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Chief Minister delivers State of the Nation address

Friday, 24 January 2014

The Chief Minister has today (Friday 24 January) highlighted the Isle of Man’s growing reputation on the international stage and the action being taken to address a number of important local challenges.

Mr Bell outlined his vision to ensure the Island’s long-term future as he delivered the State of the Nation speech at the annual conference organised by the Alliance of Isle of Man Compliance Professionals.

A capacity audience heard how the Island’s leadership and positive engagement with international agendas has strengthened our position as a cooperative and forward-thinking member of the global community.

Mr Bell reflected on the significant progress achieved over the past 12 months in terms of tax transparency and praised the outstanding contribution of the business community – describing the partnership between the public and private sectors as ‘one of the Island’s greatest strengths.’

He said growing the economy remained at the very heart of his vision and was essential to support Government’s other national priorities of rebalancing public finances and protecting the vulnerable.

But against a positive backdrop of continued success across many business sectors, the Chief Minister also sounded a note of caution.

‘We have seen some banking and fiduciary businesses rationalising their operations in recent times, resulting in job losses in the Isle of Man. Further cuts are likely as the whole structure of offshore banking undergoes major reform,’

he said.

‘The impact of the Vickers Report into banking will be hugely significant for the Island and we have been working with business leaders, the UK Government and the other Crown Dependencies to achieve the best possible outcome. We must also be in a position to respond to any external threats, including the referendum on Scottish independence and the future of the UK’s relationship with Europe.’

Mr Bell added that whilst this year’s Budget will confirm Government remains on target to rebalance its books by 2015-16, the continued pressure on public finances demanded a bold and innovative response.

He said:

‘I know the private sector has looked to Government to lead by example and accept some of the pain that has been felt elsewhere. I can assure you that we have been working towards creating a leaner, more efficient and more customer-focused Government for some time. Over the past five years we have cut the number of public sector posts by more than 500. And we continue to target further reductions of at least 100 per year.

‘We have also sought to reduce Government expenditure by containing our salary budget. Our overall employee costs peaked at £316 million in 2010-11. This figure fell to £312 million in 2013-14, and it will be lower again in 2014-15. Had salaries kept pace with inflation during this period we would now be looking at a bill of £361 million in 2013-14, or £371 million in 2014-15. That’s a difference of £50 million in the current financial year, or at least £60 million by next year.’

The Chief Minister said his proposals to modernise Government, unanimously approved by Tynwald Members on Tuesday, would cut bureaucracy even further and provide a more joined-up approach to policy and reform through the creation of a new Cabinet Office.

He also highlighted the need for a national debate about the provision of Government services, saying:

‘The current NHS model is unsustainable and unaffordable in the long term. Similarly, the costs of social care and maintaining an acceptable level of state retirement pensions present us with huge challenges – over and above simply rebalancing our budget.’

Mr Bell concluded:

‘Progress will be achieved by working together and demonstrating the enterprise, innovation and independent spirit that have stood the Isle of Man in good stead for many years. We must continue to be positive, celebrate success and invest in our future with confidence.’

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