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State of the Nation Address

Tuesday, 17 October 2017

Delivered by: Hon Howard Quayle MHK

Date: Tuesday 17 October 2017

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Mr President,

It is hard to believe that it is over a year since we sat together in this Court to form a Government. I said then that there was a new spirit of hope that followed the election. A feeling of optimism, a willingness that we could work together to tackle the big issues that were facing our Island.

We said that we would rather do the right thing than make the popular choice. We worked together to develop a Programme for Government that would reflect our shared vision for the Isle of Man. Since the plan was agreed by Tynwald, this Government has worked with the Programme in sharp focus and we have already achieved a great deal.

Achievements

We reversed the decision on TV licences, recognising that it was an unfair burden on those who needed it most. Our 2017 budget was aimed at working families, increasing child benefit and the personal income tax allowance and investing in our health service. As part of our commitment to a financially sustainable Government, we launched the SAVE programme, listening to the views of the public and setting a target to reduce public spending over the life of this parliament.

We committed to investing in the Liverpool landing stage, securing the vital Merseyside sea route for the future. We have also taken bold and direct action on the future of our strategic sea services and will continue to hold out for a good deal for the Isle of Man.

We acknowledged the need for further independent scrutiny for Government, that is why I asked my office to make funds available for this important role.

I am pleased to confirm that interviews have now been held for the Tynwald Commissioner for Administration and I hope to make an announcement on the appointment soon.

We have complied with our previous commitment to the UK and introduced the Beneficial Ownership legislation, we have reformed the Department of Economic Development to ensure it is focussed on driving economic growth and generating prosperity, we took action to grab the bull by the horns and make a decision on the redevelopment of Douglas promenade because we knew it had to be done, and we have improved our procurement policy so it’s clear that we should use our spending power to buy local where possible. These are just some of the achievements from our first year in office.

I am grateful to Ministers and their Members for their determination to focus on delivery. I am also grateful to those in the public service, who have worked hard to support this Government in achieving its ambitions. I believe the vast majority of public servants come to work every day to do a good job. They care deeply about making a difference to the place where they live, and we should not forget that. Their commitment and dedication was highlighted last night as the community responded to storm Ophelia. 

Staff from the Isle of Man Constabulary, Fire and Rescue Service, Department of Infrastructure and Manx Utilities – supported by Civil Defence volunteers – worked through the night to clear 130 fallen trees and ensure it was business as usual for the Island on Tuesday morning.

I am sure I speak for all Honourable Members in extending my thanks to them and others for ensuring we are kept safe in times of danger.

Mr President, we are already one year into this administration; we have achieved much, but there is still more to do. I know that many people are still struggling with the cost of living. They do not feel they have shared in the economic success of the Island.

One of the big concerns people have, is the cost of energy, in particular, the cost of gas. I am pleased that Manx Gas has set up a review of its prices, but I want to ensure that they receive an effective level of scrutiny.  

To that end, I will be setting up my own committee to review the current situation, and develop conclusions on whether the current arrangement is working for the Isle of Man. The committee will be made up of Tynwald Members, and I am grateful to them for agreeing to take on this challenging role. 

As a monopoly supplier, Manx Gas is in a privileged position. In return for that privilege, they have a responsibility to ensure they are fair in the way they provide their service to the people of the Isle of Man. It is a finely balanced relationship, but at the moment my instinct is that the balance is falling in their favour. I want my committee to consider whether we need to redress that balance but energy costs are just one part of the jigsaw. 

I also know that there are many who struggle with the cost of water and sewerage charges. The proposal from the Treasury to write off some of the MUA debt, means that charges will be frozen for the next year, giving certainty to those who are concerned about rising prices.  

We want to ensure that people are not just surviving, but they are able to live and participate in our society. That means that they are paid a fair wage for the work they do.

My colleague, the Minister for Policy and reform is bringing a motion to ask Tynwald to support the concept of a Living Wage. Let us be clear that this is a voluntary scheme. Let us also be clear that poverty is a complex issue which cannot be ‘fixed’ through just one initiative, but this is a start. The Living wage can help those who are paid least, but it also has benefits for business. 

75% of employees paid the living wage reported increased job satisfaction and 50% of those paid the Living Wage were more likely to implement changes in working practices. In order to support a Living Wage, Mr President, we must have an economy that is in good health.

Our economy is the bedrock of our success. Without a thriving economy, we would not be in the position we are today. There would be few jobs for our people and little revenue for public services. I am pleased to say, then, that the economy remains in good shape.

