QUARTERLY REPORT ON THE ECONOMY TO THE COUNCIL OF … · 2014. 10. 3. · QUARTERLY REPORT ON THE ECONOMY TO THE COUNCIL OF MINISTERS 1st April – 30 th June 2014 . CONTENTS Page

QUARTERLY REPORT

ON THE ECONOMY

TO THE

COUNCIL OF MINISTERS

1st April – 30th June 2014

CONTENTS

Page

General Economy 1

Manufacturing 2

Financial Services 2

E-business 3

Shipping 4

Aircraft Register 5

Construction 6

Energy 6

Tourism 7

Film and Media 8

Agriculture 8

Fisheries 10

Retailing 12

Appendices 14

A) Economic Indicators

B) Revenue Account

C) Capital Spending

D) Government Cash and Investments

E) Bilateral Tax Agreements

1

GENERAL ECONOMY

The world economy continues to move slowly towards normality in a haphazard fashion. The International

Monetary Fund (IMF) called it “an uneven global recovery” in its July 2014 update. At this time it reduced its forecast for 2014 to 3.4%, with 4% in 2015. The OECD in May 2014 improved its forecasts to 3.4% in 2014 and

3.9% in 2015, showing a broad degree of consensus on overall growth patterns.

The US economy continues to perform well. The US Government have announced that the asset purchases will

cease in October 2014, having been on a downward trend for nearly a year. The OECD see the recovery as best established in the US with growth of 2.6% in 2014 and 3.5% in 2015. The IMF are more cautious projecting 1.7%

in 2014 rising to 3% next year, citing low first quarter figures. These certainly appear to be weather driven, with strong second quarter growth of 4% announced at the beginning of August, after the IMF published.

The Eurozone finally acted on the 4th June 2014 with a 400bn Euro stimulus package, alongside negative central

interest rates, faced with low growth and the risk of deflation. The IMF project growth of 1.1% in 2014 rising to

1.5% next year. The OECD estimate 1.2% this year and 1.7% next year. Deflation concerns remain and unemployment remains stubbornly high, although it has at last started to reduce in Spain. Inflation in July fell to

0.4%, in what the central bank calls the “danger zone”. The risk now is that eurozone citizens will believe prices will fall, and as a result stop spending. This could create a negative cycle of reduced growth, further price cuts and

less spending. The other risk with deflation is that it increases in real terms the value of debts, putting further

pressure on an already depressed European housing market.

Whilst the outlook for the Eurozone remains uncertain, the United Kingdom continues to grow strongly. The IMF project growth of 3.2% in 2014 and 2.7% in 2015. The UK economy has now returned to pre-crisis levels, and

unemployment is at a six year low. All this brings further pressure on the Bank of England to consider an earlier upward move on interest rates, with most forecasters now seeing a rise around the end of 2014, or early in 2015

as likely.

The UK Housing market showed the first signs of cooling in late July. Mortgage availability continues to be a

concern, with new lending criteria making it even more difficult to access borrowing. There is evidence that the UK Housing market is still being driven by strong growth in London, with lower levels of activity elsewhere.

Outlook

The Isle of Man economy improved during the second quarter. Employment numbers were particularly strong, rising by 350, and unemployment fell to around 900, a rate of around 2%. To some extent this was predicted in

the strongly positive business barometer survey in Quarter 1, and there was some reduction in the levels of

optimism in this report seen in Quarter 2. Partially this result can be explained by changes in the mix of respondents. There are clearly still difficult trading conditions in the domestic economy, particularly retail and

construction. Strong employment levels should support these areas going forward, as they are dependent on general stability and confidence, which can only come through increased employment.

It should also be noted that, 2013 excepted, the second quarter normally sees a growth in employment and

maintaining employment at this level through Q3 and Q4 will be crucial. Supporting the strong employment

numbers though are higher levels of Income Tax receipts, which reinforces the fact that this not just a seasonal increase.

Local bank lending volumes fell by a further 2% (£50m) in Quarter 2 as people continued to repay debt. Access to

lending remains an issue for borrowers. Corporate lending picked up slightly (up 3%, £18m in the Quarter) a

welcome sign that businesses are starting to invest, and that banks are supporting this.

Local Deposits fell another 2% (£97m) over the quarter, with continued moves away from low interest rates on deposits. Around £1bn (around 20%) of local deposits have been withdrawn since the end of 2008, showing the

scale of the move out of traditional banking deposits into other forms of investment.

2

MANUFACTURING Current Situation The manufacturing and engineering sectors have seen positive growth in the last quarter, in line with expectations.

Recruitment has taken place across all sub-sectors including within food and drink manufacturing, which has seen an improvement from the 1st quarter of 2014. Confidence has generally been high, however, the results of a

review of current trading are now mixed, as a minority of businesses are expecting reduced orders.

Investment by local firms in training and productive capacity has been high in the previous quarter as strong order

book growth has continued in aerospace and engineering, placing continued pressure on local firms’ ability to satisfy demand. A shortage of engineering skills and the upward pressure that this places on labour costs has

continued to act as the principal limit to sector growth over the previous quarter. Some firms have been unable to

take additional contracts as a consequence, while others hire contractors at high cost.

The Department’s grant assistance scheme resulted in actual private investment of £700k+ and a total investment

of £1.2m during the 2nd quarter of 2014. The Department’s grant offers to new and existing business in the 2nd quarter of 2014 have been high and should generate up to £2.5m in private investment in the medium term.

Outlook

The manufacturing and engineering sectors are expected to continue to perform strongly in the coming quarter, and industry surveys have indicated that firms are planning to recruit further staff later in the year and local

investment will continue. The global aerospace industry is expecting a period of sustained growth up to 2020, and Isle of Man firms are well placed to take advantage of demand in the market.

However, due to the diverse nature of the manufacturing and engineering sectors, a minority of firms are less

positive about the coming quarter. A decline in orders for military hardware and a high dependence on a small set

of very large global producers in the aircraft industry are cited as threats to growth by some firms. High prices of raw materials, energy and price deflation for finished goods have also been identified. Some producers have

concerns that exchange rates and the strength of the pound will make Manx exports uncompetitive. The Department has identified a number of leads and opportunities which is it pursuing, including:

• Assisting an Isle of Man Aerospace Cluster member with plans to make the Isle of Man a base for their

group apprenticeship program. Support from the Isle of Man College and Advanced Manufacturing Training

Centre will also be needed. A mapping study is currently underway with the College to assess practicalities.

• A speaker from a UK university at a recent Isle of Man Aerospace Supply Chain forum has formed a

relationship with a local hi-tech firm which is resulting in accelerated development of a new product and

the formation of a new local tech start-up.

• A Memorandum of Understanding has been agreed with Mersey Maritime North West College of

Engineering and the Isle of Man Aerospace Cluster to collaborate on the development of the Island’s

Advanced Manufacturing Training Centre.

• Two new manufacturing leads are being progressed by the Department which if they are successfully set

up on the Island should result in the creation of significant employment opportunities on the Island.

