fit together I assure you, Mr President – recommendation 4 and recommendation 5. So Minister Harmer was saying do not have the independent Isle of Man Government Concerns at 4440 Work solution. Instead, have an interim solution, which is the Auditor General, in the idea that that will be an interim measure. But actually that is not available to us now. But my point is not that exactly. Recommendation 5, which was also amended and added to by Mr Henderson, has at (d), in still the amended version:

(d) the possible creation of an Isle of Man Concerns at Work service to provide oversight for the whole Island

So on the one hand, we are saying recommendation 4 interim solution Auditor General, and then 4445 at recommendation 5 we are still saying possible creation. Then I think on the point that Mr Robertshaw has raised about recommendation 4, I think there is a word missing. I think probably, either in the Committee’s Report, and also probably the amendment, it says the ‘management of all public concerns’. It probably should say ‘all public interest concerns’. So I reckon that that missing word is the missing link.

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4450 Notwithstanding that, I would say there seems to be uncertainty around who should be doing this oversight function in that we are looking for new solutions. Recommendation 5, as it stands as amended, would provide for that gateway to the additional possible creation of Isle of Man Concerns at Work and then the PSC could maybe have a sub-committee to look at particular matters of whistleblowing. So it just feels unclear. 4455 Thank you, Mr President.

The President: Well, I congratulate you on your ingenuity. (Laughter)

Mrs Lord-Brennan: That’s all right! 4460 The President: Mr Henderson was purely talking about consulting staff sides and your contribution made no reference to that. However, well done, (Laughter) you got away with it. Now, I call on the mover to reply. Ms Edge.

4465 Ms Edge: Thank you, Mr President. (Interjections)

The President: Point of order, sorry. What is your point of order?

Mrs Barber: I thought I had my hand up, sorry – 4470 The Deputy Clerk: It is not a point of order, sorry.

Mrs Barber: I thought I had raised my hand to talk to Mr Hendersonʼs amendment, but I might have been missed by you. I thought you had acknowledged me. My mistake, maybe. 4475 The President: Well, I did not see you, but if you wish to speak to Mr Henderson’s amendment I will allow that. My apologies, Ms Edge, the debate has not yet concluded and Mrs Christian also wishes to speak. My apologies. Mrs Barber. 4480 Mrs Barber: Apologies, Mr President, I thought you nodded at me, but it must have been someone behind me.

Mr Robertshaw: I want to speak as well, yes. 4485 Mrs Barber: I just wanted to talk to Mr Hendersonʼs amendment. I had obviously planned to talk earlier and then it did not get seconded. It was all a little bit chaotic. And then I lost a page of my speech and I did not know what I was doing really! But panic ye not, I am back in the room. I wanted to say that actually, for me, Mr Henderson’s amendment is a very pragmatic piece 4490 and actually is really important. I want to talk from a position of having been both a union representative, but also have been a member of staff in a unionised service. So actually, I think that there is a really important piece around the role that the union can and must play. Often staff actually though cannot access union support, because they are not union members. I think by including the staff side fully in the consultation process and in that broader framework 4495 development as the Hon. Member, Mr Thomas rightly talked about, I think there can be a greater understanding of that value of union membership and what it can bring for those members. I have certainly heard cases of people feeling, or even being threatened, fearful of losing their jobs, but forced to keep their head down for fear of reprisal, and unions are key to ensuring that people are appropriately supported and represented, and able to understand those rights. But we 4500 must also explore the access to support for those people who are non-unionised professions. So I think in absolutely supporting the amendment that Mr Henderson brings, we must also be ______1290 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

