Tynwald has voted down a bid to reinstate the 20% higher rate of income tax.

The rate was increased to 22% in this year’s Budget, with the £20m extra raised supposedly ringfenced for healthcare. It was the first income tax rise in 14 years.

It was meant to have been a temporary measure until a new NHS levy was brought in.

But Treasury Minister Dr Aled Allinson has admitted that bringing in a levy was more complicated than he initially thought and indicated the 22% rate will have to remain for now.

In Tynwald, fellow Ramsey MHK Lawrie Hooper called for the higher rate of income tax to revert to 20% in the 2025 Budget.

He told members that any intention for the tax rise to be temporary ‘seems to have gone out of the window’.

‘I think government when they brought in this tax made it quite clear to people it was going to be for a year. It is quite clear that is not going to be the case,’ he said.

Mr Hooper described the claim that the money had been ringfenced as ‘nonsense’ and a ‘clever political slogan’. ‘Who’s paying more tax now?’ he asked. ‘Lower income working families.’

He said the Treasury should look at taxing assets or capital but no economic assessment of this had been carried out.

Chris Thomas (Douglas Central) described it as ‘a pointless motion, unfortunately, except to raise the debate’.

And Dr Allinson labelled it as ‘irresponsible’ and simplistic’ - and one that was without due regard to the island’s fiscal position.

He said: ‘For clarity, when I raised the higher rate of income tax, I said it is my ambition that this increase to the higher rate of income tax will only be in place until we have investigated and introduced the NHS Levy.

‘Treasury has investigated bringing forward a new NHS levy this year but it’s become apparent that it’s far more complicated than I initially thought.’

Dr Allinson warned that with the Budget just four months away that if Mr Hooper’s motion was approved, the money would still have to be found somewhere or services would have to be cut.

He moved an amendment that the higher rate of personal income tax should continue to be reviewed in line with the taxation strategy.

In his closing remarks, Mr Hooper said members had a simple question to ask themselves when deciding how to vote: ‘Do you think it’s fair?’

Tynwald, however, backed Dr Allinson’s amendment by 10 votes to nine in the House of Keys and by five votes to three in Legislative Council and the motion as amended was carried by the same narrow majority in the Keys and by seven to one votes in LegCo.