FINANCIAL SERVICES Current Situation Overall the number of those employed in the Financial and Professional Services has increased during the last

quarter. Whilst there were a small number of previously anticipated job losses within banking; these have been offset by job growth in the corporate service providers, insurers and professional financial services. Anecdotal

indicators in the financial services sector suggest growth in the 2nd quarter which is positive and counter to the trend expected.

Recent HMRC decisions regarding the accessibility to the UK banking ring-fence from the Crown Dependencies and

increased focus on transparency will put pressure on numbers of bank licences. The Department continues to work

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on a bank by bank basis to support their emerging business models and recent new business activity provides some level of counterpoint to these threats.

Total funds under management on the Isle of Man experienced continued growth in the 1st quarter 2014 by 0.9%. This small growth masks the reality that the value of new funds are increasing but these are being offset mostly by

old funds in run off.

The 2nd quarter 2014 also saw the licensing of 3 new captive insurers on the Island, and the licensing of an additional fiduciary. The 1st quarter also saw a slight increase in the number retirement benefit schemes managed

on the Island, while 2nd quarter growth has been higher with an additional 35 pension schemes, or 3.9% growth. These early recovery signs, though fragile, are backed by anecdotal evidence from the relevant sectors.

The 2nd quarter of 2014 has seen the establishment of a digital currency sub-sector on the Island, which sits both within financial services and e-Business. Currently the sector is very much in its infancy. However several digital

currency exchanges are now trading from the Isle of Man and recruiting local staff. The DED has worked with the FSC to ensure an appropriate protection regime is implemented and this has been well received initially.

Following a meeting held at the European Payments Council last month, approval has been received and the process clarified for the Isle of Man community of banks to apply for membership of SEPA. The Attorney General’s

office will now draft the necessary legal papers and an application will follow. The process will be complete by the end of 2015. This will ensure that the IOM can compete with other jurisdictions cost effectively on Euro payments.

Outlook The pressure for regulatory and those of international challenges are expected to continue into the second half of 2014 but we are well placed to address these. External pressure on profit erosion and transparency will continue,

particularly from Europe and, in the long term, will require a repositioning of the IOM offering to ensure that our business models and infrastructure can comply with future regimes.

The level of impact that the FATCA reporting obligations will have on fiduciaries has become clearer and the Isle of Man is well placed. Preparation for Solvency II amongst Insurers is continuing within the financial services division

and, again, the financial services division is comfortable on the progress made.

Whilst the Department expects pressures to continue in banking, a manufacturing led recovery in the UK combined

with innovation industry advancements is creating opportunities for IOM businesses. As part of a need to nurture these burgeoning opportunities, the Department is working with the FSC on financial technology legislation and a

review of the domestic banking model. More information will be provided in subsequent quarters.

E-BUSINESS Current Situation The 2nd quarter of 2014 has seen e-Business employment levels rising suggesting sector growth is in line with

Departmental estimates. Advertised job vacancies in the sector are up slightly from the end of the 1st quarter. The e-Business Division has worked in tandem with the Financial Services Commission to assist in the

establishment of a local digital currency sub-sector. Currently digital currency services are trading and recruiting

locally on the island, with six companies currently being established on the island and recruitment taking place. It is expected that steps to control digital currencies through FSC anti-money laundering registration and oversight

will be in place by the end of 2015 legislative year.

The first year e-gaming strategy document has undergone its first review and the amended plan is being prepared for approval by the Department. The e-Gaming Team continues to attend relevant industry events to promote the

Island on an international basis. Early indications are tending to show specific interest in the Island from both The

US Tribes and from Israel.

e-Gaming Licences April 1st 2014 July 1st 2014

Live Licences 54 56

Licences Approved 1 2

Licences Pending 3 6

4

Licences Being Prepared 5 6

Licences Revoked/Rescinded 4 0

e-Business April 1st 2014 July 1st 2014

Job Vacancies 24 27

There has been continued progress of licence applications through the regulators office with two new licences

going live and an increase in the number of applications pending and being prepared.

The UK continues to introduce its changes to the gambling regulations including an introduction of taxation at the place of consumption. The changes are most likely to impact businesses solely targeting UK players, where a UK

licence will be a requirement which was not the case with the previous regime. The e-Gaming Team is currently

researching how many of our existing licence holders may be affected and believe this to be a very small number, if any. The Code Club MEF initiative has now developed into a drop in centre for the ICT Professional community who

regularly use it for meetings and presentations. In this period the Code Club hosted a conference for professionals by live streaming a Google conference from San Francisco over a two day period. The Code Club’s

launch had been successful and demand for enrolment in the Code Club exceeds supply.

The Department has identified key digital areas that can be developed locally including computer games, online

dating and data management and protection.

Following attendance at the Global Developers Conference, London Fintech Week and the Online iDate

Conference, the Department has successfully approached senior representatives from above industries and generated interest in the Isle of Man which has led to six businesses visiting the Island in the quarter and the e-

Business team will progress these leads in the next quarter.

Outlook The outlook remains positive as identified by the number and quality of recent site visits albeit the pipeline has

indicated some contraction from early stage, less well funded enquiries. The outlook for ICT is similarly positive based upon the high volume of enquiries from potential new businesses.

SHIPPING SECTOR Current Situation The table below shows the register performance over the first quarter of the reporting year in terms of numbers on

the register. The table shows a good level of activity where 43 vessels have been added to the register and 21

deleted. Tonnage continues to grow as vessels are added and Far East owners continue to be supportive of the register as word spreads of the cost advantages and service culture within the registry.

31/03/2014 30/06/2014 Net Change

Merchant Ships 442 449 +7

Commercial Yachts 98 93 -5

Sub-total - surveyed fleet 540 542 +2

Pleasure Yachts 329 338 +9

Fishing Vessels 71 74 +3

Small Ships 121 120 -1

Fleet Total 1061 1074 +13

Total Gross Registered Tonnes 16.31m 16.56m +0.25m

This quarter the registry has seen a decent level of activity in terms of ship registry transactions (re-mortgaging, de-registrations, registrations, name changes, and registry transfers) which reflects a continuing level of business

through the local shipping sector. Figures for this quarter are shown below:

5

Q1/2014-5

New ownership companies 12

Vessels that have contracted Representative Persons on the Island 19

Mortgages arranged through IOM advocates 20

Separate transactions recorded with the registrars 1178

Outlook The outlook remains very positive. Many of the register’s existing owners have placed orders for new vessels to be

built and will register them once they are completed over the next 2-3 years. Shipping is seeing something of a recovery from the recent financial crisis as freight rates continue to climb. As a result, the Ship Registry has a

healthy ‘pipeline’ of new ships and super yachts under construction.

Some movement resulting in a slight drop in numbers of super yachts relates to the requirement in the Balearic

Islands for Charter Licences. Current local rules require an EU Flag for the yacht and the Isle of Man does not qualify. This is a commercial consideration for yachts seeking Mediterranean charters and has forced some owners to re-

register in EU Flags such as UK or Malta.

AIRCRAFT REGISTER Current Situation The aircraft register continues to add an average of seven additional aircraft per month. The mix of aircraft joining

the register has changed slightly; the number of business jets has increased but the number of airliners (currently between commercial lease agreements) has reduced. In terms of aircraft remaining on the register (net growth),

the business jet numbers are continuing to increase which is positive for the Island’s private sector as these provide the greatest opportunity for the additional (non-aviation) services and a larger number of parked airliners

have left the Register to be taken back in to commercial service on other registers.