cognisant that there are some professions where there are not unions able there to represent people, and that those people will need to be able to access some level of support when they make a protected disclosure, because it is terrifying. 4505 I think that there is no one I have spoken to who has gone into it and thought, ‘Yeah, this is great. I’m just going to tell them how it is’ – it just does not happen like that. It might happen on the movies, but it really does not in real life. People are terrified, and that is exacerbated in a situation where there is often on this Island, because we are a small community, only one or maybe two or a very small number of employers who can take you on when you are in certain 4510 professions. In fact, possibly you could say that in all professions. So there is a really important element to be understood around both the support from staff side, but also those people who that is not an option for. I think then another element of that is ensuring that the training for the union representatives is consistent, because that is another thing that I have had through messaging. Some of the unions 4515 are more present on the Island, some are less. There are certainly huge numbers of people working incredibly hard and doing some incredibly positive work in our unions, but they need to have that support. And when you get a large whistleblowing case, suddenly being told that you are going to represent that person can be as terrifying, almost, for the person who is the union representative as it can be for the person who is being represented and making the disclosure. 4520 So I think my colleague from Council really highlighted the fear that people have going through that process of whistleblowing, and that it is worsened by not having that representation available to them. The process then can often be exacerbated by it being escalated, rather than the issue being dealt with right at the outset, which is something that a union can really support someone to do – to raise that concern before you get the associated grievances, conduct queries in, and all 4525 those other things that often do end up going hand in hand with a whistleblowing disclosure. So I think it is really important to include staff side. I wholeheartedly support Mr Henderson’s amendment, but I would say I just would ask that there is consideration for those people who do not have the ability to access a union, either because they are not a member or because they are simply a non-unionised profession. 4530 Thank you.

The President: Hon. Member, Mrs Christian.

Mrs Christian: Thank you, Mr President. 4535 What I would like to do is actually move an amendment to insert into Mrs Barber’s amendment. Mr Phillips is actually doing that just now, but I will read it to you: just to add ‘public interest’ for clarity into ‘Government to ensure all public interest’ before ‘concerns’ … Sorry, that is not very explanatory! So, yes.

To add to Mrs Barber’s amendment after the words ‘management of’ the words ‘public interest’ and after the words ‘to ensure that any’ to insert the word ‘such.’

4540 The President: Could I ask the Clerk, if he has the text of the amendment, to please read it out?

The Clerk: Yes, this is based on Mrs Barber’s amendment, so if you go to the words where the amended motion would be, it will read:

That Tynwald is of the opinion that as an interim measure, the Tynwald Auditor General shall oversee the management of public interest concerns raised by public sector employees and workers stationed within Departments, Boards and Offices of Government to ensure that any such concerns raised have been addressed; to review …

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– and then it carries on as Mrs Barber’s amendment. I am just getting that typed out, so it can be 4545 signed and distributed –

The President: And circulated, thank you.

Mrs Christian: Mr President, what that actually does is it just clarifies all the points that have 4550 been made and just makes it really succinct. Sorry, my explanation was not very succinct, (Laughter) but thank you, Mr Phillips.

The President: Thank you. Now, there needs to be a seconder to that amendment. 4555 Mrs Corlett.

Mrs Corlett: Thank you, Mr President. I beg to second Mrs Christian’s amendment.

4560 The President: You second the amendment. Mr Peake to speak.

Mr Peake: Well actually, Mr President, it was my job to second the amendment … (Laughter) But I am happy to give way to a lady; and good luck, Mrs Corlett. (Laughter) 4565 Thank you very much, Mr President.

Mr Ashford: Building up a head of steam!

The President: Right. I think we had better get that amendment circulated as soon as possible. 4570 No one else on my list to speak ...

The Speaker: Just as a point of order, then –

The President: Point of order. 4575 The Speaker: I am conscious, Mr President, we are not exactly pushed for time on the basis that we need to get this printed and circulated, but I was just wondering whether Mrs Barber intended to withdraw hers on the basis that Mrs Christian would overwrite it anyway, and perhaps we had confusion – 4580 The President: Well, I understood Mrs Christianʼs amendment sat alongside Mrs Barber’s amendment.

The Speaker: It is an extension to it. 4585 Mrs Barber: I think it will simply depend how it is drafted. If it is to simply add public interest you would need both. If it includes public interest in the wider one, I would be more than content to withdraw my amendment. Thank you, Mr President. 4590 The President: Anyway, we will see what eventually gets circulated. Mrs Maska, please.

Mrs Maska: Thank you, Mr President.

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4595 I would like to support the amendment as proposed by my hon. colleague, Mrs Christian. I think it actually adds clarity. I have been around in Government for a long time, longer than most, I am a pensioner. (Interjection) But I have also become very aware, from being a junior employee, of the culture that has existed both within central Government and further afield, where people have been really 4600 afraid to make their representations, and have not known where to go. There has been a culture, unfortunately, of promoting, and going sideways and promoting up, which actually really damages morale. (A Member: Hear, hear.) I do thank the Committee for their Report and the very moving and difficult reading it made but I really think that the amendment, and the way the amendments sit now, does add clarity. But 4605 we have to have resources. I would hate to think that we nurture the climate of the past that has actually ended up with people with not the right ability having posts that they actually cannot fulfil properly sometimes. In fact where you have able people, if we do get this right, then they are not going to be in danger of living in fear and we actually will have a much better culture within Government. 4610 So I do thank the Committee and I thank the mover, the Hon. Mrs Christian’s amendment too. Thank you, Mr President.

