Higher wage bill would hit small business

NEARLY half of small firms already paying staff at or above the amount advocated by the living wage campaign, according to new research.

A survey by the Federation of Small Businesses (FSB) suggests that 49 per cent of firms already pay their staff at or above the amount that the campaign is pushing for, but some would struggle if it were made mandatory by the government.

There has also been a fall in the number of small companies paying staff the minimum wage, down to 23 per cent from 27 per cent in 2012.

John Allan, FSB national chairman, said that it would put pressure on small firms to legislate for a higher minimum wage: “Even with the beginnings of an economic recovery, small businesses in some sectors still face rising business rates and utility bills.”

Allan added: “This means that not all firms are in a position to raise salaries and policymakers therefore need to be prudent when legislating on pay.”

The FSB’s research also suggests that owners of small firms intend to raise wages when they are able to do so, but that many businesses are not yet in a position to invest more in their workforce.