Aircraft Register Total 31/03/2014 3/06/2014 Gross Change

Executive jets 468 483 15

Airliners between commercial lease 90 91 1

Helicopter/turbo prop/small plane 123 127 4

Aircraft Fleet 681 701 20

Aircraft Register Net 31/03/2014 30/06/2014 Net Change

Executive jets 329 336 7

Airliners between commercial lease 21 14 -7

Helicopter/turbo prop/small plane 85 85 0

Aircraft Fleet 435 435 0

Two members of staff have left to join the private sector and additional staff have been recruited to cope with the

high workload and are expected to start during the second week of July. The construction of the new IT system is moving forward and is on track to be operating internally by the end of September 2014 and complete installation

is forecast to be in operation by 31 March 2015. This is expected to improve both productivity and provide better online services to clients.

Outlook Demand for registration continues to grow. High demand will continue to create revenues and jobs in professional

services on the Island.

6

CONSTRUCTION Current Situation

Construction activity remains depressed and some significant construction companies continue to be reliant upon

Government as a client for the bulk of their work.

There are some positive indications though. Professionals at the “front end” of the construction project process e.g. architects, are reporting that they are busy with private commissions which leads to optimism that projects will

reach the construction phase next year.

Additionally, significant private housing projects have commenced at Port Erin and have received planning

permission at Peel for a total of circa 295 new dwellings.

Whilst this optimism is welcomed, it is tempered by opinion from some industry commentators who predict that the Sector is susceptible to “overheating” in the event of a significant upturn in demand for new building which may

result in demand being unfulfilled or required to be delivered by off-Island contractors. The susceptibility is

attributed to down-sizing and skills losses during the past years of recession.

Other potential problems facing the sector are price increases and supply times for materials, upward pressure on employment costs from employees and sub-contractors expecting increased rates following a period of no

increases.

Island quarry outputs have generally shown modest production increases over the past year and construction

sector unemployment numbers continue a downward trend. There were 129 individuals seeking construction work in May 2014.

Government continues to invest in construction sector training. The Department of Economic Development

provides financial support to apprentice training and to the skills development of established workers, and the

Department of Education and Children continues to provide construction trades learning facilities and training to help the sector to acquire and develop the skills and knowledge required to sustain the sector.

Outlook

There is optimism that demand for construction services will increase in the medium term, but concern that the

construction sector’s abilities to meet that demand (especially for large projects) have declined over recent years.

ENERGY Current Situation The energy sector has seen a stable quarter, without a significant change in employment levels.

Most of the recent electricity tariff changes were expected and the manufacturing sector was supportive of the new industrial tariff.

An expression of interest for a 3D seismic study produced 7 responses from businesses. The collection and evaluation of 3D seismic data to better quantify the hydrocarbon resource will improve the attractiveness of a

future hydrocarbon licensing round.

Browne Craine & Co launched the Manx Cleantech Hub which is affiliated with the Commonwealth Environmental Investment Platform. It is hoped this will expand the Isle of Man as a centre for Cleantech growth and establish

the Island as a principle in the field of renewable energy.

The Department hosted two energy/Cleantech events at the International Festival for Business in Liverpool to

promote the offshore energy opportunities in the Isle of Man territorial sea and the benefits for businesses relocated to the Island.

The Department continues to build relations with other small islands and have joined as an Associated Island the

EU funded SMILE-GOV project at no financial cost. This project provides European Islands with an opportunity to

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share best practice and collaborate on developing future energy plans. The IOM are part of the Island cluster which includes Isle of Wight, Alderney, Guernsey and Scilly Isles

Outlook

Continued economic growth is expected in the long-term.

The development of offshore energy in Isle of Man waters continues to be progressed. DED are working closely

with DOI to evaluate submissions for potential tidal site developments. It is expected that developers will be appointed in July and offered survey licenses.

The deadline for submission of offshore wind farm tenders is 14 July. Interview and selection process will be concluded during the summer and the site award(s) proposed in October 2014.

DED are considering a proposal to develop an interconnector hub on the Island to facilitate the transfer of renewable energy from multi projects in the Irish Sea to the UK grid.

TOURISM Current Situation Tourist accommodation employment numbers have increased over the previous quarter and while some of this

growth is seasonal, numbers of employed are higher than at the end of 2nd quarter 2013, suggesting some non-seasonal growth has occurred. The 2014 Quarter 1 passenger figures showed a 7% increase in the number of

traditional leisure visitors which supports this analysis.

Current ongoing initiatives to stimulate growth include identifying the variances within the accommodation sector via occupancy statistics to establish where the Department of Economic Development and the private sector need

to initiate targeted marketing campaigns undertaken in conjunction with the Visitor Economy Strategic Group.

As reported previously during the year 2013-14 Leisure visitors increased by 5.2% and visitor spend increased by

3.8% to £107 million or £367 per visitor. The fiscal benefit of the partnership marketing campaigns was £182,865 for an investment of £39,406, which is a return of £4.60 for every £1 spent.

Motorsport performance over the quarter is dominated by the TT which continues to show consistent annual

growth. Provisional data analysis suggests:

• A 7.5% increase in Steam Packet TT travel.

• A 5% increase in TT air passengers.

• A 17% increase in sponsorship revenue, excluding the one-off Subaru payment of £100,000.

• An 8% increase in sales of merchandise.

• TT TV global viewing figures are anticipated to be approaching 30 million this year, subject to confirmation

by Kantar Media; an increase in the region of 15% over last year’s viewing figures.

Outlook Isle of Man Tourism in partnership with the Steampacket and the Post Office has a presence at the Tour de France,

Grand Depart in Yorkshire to promote the Island as a Cycling Destination. The bid with IOM Cycling Association for

the IOM to host the 2016 British Cycling National Road Championships is progressing and the deadline is January 2015.

The main potential threat to the tourist industry includes the lack of capacity provided by the air routes and the intensive investment required to develop new air routes.

The Department is continuing to work with the Steam Packet to establish a Visiting Friends and Relatives (VFR)

campaign in order to increase volume but also to address the 7.5% drop in this particular market as identified in the 2013 Passenger Survey and in the 2014 Quarter 1 figures.

Motorsport performance also appears to be strengthening with Advance bookings for the Festival of Motorcycling continuing to show good growth with sea travel showing a 22% year-on-year increase at this stage. First day ferry

bookings for TT2015 saw a 40% increase on last year’s comparable figure which further indicates the strong

demand for the event. Future growth in TT visitors is expected to increase with additional ferry, air and accommodation capacity as current demand continues to exceed supply.

8

FILM & MEDIA Current Situation

There has been a healthy level of film production activity and local spend and employment in the first half of 2014.

Take Down has been shooting on the Island from 25th June to 18th July 2014, and has employed over 40 local freelancers and created 2,500 bednights.

Pinewood Studios recently won its appeal to double its stage capacity and improve existing infrastructure.

Following the announcement that Pinewood had won planning permission to double in size, shares in the company

had gone up to 482p from 415p at the start of June.