The President: Thank you. I call on the mover to reply, Ms Edge. 4615 Ms Edge: Yes, thank you, Mr President. I thank everybody who has contributed to a debate that perhaps was long overdue. I do want to do it justice and comment on some of the remarks that have been made. Obviously, I thank the Hon. Member, Minister Harmer, saying that he welcomed the detailed 4620 analysis of the Committee and Government policy, etc. I just thank him for his support and for taking the topic seriously. I think many of the people that we did speak to always felt that they were not taken seriously, so I appreciate that the Government is taking this seriously. He also commented that policy does need to be changed and that they are starting on this early next month. I think that is commendable … The policy is where it starts, and if we have got 4625 good, stringent policy we should not end up with a situation where an individual feels they need to go as far as going to employment tribunals. The Minister commented on recommendation 4 and obviously we have got two amendments to that. The Committee obviously supports Mrs Barber for Douglas East’s amendment and when we have had this second amendment, circulated from Mrs Christian, as long as the wording and 4630 the area of ‘adequately resourced’ is still included, the Committee Members will support that. I do feel, and I will have to use the word ‘disappointed’, that the Government felt they should remove the word, or not agree with the Committee with regard to resourcing. I am disappointed because as a Government, we should be supporting and be prepared to support the whistleblower and have effective policy, because if we do not support it and resource it, it will fail. We have seen 4635 so many cases that have cost the public purse enormously because of failures from the outset and I think the Minister will probably agree with us now, and following the intervention from the Hon. Member for Rushen, the Speaker, that it depends on the level of workload that comes forward. Just really to comment on that, I think the issue, when people say there are not many that come forward, it is because there are so many people in fear of coming forward. That cannot be 4640 underestimated. So there might be an initial spike, but there were also comments with regard to the Tynwald Commissioner for Administration. As a Committee we did look at that, but at this present time it was not felt that the legislation was appropriate to address what the Committee feel is an urgent, important matter that needs to have a place that is independent. So that was the reason for that. 4645 Minister Harmer also commented on the UK Bill, and that we might not agree with that if it does go through, or if it fails. We always have the option that we can bring our own legislation if ______1293 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