 

Current Landscape

Employment continues to rise.  There are over 500 more people in employment than at the same time last year. In financial services, after a long period of consolidation, many of our banking businesses are now actively expanding. 

Our world class life industry also continues to grow. I understand that our largest manufacturing companies are bullish about the future, and are telling us they want further growth and expansion, and we continue to be optimistic for the future of our tech sector.  

The recent completion of the new Microgaming headquarters is not just an investment in bricks and mortar.  It is an investment in the Isle of Man. An acknowledgement that our stable financial environment, responsive legislation and fantastic quality of life is a combination that is hard to beat.

So I am confident that we are making progress. but there are challenges ahead.

 

Challenges Ahead

The UK’s decision to withdraw from its membership of the European Union has caused significant challenges during the first year of this new administration. These challenges lie both in the complexity, and the volume, of issues our politicians and officers are facing  –  there is still great uncertainty. 

Although we have a limited relationship with the EU, it affects the way we trade and it underpins our customs regime. So we are preparing for the necessary changes we will need to make to be ready for the UK’s departure from the EU. We have an EU Withdrawal Bill in draft, and hope to release it for consultation within the next few weeks. 

We are also considering what changes we need to make to our law to continue to trade with the UK, and potentially, the EU. There are both risks and opportunities which flow from these changes. One of the key opportunities is for our potential inclusion in new Free Trade Agreements.

We are engaging extensively with the UK Government – at official and political level – across several policy areas. We are ensuring that the UK negotiators understand what impact potential changes may have on us, but also, what we might be able to secure from a new UK/EU relationship

Our position remains clear. We wish to continue to trade freely in goods with the UK, and we want to see the Common Travel Area, which allows for free movement of people within the British Isles, preserved.

We would also like to be able to continue to trade freely in goods with the EU – but we know that when the UK leaves the Customs Union, and the Single Market, then we will too, and we are dependent on what the UK and EU can negotiate. 

We must continue to follow the path we’re on, staying close to the UK and influencing where we are able. Honourable Members should be in no doubt that there are big decisions to be made, many of which will have a significant impact on us. 

In short, the UK’s withdrawal from the European Union is a once in a generation shift. As an Island, we have faced equally serious challenges in the past, and we have prevailed. I am certain, that Brexit will be no different.

There are other tests for us on the horizon too. Tax and transparency issues continue to remain high on the international agenda. We are confident that the Island is a well regulated, compliant and transparent business centre. Nonetheless, we must recognise that we are part of a global community and be alive to international developments.

As an Island, we are entirely dependent on safe, reliable transport. It is our lifeline, carrying fresh food to our shores and goods to our shops.  We rely on it to bring us together with family and friends. We must remember though, that as a community of almost 84,000 people, we must strike the right balance between competition and commitment. The current discussions in relation to our strategic sea services are of vital importance. 

I have been clear that we must achieve an outcome that is right for the Isle of Man.  That means being clear on our objectives and moving at our own pace. We will not be forced into making a decision before we are ready to do so. Air travel, as well as sea travel, is a vital part of our social and economic offering. 

The Council of Ministers continues to support the Open Skies Policy as the best approach to ensuring the security of our vital links to the UK. Honourable Members making sure we have the right air and sea links is just one of the things we are working hard to address. Another is ensuring we have the right people with the right skills at the right time.

As of today there are over 600 job vacancies in the Isle of Man. This position makes us the envy of other nations, but it is not sustainable. If the companies here cannot fill these roles, they will move them elsewhere.  We must act quickly to ensure that we are attractive to those with the skills we need who want to come and join our community.

I hear time and again that the work permit system is preventing companies from recruiting to the jobs which are currently vacant. That is why we are loosening the restrictions on employment. If we do not act now, these jobs will be moved elsewhere. 

I welcome the DED’s proposals to change the work permit system. These changes are necessary to support further economic growth. I hope you will support their introduction too.

Mr President, the rising cost of healthcare is a concern for all of us. As a former Minister for Health and Social Care, I am well aware of the massive challenges facing the Department. Without immediate and radical action, costs will continue to increase. There are no magic bullets and any change will be painful, but it is necessary to ensure future economic sustainability for our vital public services. 

We must also recognise that we all have a role to play in taking responsibility for our own health. Almost two thirds of people in the Isle of Man are now overweight or obese. This is creating a potential bow wave of conditions such as heart disease, type 2 diabetes and cancer which will only put further pressure on the health service in the future. That is why I support the Department’s approach to ensuring we are able to make healthy choices in our own lives.