Belle went on a wide UK Theatrical Release on the 13th June and has performed well, having exceeded £1m at the UK Box office over its first two weekends.

The Mannin Shorts short film scheme is currently underway, which will develop the local skills required in the area

of crafts (e.g. wardrobe, construction) but also in critical background areas , e.g. project development, financing

and distribution. Isle of Man Film has been working with three project teams, which this year are eligible to receive match-funding from Isle of Man Film Ltd of up to £7,500 each:

• “Breathless” by Shawn Sturnick, Produced by Angela Campbell and Jennifer Chance. Filming took place on Port St

Mary Promenade 3rd to 9th June 2014

• “Muck” by John Craine, Produced by Bev Lawley and James Barrett – Filming 14th to 19th July 2014 • “The Battle of Ronaldsway” by James Franklin, Produced by Mark Brabbs

Outlook

The Isle of Man film industry is expected to remain stable in the coming quarter. From July 1st 2014 Stuart Semark of Connect Media Services Ltd has been engaged on a 6 month trial basis to generate leads from off-Island

businesses related to media and creative industries. Mr Semark is to arrange visits each month to the Island from qualified leads who are interested in potentially establishing physical businesses on the Island, market the

opportunity in the UK and to report progress on a monthly basis.

AGRICULTURE Current Situation

The recent spell of good weather has been a bonus to the farming industry. This combined to the mild winter and

early spring has meant that most producers have managed to harvest good crops of hay and silage. Winter barley

harvest has started and prospects for the cereal harvest look good.

Isle of Man Meats have commenced the refurbishment of the plant; with modifications to the lairage and killing

line already well under way.

The market place for meat in the UK and Ireland remains challenging however IoM Meats have introduced an

extended booking in procedure and are now able to better match stock coming onto the plant to customer

demand. This has helped margins on beef to recover to their budgeted level of 10%.

IoM Meats are maintaining their position as ‘destination of choice’ for beef producers. The graph below illustrates

on a monthly basis the percentage share they have of the cattle sold on the island, this equates to 81% for the

year to date.

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The destination of choice story is stronger for sheep and lamb some 84% of sheep ewes and lambs sold to date

this year have gone to IoMM’s. Some sheep were exported in the spring this year. However this was opportunistic

due to low transport costs where the stock were exported as a ‘return load’ on incoming trailers carrying new stock

to replace those lost in the snow.

Isle of Man Meats have recently taken the decision to alter the method for calculating payment rates for lamb to

take better account of the true market price. This improved alignment with the market is another positive step in

maximising their commercial potential. This more realistic reflection of the market has enabled them to amend

their percentage to 92% of the UK price, up from 86% of the previous price.

Jan Feb March April May June

% IoM 87% 86% 67% 75% 89% 76%

Exported 63 74 257 155 62 178

IoMM's 386 439 491 430 412 495

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200

300

400

500

600

700

800

Nu

mb

er

Cattle > 18 months exported vs IoMM's

Jan Feb March April May June

Exported 0 648 919 619 0 0

IoMM's 3166 1693 1582 1351 1712 2125

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1000

1500

2000

2500

3000

3500

Sh

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Sheep utilisation

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At current prices it costs around £13.50 to export a lamb which makes the price paid by IoMM’s of 92% of selected

UK markets an attractive option for farmers; hence the exported sheep numbers are lowest for the year to date for

a while

Policy

Discussions have started with the Industry Advisory Committee (IAC) as to how the Department should address

the 9 recommendations made by the EIPRC. IAC sought clarification of some of the recommendations from the

Chair and clerk of the EIPRC last week. Options such as introducing a definition of ‘Active Farmer’ similar to EU

proposals and front-loading of payments are being investigated as ways of ensuring the Countryside Care Scheme

reaches its intended recipients.

In conjunction with the industry, the Department is working on a Food Business Development Strategy which will

refocus the goals of the agriculture (and fisheries) sectors on being competitive and profitable by improving and

increasing the diversity of food products produced on the Isle of Man. This Strategy is scheduled to be laid before

Tynwald in November and will likely result in some changes to current agricultural schemes and policies.

FISHERIES Current Situation Inland Fisheries

Licence sales to anglers are up compared to last year and, for several categories of licence, are approaching or

exceeding the same period in 2012. However, sales of adult reservoir season licences, which make a major

contribution to licence income, while better than last year, are noticeably down compared to the same period in

2012.This may be due to the rise in their price in 2013, by 10%. For this season, with the exception of the

reservoir season concessionary licences available to OAPs and those with disabilities, licences have had to be

purchased via the Government on line system. For people finding it difficult to access this system, help has been

provided to those coming to DEFA. More recently, paper licences, which can only be purchased from DEFA have

been made available. It is hoped that, as people become more familiar with the online system and the economic

situation improves licence sales will grow, aided by promotional activity carried out by the Department.

0

2000

4000

6000

8000

10000

12000

J F M A M J J A S O N D

Sheep Exports 6-12 months 2010-

2014

2010

2011

2012

2013

2014

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Sea Fisheries

Queen Scallops

The stock assessment carried out by Bangor University, scientific advisors to DEFA, in May this year, indicated a fall

in Queen Scallop volume and it recommended a nil catch of Queen Scallops this year. The Isle of Man Queen

Scallop Management Board (QMB) has agreed a limited fishery this year, together with a range of measures to

permit fishing whilst protecting the Queen Scallop population. Weekly reports on the fishery are provided to the

QMB so that it can recommend appropriate changes to the fishery if required.

The Marine Stewardship Council’s accreditation of the Isle of Man trawled Queen Scallop fishery has been

suspended, pending receipt of a recovery plan to bring the fishery back into a sustainable condition. This report

will be completed for the deadline of 14th August.

Outlook

It is hoped that the measures introduced this year will be sufficient to enable the fishery to recover for next year. A

financial support scheme is being considered to assist fishermen through this season, compensating for the loss of

earnings this year, compared to last year.

King Scallops

The King scallop season (November 2013 - May 2014) appeared to be successful. Latterly some complaints were

voiced by Manx fishermen about increasing numbers of UK vessels, particularly from Northern Ireland, fishing in

the southern part of the Territorial Sea. This is their right however, as is the ability of Manx fishermen to fish UK

waters.

DEFA Minister (then) Phil Gawne MHK had previously offered the opportunity to explore a southern scallop

management zone, perhaps with some similar characteristics to the Ramsey Bay Fisheries Management Zone. Such

a concept could provide a higher degree of autonomy for Manx fishermen in terms of managing Manx scallop

stocks. To date the industry and Manx Fish Producers Organisation have not pursued or chosen to discuss this

option further.

The scallop survey conducted in April 2014 identified relatively high numbers of juvenile (2 year old) scallops on

the Targets ground. This would indicate a recovery of this ground from the heavily depleted state left after the

2009 fishery following a similar good recruitment in previous years. Based on expected growth rates, this juvenile

stock will become fishable for the 2016 season (November). It will be important to undertake strategic planning for

the sustainable management of this stock in order to avoid a repeat of the 2009 depletion.

Bangor University continue to progress development of a stock assessment for this species to complement that

already undertaken for the queen scallop.

