Alf Cannan at the 20 May Press Conference

This is a very rough and unverified transcript of the Isle of Man Government Press Conference conducted on 20 May 2020. You should not rely upon it — it is transcribed by an automated speech recognition service, and I cannot guarantee its accuracy.

Before relying or quoting anything contained here, you should verify it against the underlying audio recorded here. Time Stamps and automatically-generated speaker names should help in the verification.

Alf Cannan 0:00
Here are the statistics for today for Coronavirus. The total number of tests undertaken on the island is 4262. We have had 4244 tests back, which means there are 18 outstanding tests. There have been 336 confirmed cases, meaning today we have had one new case and a total active cases is 10. Now, as you are all fully aware, the Coronavirus has presented not only a serious and significant health challenge to the island, but also a serious economic and fiscal challenge. 10 weeks ago we set out to equip the island as best we could to meet the requirements needed to suppress the threat of Coronavirus to our health and that of our families. We brought about a number of fiscal support schemes and initiatives designed to provide businesses and individuals with with as many options as possible to keep themselves going through this pandemic, and to save jobs. Key amongst these initiatives are the salary support scheme and the Manx earnings replacement allowance. And both these schemes were brought forward for an initial period of 12 weeks. Now we expect that the salary support scheme will pay out around 30 million pounds for the 12 week period, protecting we estimate some 11,000 jobs and supporting 1500 businesses. In a similar vein, we expect that the bank’s earnings replacement allowance will pay out some 5 million pounds supporting some 2000 individuals on the island. Of course, I’m pleased that recently the suppression of the virus has meant that some sectors of our economy are starting to return to work to work, and therefore we do expect some reduction in the level of claims both for the salary support scheme The bank’s earnings replacement allowance over the coming weeks. Nevertheless, I have to accept that it is far too early at this stage to expect these businesses that are returning to resume normal levels of activity and profitability. And in any case, many of those businesses will have to make up considerable ground having been closed down for a significant period of time. There are also of course, today those businesses that are not yet been allowed to open and the financial pressure on them will continue to grow. It is simply now not right, therefore, that we start to close these schemes down at this present time. And I’m pleased to say that yesterday Tynwald prove the extension of the salary support scheme, and the Manx earnings replacement allowance for a further 12 weeks. I very much hope that extending the salary support in this manner will provide a platform for those reopening their businesses to do so. successfully knowing that this vital support mechanism remains with them as they start to adjust to new working arrangements, and establish and re establish their revenue and income streams. I must caution and indeed urge those businesses who are reopening now to seek to move forward as quickly as possible, though, I’m sure that we will all recognise and acknowledge that these support schemes cannot go on indefinitely. And indeed, flexibility is now built into the schemes to allow the Treasury to determine when and if support should be curtailed for certain sectors. But to do that, we need data. And we need to be confident that businesses are operating as fairly and equally as possible in the circumstances. We do not have that data yet. And it is right therefore, that we continue to extend support to protect jobs and the economy.

10 weeks ago, there was a widespread acknowledgement that we needed to think local, act local and buy local and the army has responded well over this period. Now we need to keep going with this mantra as our businesses open up. Your support now for local businesses will help stabilise our economy. It will help maintain jobs, and it will create opportunity. Please, I ask if you’re going to spend your money, think local, act local and buy local. Of course as we approach the summer season, we’ll hope that the virus will remain suppressed, and we can open up more of our businesses and industries. Given all the uncertainty, it is likely that many of you may now choose to spend your summer breaks and holidays on the island. A well planned staycation this year will be an added bonus to the domestic economy. And I know that my colleagues in the department for enterprise will be considering how this opportunity can be maximised within the framework of government rules and regulations on Coronavirus. Of course more broadly, the government must also play its part In regaining momentum in our economy, we are working now on developing our plan to push vital government spending programmes forward, and assessing how specific support programmes can be delivered to those sectors who may be continuing to struggle. Yesterday Lawrence Skelly confirmed our plans for high speed fibre will be rolled out across the island by Manx Telecom. And we need to get on with this as fast as we can. We will review our capital spending programmes now to bring forward relevant and prioritised investment in our key assets and infrastructure. We will re energise our initiatives to attract businesses to the island, and we will examine our financial support schemes that will be vital in aiding and developing our existing businesses. We will bring all this together in a in a short to medium economics, not short to medium term economic strategy, which will be brought before Tynwald at the earliest opportunity. We need to support new business opportunities Help existing businesses adapt business models, and we need to create new jobs. I do not want to render estimate that there is a significant challenge ahead of us. We all know that. But there is no reason not to be optimistic that the island can pull together and bringing our economy back to life. It will be tough. But as much as we have relied on each other to suppress and contain the virus and protect health, we now need to rely on each other to get back to work and to rebuild the economy. At some point, we have to let go of fear and start to embrace the New Living and Working with Coronavirus. However you choose to do that. We need to all play our part in supporting our local economy, supporting local businesses and supporting local jobs. Thank you very much and I will now take any questions starting with Manx radio and Tim Glover. Good afternoon Tim

