The Federation of Small Businesses (FSB) has insisted that its members want to pay their employees a higher salary, but argued that they are "struggling" with cash flow in the current economic climate.
Companies are under pressure to pay staff the Living Wage - which was increased today to £8.55 in London and £7.45 elsewhere - following campaigning by London mayor Boris Johnson and Labour leader Ed Miliband.
Small firms want to pay their employees more, and recognise the benefits of doing so. However, they are struggling to manage cash-flow in the midst of weak economic demand and increasing energy and fuel costs.
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