Outlook

Given the relatively poor management of scallops in the Irish Sea and beyond, the significant increase in fishing

effort applied to this species in recent years, and the problems in the related Queen scallop fishery, there is a

danger of even higher, compensatory efforts in this fishery in 2014 and beyond. Combined with poor levels of

stock knowledge, there is therefore a higher risk of a problematic situation developing. It is recommended that

strategic fishery management is implemented prior to the fishery over the next 2-3 years. This is likely to form part

of the forthcoming 5-year fisheries plan to be developed by DEFA.

Whelk

The pot fishery for whelk around the island is a relatively recent development and has involved a small number of

vessels. It has not historically been included in the annual Fisheries Digest of landings and value prepared for DED.

In 2013 however, it was included and the previous 3 years of data considered. It clearly indicates a substantial

increase, from 135 tonnes in 2011 to 543 tonnes in 2013. It is now the 4th most valuable fishery for the Island.

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Although the current management regulations are considered to be better than in UK waters, for example, we

have a higher Minimum Landing Size plus limitations on potting within the 0 to 3 nautical miles of the Territorial

Sea, this has highlighted the need for greater consideration of its management since whelk are a potentially

vulnerable species for overfishing.

Scientific advisors from Bangor University have begun collecting data which will assist in developing more informed

management strategies.

Outlook

This is a potentially vulnerable species with increasing fishing effort being directed towards it. Limited data

available makes appropriate management difficult, although existing precautionary legislation does provide a

degree of safety.

RETAILING

Current Situation

The retail sector continues to face serious challenges, especially local and comparison retail. While sales are

consistent, the margin is being constantly eroded with increasing costs and a downward pressure on prices. Seasonal trends are evident and this is evidenced by the creation of some jobs in the sector in the last quarter and

the continued improvement in shops occupancy in the main Douglas shopping area. The graph below shows four

months of increased occupancy: -

The sector has continued concerns regarding several key issues including the proposed increases to the minimum

wage, ongoing road works disrupting access to town centres, the speed of progress of Strand Street Regeneration works and proposals to introduce car parking charges.

• Retail Sector Strategy – Progression of the strategy actions has slowed due to commitments with the

International Festival for Business. It is hoped that these will be prioritised during late July and August.

• Douglas Regeneration – The Phase 2 major works in Strand Street have re-commenced following the

agreed pause for TT week. This comprises Strand Street from its junction with Regent Street to the Strand

Shopping Centre and has a completion date of November 2015.

• Castletown Consultancy – Martin Sewell (DED’s on-Island Retail Consultant) has now met all interested

parties, including Castletown Commissioners and Mr Roy Tilleard. The draft report has been received and

accepted by the Department.

0

5

10

15

20

25

Douglas - Empty units

Number of empty units

13

• Central Douglas Masterplan – This project remains on schedule and on budget. Further stakeholder

workgroups were held during May, followed by a public exhibition at the Strand Centre which was

generally well received.

Outlook

Continued cross-sector economic growth is expected to aid the retail sector. However, consumer confidence has

still not increased to the point at which it develops into real spending benefits within the high street.

14

ECONOMIC INDICATORS

A. GENERAL

1. Labour Market

a) Unemployment

2012 2013 2014

Males Females Total Males Females Total Males Females Total March 735 296 1,031 855 353 1,208 763 298 1,061

June 699 293 992 722 334 1,056 622 296 918

September 702 312 1,014 706 316 1,022 December 741 279 1,020 807 352 1,159

b) Employment Number of Number of Number of Employers Persons in jobs being Employment undertaken Quarter 4 2008 3,784 39,259 46,057 Quarter 1 2009 3,788 38,637 44,824

Quarter 2 2009 3,805 39,053 45,589

Quarter 3 2009 3,790 39,048 45,619

Quarter 4 2009 3,816 38,846 45,397

Quarter 1 2010 3,824 38,673 45,186

Quarter 2 2010 3,848 39,154 46,075

Quarter 3 2010 3,854 38,726 45,588

Quarter 4 2010 3,816 38,555 45,457

Quarter 1 2011 3,908 38,391 45,211

Quarter 2 2011 3,916 38,910 45,961

Quarter 3 2011 3,913 39,471 46,851

Quarter 4 2011 3,927 39,219 46,599

Quarter 1 2012 3,952 38,833 46,012

Quarter 2 2012 3,964 39,246 46,657

Quarter 3 2012 3,910 38,916 46,530

Quarter 4 2012 3,915 38,723 46,391

Quarter 1 2013 3,946 38,594 46,201 Quarter 2 2013 3,963 38,478 46,058

Quarter 3 2013 3,987 38,590 46,385 Quarter 4 2013 4,014 38,375 46,441

Quarter 1 2014 4,014 38,206 46,228

Quarter 2.2014 3,969 38,543 46,875 c) Self-employment - ITIP ‘A’ Cases (self-employed) and ‘C’ cases (employed and self-employed 2011 2012 2013 2014

