The Budget process has been labelled a ‘relic of the colonial age’ and Treasury’s powers have been likened to that of a dictator by the Speaker of the House of Keys.

Juan Watterson SHK, said there is an ‘unnecessary culture of secrecy’ within the system and criticised the inability of Tynwald to amend any of the Budget.

Looking at the Covid pandemic, Mr Watterson said that the island’s unemployment rate was ‘comparable to the financial crisis post 2008’ but said there was ‘a far greater need to get money into the pockets of real people, whose daily livelihood vanished before their eyes when our people had to lockdown’.

Mr Watterson criticised a lack of spending on mental health after an alarming number of suicides being recorded on the island over the past year, the lack of efficiencies being made across the gov, and the looming pension funding crisis.

He said that ‘gross pension costs have fallen from an estimated £128m for the current year to just £112m’. 

‘On the face of it, this is a 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 £200m of reserves over the next 5 years 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, 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 £70m out to pay for Covid salary support. It is also worth noting that the printed pink book under estimates the cost of NI payments over the next four years by some £24.5m.’

The Speaker also went on to criticise the rise of rents and rates across the island and of a gap between public and private sector housing.  He said that the 2008 crisis had created a ‘structural deficit’ which the island still had not yet recovered from’

Mr Watterson added: ‘We have, in effect, been spending more than we have been bringing in since that date. This is not sustainable. Our finances are not currently sustainable.

‘However, I doubt we can really fix our finances until we fix the budget system. It is a relic of the colonial age which vested executive power in the Governor. As our democratic institutions took hold, more 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 Honourable 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.

‘Honourable 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. What Treasury wants, it funds, what it does not want gets pushed down the national priority list without reference to Hon. Members.’

Unsurprisingly, Mr Watterson voted against the Budget, not because he opposed the financial plans, but because of the Budget process itself.