Health is not the only area where there are cost pressures though. I have been adamant that we must reduce the cost of Government.  Key to this is working smarter and using technology to become more efficient. It is the responsibility of everyone in this Honourable Court to ensure the future sustainability of our public services. We cannot kick the can down the road for future generations. 

That is why we brought forward our plans to reduce the future liabilities for public sector pensions. I first raised this issue as a backbencher and it is as relevant today as it was then. We will bring forward further reforms that tackle the legacy funding gap. 

There is also the issue of intergenerational fairness coming down the road towards us. Our economy is skewed towards baby boomers, leaving younger people, particularly millennials, worse off than their parents. There are many in our society now who do not have the opportunities that almost all of us in this chamber have had. They cannot afford to own their own home. Many of them have seen their incomes reduce in real terms. And, as more baby boomers retire, the pressure on those of working age to support this large group of people will increase. 

I do not pretend to have the solution to this problem, but I highlight it today as it will need to be addressed sooner rather than later. These are just some of the challenges we are facing Honourable Members and I make no apology for looking to the future.

Warren Buffett is one of the most successful investors in the world because of his ability to anticipate future trends. Each year he writes a long letter to investors in his asset management company Berkshire Hathaway.  In 1991 he wrote:

'Someone is sitting in the shade today because someone planted a tree long ago.'

It is our responsibility in this Court to ensure we are – metaphorically speaking – planting our trees for the future. I came into politics because I wanted to make things better for future generations. I still do. I am a proud Manxman.  I can trace my heritage back many hundreds of years. 

I want my children – all of our children  - and their children, to be able to have that same pride in the Isle of Man - in fifty or a hundred years - as I have today. I want to ensure that we are able to lay the foundations for a sustainable future for them. This means ensuring that our economy is diverse and stable, supporting employment for everyone. And it means public services that are cost effective and fit for purpose. 

I want to ensure that our Island remains the special place it is today. This will require us to move faster to make sure we remain competitive. We need to respond more quickly to new areas of growth, we also need to continue to ask whether our regulation is still fit for purpose. 

The technology sector on the Island continues to grow, but we cannot be complacent. Ten years ago, our communications infrastructure was state of the art.  Now it is not. We need to lay the groundwork for another leap forward, taking bold decisions where necessary. So I am grateful for the work of my committee on telecommunications in the Isle of Man. 

They have proposed some radical changes which I hope will stimulate growth and ensure we are once again known for innovation and technology in telecoms.

Abraham Lincoln said:

'you cannot escape the responsibility of tomorrow by evading it today. It is us who must take responsibility for tomorrow.'

Changes to PFG

Mr President, the world has moved on since we first developed the programme for government a year ago. Every plan should be checked to ensure it is still valid. That’s why next month I will bring the progress report for the first two quarters of our programme. 

I would like Members to take this report and use it as an opportunity for a policy debate during that sitting. I want us to consider whether our priorities are still valid. What are the policies which need to be pursued for the future?Where do Members feel resources should be focussed?

We will then consider the responses and return in January with a revised plan. Our legislative programme is developing well. We hope to bring several significant bills into the branches in the next year. These include an Education Bill, a safeguarding Bill and a sentencing bill. 

Mr President, I hope we can debate the policies of Government in an open and honest way, dealing in facts and figures rather than hearsay and rumour. I say this because there seems to me, to be a worrying trend for knee jerk responses to Social Media. 

There is much discussion about fake news. To me, the role of a free press is more important than ever. I have noticed though, an increasing tendency for more sensationalism in the way stories are reported.

We should remember what is in the public interest is different to what is interesting to the public. We cannot rely on second hand gossip posted anonymously to inform our thinking. Good journalism is well researched, relying on facts and evidence rather than half-truths and tittle tattle. 

There are many benefits to Social Media, but we must also be alive to the fact that many of the things we read on it are not objective.  They often contain incorrect information and are driven by a single person’s agenda. I think we can do better.

Honourable Members, we started this new House in the spirit of co-operation, mutual respect and a shared belief that we could make things better. I believe that same sense of purpose continues today. We can accomplish much more together than when we are divided.

Our vision for the future will not happen on its own. It will take courageous, sometimes unpopular decisions. It will mean a conscious choice to support a future for the silent majority and not to pander to the interests of a vocal minority. Most of all though, it will require action. 

Thank you, Mr President

 

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