gasA loan of up to £26m to state energy provider Manx Utilities (MU) has been approved by Tynwald.

It means electricity prices will be capped at current levels for homes and businesses until the end of March 2023.

MU had forecast a 70% hike in bills from October to pay for the spiralling cost of wholesale gas.

The funds, to be taken from treasury reserves, will be repaid over a twenty-year period with a 2% interest rate.

Although the support recommended by Treasury Minister Alex Allinson to help with the rising cost of living was backed unanimously, some politicians expressed concerns about the package.

‘Cost of living tsunami’

In the extraordinary sitting of the court, David Ashford MHK told members that he would have preferred targeted help for low and middle income households.

“For many it’s a not a cost of living crisis anymore, it’s a cost of living tsunami,” he said.

Highlighting that MU already had bonds of £260m to repay within the next 12 years, as well as previously accrued debt to the treasury, Tim Glover MHK said he was worried about passing on debts to future generations.

He added he was “anxious” about “the future viability of an organisation already saddled with debt”.

Outgoing MU chairman Rob Callister MHK agreed that the current situation would not be sustainable if wholesale natural gas prices continued to increase at current rates.

Whilst the cap would be of “significant benefit” to the Isle of Man economy during the winter months, it would have an “adverse affect” on the company, he added.

In response, Dr Allinson said the freeze would get rid of the “sudden shock going into winter” but warned that electricity prices would have to go up in a “staggered and proportionate way” in April.