Tim Glover 6:59
festival in May. Mr. Last Friday, you were giving evidence to the Public Accounts Committee and you said that the overall cost of the schemes was lower than you anticipated. Where does jobs secret and you mentioned there are over 1000 jobs have been saved by the support packages? Where does Jobseeker’s allowance factor it into the calculations as unemployment in April? stands at 1347 arise? just shy of 918 months, and obviously another cost to bear for government.

Alf Cannan 7:31
Yeah, so I mean, combined, so we haven’t featured that figure in today’s briefing are focused on the mirror that makes earnings replacement allowance. So we have 2188 people on mirror we have just over 1300 people on job seekers, their large numbers, Tim, it’s hard to understand at the moment, the true relevance of the data until we start to get all our sectors back to work when we do that. The mist will effectively start to list and we’ll see the true extent of unemployment and those needing to find new jobs. So it’s a figure that we are very conscious of, you know, clearly you look at these figures with with some alarm. But you also have to recognise that as we start to get people back to work, you should see some decline. As things level out. Once the sectors are back, once the support schemes start to lift them, we’ll get a true feel for how damaged we are or how much we’re going to suffer from an unemployment clearly, it would be remiss not to accept that there’s going to be higher levels of unemployment. 1300 Plus is a figure I think that we can deal with if it gets higher than that, as we, you know, as we go through this, then, clearly we’ll have much more pressure to work out how best we can rescale our workforce where those opportunities exist, what we need to do from an educational perspective and retraining perspective.

Tim Glover 9:03
Can I just follow up on that this particular question is around 900, a figure that you would have expected in the opening two months of job losses, because we all knew there were going to be job losses.

Alf Cannan 9:18
Hey, it’s it was just too hard to really determine that, Tim, you know, you expected the finger to rise on a 1300 or so which is on the job seekers, they’re not figures that we haven’t dealt with. Previously, in fact, you know, before this government came in, or just as this government came in, or just slightly beforehand, those figures were about 1300. So we can deal with that kind of level in terms of, as I said, focusing on new opportunities within the economy looking at retraining rescaling, clearly as you move up the scale and get further further numbers. Beyond the 2000 figure up to two and a half thousand a job becomes much more complex if you like and then we need to understand how best to direct government spending what the government needs to do. To create as many opportunities as possible.

Tim Glover 10:04
And can I tend to Douglas prominent one of those capital projects back in November last year, it was revealed costs was signalling for the track crossing the road at the war memorial to the single track to the C terminal. We’re about a million pounds and it wasn’t included in the overall scheme budget. We then found out that Jeffrey Robinson at the next strategic meeting wanted the scheme to have the lowest possible costs even at the risk of compromise to the horse tram service. Well, just following that money, it seems the single track to the scenes ctm on spinning down. Well before Coronavirus, appeared as Treasury put a big squeeze on the project so it appears to cover as close to budget as possible. Even if this is against the original world Tim old

Alf Cannan 10:51
no Treasury has not put a big squeeze on the project we authorise the budget and the last we authorise As the amounts to spent expenditure in the last budget, and, you know, the Department of infrastructure are well aware that any overspend that they they might incur on this project will need to be found from within their existing plans and projects. But we haven’t put a big squeeze on on the Department for infrastructure. I think they have taken a sensible view on that project, what needs to be done to get it done within the circumstances that we’re living in to take the opportunity or perhaps a lack of tourists or lack of visitor accommodation being utilised during this period to complete the promenade and that’s very much an operational decision to get on with it and to alter the scheme plans as they’ve outlined.

Unknown Speaker 11:47
Okay.

Alf Cannan 11:49
Thanks very much, Tim energy FM Chris cave.

Unknown Speaker 11:53
Good afternoon.

Tim Glover 11:55
As you mentioned the importance of buying local encourage people To have staycations the impact this pandemic is going to have on many industries will be severe and long lasting, not least for the tourism and hospitality trades. There’s often talk about a new normal, and that causes further worry for owners of restaurants, pubs and clubs that people may still be discouraged and feel unsafe about going out once this virus has passed. In that case, are there any considerations to ease the impact of this for those industries, for instance, government subsidy on alcohol duty perhaps.

