The Road to the Budget 2026

With just a few weeks to go, what can we expect from the last Budget of this administration?

It's fair to say that the road to this year's Budget has been a pretty bumpy one - namely the fact the treasury minister will only have been in the position for four weeks - so I thought it'd be useful to look back and see how we got to this point.

October 2021

Following the September general election, Ayre and Michael MHK, Alfred Cannan, was elected Chief Minister by his peers.

He appointed his Council of Ministers, which included Douglas North member David Ashford for Treasury and Ramsey's Alex Allinson in Enterprise.

November 2021

The new Chief Minister, Alfred Cannan, revealed his priorities for the next five years as he published the first draft of 'Our Island Plan'.

Health, the environment and a diverse economy were named as some of the major focuses of his administration.

One of the commitments made in the document by Mr Cannan was moving the minimum wage towards parity with the living wage.

May 2022

Alex Allinson MHK swapped his Enterprise Minister position for Treasury, after David Ashford MHK resigned from the role following the fallout from the Ranson tribunal.

February 2024

The treasury minister, Alex Allinson, presented his Budget to Tynwald.

In it, he announced plans to create an 'NHS levy' - a separate tax that would be used to plug the funding gap for the Isle of Man's health service.

The levy was to be introduced in the 2025/26 financial year, and while it was logistically worked out, Dr Allinson temporarily raised the higher rate of income tax by two percent to 22 percent, although the personal allowance thresholds were kept the same.

November 2024

The treasury minister laid a report about the Island's National Insurance fund before Tynwald.

Alex Allinson called for a 'national conversation' on how to preserve the Manx National Insurance Fund - considering four options.

The document outlined the scale of the issue and some ways to try and resolve it - including potentially scrapping the triple lock - which could help stop the National Insurance pot being exhausted by 2047.

The triple lock makes sure pensions rise annually by inflation, average earnings, or 2.5 percent, depending on which is higher, and is linked via a reciprocal agreement with the UK.

It was revealed at the time that this would be a feature of February 2025's Budget.

February 2025

Treasury Minister Alex Allinson had outlined plans to bring forward a 'double lock guarantee' for those who retired after 5 April 2019 as part of the 2025-26 budget to preserve the National Insurance Fund.

But those plans had faced criticism from several MHKs, prompting the minister to agree to separate the changes from the budget debate itself.

Concerns had been raised over a lack of consultation with politicians and the public over the changes and the inclusion of the measures within the budget itself.

Dr Allinson said that, after listening to the comments, it was 'clear that more time is needed to ensure there is consensus around the best way to secure our NI Fund and protect pensions in the future'.

Meanwhile, Dr Allinson announced in his Budget that introducing the proposed NHS levy had proven more challenging than initially predicted.

He delayed the implementation of the levy, and also lowered the higher rate of income tax by one percent to 21%, halving the increase of the previous year. That extra one percent would still be ringfenced for health though.

The personal tax allowance thresholds were also raised by £250 for individuals and £500 for jointly assessed couples - the first increase in three years.

July 2025

Tynwald approved plans to scrap making the minimum wage align with the living wage.

Instead, it agreed it should be calculated as a proportion of the median wage.

September 2025

Government proposed a new minimum wage of £13.46 - an increase of 9.9 percent - which, if approved, would come into force on 1 April 2026.

In this month, the treasury minister also announced plans to scrap the NHS levy following the results of a public consultation, which had over 3,800 responses.

October 2025

Tynwald approved proposals to increase the minimum wage.

It passed with 25 votes for and seven against - with all members of the Council of Ministers voting in favour of it, including the chief minister.

However businesses across the Island raised concerns about the move, warning it could be 'devastating', particularly for those in the hospitality and retail sectors who were already struggling with the impacts of the increased cost of living.

January 2026

Buckle up, because a lot has happened in the last month!

On Monday 19 January 2026, Mr Cannan made the shock announcement that, after nearly four years in the role and with a month to go until the last Budget of this administration, he'd asked Treasury Minister, Dr Allinson to step down, as well as the Infrastructure Minister, Michelle Haywood.

In the letter he sent to Dr Allinson, Mr Cannan said: "It is with regret that I must ask you to step down from your role as Treasury Minister to allow for a reset of our approach to the economy."

Chris Thomas was appointed as Dr Allinson's replacement, promising that his priorities would be to "address concerns surrounding the introduction of the minimum wage by taking a slower approach to the increase being proposed, and to work with officers to ensure there is a substantial rise in personal allowances at the budget."

The next day, Tuesday 20 January 2026, Mr Cannan gave an urgent statement to Tynwald and also tabled an amendment proposing to reduce the speed with which the minimum wage increase was implemented.

It was supported by his political colleagues (although notably not Dr Allinson), meaning that the rate will increase by five percent to £12.86 from April rather than the previously proposed 9.9 percent.

It also proposed to 'maintain the existing differential to the Youth Rate', setting a revised level from 1 April 2026 of £10.16 - another key concern of many members of the business community.

As well as the changes to the rollout of the minimum wage increase, Mr Cannan's Tynwald amendment also agreed that a 'substantial' increase in the personal allowance thresholds should be brought forward at the Budget - a highly unusual move given the confidentiality of the Pink Book, which is strictly 'top secret' until the treasury minister gives their Budget speech before Parliament.

Because of this, it's not usually received well if any part of the Budget is revealed ahead of time, as demonstrated with last year's triple lock u-turn.

However, as former Treasury departmental member Sarah Maltby MHK explained, there'd be very little influence Mr Thomas would be able to have on the Budget at this stage of the game:

February 2026

The Budget for the 2026/27 financial year is due to be presented in Tynwald on Tuesday 17 February.

Manx Radio will be hosting a live programme with Treasury Minister Chris Thomas reflecting on the last Budget of this administration.

It'll be held at Looky's Bar from 5-6.30pm on Friday 20 February and will be free to attend, although ticketed to manage numbers.

If you'd like to register your interest in attending the event, you can do it here.

September 2026

The next Isle of Man General Election is scheduled for Thursday 24 September... Just saying...