it is deemed necessary and hopefully under recommendation 5, when this is looked at seriously, that will be considered. Mr Hooper asked for clarity on the Employment Act and equality of arms, and I think you were 4650 in the room when Mrs Poole-Wilson was speaking, and hopefully she has covered some of those matters. A Manx solution for a Manx problem, he states, and I do not disagree with what he said with regard to equality of arms and tribunals. We do need to look at all of this, but we have to start somewhere and I think the approach that has been taken is to make sure we have got something in place to get this off the ground, and hopefully it will be flying before long. 4655 Mr Henderson’s amendment. I understand that consultation would normally take place with staff sides if there are any changes coming forward, but as Committee Members we do support his amendment to make sure that is there. His comments were really helpful with regard to considering all staff bodies are included in the consultation process, because for the statutory framework that is a good way forward, looking at policy. So I totally agree with that and concur 4660 that amendment is appropriate. Mrs Barber, for Douglas East, I think straight away she said this is not about financial cost, as the human cost is greater, and we have seen many times how that has affected individuals. She is quite right, they did feel overpowered by the big machine that was against them. I also personally agree that we have areas where concerns are raised and the operator of the concern that has 4665 been raised is also the regulator, and it leaves nowhere for the individual to go. It is a closed door; and this does need to change. I think Mrs Barber also said that the interim measure is okay, but that it needs to be in an expedient manner, and obviously we need to leave that to the Selection Committee for the Auditor General to make sure that it is done in an expedient manner, so that from an interim point 4670 of view the Auditor General can be involved with anybody that comes forward. Mr Quine, I liked his words: ‘safety’ and ‘error chains’ and ‘disclosure without fear’ and how the blame culture was superseded by a safety culture. All public concerns most likely have an element that there is a safety impact – if it is not just the safety of the public ... But I think what he said about the culture and changing it and addressing the concerns so that 4675 everybody understood … and that the training was really key prior to promotion. I did say with regard to that within my opening remarks, that the people that seem to have failed within the policy and process end up getting promoted! The Hon. Member of Council has just said that, and how many times have we seen that, Hon. Members? We have a duty to make sure that promoting beyond competence to get a problem out of the way is not a solution. 4680 I thank the Member of my Committee, Mrs Sharpe, Hon. Member of Council, and she described individuals so correctly. They were ‘grey with worry’. They had worked for Government for years and years, but were in fear. And it is true! They had to come to our Committee secretly because they were so in fear of carrying on in jobs which they all wanted to do, but they wanted the right thing doing while they were in the workplace. Policy is not clear and the oversight does need to 4685 be in one place, and we do need to value whistleblowing. She is so right in everything that she said. She also commented with regard to the one case that people are currently aware of; and the £600,000. That would go a long way to making sure we have got things right in the first place, that we do not have to see people getting claims that can pay out values of that amount of money. It 4690 is all about making sure we do it right for the best interests of the individual and the organisation, going forward. Mrs Lord-Brennan, Hon. Member of Council, I really liked what she said: ‘serious issues exposed’ and ‘at odds with the seven principles of public life’. I think many people need to remember what the seven principles of public life are and that greater accountability and good 4695 governance systems are what are required. I do not think any of us in here would disagree with that. We do need to be supporting people who speak out, and help them. Mr Thomas went through point-by-point and I think he started in the best place, which was to thank people that were brave enough to speak out. I think we all do need to be thanking those ______1294 T138 TYNWALD COURT, TUESDAY, 16th FEBRUARY 2021

people for being brave and speaking out, because we would not be standing here debating it today 4700 if we had not had that input from these individuals who had been severely affected. He also commented about recommendation 1 and the DfE consulting, and the commitment, and to do it soon. Also about the perception of conflict of interest, and that the consultation should be published. I agree with everything that the Hon. Member for Douglas Central said, and I am quite certain that the Minister for Enterprise will ensure that this process and consultation 4705 are carried out as soon as possible. He had concerns about recommendation 4 and why the Tynwald Auditor General. I hope that I have answered that we did look at it being the Tynwald Information Commissioner, because that is more of a check-the-policy-type role. Unfortunately it is not possible at the present time, but that does not mean to say it could not be in the future, you never know; and hopefully under 4710 recommendation 5 that will be looked at. The Member for Douglas Central also comments about employers developing their understanding of what whistleblowing is about. It is so clear that there is very little understanding of somebody coming forward with a concern. I know the Hon. Member for Douglas East, Mr Robertshaw said, what does that mean? What is ‘all public interest’? My view of ‘all public 4715 interest’ is if somebody has got a concern that they feel they need to raise, it could be of public interest; and without having the independent body that establishes that, or good training with all of the workforce, when somebody does come forward with something, you will never know. So I understand what you are saying about ‘all’, but could it be somebody today walking along Douglas Promenade and they see one of the metal plates is not quite in the right place? You would 4720 want them to raise that; it is a serious health and safety issue. So there are all sorts of scenarios that could be explained. Sorry, Minister Baker, it was the first thing that came to my mind! I am trying not to repeat, Mr President, so I will just take a few moments. I have got written down here, again, that people are in fear of coming forward because of the retribution. We need to remove that fear and make it a process that people are confident they 4725 will be listened to, and the right effects and everything … They will be listened to, they will be heard, and if they have a whistleblowing case it will be dealt with correctly. Mr Robertshaw, Hon. Member for Douglas East, also said about the Office of Human Resources and looking at the funding and whether that should be transferred. I think the Hon. Member of Council, Mrs Poole-Wilson in her role within the Public Services 4730 Commission, is committed enough to make sure that the Public Services Commission is looking more thoroughly at the processes and challenging more. I am sure she will take that forward. I am not so sure about transferring the funds, but certainly we need to make sure that the Office of Human Resources is doing the role effectively and not supporting the employer. The Speaker said that if the numbers are low, the Auditor General should be able to deal with 4735 this. The Auditor General has the flexibility to call in expertise. Mr Thomas said that the challenge is about scientists being challenged by a bureaucratic process. The Auditor General would be able to call in expertise to make sure that … OHR has not got that expertise, we need a space where somebody can call in expertise to make sure that somebody in a regulatory industry can be listened to, rather than a bureaucratic process from an officer. 4740 Mrs Poole-Wilson, just to say ‘life-changing’ experiences from the individuals that came forward. That is definitely one that needs to be remembered. It was life-changing for the majority of people that came forward. She also commented that the officers need to understand what a public concern is; and training. And that managers need to know the policies and procedures and processes. Without that basic skill which, personally, I feel should be done at the recruitment 4745 process, nobody should be recruited to a management role if they do not understand the basic principles of following Government policy, adhering to it and supporting individuals – because that is a manager’s role. Managers get promoted too easily. You could not become a manager within 18 months or two years within Government when I was in the Civil Service, it was certainly unknown. I am not saying that you cannot come with external skills and do that, but it is important.