Alf Cannan 12:33
So the purpose of announcing today that these the salary support scheme, which is very much the pillar of the support mechanisms that’s providing a lot of valued support to our businesses is going to be extended is to give as many businesses every every opportunity to get back on their feet over the next 12 week period effectively through to the end of August. What we will need to do then is consider Almost on a sectorial basis, sector by sector, what might need to be done to help support those sectors through an extended period to allow them every opportunity? You know, clearly there are challenges. There are challenges for a lot of businesses, but for our leisure businesses or hospitality industry, these challenges are going to be increased because of the rules and that are going to be in place, particularly around social distancing. And they will need to adapt to that. So government’s going to have to pay very close attention to the impact on that. And we need to try and find ways around that. And I think the businesses and the business models will probably need to adapt, but you know, we will consider how to support these sectors on an ongoing basis. You know, once they get back once we can see the levels of trading that they’re at once we can understand a bit more about the obstacles that they’re facing, and then we need to make some broader decisions as to what level of support and I’m what context do we do we support each each business sector.

Tim Glover 14:06
But just to clarify, you are working on further support packages for these people in the hospitality industries, as if they do have to keep social distancing measures in place, once the virus has passed, their business could be down and they could still struggle.

Alf Cannan 14:25
Yeah, absolutely. So, you know, we’re looking at a range of economic factors at the moment. And the most important thing for us, generally, is to make sure that we have a high level strategic economic plan that is really delivering on the ground delivering maximum value to to sustain jobs and create jobs and that’s what we’re going to be bringing forward in the next next couple of weeks, I hope and as soon as that package together we’ll be bringing that to Tim wall to to gain their support. And I went as I said, then we will need to look at these sectors. on a case by case basis and try and understand and know what level of government support should be available or what framework government needs to put in place to give the biz the individual businesses an equal and fair chance of making it through and adjusting their business models and adapting to this new normal that everybody’s talking about.

Tim Glover 15:25
Okay, there was, as has already been said, expect his record number of those registered unemployed last month. How quickly do you forecast this number to come down to what are regarded as the usual levels of unemployment and how do you plan to mobilise the workforce?

Alf Cannan 15:43
Well, it’s very hard to say where we expect unemployment to be as I outlined to Tim earlier, we do expect I think, initially to see people getting back to their jobs, but then of course, in a wash this was the support systems in place, it may mask to a certain degree what the what the actual reality is on the on the ground perhaps as those support starts to fall away, as businesses get back on their feet, then we’ll get a true picture of the unemployment level, I’m certainly not going to predict where that will be. But suffice to say it will be significantly higher than where we’ve got it to. Before this all started and bear in mind, we’ve brought it down to its lowest level for some 20 years. The key then will be to us understanding what we need to do to rescale people understand where the new opportunities align, where businesses are developing business opportunities, and then we will start to understand what we need to do as a government to help facilitate that and to get people back into, into into work.

Thank you. Thank you, Chris. So Simon Richardson at business three Six Five.

Josh Stokes 17:03
Good afternoon, Mr. Cannon. Good afternoon. My first question

Alf Cannan 17:06
government’s purchase. Sorry, government’s purchase of the steam packet company. It’s looking like an inspired decision at this time. But given the turmoil in the aviation industry and the real possibility that when the crisis ends, we may have virtually no flights between the other man in the UK has government reconsidered, setting up its own airline to safeguard services as Guernsey did some years ago.

Yeah, so again, the airline industry is under huge pressure at the moment. We all know that you know, the government is maintaining a framework of air links at the moment, a small framework of air links with flights to London and Liverpool. But in our we need to understand in the next few weeks, the airlines plan predominately what our main carriers are or EZ jets plans are for example. And once we understand what while there will have one, then we will need again need then need to understand what government’s plan needs to be I’m not going to dismiss unnecessarily that government needs to take a more proactive stance in this space. But I think we do need to give the airline industry some opportunity to present to the island what its plans are and clearly one would expect initially, some sort of phased return to a new normal in terms of so I think that remains uncertain. It’s far too early really for me, Simon to give any firm commitment other than to say again, this is another area that we are looking at incredibly carefully.

Unknown Speaker 18:58
You’re not against the patient.

