By Bernard Moffatt From IOM Today

About 30 years ago the Isle of Man Government rolled out its ‘master plan’ for the future. We were told by Miles Walker MHK (then Chief Minister) that the island was to become a ‘Prosperous and Caring Society’.

The memorable strategy said: ‘To raise the living standards of the few and ignore the needs of the many would be unjust and divisive.

‘Everyone must share in the benefits of progress…Growing prosperity must be shared, good services must be provided and the elements which go to make up the quality of life must be protected.’

Part of the cornerstone of this plan (which also coincidentally included a strategy to neutralise the trade union movement that had been increasingly vocal and active in the preceding years) was to attract ‘well-heeled’ individuals to the island who would invest in the community.

The argument was that this would lead to growth and, while some might do disproportionately better than others, it would all even itself out via ‘trickle-down’ economics.

Well the theory was sound in principle and there’s little doubt that disposable income was on the rise in the following few years but an unforeseen consequence was one of the sharpest population rises in recent years.

From 1986 to 1991 the population grew by more than 5,000, although how many of these were high flyers ‘trickling-down’ their wealth to the existing less ‘well-heeled’ among the population has never been established.

What undeniably did happen was that house prices shot up from and average of £35,000 to £82,000 in a few years.

Evictions and homelessness became a big news story and of course militant nationalism in the shape of FSFO materialised briefly.

The government did eventually get its act into gear – more social housing and first time buyer units were introduced and assistance with mortgages (to first time buyers) provided.

However given the huge increase in the price of property you could say that effectively a generation was saddled with excessive housing debt repayment commitments as a consequence of a policy ostensibly introduced to make them better off.

Later, Manx governments clung to this notion that what are now called ‘high net worth individuals’ (HNWI) will somehow improve the lot of us all just by being here and getting a free ride on tax while the rest of us now even have to cough up to go to the toilet.

I have no doubt at all that the Walker strategy was well-intentioned but as an economic master plan, given where we find ourselves today, it was a complete disaster.

Most damagingly ‘the political old order’, which includes our current Chief Minister, cling to that philosophy which set us off on the road to ruin all those years ago.

They are not challenged in this because, like him or loathe him, Allan Bell and some of the old guard face no real challenge in what must politically be the most lightweight Tynwald for decades.

Despite what’s written about him by some of the ‘internet pond life’, Bell is ‘the only show in town, boys’ but unfortunately Eddie Teare is no David Cannan (Miles Walker’s first Treasury Minister)!

Anyway, there was one outspoken critic at the time and that was a certain full-time union official called ‘Moffatt’. Only a year after the plan was unveiled I criticised it, and where it would lead us, forcefully, in the Manx Independent newspaper.

Well nobody was listening to the TGWU then and they certainly don’t listen to its successor union now.

The first ‘Prosperous and Caring’ generation are today probably just about on top of the mortgage debt mountain that was created for them but what of the ‘high-net worth’ generation of today.

Well one factor that did ameliorate the impact of the higher living costs in the 1990s was that the unions ramped up their act and won substantial increases in pay across the board. This went some way to enabling working people to cope with the ‘New Jerusalem’ that Miles and Co had created for us.

I see little scope for that today and I do not think that Bell’s HNWI individual strategy has any more traction than Walker’s ‘Prosperous and Caring’ ideology.

IMAGE: Bernard Moffatt

For more on this story go to: http://www.iomtoday.co.im/news/columnists/bernard-moffatt-outside-left-trickle-down-economics-does-not-work-1-7362118