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4750 Mrs Poole-Wilson also commented about a central portal for concerns, but it really does need to be independent. I know that within the health sector there is software that they use and they do report concerns, and that is monitored; but the independence is key, because we have also heard that is not necessarily picked up on in an appropriate way. Value for money may be achieved. It will be achieved immediately if we get this right, and we 4755 do not have any more cases going to employment tribunals and costing the taxpayer of the Isle of Man … Non-disclosure agreements: none of us know what they have cost if they are to do with employment cases – and we should not, if it is a non-disclosure agreement – but we need to know that those savings can be made. And that could help the Treasury Minister, going forward! I think that is all I really need to say, Mr President. The Treasury Minister did say that he did 4760 not feel that it should be supported with regard to the finances but I am sure, following the debate, that he has changed his mind and sees the importance of supporting that going forward and hopefully the savings that will be achieved. With that, Mr President, I beg to move. Thank you. 4765 The President: Hon. Members, I put to the Court the motion at Item 5. Just for clarification, it is Item 5. If you are reading from a hard copy of the Order Paper it will say Item 6, because the numbering has all gone adrift. It is Item 5. We will deal first with recommendation 1. First, I will put Mr Harmer’s amendment. Those in 4770 favour of Mr Harmer’s amendment, say aye; against, no. The ayes have it. The ayes have it. Recommendation 1 then, as amended. Those in favour, say aye; against, no. The ayes have it. The ayes have it. Recommendation 2. Those in favour, say aye; against, no. The ayes have it. The ayes have it. Recommendation 3. Those in favour, say aye; against, no. The ayes have it. The ayes have it. 4775 Recommendation 4. I will put Mrs Christian’s amendment. In the event that that does not carry I will put Mrs Barber’s. Mrs Christianʼs, in effect, incorporates Mrs Barber’s, but with some additions. Those in favour of Mrs Christian’s amendment, say aye; against, no. The ayes have it. The ayes have it. I am now applying Mrs Christian’s successful amendment to Mr Harmer’s amendment. Those 4780 in favour, say aye; against, no. The ayes have it. The ayes have it. Recommendation 4, as amended, say aye; against, no. The ayes have it. The ayes have it. Recommendation 5, I put Mr Harmer’s amendment first. Those in favour, say aye; against, no. The ayes have it. The ayes have it. I put Mr Henderson’s amendment, which adds to what you have just passed. Those in favour, 4785 say aye; against, no. The ayes have it. The ayes have it. Recommendation 5, as amended. Those in favour, say aye; against, no. The ayes have it. The ayes have it. I put Item 5, as amended. Those in favour, say aye; against, no. The ayes have it. The ayes have it.

Royal Assent – Gas Regulation (Amendment) Act 2021; Church (Miscellaneous Provisions) Measure (Isle of Man) 2021

4790 The President: Hon. Members, I can announce that Royal Assent has today been given to the Gas Regulation (Amendment) Act 2021; and to the Church (Miscellaneous Provisions) Measure (Isle of Man) 2021, also. (The Speaker: Hear, hear.)

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Now, Hon. Members, it seems to me it would be very sensible to conclude at this point (Several Members: Hear, hear.) and come back tomorrow afresh. Do you agree? (Members: Agreed.) 4795 Thank you very much. In that case, the Court will adjourn until 10.30 tomorrow morning.

The Court adjourned at 7.51 p.m.

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