Quarter 1 7,708 7,840 7,945 7,234 Quarter 2 7,568 7,689 7,819 7,729

Quarter 3 7,510 7,692 7,725 Quarter 4 7,471 7,755 7,647

15

d) Job Vacancies

Vacancies notified during the Quarter

2012 2013 2014

F/T P/T Total F/T P/T Total F/T P/T Total

Quarter 1 1,048 397 1,445 1,126 434 1,560 1,221 505 1,726

Quarter 2 1,101 403 1,504 1,258 575 1,833 1,337 542 1,879

Quarter 3 1,039 569 1,608 1,302 670 1,972

Quarter 4 834 369 1,203 1,004 434 1,438

Total 4,022 1738 5,760 4,690 2,113 6,803

e) Unemployment and Vacancies by Occupation

No. of

unemployed at

the end of June

No. of vacancies

notified during

June

No. of vacancies

Remaining at the

end of June

2013 2014 2013 2014 2013 2014

Farmwork 15 12 0 2 0 2

Engineering – skilled 14 17 22 4 14 1

Factory Work – unskilled 24 9 0 3 0 21

Construction – trades/skilled 90 93 27 32 18 2

Construction – unskilled 82 55 9 5 6 14

Banking and Insurance – administration 41 23 29 16 19 6

Finance and Accounting – professional 13 5 19 11 10 47

Health and personal care 35 21 65 63 33 6

Education/teaching 8 21 20 21 18 6

Other professions 14 8 10 8 8 14

Management and Consulting 20 18 11 31 8 12

ICT 17 15 10 17 7 8

Rest of administrative/clerical 84 61 26 21 15 7

Drivers 29 21 19 8 9 75

Hospitality 125 119 122 173 91 8

Domestics and Office Services 52 42 22 18 8 32

Retailing/Sales/Buying 148 94 48 66 26 4

Other/not classified 67 34 15 9 1 0

No previous job 178 250 0 0 0

Total 1,056 918 474 508 291 266

f) Work Permits

i) New Work Permits Issued

2011 2012 2013 2014

Quarter 1 604 500 353 409

Quarter 2 751 546 598 490

Quarter 3 827 713 464

Quarter 4 572 491 453

Total

16

ii) Renewals

2011 2012 2013 2014

Quarter 1 775 670 524 488

Quarter 2 859 746 678 543 Quarter 3 840 781 653

Quarter 4 722 637 519

Total 3,196 2,834 2,374

iii) Employed Permits

2011 2012 2013 2014

Quarter 1 1,250 1,061 807 823 Quarter 2 1,461 1,190 1,158 952

Quarter 3 1,567 1,352 1,389

Quarter 4 1,175 1,039 1,036 Total 5,453 4,642 4,259

iv) Self-Employed Permits

2011 2012 2013 2014

Quarter 1 129 109 70 74 Quarter 2 149 102 118 81

Quarter 3 100 142 133 Quarter 4 119 89 67

Total 497 442 388

v) Indefinite Permits

2011 2012 2013 2014

Quarter 1 1 1 2 1 Quarter 2 1 2 0 3

Quarter 3 7 0 1

Quarter 4 0 2 1 Total 9 5 4

vi) Temporary Permits

2011 2012 2013 2014

Quarter 1 1,378 1,169 875 896

Quarter 2 1,609 1,290 1,276 1030 Quarter 3 1,660 1,494 1,116

Quarter 4 1,294 1,126 871 Total 5,941 5,079 4,238

* Provisional

17

2. National Insurance

Number issued to foreign nationals

2011 2012 2013 2014

Quarter 1 95 60 80 92 Quarter 2 143 98 100 106 Quarter 3 109 99 101 Quarter 4 61 100 82 Total 408 357 363

3. Child Benefit

Net transfers, children and adults

2011 2012 2013 2014

Quarter 1 -26 -9 70 37

Quarter 2 34 26 46 -11 Quarter 3 80 46 28

Quarter 4 148 -22 -6

Total 236 41 138

4. Inflation

2011 2012 2013 2014

March 6.7% 3.0% 3.3% 2.6%

June 6.4% 2.5% 2.9% 2.8%

September 5.9% 2.8% 2.4%

December 4.7% 2.5% 2.9%

5. Passenger Arrivals

2011 2012 2013 2014

Quarter 1 106,774 107,086 109,971 107,101

Quarter 2 199,000 195,368 200,556 202,000

Quarter 3 210,564 209,158 214,385

Quarter 4 127,969 131,001 121,076

Total 644,307 642,613 645,988

* Provisional

6. Business Visitors

2011 2012 2013 2013

Quarter 1 16,202 14,784 16,097 13,641

Quarter 2 15,609 17,153 17,808 11,409

Quarter 3 23,023 18,117 17,408

Quarter 4 13,332 15,508 15,020

Total 68,166 65,562 66,333*

* Provisional

18

7. Non-Business Visitors

2011 2012 2013 2014

Quarter 1 22,201 27,746 26,081 22,792

Quarter 2 85,143 83,423 84,314 88,604

Quarter 3 89,280 89,154 83,115

Quarter 4 29,694 28,586 30,911

Total 226,318 228,909 224,421

* Provisional

8. Postal Traffic (000s)

a) Letter Mail

i) Inward

2011 2012 2013 2014

Quarter 1 124 131 87 65

Quarter 2 114 105 76 63

Quarter 3 113 105 73

Quarter 4 139 115 79

Total 490 456 315

ii) Posted (IOM Delivery)

2011 2012 2013 2014

Quarter 1 72 74 62 63

Quarter 2 75 67 66 60

Quarter 3 71 63 60

Quarter 4 83 76 70

Total 301 280 258

iii) Posted (UK & International Delivery)

2011 2012 2013 2014

Quarter 1 61 63 67 61

Quarter 2 66 62 64 61

Quarter 3 61 62 58

Quarter 4 78 83 93

Total 266 270 282

b) Parcel Mail

i) Inward

2011 2012 2013 2014

Quarter 1 127 145 104 114

Quarter 2 104 124 114 112

Quarter 3 82 118 108

19

Quarter 4 163 143 151

Total 476 530 477

ii) Posted 2011 2012 2013 2014

Quarter 1 57 71 71 57

Quarter 2 71 71 57 457

Quarter 3 71 71 57

Quarter 4 71 71 71

Total 270 284 256

9. Electricity Consumption (Thousand Units)

i) Domestic

2011 2012 2013 2014

Quarter 1 60,174 50,373 51,798 54,324

Quarter 2 38,342 39,268 42,433 35,510

Quarter 3 32,487 33,178 29,533

Quarter 4 40,129 39,570 39,649

Total 171,132 162,389 163,413

ii) Non-Domestic

2011 2012 2013 2014

Quarter 1 62,155 55,658 56,938 57,475

Quarter 2 48,844 49,556 43,488 48,019

Quarter 3 50,093 51,451 51,874

Quarter 4 53,742 54,267 54,017

Total 214,834 210,931 206,318

iii) Total

2011 2012 2013 2014

Quarter 1 122,329 106,030 108,736 111,799

Quarter 2 87,186 88,824 85,920 83,529

Quarter 3 82,580 84,629 81,408

Quarter 4 93,871 93,837 93,666

Total 385,966 373,320 369,731

10. Housing

(i) Total number of residential property sales over the 12 months to June:

2011 2012 2013 2014

Houses only 844 852 804 703

Flat/apartments 327 211 192 180

20

(ii) Average residential property price over the 12 months to June (£):

2011 2012 2013 2014

Houses only 284,140 278,046 271,535 259,168

Flat/apartments 170,686 166,384 158,526 152,931

Note historic figures have been revised following review.

11. Planning applications approved

2011 2012 2013 2014

Quarter 1 370 495 387 315

Quarter 2 460 478 412 351

Quarter 3 494 422 357

Quarter 4 439 400 430

Total 1,763 1,795 1,586

12. Building applications received

2012 2013 2014

Quarter 1 249 208 220

Quarter 2 249 224 202

Quarter 3 195 215

Quarter 4 187 192

B. FINANCIAL AND RELATED SERVICES

1. Banking

(a) Number of Licenses 2013 2014 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Deposit Taking 32 30 30 29 28 26 Investment Business 56 55 54 53 54 53 Services to Collective Investment Schemes 63 63 60 60 58 57

Corporate Services 183 181 176 174 172 172 Trust Services 131 128 127 126 126 125 Money Transmission Services 6 6 6 6 0 6

Management/Administration Services 9 9 9 9 9 9

(b) Deposit Base (£ billions) Total Bank

Deposits Sterling Non-Sterling

March 2008 65.59 43.36 22.23

June 2008 66.26 43.90 22.36

September 2008 66,26 43.13 23.13 December 2008 69.96 43.71 26.25

March 2009 66.95 43.26 23.69

21

June 2009 63.46 42.65 20.81 September 2009 63.34 41.58 21.76

December 2009 63.10 39.26 23.84 March 2010 63.09 38.85 24.24

June 2010 63.77 38.58 25.19

September 2010 62.09 38.59 23.50 December 2010 62.21 37.96 24.25

March 2011 59.53 37.49 22.04 June 2011 59.41 37.53 21.88


March 2012 57.55 36.45 21.10

June 2012 56.97 36.44 20.53 September 2012 56.98 36.13 20.85

December 2012 56.45 36.32 20.13 March 2013 59.84 35.99 23.85

June 2013 55.18 33.91 21.27


March 2014 51.40 32.50 18.90 2. Insurance (a) Number of Insurance Companies 2012 2013 2014 Life Captive Total Life Captive Total Life Captive Total