Alf Cannan 19:02
I think the government, we need to things are changing frameworks are changing the way we’ve done things in the past or the positions that we adopted pre COVID are not necessarily the positions that we will have to adopt afterwards. In all honesty, I think from an airline industry perspective, I would prefer us to have a stable carrier providing us with well priced travel options. And clearly to balance alongside that one hopes that our purchase of the steam packet will also prove to be an inspired decision. And I hope that actually as the future progresses, we understand a bit more about the balance we will need to adopt between sea and air travel and be realistic and in our ambitions I guess for services to and from the islands certainly in the short to medium term, but in a given all the uncertainty in the end In the airline industry, given the need for us as an island to maintain our critical transport links, to ensure that our people are able to get off the island that our businesses are able to operate, then, clearly, you know, we pay very, very close attention to the options that are opening up in front of us trying to understand a bit more about what framework we will be left with. And we need to we obviously speak closely to the airlines and, you know, if necessary, then government would consider taking a more more proactive step if it felt for any reason that the island would not be left with appropriate links, but it’s very early days on that Simon.

Yeah. Okay. Thank you. And secondly, is the figure in the UK is recovery that you have in mind, where you would think that you would be satisfied to consider reopening Air Services and You’re reopening the island?

internationally? Yeah, I look, I mean, we’ve taken on and we’ve relied a lot on the advice and data that’s been coming through and being provided by our healthcare professionals. In our we are managing that’s very much about border management, that question. We are managing our borders in the most appropriate way. And we have slowly but surely started to understand what we are capable of, and what we need to do to have an appropriate system for our residents. I’m sure that that’s going to continue to progress in in the coming weeks. But, you know, and I think I’ll probably leave it at that. I think, you know, for me to answer that question. That means really sort of having open borders and at the moment, we’re committed to protecting people’s health on the island. We’re committed to residents only Travel, we’re progressing that and we’re going to continue to progress that in the coming weeks. And, again, as we move forward, it’ll be something for us to consider what actions the UK for example, are undertaking what actions other countries are, are undertaking. Clearly we don’t want to be left completely out of the loop in terms of accessibility to to travel, but we do obviously want to be in a position to ensure that certainly on an ongoing short to medium term basis, we’re protecting our own residents living on the island as much as as much as possible.

Unknown Speaker 22:37
Thank you very much.

Alf Cannan 22:40
And finally, Josh Stokes from ITV. Josh.

Josh Stokes 22:44
Good afternoon minister. You’ve spoken today about extending the schemes by 12 weeks. I’m just wondering how does that directly coincide with the phase return to work? Do you have a name of what phase you hope to reach by the 12th week in reference to the medium term response documents, because otherwise presumably the schemes may have to be extended again, if phase five of hospitality isn’t reached by them.

Alf Cannan 23:05
Yeah, there’s no definitive timescales. We are doing our best to act with what we can see in front of us. And as it stands today, and in the last couple of weeks, we can feel confident that we’ve suppressed the virus we contain that we’ve got the right facilities in place. And as I’ve mentioned, many times the health service is well prepared to deal with anybody who needs to go into the hospital for treatment. So there’s no timescales attached. As we’re currently progressing. One would feel confident that we are going to get more businesses back to work, and then we’re going to do that and a relatively healthy timescale. I certainly would not be expecting outstanding businesses towards the back end of July, in terms of return, so I would have expected that majority the vast majority of our businesses should be back at least a month before the extension of these schemes based on the current tracking of the virus and the current performance levels. And we should feel at some point, you have to take a confident optimistic approach that actually know the islands got this under control, there’s very little evidence to say that we shouldn’t be optimistic now that we shouldn’t be confident about the situation on the ground, and that we shouldn’t be confident that we can get most of it or all of our businesses back and back and operating in the next few weeks, rather than wait for the end of these, you know, the period outline towards the end of these schemes.

Josh Stokes 24:39
And presumably, if all those phases do come together, as you say, within the 12 weeks, then the next thing would be borders opening.

Alf Cannan 24:49
Now again, you know, as I’ve just just outlined to Simon, we are very careful with the border situation. You know, the important thing is we’ve got to choose to progress through this, we’ve got to work out how to manage the borders effectively, we’ve got clearly cognizant that residents on this island, you know, whilst everybody wants to be protected, there’s also very good reason for people to come to and from the island, whether that’s on compassionate grounds, whether that’s on commercial grounds, or what, for whatever. Other reason, we can’t just say sort of locked down forever. we’re managing now, I think we’re managing that in a way so that we’re becoming more confident, more understanding of what needs to be done. And, you know, when I think the document talks about borders, open unit, one also has to recognise that we may only have that open to a limited capacity. So that question is very much at the forefront of the Council of Ministers minds at the moment about how we manage the border going forward, how we offer the best protection possible to ensure that we don’t slip back and allow The virus to come onto the island effectively are noticed if you like as much as possible. Clearly, there’s always risk in that the answer to that is smooth, effective, efficient, proper testing and controls at the border. And as I said, we’re working through that. We recognise there’s quite a lot of pressure in this area. However, we’re doing it in our own time, in terms of ensuring that we are prepared to protect the island as much as we possibly can.

