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.
– FSB national chairman John Walker
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.