March 16 96 148 16 93 143 14 93 138

June 16 94 144 16 93 143 16 92 137 September 16 92 141 16 92 141

December 15 93 142 16 92 140

(b) Life and non-Life Premiums (£ billions)

2009 2010 2011 2012 31 December 7.4 10.1 8.9 7.5

3. Funds under Management

(i) All Schemes ($ billions)

2011 2012 2013 2014

March 28.1 22.6 21.7 21.8

June 29.6 21.9 20.9 September 27.9 21.9 21.2 December 22.3 22.3 21.6

(ii) Life and non-Life Insurance Funds (£ billions)

2009 2010 2011 2012

31 December 47.1 55.2 55.3 58.6

22

4. Ship Registration i).Number of Merchant (non-Demise) Ships Registered 2011 2012 2013 2014 Quarter 1 352 376 385 397

Quarter 2 362 389 385 385 Quarter 3 365 396 387

Quarter 4 373 391 395

ii) Gross Registered Tonnage

2011 2012 2013 2014

Quarter 1 10,742,793 12,624,625 14,039,974 15,186,690

Quarter 2 11,193,208 13,362,004 14,439,946 15,259,184

Quarter 3 11,831,113 14,030,406 14,943,421

Quarter 4 12,349,670 14,137,586 15,271,231

5. Company Registration

i) New Companies Formed

2012 2013 2014

(a) (b) (c) (a) (b) (c) (a) (b) (c)

Quarter 1 275 45 252 246 42 286 253 28 287

Quarter 2 266 95 281 221 47 325 237 26 259

Quarter 3 250 56 231 224 81 318

Quarter 4 227 75 234 225 81 356

Total 1,018 271 998 961 251 1,285

(a) refers to formations under the 1931 Act

(b) refers to conversions to 2006 Act companies (c) refers to new 2006 Act companies (excluding conversions)

ii) Companies Removed

2011 2012 2013 2014

Quarter 1 1,084 1,026 1,014 741

Quarter 2 361 417 335 399

Quarter 3 456 327 327

Quarter 4 353 374 404

Total 2,254 2,144 2,080

* includes conversions to 2006 Act incorporation

iii) Total Companies on Register

2011 2012 2013 2014

(a) (b) (a) (b) (a) (b) (a) b)

Quarter 1 22,696 5,701 21,582 6,726 20,447 7,633 19,584 8,412 Quarter 2 22,617 6,001 21,431 6,990 20,333 7,804 19,422 8,524

23

Quarter 3 22,417 6,973 21,354 7,175 20,230 8,049 Quarter 4 22,307 6,542 21,207 7,396 20,051 8,355

(a) Refers to incorporations under the 1931 Act

(b) Refers to incorporations under the 2006 Act

iv) Trusts

2010/11 2011/12 2012/13 2013/14

Trusts 20,905 21,411 19,567 19,089

Private Trust companies 220 347 292 645

Total 21,125 21,758 19,859 19,734

24

APPENDIX B REVENUE ACCOUNT

SUMMARY

1. Compared with the same period last year income at £115.1 million is £2.5 million (+2%) higher, whilst

Departments' net payments at £131.0 million are £1.0 million (+1%) higher.

2. Customs’ net cash receipts of £80.0 million for the 3 months to 30 June 2014 have been adjusted to the proportion of annual estimate for the year and are £1.9 million (+2%) up on last year’s position. It is currently

anticipated that the Customs Estimate for the year will be attained.

3. Income Tax receipts at £34.3 million are £0.1 million (>-1%) lower than the same period for last year. It is

currently anticipated that the Income Tax Estimate for the year will be attained.

4. ‘Other Treasury Income’ includes £8.3 million from interest on investments, including income from Reserve Fund investments, which is remitted quarterly in arrears. It is currently anticipated that the ‘Other Treasury

Income’ Estimate for the year will be attained.

5. At this, the first quarter stage of the year, taking normal seasonal patterns into account and assuming year-on-

year accruals are unchanged, there are no indications yet that any Department will definitely overspend their revenue Vote. However, some Departments are experiencing significant financial pressures and will find it

challenging to remain within their Votes for the year.

6. A transfer from Reserves of £11.0 million was included within the Budget presented to Tynwald in February 2014 (Page 19 of the Budget (GD No. 2014/0001)).

7. The actual balance brought forward at the 1 April 2014 of £41.3 million was £9.7 million higher than the "Probable" shown in the Budget in February 2014, as a result of income being £2.8 million higher and

expenditure being £6.9 million lower than “Probable”.

Estimate inc.

Actual Actual to % of Estimate Supp. Votes Actual to % of

2013-14 30 Jun 13 Actual 2014-15 30 Jun 14 30 Jun 14 Estimate

£'000 £'000 £'000 £'000 £'000

Income

Customs and Excise 312,000 78,000 25% 319,700 319,700 79,925 25%

Income Tax 196,116 34,437 18% 201,000 201,000 34,300 17%

Other Treasury Income 13,264 114 1% 11,910 11,910 825 7%

Total Income 521,380 112,551 22% 532,610 532,610 115,050 22%

Expenditure

Net Voted Services 538,230 131,020 24% 543,603 543,603 132,015 24%

Surplus (Deficit) (16,850) (18,469) (10,993) (10,993) (16,965)

Add:

Transfers from/(to) Reserves 23,600 - - 11,000 11,000 (500) (5%)

Add:

Balance b/f 1st April 34,531 34,531 100% 31,571 31,571 41,281 131%

Balance c/f 41,281 16,062 31,578 31,578 23,816

25

APPENDIX C CAPITAL SPENDING

CAPITAL REPORT TO COUNCIL OF MINISTERS

1st April 2014 to 30

th June 2014

1. Introduction

Government Departments’ capital spending, excluding borrowing authorities and land purchases, for the first

quarter of the year to 30th June 2014 was £6.83 million against an estimate of £9.46 million (72%).

This spending represents 12% of the full year estimate. Spending over the same period last year was £7.32 million

(16% of full year estimate (£46.5m)). Last year’s figure of £7.32 million did, however, include a sum of £1.395

million for HPAS loans and removing this sum indicates that Departments are ahead compared with the same stage

last year, on a like for like comparison.

It has been a particularly busy period for approvals; a combined total of £8 million of construction schemes have

been approved in the quarter relating to Government capital spending alone.