Josh Stokes 26:31
Okay, just off the back of that, there’s a second question, isn’t there a real opportunity to potentially boost the tourist rate on the island as we slowly start to move out of the pandemic? Jubilee people won’t be travelling long distances for a while, and the old man may seem like a potential holiday destination for many more people they did. So is this something you’re looking at from a financial perspective? Maybe, you know, take benefit from that?

Alf Cannan 26:53
Well, I alluded to it in my opening remarks, Josh, that actually, you know, is likely the international travel will will be curtailed. It’s hard to understand what holiday options will be available for people and I accept that a lot of people will be thinking that this summer is actually the best option for them maybe to stay at home. There could be opportunities for us in that. We need to draw up and understand what the scale of opportunity is. But the message is actually for people who are considering a staycation and this is the perfect time for people to think about a staycation if we can maintain the control levels on the virus at the current existing rates, if we can open up more businesses, if we can understand exactly what where we need to be safely in terms of levels of gatherings, and we can open up our restaurants and our leisure businesses and the answer the question is actually we could recover some ground. You know if we take that what would have been off Island holiday spend and convert that to an island holiday And then people take that opportunity for a staycation and look to explore and maximise the opportunities that exist for them to have a break on the on the island.

Josh Stokes 28:11
Okay, thank you.

Alf Cannan 28:12
Great. Okay. Well, thank you very much. Oh, Tim is waving at me. Sorry. Apologies, Tim.

Tim Glover 28:18
Yeah, I’ve just wanted to ask about the take chances, comments, recently seen that who’s warned of a severe recession and quote, the likes of which we’ve never seen? Obviously, the UK is our biggest trading partner. The effects are likely to ripple through it. So the the economy, how much of a concern is that and argue and I know you’re not going to give me an answer. But is it under consideration, a change in income tax rates? I think

Alf Cannan 28:46
in short term, I mean, again, I’ll be delivering a budget statement, a budget update, and a statement in July and I’ll outline exactly any plans that the Treasury has one has to recognise at that stage we’ll have a better understanding of the impact on our economy and and got on government revenues. As I’ve said quite a quite a few times, it’s not really the just the cost of the schemes that we’re delivering, per se. It’s the impact in terms of any loss of revenue that we will see, both from VAT, customs and excise and of course, income tax and National Insurance. So, once we get a better position, once we understand that, then we’ll be in a better position to deliver a much more meaningful statement around what sort of actions that the government is taking. But you know, I’m pretty clear now that we need, we don’t want to regress on the island, we don’t want to take negative steps that are going to impact on our development, if anything we want to look ahead positively to try and work out how best to to get out of this to get people back to work and to support businesses through through what is forecasted. A tricky 12 to possibly 18 month period depending on on who you talk to, I mean that the fact is the UK is already in recession. And I bought like us, they have still got support schemes schemes going, they are likely to continue it would appear through to the autumn those schemes and again, you know, as time moves forward, you begin to get a better understanding of where you’re going to see the the impacts on this. So for example, today, you saw Rolls Royce announcing that 9000 jobs are to go globally. You know, and clearly one then asked the question about what sort of impact that might have on manufacturing on the on the island what we then might need to do, you know, in terms of reacting to those types of moves, and I think the island is in is in a strong position in terms of our finances, we’ve generally we’ve got robust finances, and we are going to support that spending. And we’ve already made it clear that we’re going to go borrow syndicated borrow of 250 million pounds, you know, and that money was initially thought to be there for cash flow purposes, but it is equally that we may well find parts of that money to be used to support the economy. But as I said, it’ll be July. Before I need before I’m in a position to issue a proper meaningful statement that will really outline how we can meet the challenges of a UK recession. And what we need to do to support our economy going forward proactively, hopefully, without regressing back, and we’ve had a challenging 10 year period 2008 to 2018 2019. And I just before this virus came about, you know, many ways there’s a lot of positive indicators people was starting to get proper pay rises again, had more pounds in their pocket effectively, to span and of course, we had unemployment at 20 year, low point. We don’t want to lose the progress that we’ve made in that four years and then have to suffer another decade of struggle. So we’re looking to try and avoid that and go forward as positively as possible. And obviously, there may be some adjustments possibly in terms of what we need to do as a government in terms of collection revenue collection, but we don’t want to regress, that will be my message, press. Thank you. Thank you very much indeed. And enjoy the rest of your day.