FINANCIAL POSITION

1 April to 30 June Forecast for Year

2014-15 Revised* Forecast Forecast

Actual Actual as % of Estimate Under- as % of

2013-14 2014-15 2013-14 2014-15 2014-15 Spend Estimate

£'000 £'000 £'000 £'000 £'000

Government Total 7,329 6,834 93 56,390 45,112 11,278 80.0%

Statutory Boards' Spending 1,950 2,871 147 21,254 19,618 1,637 92.3%

* Revised Estimate 2014-15 refers to original 2014-15 Budget plus supplementary votes approved by Tynwald

Treasury

Forecast

2

4

6

8

10

12

14

16

18

20

June Sept Dec March

£ m

illi

on

s

Quarterly Capital Spendingexcludes Statutory Boards' and Local Authority Borrowing

2011-12

2012-13

2013-14

2014-15

26

APPENDIX D

GOVERNMENT CASH AND INVESTMENTS

Value of Externally Managed Investments

As at 30th June 2014 Book cost Market value

£ millions £ millions

National Insurance Investment Account 680.6 744.3

Reserve Fund 305.7 340.3

Hospital Estates Development Fund 43.5 44.5

Manx Currency Account 32.7 33.6

Public Service Employees Pension Reserve 214.2 236.4

1,276.7 1399.1

Note:

Each of the funds has its own investment strategy according to its investment needs. Treasury's investment

strategy for those reserve funds which have a significant exposure to equities is to maximise the total return

on the funds over the long term. The short term fluctuations of market values are therefore considered of less importance than the long term return on investments held.

2. Capital Spending Summary 1 April to 30 June 2014

(includes Statutory Boards' spending, excludes Statutory Boards' borrowing)

Original

2014-15 £

Revised

2014-15 £

Actual

spend

£

spend against

original est

%

spend against

revised est

%

spend against

YTD est

%

Economic Development 2,245,148 2,245,148 0 0.0 - - Education & Children 9,200,112 9,200,112 1,717,228 18.7 18.7 115.0 Environment, Food & Agriculture 3,524,340 3,524,340 180,577 5.1 5.1 17.3 Health & Social Care 16,396,401 16,396,401 1,312,641 8.0 8.0 62.0 Home Affairs 6,645,750 6,645,750 104,080 1.6 1.6 20.8 Infrastructure 15,440,730 17,522,730 3,489,916 22.6 19.9 96.7 Manx Museum & National Trust 855,631 855,631 29,062 3.4 3.4 44.7 Government Total 54,308,112 56,390,112 6,833,504 12.6% 12.1% 72.2%

Treasury (Contingency Fund) 0 0 0

54,308,112 56,390,112 6,833,504

Statutory Boards' Spending 0 0

Manx Utilities Authority 15,437,152 15,437,152 2,053,502 13.3 13.3 53.2 69,745,264 71,827,264 8,887,006

Water Schemes 2,250,000 2,250,000 533,986 23.7 23.7 178.0 Post Office 3,567,000 3,567,000 283,510 7.9 7.9 243.9

75,562,264 77,644,264 9,704,502

Spending analysed by type of scheme Actual

for the period 1 April to 30 June 2014-15 spend spend by compared to same period last year as % of Statutory

2013-14 2014-15 2013-14 spend Boards 2014-15 £ £ % £ £

Construction 3,460,214 3,275,266 94.7 0 3,275,266

Engineering 1,412,785 1,409,848 99.8 2,587,488 3,997,336

Plant / Equipment 1,054,409 1,764,758 167.4 283,510 2,048,268

Land Acquisition 0 0 0.0 0 0

Loan Schemes 1,395,410 0 0.0 0 0

Other 6,577 383,632 5,832.9 0 383,632

7,329,395 6,833,504 93.2 2,870,998 9,704,502

27

Bank Deposits and Call Accounts Held in Local Banks

Fixed term deposits and call accounts directly held by Treasury as at 30th June 2014 totalled:

Sterling £226.23 million

Euro Nil

APPENDIX E BILATERAL TAX AGREEMENTS

Agreements – In Force

COUNTRY

Argentina TIEA in force (4 May 2013)

Australia 1. TIEA in force (January 2010) 2. Agreement for the allocation of taxing rights with respect to certain income of individuals and to establish a mutual agreement procedure in respect of transfer pricing adjustments in force

Bahrain DTA in force (March 2012)

Canada TIEA in force (December 2011)

Channel Islands DTAs with Guernsey and Jersey in force 5 July 2013 and 10 July 2013, respectively.

China TIEA in force (August 2011)

Czech Republic TIEA in force (May 2012)

Denmark (Faroe Islands & Greenland)

1. TIEA in force (Denmark September 2008, Faroe Islands August 2008, Greenland April 2008)

2. Agreement on the access to mutual agreement procedures in connection with the adjustment of profits of associated enterprises in force

3. Agreement for the avoidance of double taxation on individuals in force 4. Agreement for the avoidance of double taxation with respect to enterprises operating ships or aircraft in international traffic in force

Estonia DTA in force (January 2010)

Finland 1. TIEA in force (June 2008) 2. Agreement on the access to mutual agreement procedures in connection with the adjustment of profits of associated enterprises in force


France 1. TIEA in force (October 2010) 2. Agreement for the avoidance of double taxation with respect to enterprises operating ships or aircraft in international traffic in force (14 January 2012)

Germany 1. TIEA in force (November 2010) 2. Agreement for the avoidance of double taxation with respect to enterprises operating ships in international traffic in force

Iceland 1. TIEA in force (December 2008) 2. Agreement on the access to mutual agreement procedures in connection with the adjustment of profits of associated enterprises in force


India TIEA in force (March 2011)

Ireland TIEA 1. TIEA in force (December 2008) 2. Agreement for affording relief from double taxation with respect to certain income of individuals and establishing a mutual agreement procedure in connection with

28

the adjustment of profits of associated enterprises in force

Japan TIEA in force (September 2011)

Malta DTA in force (February 2010)

Mexico TIEA in force (March 2012)

Netherlands TIEA 1. TIEA in force (July 2006) 2. Agreement on the access to mutual agreements procedures in connection with the adjustment of profits of associated enterprises and the application of the

Netherlands participation exemption in force 3. Agreement for the avoidance of double taxation with respect to enterprises operating ships or aircraft in international traffic in force

New Zealand 1. TIEA in force (July 2010) 2. Agreement for the allocation of taxing rights with respect to certain income of individuals and to establish a mutual agreement procedure in respect of transfer pricing adjustments in force

Norway 1. TIEA in force (August 2008) 2. Agreement on the access to mutual agreement procedures in connection with the adjustment of profits of associated enterprises in force


Poland 1. TIEA in force (November 2011) 2. Agreement for the avoidance of double taxation with respect to certain income of

individuals in force 3. Agreement for the avoidance of double taxation with respect to enterprises

operating ships or aircraft in international traffic in force

Portugal TIEA in force (18 January 2012)

Qatar DTA in force (15 November 2012)

Seychelles DTA in force (16 December 2013)

Singapore DTA in force (2 May 2013)

Slovenia TIEA in force (31 August 2012)

Sweden 1. TIEA in force (December 2008) 2. Agreement on the access to mutual agreement procedures in connection with the adjustment of profits of associated enterprises in force


United Kingdom TIEA in force (April 2009)

United States of America

TIEA in force (January 2004)

Note: On 2 April 2009, the OECD placed the Isle of Man on the ‘white list’ of countries which have substantially

implemented the internationally agreed tax standard.

The Island now has 41 agreements with exchange of information to the OECD standard.

Documents

QUARTERLY REPORT ON THE ECONOMY TO THE COUNCIL OF … · 2014. 10. 3. · QUARTERLY REPORT ON THE ECONOMY TO THE COUNCIL OF MINISTERS 1st April – 30 th June 2014 . CONTENTS Page